Sears, Roebuck & Co. v. Forbes/Cohen Florida Properties, L.P.

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

SEARS, ROEBUCK & CO.,

Appellant,

v.

FORBES/COHEN FLORIDA PROPERTIES, L.P., a Michigan Limited

Partnership, and CITY OF PALM BEACH GARDENS, FLORIDA, a

Florida Municipal Corporation,

Appellees.

No. 4D16-2314

[July 12, 2017]

Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm

Beach County; Donald W. Hafele, Judge, and Edward A. Garrison, Acting

Circuit Court Judge; L.T. Case No. 50-2014-CA-011945-XXXX-MB.

Gerald F. Richman and Leora B. Freire of Richman Greer, P.A., West

Palm Beach, and Natalie J. Spears and Steven L. Merouse of Dentons US

LLP, Chicago, Illinois, for appellant.

Bruce S. Rogow and Tara A. Campion of Bruce S. Rogow, P.A., Fort

Lauderdale, and Robert M. Carson and Jeffrey B. Miller of Carson Fischer,

P.L.C., Bloomfield Hills, Michigan, for appellee Forbes/Cohen Florida

Properties, L.P.

R. Max Lohman and Abigail F. Jorandby of Lohman Law Group, P.A.,

Jupiter, Florida, for appellee City of Palm Beach Gardens.

LEVINE, J.

Sears, Roebuck has a lease with Forbes/Cohen for a store within the

Gardens Mall. It attempted to sublease part of its store to Dick’s Sporting

Goods. However, the landlord disapproved of the sublease and

collaborated with the City of Palm Beach Gardens, unbeknownst to Sears,

to enact a resolution to now require both the landlord and the City to agree

to any subdivision of space within the Gardens Mall.

The issues presented in this case are whether the City’s resolution

unconstitutionally impairs Sears’s contract rights and whether that

resolution violates substantive due process because it has no criteria

stating when approval to subdivide Sears’s leased space may be granted

or denied. As a related issue, we consider whether Sears is owed attorney’s

fees as a result of the City’s alleged violation of substantive due process.

Finally, we consider whether Sears has a contractual right to sublease.

We conclude the City’s resolution is unconstitutional both because it

impairs Sears’s right to contract—and the contract rights emanating from

the lease between Sears and Forbes/Cohen—and deprives Sears of its

substantive due process rights. Consequently, we find Sears is a

prevailing party under 42 U.S.C. sections 1983 and 1988 and is owed

attorney’s fees. We further conclude that Sears has the contractual right

to sublease without authorization from Forbes. The remaining issues are

without merit and we affirm without comment.

FACTS

In 1984, Forbes/Cohen Florida Properties, L.P. (“Forbes”) entered into

a Land Lease to develop property within Palm Beach Gardens and

construct a mall. Forbes then petitioned the City of Palm Beach Gardens

(the “City”) to approve construction for the mall. The City approved

Forbes’s petition and enacted the Palm Beach Gardens Planning Unit

Development (“P.U.D.”) through resolution.

The P.U.D. specifically requires that all anchor stores at the mall

undergo architectural review “to achieve architectural design harmony and

to maintain integrity throughout the project.” Issuance of a building

permit requires city council approval of any preliminary designs to ensure

the proposed modifications do not “disrupt the architectural design,

harmony and integrity” of the mall. Further, the P.U.D. restricts signage

by limiting anchor tenants to “[o]ne wall sign for each anchor department

store facade representing typical identification by sign logo, style, and

illumination indigenous to that anchor department store . . . .”

In 1987, Forbes entered into a sublease with Sears, Roebuck & Co.

(“Sears”). The thirty-year sublease gives Sears the option to extend its

lease for four separate periods of ten years each so long as Sears was not

in material default and was operating as a retail store. Additionally, the

sublease gives Sears the “right” to sublease, stating:

[Sears] shall have the right to assign this Lease and to sublet

from time to time the Demised Premises or any part thereof;

subject however, to the terms and provisions of the [Reciprocal

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Easement Agreement]. No such assignment or subletting

shall relieve Tenant of its obligations under this Lease . . . .

(emphasis added). Lastly, the sublease requires Sears to “comply with all

laws and ordinances and the orders, rules, and regulations and

requirements of all Federal, State, County and municipal governments . .

. which may be applicable from time to time to the Demised Premises.”

However, the sublease also allows Sears the “right to contest the

applicability of any laws, ordinances, orders, rules, regulations or

governmental requests . . . .” (emphasis added).

Concurrent with the sublease, Sears entered into a Reciprocal

Easement Agreement (the “R.E.A.”). The R.E.A. mandates that Sears

initially operate as a department store, but after twenty years, Sears could

use its space for “retail and service purposes and for no other purposes.”

