Requiring Tenant Insurance

In a recent appellate decision, 1 Jedak Corp., v. Seabreeze Office Associates, LLC, a landlord lost an appeal where the landlord sued the tenant for breach of contract for failing to maintain insurance. Apparently, damage occurred on the premises, and the landlord’s insurer covered the damages; but the landlord did not have to pay any monies out of pocket. 

The trial court granted summary judgment in favor of the landlord, and the tenant appealed. The appellate court’s decision is stated below, in which it reversed the lower court ruling. It ruled that even though the tenant breached the lease, the landlord had no cause of action against the tenant because the landlord suffered no damages (i.e. his insurer covered the damages).

The appellate court noted that the landlord’s insurer did not join the action against the tenant. The footnote is noteworthy: it implies that the landlord’s insurer may have had a successful action against the tenant for failing to obtain insurance, because the landlord’s insurer became obligated to pay the damages (i.e. suffered damages as a third party beneficiary to the lease agreement), instead of the tenant’s insurance provider (had they obtained one).

Before filing suit against a tenant for breach of contract, make sure the landlord has suffered actual damages, and have the landlord’s insurer join the action where the insurer became obligated to pay for damages for which the tenant was contractually obligated to have insurance coverage.

1 Jedak Corp., v. Seabreeze Office Associates, LLC, 244 So. 3d 342 (Fla. 5th DCA 2018):

In this action arising from a written commercial lease agreement, Appellee, Seabreeze Office Associates, LLC (“Landlord”), obtained summary judgment for damages arising from the breach of contractual provisions requiring that Appellant, Jedak Corporation d/b/a Razzle’s (“Tenant”), indemnify and provide insurance coverage to protect Landlord from losses arising from Tenant’s occupancy of the premises. Although Tenant raises numerous issues on appeal, we need only address one, which we conclude is dispositive of this dispute. Because Landlord did not incur any damages that were caused by the breach of these particular lease provisions, the lower court erred in granting summary judgment in favor of Landlord and in denying summary judgment in favor of Tenant. Accordingly, we reverse and remand this cause with directions that summary judgment be entered in favor of Tenant. See Cas. Indem. Exch. v. Penrod Bros., 632 So.2d 1046, 1047 (Fla. 3d DCA 1993) (where landlord’s insurer fully covers loss, landlord suffers no compensable damages arising from tenant’s breach of contract).1[244 So.3d 343] 


COHEN, C.J., PALMER and TORPY, JJ., concur.