COASTAL FUELS MARKETING, INC., APPELLANT,
v.
LEASCO INVESTMENTS, ETC., ET AL., APPELLEE

Fla. 5th DCA | 1995-10-06
No. 94-332
PETERSON, C.J., and HARRIS, J., concur.
662 So. 2d 375 Florida District Court of Appeal, Fifth District (1995) Positive Treatment
Cited by 6 cases

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Synopsis

Coastal Fuels appeals a trial court judgment that reformed a 1977 Terminalling Agreement between Coastal and Leasco regarding oil terminal lease payments. The court had interpreted the CPI adjustment provision to always use 1977 as the base year, but the appellate court reversed this interpretation, holding that the plain language requires using the CPI from the immediately preceding five-year period for each adjustment.


Holding

The appellate court held that the trial court erred in rewriting the payment provision because the language was clear and unambiguous. The agreement unambiguously requires that monthly payments be adjusted according to the CPI for the previous five-year period; therefore, the 1982 adjustment should use 1977 CPI, but the 1987 and 1992 adjustments should use 1982 and 1987 CPI respectively, not 1977.


Headnotes

[1] Courts are not authorized to rewrite a contract when the provision at issue is clear and unambiguous.

[2] Contractual payment provisions requiring adjustment based on the Consumer Price Index for a previous five-year period must be applied using the index from the relevant pr…

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Key Quotes

“Courts are not authorized to rewrite a contract between the parties when the provision at issue is clear and unambiguous.”

Establishes the governing legal principle that courts cannot reform contracts with unambiguous language

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Facts & Procedural History

In 1977, Coastal and Leasco entered into a Terminalling Agreement for an oil terminal lease with a primary term ending August 31, 1997. The agreement …

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Opinion of the Court
THOMPSON, Judge.

THOMPSON, Judge.

Coastal Fuels Marketing, Inc. (“Coastal”), formerly known as Belcher Oil Company, appeals the trial court’s final judgment which construed the provisions of the parties’ Ter-minalling Agreement in favor of appellee Leasco Investments (“Leasco”). We affirm in part and reverse in part.

In 1977 Coastal and Leasco1 entered into a Terminalling Agreement whereby Leasco agreed to lease a parcel of real property to Coastal for use as an oil terminal in Coastal’s business operations. The primary term of the Terminalling Agreement began 7 September 1977 and ended 31 August 1997. The agreement included an option to extend the term for an additional ten years after the expiration of the primary term. For the first three years of the primary term, the agreement required Coastal to pay terminalling fees in the base sum of $54,400 per month. For the remaining seventeen years of the primary term, the agreement required Coastal to pay terminalling fees in the base sum of $30,000 per month. The agreement provided, however, that this base sum would be adjusted every five years to reflect the percentage change in the Consumer Price Index. Specifically, the agreement provided that:

On September 7,1982; September 7,1987; and September 7, 1992; the monthly payment shall be adjusted upward or downward using the percentage change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)— U.S. City Average and Selected Areas (Base Period 1967 = 100) for the previous five (5) year period (for September 7,1982, the monthly payment shall be calculated by multiplying $30,000 times the resultant of dividing the CPI-W for June 1982 by the Consumer Price Index for June 1977).

In 1987, a dispute arose between the parties concerning the calculation of the monthly payment due under this provision. Leasco took the position that the monthly payment should be calculated using the Consumer Price Index (CPI) for 1977; Coastal, on the other hand, contended that the CPI for 1982 was the appropriate figure. Coastal began making the adjusted monthly payment due under the provision as calculated by Leasco; however, Coastal subsequently filed this lawsuit seeking to recover overpayments and to obtain a declaration of its rights under the agreement.

After conducting a non-jury trial, the trial court entered a final judgment in favor of Leasco and against Coastal. In its final judgment, the trial court “reformed” the agreement to provide that the CPI for 1977 would be used in calculating the monthly payment due under the agreement for each adjustment period.

On appeal, Coastal contends that the trial court erred in rewriting the pay-. ment provision of the parties’ agreement. We agree. Courts are not authorized to rewrite a contract between the parties when the provision at issue is clear and unambiguous. Voelker v. Combined Ins. Co., 73 So. 2d 403, 408 (Fla.1954); North Am. Van Lines v. Collyer, 616 So. 2d 177, 179 (Fla. 5th DCA 1993). In the present case, the clear and unambiguous language of the payment provision states that the monthly payment due under the agreement shall be adjusted according to a formula which uses the CPI for the previous five-year period. At the time of the 1982 adjustment, therefore, the applicable CPI was the CPI for June 1977. In 1987 and 1992, however, the monthly payment should have been adjusted using the CPI’s for 1982 and 1987, respectively, and not 1977.

Accordingly, we reverse that portion of the trial court’s final judgment which changes the payment provision of the parties’ Termi-nalling Agreement to state that the applicable CPI is always the CPI for 1977. In all other respects, the final judgment is affirmed.2

AFFIRMED in part; REVERSED in part.

PETERSON, C.J., and HARRIS, J., concur. . Appellee Cyrus Luley is a general partner of Leasco, and appellee Wayne Tidwell is the managing general partner of Leasco.

. We reject Coastal’s additional argument that the trial court erred in construing the parties’ agreement to provide that an additional $5,000 monthly payment was due beginning September 1977 rather than September 1997. Further, in light of our holding, we conclude that the trial court did not err in dismissing Leasco's counterclaim for tortious interference or in refusing to award Leasco its attorney’s fees and costs.


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Citator

Cited By

  • Beach St. Bikes, Inc. v. Bourgett's Bike Works, Inc., 900 So. 2d 697 (Fla. 5th DCA 2005)
    …ration for the contract. For these reasons, Pompano Pats correctly argues that the lower court lacked authority to rewrite the contract where its provisions were clear and unambiguous. See, e.g., Coastal Fuels Marketing, Inc. v. Leasco Investments, 662 So. 2d 375, 376 (Fla. 5th DCA 1995). Accordingly, we reverse that portion of the final judgment finding that Pompano Pats breached the contract. Bourgett moves for attorneys fees and costs pursuant to the contract, which provides, “Dealer shall reimburse [Bou…
  • Hamm v. Eckler, 712 So. 2d 770 (Fla. 5th DCA 1998)
    …the payable be “for goods and services,” the trial court violated the rule that courts are not authorized to rewrite contracts between the parties where the provision at issue is clear and unambiguous. See Coastal Fuels Mktg., Inc. v. Leasco Invs., 662 So. 2d 375, 377 (Fla. 5th DCA 1995)(citing Voelker v. Combined Ins. Co. of America, 73 So. 2d 403, 408 (Fla.1954); North Am. Van Lines v. Collyer, 616 So. 2d 177, 179 (Fla. 5th DCA 1993)). Eckler answers that the OSHA fine was usual and customary, as Hamm had…
  • Staly v. Staly, 799 So. 2d 1100 (Fla. 5th DCA 2001)
    …PER CURIAM. AFFIRMED. See Coastal Fuels Marketing, Inc. v. Leasco Investments, 662 So. 2d 375 (Fla. 5th DCA 1995). COBB, GRIFFIN and PLEUS, JJ., concur.…

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