As to subleasing, the R.E.A. indicates that “Majors,” that being anchor

tenants like Sears, could “lease all or any portion(s) of its building and/or

license departments therein” so long as the sublease otherwise complied

with the R.E.A. The R.E.A also sets forth criteria for signage. The R.E.A.

requires signs to comply with aesthetic and safety standards, for example

prohibiting blinking lights and rooftop signs and requiring compliance

with electrical codes. The R.E.A. also prohibits tenants from creating

dangerous hazards within the mall. Finally, the R.E.A. provides that it

exists for the “exclusive benefit of the Parties and the Fee Owner” and

nothing in the R.E.A. should “be construed to create any rights in or for

the benefit of any space lessee of any part of the Shopping Center Parcel.”

In 2011, Sears began seeking a subtenant to sublease part of its two-

story store and entered into negotiations with Dick’s Sporting Goods.

Sears informed Sidney Forbes, a partner of Forbes, of its plans.

Without informing Sears, Sidney met with the City, told the City of

Sears’s plans, and personally requested that the City enact a resolution.

Forbes submitted a development application along with a $1,650 fee and

then collaborated with the City in crafting the proposed resolution. The

City passed Resolution 20-2012 (the “Resolution”) as part of its consent

agenda without taking any testimony.

The Resolution states that its purpose was to clarify the P.U.D. The

Resolution requires the following:

Prior to any proposed structural modifications, installation of

kiosks, and/or any subdivision of an anchor tenant space into

any sub-space which requires separate business tax receipts

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and/or newly separate licensing of any kind whatsoever for

the business enterprise intending to occupy the newly created

sub-space, anchor tenants must obtain City Council approval.

Prior to seeking City Council approval the subject anchor

tenant must obtain approval for the subject modification from

mall ownership.

Sears, not knowing of the Resolution, informed Forbes of its plans to

sublease to Dick’s. Forbes claimed Dick’s was inappropriate for the mall.

Subsequently, Forbes sent Sears a letter stating that Sears’s

“contemplated actions . . . are beyond [Sears’s] authority under the

Sublease.” The letter further stated that Forbes did “not consent to the

marketing by Sears of any portion of its space within the Gardens and will

not consent to any proposals that is not fully in compliance with all

applicable restrictions and fully satisfies all of [Sears’s] obligations.” Then,

at a subsequent meeting, Sidney told Sears that it was not within its rights

to sublease to Dick’s. Sidney believed Sears could not sublease to Dick’s

because Dick’s was not a department store, Dick’s did not have signage

rights, and Dick’s did not “belong” at the mall.

Sears filed a complaint seeking declaratory relief. As to Forbes, Sears

sought a declaratory judgment stating that it had the right to sublease to

Dick’s. As to the City, Sears sought a declaratory judgment stating that

the Resolution was an unconstitutional impairment of contract under the

Florida and United States Constitutions and that the Resolution violated

Sears’s substantive due process rights. Lastly, Sears sought attorney’s

fees under 42 U.S.C. sections 1983 and 1988. 1

During the pendency of litigation, Sears entered into a sublease with

Dick’s for one floor of Sears’s two-floor lease. As per the sublease, Dick’s

was to operate as a sporting goods store. Furthermore, the sublease was

contingent on Sears getting necessary government approvals, including

approvals for signage as well as obtaining a favorable declaratory

judgment.

Following the trial court’s denial of the City’s and Forbes’s motions to

dismiss and Sears’s motion for summary judgment, the case went to trial.

At trial, testimony established that Dick’s was a “first-class” retailer.

Further, Forbes conceded that Sears had the right to sublease so long as

1 Sears also contended the Resolution was in fact an ordinance and was therefore

void as the passing of the Resolution did not comply with statutory requirements

for enacting ordinances. We find this argument to be without merit and affirm

without comment.

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it complied with the sublease and the R.E.A. Nevertheless, Forbes

asserted the following reasons against the sublease: the proposed Dick’s

sublease was not compliant with the sublease and the R.E.A. because

Dick’s could not put up a sign, Sears could not exercise its option to extend

its lease while subleasing to Dick’s, Sears had not gotten the requisite

architectural approvals for modification of the leased premises, and Dick’s

potential gun sales violated the R.E.A.’s prohibition on creating dangerous

hazards.

Sears conceded that, under the sublease, the current signage plans

were not compliant with municipal zoning standards. Sears noted that it

would need to get city approvals and waivers, but that other anchor

tenants at the mall had multiple signs and that it was a regular industry

practice to work with municipalities in getting necessary approvals and

waivers. Further, Sears conceded that it had not yet attained the

necessary architectural approvals for the mall, but would do so upon

favorable disposition of the declaratory judgment action. Finally, Sears

had not exercised its option to renew its lease, which was set to expire in

2018.

The City’s contention at trial was that the Resolution did not create new

rights or obligations, but instead was administrative and merely

interpreted, and reiterated, pre-existing requirements under the P.U.D.

Further, the Resolution did not require approval for “subleasing,” but

required approval for “subdividing” anchor tenant space. Thus, the

resolution did not impair Sears’s contract rights nor did it violate

substantive due process.

Sears argued that the prohibition on subdividing space without

approval was tantamount to a prohibition on subleasing without approval.

