Issues Not Addressed in Settlement Agreement Require Separate Lawsuit

Facts: An owner sued its tenant for nonpayment of rent. Before the trial, the owner and tenant settled the dispute and entered into a settle agreement. The trial court approved the terms and retained authority to enforce them. The tenant agreed that if it violated any of the financial terms of the settlement agreement, the owner would automatically take possession of the buildings.

Almost immediately, the tenant violated the financial terms of the settlement agreement, and possession was returned to the owner. In addition, the tenant violated the original lease terms that required it to comply with all environmental laws, pay for any work necessary to fix any environmental violations, and provide monthly environmental reports.

The owner went back to the trial court and asked it to use the authority retained under the settlement agreement to address the environmental issues. After a hearing, the court ruled in favor of the owner and awarded damages. The tenant appealed, arguing that the court did not have the authority to award damages based on environmental violations.

Decision: A Florida appeals court reversed the trial court's decision and ruled in favor of the tenant.

Reasoning: The court ruled that because the damages sought by the owner were not addressed in the settlement agreement, a separate lawsuit would need to be filed in order to obtain relief.

• Boca Petroco, Inc., v. Petroleum Realty, LLC, September 2008