Crossman v. Fontainebleau Hotel Corp.

In January 1955, women’s dress-shop owner Florence Lustig Crossman (plaintiff) was asked by Fontainebleau Hotel Corp. (Fontainebleau) (defendant) to open a dress shop in Fontainebleau’s new Miami hotel. The parties orally agreed on the terms of a lease. To help the hotel establish shopping for guests quickly, Crossman agreed to move in immediately, before the execution of the formal lease. Crossman took possession of the premises, spent $50,000 on fixtures and improvements, and gave the hotel $5,000 as a good faith deposit. After Crossman began improvements, Fontainebleau provided a written lease that Crossman alleged was not in accordance with the parties’ original oral agreement. Crossman’s husband and a hotel representative each penciled in changes to the lease, and both parties’ representatives approved the changes. Fontainebleau’s representative said that he would take the lease back to the hotel’s attorneys for redrafting, but Crossman never received an updated lease. Nevertheless, Crossman occupied the premises and began paying rent on March 1, 1955. In July 1958, Crossman notified Fontainebleau that she wished to exercise her option under the lease to renew the lease term. Fontainebleau denied that Crossman had an option to renew and demanded Crossman return the premises no later than September 1959. Crossman sued Fontainebleau, seeking a declaration that the lease had a renewal clause. Fontainebleau moved to dismiss, arguing that the entire lease was invalid, because it violated the Florida statute of frauds. Crossman responded that her possession of the property, payment of rent, and expenditure on improvements made the statute of frauds inapplicable to this lease. The district court found for Fontainebleau. Crossman appealed.