Further, the Resolution gave both the City and Forbes unfettered authority

to decide whether to permit an anchor tenant, such as Sears, to sublease.

This authority, as outlined in the Resolution, did not exist in the sublease,

P.U.D., or R.E.A.

Following the conclusion of trial, the trial court did not make any

findings of fact or conclusions of law nor did it declare the parties’ rights

with respect to the sublease, R.E.A. or P.U.D. Instead, the court found as

follows:

As to Count 1, the Court finds for the Defendant, [Forbes],

who shall go hence without a day.

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As to Counts 3, 4, 5, and 6, the Court finds for the Defendant,

[the City], who shall go hence without a day.

Sears appealed.

ANALYSIS

I. DECLARATORY JUDGMENT

As a preliminary issue, Sears argues that, although the trial court’s

order was deficient as it failed to determine the rights of the parties or

make any factual findings, we may nevertheless consider the merits of this

appeal without remanding to the trial court. We agree.

Florida’s Declaratory Judgment Act provides as follows:

The circuit and county courts have jurisdiction within their

respective jurisdictional amounts to declare rights, status,

and other equitable or legal relations whether or not further

relief is or could be claimed. No action or procedure is open

to objection on the ground that a declaratory judgment is

demanded. The court’s declaration may be either affirmative

or negative in form and effect and such declaration has the

force and effect of a final judgment.

§ 86.011, Fla. Stat.

Under this Act, where a trial court denies a motion to dismiss, the trial

court must “fully determine the rights of the respective parties, as reflected

by the pleadings.” Local 532 of the Am. Fed’n of State, Cty., & Mun. Emps.,

AFL-CIO v. City of Fort Lauderdale, 273 So. 2d 441, 445 (Fla. 4th DCA

1973). Thus, conclusory final judgments on declaratory judgment claims,

which are devoid of factual findings or conclusions of law, are inadequate.

See id.; Hyman v. Ocean Optique Distribs., Inc., 734 So. 2d 546, 548 (Fla.

3d DCA 1999).

The final judgment in the present case simply found for Forbes and the

City, stating they “shall go hence without a day.” Consequently, the trial

court failed to “fully determine the rights of the respective parties.” See

Local 532, 273 So. 2d at 445; see also State Farm Mut. Auto. Ins. Co. v.

Hinestrosa, 614 So. 2d 633, 635 (Fla. 4th DCA 1993) (stating that the

words “plaintiff take nothing and defendant go hence without day” are

“words usually found in cases seeking only a money judgment rather than

a declaratory judgment”).

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Review of a declaratory judgment generally requires adequate findings

of fact and conclusions of law. Trump Endeavor 12, LLC v. Fla. Pritikin Ctr.,

LLC, 208 So. 3d 311, 312 (Fla. 3d DCA 2016). Thus, normally, we would

remand for the trial court to make additional findings. See Exotic

Motorcars & Jewelry, Inc. v. Essex Ins. Co., 111 So. 3d 208, 209 (Fla. 4th

DCA 2013). However, in the present case, the issues to be reviewed are

purely legal in nature and the underlying facts are not in dispute.

Therefore, we conclude remand is unnecessary, and find that we may

consider the merits of Sears’s appeal.

II. IMPAIRMENT OF CONTRACT

Sears argues that the Resolution passed by the City, at the prompting

of Forbes, unconstitutionally impaired its contract rights. We agree with

Sears and find that the City’s Resolution unconstitutionally impaired

Sears’s right to contract.

We review the constitutionality of statutes and municipal enactments

with the de novo standard. Kuvin v. City of Coral Gables, 62 So. 3d 625,

629 (Fla. 3d DCA 2010).

Both the state and federal constitutions prohibit the impairment of

contract. See Art. I, § 10, cl. 1, U.S. Const.; Art. I, §10, Fla. Const. It is a

hallmark of the law in Florida that contracts are protected from

unconstitutional impairment, and the Florida Supreme Court has

unequivocally stated that “[t]he right to contract is one of the most

sacrosanct rights guaranteed by our fundamental law. It is expressly

guaranteed by article I, section 10 of the Florida Constitution.” Chiles v.

United Faculty of Fla., 615 So. 2d 671, 673 (Fla. 1993); see also In re

Advisory Opinion to the Governor, 509 So. 2d 292, 314 (Fla. 1987) (“It is . .

. indisputable . . . that rights existing under a valid contract enjoy

protection under the Florida Constitution.”).

The Florida Constitution offers greater protection for the rights derived

from the Contract Clause than the United States Constitution. See

Sarasota Cty. v. Andrews, 573 So. 2d 113, 115 (Fla. 2d DCA 1991) (citing

Pomponio v. Claridge of Pompano Condo., Inc., 378 So. 2d 774, 780 (Fla.

1979)); James W. Ely, Jr., The Contract Clause: A Constitutional History

253 (2016) (“[T]he Florida Supreme Court has signaled its willingness to

protect contracts more fully than the federal courts.”). Thus, the Florida

Supreme Court has recognized that it is “not bound to accept as

controlling the United States Supreme Court’s interpretation of a parallel

provision of the federal constitution.” Pomponio, 378 So. 2d at 779.

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“To impair a preexisting contract, a law must ‘have the effect of

rewriting antecedent contracts’ in a manner that ‘chang[es] the

substantive rights of the parties to existing contracts.’” Searcy, Denney,

Scarola, Barnhart & Shipley, etc. v. State, 209 So. 3d 1181, 1191 (Fla.

2017) (citation omitted). “Total destruction of contractual expectations is

not necessary for a finding of substantial impairment.” U.S. Fid. & Guar.

Co. v. Dep’t of Ins., 453 So. 2d 1355, 1360 (Fla. 1984). Rather, impairment

is defined as “to make worse; to diminish in quantity, value, excellency or

strength; to lessen in power; to weaken.” Pomponio, 378 So. 2d at 781

n.41 (citation omitted); Pudlit 2 Joint Venture, LLP v. Westwood Gardens

Homeowners Ass’n, 169 So. 3d 145, 150 (Fla. 4th DCA 2015).

“Any legislative action which diminishes the value of a contract is

repugnant to and inhibited by the Constitution.” In re Advisory Opinion,

509 So. 2d at 314. For example, “[a] statute which retroactively turns

otherwise profitable contracts into losing propositions is clearly such a

prohibited enactment.” Id. at 314-15. Indeed, it is a “well-accepted

principle that virtually no degree of contract impairment is tolerable.”

Pudlit, 169 So. 3d at 150 (quoting Coral Lakes Cmty. Ass’n v. Busey Bank,

N.A., 30 So. 3d 579, 584 (Fla. 2d DCA 2010)); see also Citrus Mem’l Health

Found., Inc. v. Citrus Cty. Hosp. Bd., 108 So. 3d 675, 677 (Fla. 1st DCA

2013) (“[A]ny legislation that detracts from the value of a contract is

subject to the constitutional proscription . . . .”).

The conclusion, however, that “‘virtually’ no impairment is tolerable

necessarily implies that some impairment is tolerable,” though not as

much impairment as would be “acceptable under traditional federal

contract clause analysis.” Pomponio, 378 So. 2d at 780. “[S]ome

impairment” may be “tolerable” where the governmental actor can

demonstrate a “significant and legitimate public purpose behind the

regulation.” Searcy, 209 So. 3d at 1192 (quoting Energy Reserves Grp.,

Inc. v. Kan. Power & Light Co., 459 U.S. 400, 411 (1983)).

In Griffin v. Sharpe, 65 So. 2d 751 (Fla. 1953), a piece of real property

had a restriction whereby only residences and apartments could be built

upon it. A few years before the restriction was set to expire, the legislature

enacted a statute to extend the restriction. A purchaser subsequently

purchased the property and sought to build a medical office on it. The

Florida Supreme Court held that the legislative enactment violated the

Contract Clause. The court described this legislative restriction as

“legislative fiat,” stating:

The contested restriction is without doubt a private contract

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between private individuals, and its attempted extension by

the Legislature can in no wise [sic] be related to the reasonable

exercise of the police power of the state and is a futile effort to

by-pass constitutional prohibitions and re-write the

agreement through governmental authority.

Id. at 752.

The Resolution passed by the City, at the behest of Forbes, states the

following:

Prior to any proposed structural modifications, installation of

kiosks, and/or any subdivision of an anchor tenant space into

any sub-space which requires separate business tax receipts

and/or newly separate licensing of any kind whatsoever for

the business enterprise intending to occupy the newly created

sub-space, anchor tenants must obtain City Council approval.

Prior to seeking City Council approval the subject anchor

tenant must obtain approval for the subject modification from

mall ownership.

It is clear that the Resolution diminished Sears’s interest in the

contract, namely Sears’s right to sublease. Although the Resolution does

not mention subleasing specifically, total destruction of Sears’s interest in

the contract is not required to claim an impairment of contract. U.S. Fid.

& Guar., 453 So. 2d at 1360. The Resolution has “made worse” Sears’s

rights emanating from the contract. See Pudlit, 169 So. 3d at 150. Sears,

although it can still enter into a subleasing agreement, as it has with

Dick’s, must now get approvals from both Forbes and the City before it

can subdivide the property to act on that agreement. Thus, the Resolution

has depreciated and diminished the value of Sears’s contract.

Having concluded the Resolution is an impairment of contract, we must

consider “whether the nature and extent of the impairment is

constitutionally tolerable in light of the importance of the State’s objective,

or whether it unreasonably intrudes into the parties’ bargain to a degree

greater than is necessary to achieve that objective.” Searcy, 209 So. 3d at

1192 (quoting Pomponio, 378 So. 2d at 780).

The City’s public purpose justification for the Resolution is that it helps

to strengthen and maintain the mall’s aesthetic qualities. This

justification is neither “significant” nor “legitimate,” particularly where the

P.U.D. already sets forth aesthetic standards for the mall and already

requires architectural approvals. The City has failed to show how the

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Resolution accomplishes anything to further its supposed purpose beyond

what the P.U.D. already accomplishes. Additionally, the contract has been

substantially impaired as it gives both the City and Forbes the unbridled

discretion to disapprove of any attempts to divide property to effectuate a

sublease. Thus, the impairment “unreasonably intrudes into the parties’

bargain to a degree greater than is necessary to achieve that objective.” Id.

It is clear that the Resolution is an effort to “re-write the agreement

through governmental authority,” and that governmental authority’s

intervention resulted in the diminishment of Sears’s interest in a pre-

existing contract. Griffin, 65 So. 2d at 752.

Finally, the City contends that Sears has contractually waived its

impairment of contract claim. The sublease states that Sears “shall . . .

promptly comply with all laws and ordinances and the orders, rules, and

regulations and requirements of all Federal, State, County and municipal

governments . . . which may be applicable from time to time to the Demised

Premises . . . .” The City argues that the parties anticipated amendments

and changes to laws and rules and that Sears agreed to follow those laws

and rules, as amended. We note, however, that in the very same

paragraph of the contract, Sears reserved “the right to contest the

applicability of any laws, ordinances, orders, rules, regulations or

governmental requests . . . .” (emphasis added).

We must read the entire agreement as a whole, and “[t]he language

being construed should be read in common with other provisions of the

contract.” Royal Oak Landing Homeowner’s Ass’n v. Pelletier, 620 So. 2d

786, 788 (Fla. 4th DCA 1993); Am. K-9 Detection Servs., Inc. v. Cicero, 100

So. 3d 236, 238-39 (Fla. 5th DCA 2012). The two provisions, read

together, indicate that Sears must follow all laws and ordinances, but that

it has the right to challenge those laws and ordinances where they are

illegal, or, as here, unconstitutional. Accordingly, Sears did not

contractually waive this issue and is free to challenge the Resolution.

We therefore conclude that the Resolution is unconstitutional as it

impairs Sears’s contract and is not “reasonable and necessary to serve an

important public purpose.” Searcy, 209 So. 3d at 1192.

III. SUBSTANTIVE DUE PROCESS

Sears next contends that the Resolution, in addition to being an

unconstitutional impairment of contract, also deprives it of substantive

due process because it requires Forbes and the City to approve

subdivisions of anchor tenant space without also setting forth any

standards or criteria upon which the City and Forbes are to base such a

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decision.

An individual’s substantive due process rights protect against the

“mere arbitrary or irrational exercise of power having no substantial

relation to the public health, the public morals, the public safety or the

public welfare in its proper sense.” WCI Cmtys., Inc. v. City of Coral

Springs, 885 So. 2d 912, 914 (Fla. 4th DCA 2004). For a government policy

to be unconstitutional, “it [is not] necessary that the record reveal that the

governing body or its members have in fact acted capriciously or

arbitrarily. It is the opportunity, not the fact itself, which will render an

ordinance vulnerable.” ABC Liquors, Inc. v. City of Ocala, 366 So. 2d 146,

150 (Fla. 1st DCA 1979). Thus, the Florida Supreme Court has instructed

that

[a]n ordinance whereby the city council delegates to itself the

arbitrary and unfettered authority to decide where and how a

particul[a]r structure shall be built or where located without

at the same time setting up reasonable standards which

would be applicable alike to all property owners similarly

conditioned, cannot be permitted to stand as a valid municipal

enactment.

N. Bay Vill. v. Blackwell, 88 So. 2d 524, 526 (Fla. 1956).

In Drexel v. City of Miami Beach, 64 So. 2d 317 (Fla. 1953), the plaintiff

was denied a permit to build a parking garage. The applicable city

ordinance stated that no parking garages should be built except “upon

‘approval and permit by the City Council . . . after a public hearing at

which due consideration shall be given to the effect upon traffic of the

proposed use . . . .’” Id. at 318 (alteration in original). The court stated

the ordinance was unconstitutional, reasoning:

In the present ordinance there is found no guide whatever to

aid the councilmen in deciding what permits should, and what

permits should not, be granted. Reading the ordinance in a

light most favorable to the city’s position, each councilman

was accorded the privilege of deciding in his own mind

whether he had duly considered the traffic problem and when

a majority of councilmanic minds concluded that such

consideration had been duly given and that the proposed

building would complicate traffic conditions, the composite

thought would ripen into a power that would take away

property. This, in our opinion, would be doing so in violation

of the guaranties of the State and United States Constitutions.

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Id. at 319.

Similarly, in City of Miami Beach v. Fleetwood Hotel, Inc., 261 So. 2d

801 (Fla. 1972), the city enacted an ordinance in order to regulate rents.

However, the ordinance failed to set “objective guidelines and standards

for its enforcement . . . nor [could] such be reasonably inferred from the

language of the Ordinance.” Id. at 805. Further, the ordinance vested

with a single individual, the City Rent Administrator, the “unbridled

discretion to determine which accommodations are to be controlled and a

number of other things.” Id. at 806. The court concluded that the

ordinance was unconstitutional because it failed to lay out any guidelines

for its enforcement. Id. at 805-06; see also Friends of the Great S., Inc. v.

City of Hollywood ex rel. City Comm’n, 964 So. 2d 827, 830 (Fla. 4th DCA

2007) (“In order for ordinances which provide decisional authority to be

constitutional, they must have mandatory objective criteria to be followed

when making a decision.”); ABC Liquors, 366 So. 2d at 149 (“Any

standards, criteria or requirements which are subject to whimsical or

capricious application or unbridled discretion will not meet the test of

constitutionality.”).

The City contends substantive due process protections do not apply to

non-legislative zoning decisions such as the Resolution. It is true that

substantive due process challenges are permitted for the alleged

deprivation of constitutional rights, and not the alleged deprivation of rights

arising under state law, such as zoning decisions. See McKinney v. Pate,

20 F.3d 1550, 1556 (11th Cir. 1994); Kantner v. Martin Cty., 929 F. Supp.

1482, 1486 (S.D. Fla. 1996). Thus, decisions based on the application of

zoning regulations will not be susceptible to substantive due process

challenges. See Kantner, 929 F. Supp. at 1486-87. However, a land use

regulation itself may be challenged under substantive due process. See

Restigouche, Inc. v. Town of Jupiter, 59 F.3d 1208, 1213-15 (11th Cir.

1995) (addressing the merits of whether a zoning regulation prohibiting

automobile sales violated the plaintiff’s substantive due process rights);

Kantner, 929 F. Supp. at 1487. In the present case, it is the Resolution

itself, not the application of the Resolution, that is being challenged. Thus,

the Resolution may be subject to a substantive due process challenge.

In the present case, the Resolution states:

Prior to any proposed structural modifications, installation of

kiosks, and/or any subdivision of an anchor tenant space into

any sub-space which requires separate business tax receipts

and/or newly separate licensing of any kind whatsoever for

12

the business enterprise intending to occupy the newly created

sub-space, anchor tenants must obtain City Council approval.

Prior to seeking City Council approval the subject anchor

tenant must obtain approval for the subject modification from

mall ownership.

The Resolution requires a tenant to “obtain approval” from both the City

Council and “mall ownership,” that being Forbes, to subdivide its anchor

tenant space, but it fails to identify any standards or criteria that would

govern when approval is to be granted or withheld. The Resolution, in

other words, grants the City and Forbes with “unbridled discretion” in this

matter. See Fleetwood Hotel, 261 So. 2d at 806. Therefore, we conclude

that the Resolution violates substantive due process and “cannot be

permitted to stand as a valid municipal enactment” because it permits the

City and Forbes to arbitrarily and capriciously deprive Sears of its property

rights as a Tenant pursuant to the contract negotiated and executed by

the parties. See N. Bay Vill., 88 So. 2d at 526. 2

The City argues that it had a rational basis for enacting the Resolution,

claiming the Resolution preserves the “form, function, and composition of

the Gardens PUD” and promotes “the health, safety, and welfare of the

public at large.” Although the interests described may be a legitimate

governmental interest, see City of Miami Beach v. Ocean & Inland Co., 3

So. 2d 364, 366-67 (Fla. 1941), the Resolution’s total lack of guidance

would allow for arbitrary and capricious enforcement “having no

substantial relation to the public health, the public morals, the public

safety or the public welfare in its proper sense.” See WCI Cmtys., 885 So.

2d at 914; cf. Estate of McCall v. United States, 134 So. 3d 894, 901-03

(Fla. 2014) (stating a medical malpractice statute was irrational when it

treated multiple claimants differently from a single claimant because there

was no reason to treat the two categories differently).

We next address Sears’s argument that it is entitled to an attorney’s fee

award against the City under 42 U.S.C. sections 1983 and 1988. Under

section 1983,

Every person who, under color of any statute, ordinance,

regulation, custom, or usage, of any State or Territory or the

District of Columbia, subjects, or causes to be subjected, any

2 We note that our opinion is limited to the Resolution itself. We express no

comment as to the architectural review requirements found within the P.U.D. nor

do we comment on any other municipal ordinance or code.

13

citizen of the United States or other person within the

jurisdiction thereof to the deprivation of any rights, privileges,

or immunities secured by the Constitution and laws, shall be

liable to the party injured in an action at law, suit in equity,

or other proper proceeding for redress . . . .

Section 1988 provides for attorney’s fees, stating, “In any action or

proceeding to enforce a provision of section[] . . . 1983, . . . the court, in

its discretion, may allow the prevailing party . . . a reasonable attorney’s

fee as part of the costs.” 42 U.S.C. § 1988(b).

As a preliminary issue, municipalities are liable under section 1983 but

only if a plaintiff shows: “(1) that his constitutional rights were violated; (2)

that the municipality had a custom or policy that constituted deliberate

indifference to that constitutional right; and (3) that the policy or custom

caused the violation.” McDowell v. Brown, 392 F.3d 1283, 1289 (11th Cir.

2004). As discussed above, Sears’s substantive due process rights were

violated, thus satisfying the first prong. Furthermore, Sears has satisfied

the second and third prongs because the City formally and expressly

created and adopted the unconstitutional Resolution. See Spell v.

McDaniel, 824 F.2d 1380, 1387 (4th Cir. 1987) (“Policy, in the narrow

sense of discrete, consciously adopted courses of governmental action may

be fairly attributed to a municipality . . . because (1) it is directly ‘made by

its lawmakers,’ i.e., its governing body . . . .” (quoting Monell v. Dep’t of

Social Servs., 436 U.S. 658, 694 (1978))).

Section 1988 requires courts to conduct a two-part inquiry. First,

“whether the plaintiff is a prevailing party,” and second, “if the plaintiff is

a prevailing party, what constitutes a reasonable fee award.” Boston’s

Children First v. City of Boston, 395 F.3d 10, 14 (1st Cir. 2005). As to the

first inquiry, “[a] plaintiff ‘prevails’ . . . ‘when actual relief on the merits of

his claim materially alters the legal relationship between the parties by

modifying the defendant’s behavior in a way that directly benefits the

plaintiff.’” Lefemine v. Wideman, 568 U.S. 1, 4 (2012) (quoting Farrar v.

Hobby, 506 U.S. 103, 111-12 (1992)). Having a declaratory judgment

entered in a party’s favor will generally satisfy the “prevailing party” test.

See id. A prevailing party is “ordinarily” entitled to recover attorney’s fees

“unless special circumstances would render such an award unjust.”

Hensley v. Eckerhart, 461 U.S. 424, 429 (1983) (citation omitted).

As a consequence of the present appeal, Sears is a prevailing party

under section 1988 as it has obtained the declaratory relief it sought.

Citing Farrar, the City argues that, even assuming Sears prevailed in

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its appeal, any victory on Sears’s part would be a merely nominal victory

for which Sears would not be entitled attorney’s fees. In Farrar, the

plaintiff sought substantial monetary damages but received only a nominal

award. The Court held that the plaintiff was not entitled to attorney’s fees.

Although the plaintiff was technically a “prevailing party,” the plaintiff had

failed to prove damages, “an essential element of his claim for monetary

relief.” Id. at 114-15. Thus, the Court stated that in such situations, “the

only reasonable fee is usually no fee at all.” Id.

The City contends that because Sears has not sought damages as part

of its substantive due process claim, Sears should not be entitled to

attorney’s fees. We conclude, however, that Farrar is distinguishable. In

Farrar, the plaintiff did not prevail in his attempt to secure substantial

damages whereas in the present case Sears has received precisely what it

requested: declaratory relief. The United States Supreme Court has

“repeatedly held . . . an injunction or declaratory judgment” will satisfy the

prevailing party test. Lefemine, 568 U.S. at 4; see also Sanchez v. City of

Austin, 774 F.3d 873, 882-83 (5th Cir. 2014) (explaining that Farrar does

not control where a party sues for, and obtains, declaratory or injunctive

relief even if the party receives only nominal damages). Here, because

Sears has “materially alter[ed] the legal relationship between the parties,”

we conclude Sears is entitled to attorney’s fees.

On remand, the trial court should, in calculating Sears’s fees, consider

both the hours expended and the reasonableness of the hourly rate and

“whether the expenditure of counsel’s time was reasonable in relation to

the success achieved.” Hensley, 461 U.S. at 433-37; see also Phelps v.

Hamilton, 120 F.3d 1126, 1131 (10th Cir. 1997) (“A court will generally

determine what fee is reasonable by first calculating the lodestar—the total

number of hours reasonably expended multiplied by a reasonable hourly

rate—and then adjust the lodestar upward or downward to account for the

particularities of the suit and its outcome.”).

IV. SUBLEASING RIGHTS

Sears also argues it has the contractual right to sublease and may do

so without Forbes’s approval. Thus, Sears asserts the trial court erred

when it failed to award declaratory relief in its favor.

In interpreting the Sears-Forbes sublease, we must “give effect to the

plain and ordinary meaning of its terms.” Golf Scoring Sys. Unlimited, Inc.

v. Remedio, 877 So. 2d 827, 829 (Fla. 4th DCA 2004). “Words should be

given their natural meaning or the meaning most commonly understood

in relation to the subject matter and circumstances, and reasonable

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construction is preferred to one that is unreasonable.” Id. (citation

omitted).

The Sears-Forbes sublease states, “[Sears] shall have the right to

assign this Lease and to sublet from time to time the Demised Premises or

any part thereof; subject however, to the terms and provisions of the

R.E.A.” (emphasis added). Although the sublease indicates certain

restrictions apply should Sears seek to sublease “all or substantially all of

the Demised Premises,” these restrictions do not apply because Sears

seeks to sublease less than “all or substantially all” of the premises, that

being only one floor of its two story mall location. Similarly, the R.E.A.

states that Sears may “lease all of any portion(s) of its building and/or

license departments therein . . . .” While the R.E.A. states Sears’s space

must be used for “retail and service purposes and for no other purposes,”

this restriction is also not prohibitive as Dick’s is a retailer. Therefore, we

conclude Sears may sublease to Dick’s without obtaining approval from

Forbes.

Forbes contends that, even if Sears does have subleasing rights, Dick’s

would have no right to install a sign as it is not permitted under the R.E.A

because Dick’s is not a party to the R.E.A.

The R.E.A does not expressly prohibit sublessees, such as Dick’s, from

installing signs. Rather the R.E.A. puts in place criteria by which signs

are to be installed and maintained. This signage criteria does not expressly

prohibit a sublessee from installing a sign nor does it prohibit Sears from

granting a sublessee the right to install a sign.

Generally, a sublessee can have no more rights to the subleased

premises than the sublessor had. See Thal v. S.G.D. Corp., 625 So. 2d

852, 853 (Fla. 3d DCA 1993). As a corollary to that rule, where a lease

includes the right to sublease, the sublessor may grant any rights and

privileges the sublessor has except where specifically prohibited. See Max

& Tookah Campbell Co. v. T. G. & Y. Stores, 623 P.2d 1064, 1067 (Okla.

Civ. App. 1981); Restatement (Second) of Prop.: Landlord & Tenant § 15.1

(Am. Law Inst. 1977) (“The interests of the landlord and of the tenant in

the leased property are freely transferable, unless: . . . (3) the parties to

the lease validly agree otherwise.”). Consequently, Sears has the right to

grant Dick’s signage rights that Sears has under the Forbes-Sears

sublease and the R.E.A.

Additionally, in interpreting an agreement, “the goal is to arrive at a

reasonable interpretation of the text of the entire agreement to accomplish

its stated meaning and purpose.” Am. K-9 Detection Servs., Inc. v. Cicero,

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100 So. 3d 236, 238-39 (Fla. 5th DCA 2012) (citation omitted). It would

be unreasonable to conclude that both the Forbes-Sears sublease and

R.E.A. expressly and unequivocally permit Sears to sublease to a retailer

while at the same time conclude that the R.E.A.’s signage criteria impliedly

prohibits a retail sublessee, such as Dick’s, from installing a sign. Where

the contract unambiguously gives Sears the right to sublease, we will not

rewrite the parties’ agreements to add to the agreement, such as in this

case, a prohibition on signage. See Peach State Roofing, Inc. v. 2224 S.

Trail Corp., 3 So. 3d 442, 445 (Fla. 2d DCA 2009). To do so would

effectively eviscerate Sears’s right to sublease and render its express

contractual rights merely illusory.

Forbes has also stated that the sublease is set to terminate soon and

Sears would be unable to extend the sublease if it subleases to Dick’s.

However, no such limitation appears in the sublease. The sublease states

that Sears “shall have the right to extend the term of this Lease for Four

(4) separate periods of ten (10) years each” so long as Sears is not in

“material default at the time of the exercise of such right” and Sears is

“operating the Demised Premises for retail purposes.” Further, nothing in

the sublease indicates Sears’s subleasing rights exist only for the initial

thirty-year term. Thus, we conclude Sears may extend its lease so long as

it is not in material default and is operating the leased premises for retail

purposes.

Forbes contends that Sears has asked us to “approve” its sublease with

Dick’s. Sears has neither asked this court, nor the court below, to

explicitly approve of its lease with Dick’s in toto, nor do we do so here. Our

opinion is limited to our interpretation of the Sears-Forbes sublease and

the R.E.A., and our conclusion that nothing within those agreements

requires Sears to seek approval before subleasing one floor of its two-story

lease, within the mall, to either Dick’s or any other retailer. We make no

comment on whether aspects of the Sears-Dick’s sublease, either as

planned or as implemented in the future, violate existing contractual

obligations, the P.U.D., or other any law or regulation. 3

CONCLUSION

3Specifically, Forbes has argued (1) that Dick’s potential sale of guns violates the

R.E.A.’s prohibition on creating “dangerous hazards” and (2) Sears has not gotten

the necessary approvals for signage. We do not consider the first argument as it

has been made prematurely. As to the second argument, while we conclude Sears

may grant its signage rights to Dick’s as part of a sublease, we do not comment

on whether any planned or implemented sign will in fact comply with the P.U.D.

or any other local ordinance.

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We conclude that the City unconstitutionally impaired Sears’s right to

contract and deprived Sears of its rights to substantive due process.

Because the City’s Resolution deprived Sears of substantive due process,

Sears is also owed attorney’s fees under 42 U.S.C. sections 1983 and 1988.

Finally, we conclude that the trial court erred in not granting declaratory

relief in Sears’s favor, and we specifically find that Sears has a right to

sublease, pursuant to the 1987 lease agreement.

Affirmed in part, reversed in part, and remanded with directions.

WARNER and FORST, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.

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