Fla. SC answers questions about contract breach, deceptive trade practices

TALLAHASSEE, Fla. (Legal Newsline) - The Florida Supreme Court answered four certified questions regarding state law in a breach of contract and deceptive trade practices case before the Eleventh Circuit Court of Appeals.

Justice R. Fred Lewis wrote the majority opinion, filed Jan. 10, and Justice Charles T. Canady wrote an opinion, concurring in part and dissenting in part, to the majority's answers.

"The action from which these certified questions arose involves a contract dispute between Dr. Alan Horowitch, M.D., a resident of Arizona, and Diamond Aircraft Industries Inc., a foreign corporation that operates in Florida and has an agent there.

"In June 2004, Horowitch contracted to buy a single engine jet aircraft from Diamond Aircraft for the price of $850,000. Diamond Aircraft, however, failed to deliver the aircraft to Horowitch and refused to complete the transaction unless he paid a purchase price of at least $1, 380, 000," the opinion states.

Horowitch filed an action in state circuit court seeking specific performance of the contract. He filed in Florida because of a provision in the contract which established exclusive jurisdiction and venue in the state for all disputes and controversies arising from the contract.

After the case was removed to federal court, an amended complaint was filed providing four claims: (1) specific performance; and in the alternative. (2) breach of contract; (3) breach of the covenants of good faith and fair dealing; and (4) deceptive trade practices under the Florida Deceptive and Unfair Trade Practiced Act.

Diamond Aircraft offered to settle for $40,000 but Horowitch did not accept the offer. The district court, applying Florida law, entered final summary judgment for Diamond Aircraft on the three contract claims; however, it permitted the deceptive trade practices claim to proceed under the Arizona Consumer Fraud Act rather than Florida law.

After a nonjury trial, the court entered judgment in favor of Diamond Aircraft on the final claim as well.

Diamond Aircraft then moved for attorney's fees under section 768.79, pursuant to its rejected offer of judgment, and also under provisions of the FDUTPA. They argued that although the court did not apply FDUTPA, because Horowitch invoked the application of FDUTPA's attorney fee provision for himself, it opened it up for Diamond Aircraft to be awarded the fees under section 501.2105.

The court denied Diamond Aircraft's motion for attorney's fees because Horowitch had asserted an equitable claim for non-monetary damages which the court ruled made section 768.79 inapplicable. On the deceptive trade practice based claim, the court applied Arizona, not Florida law, to the claim and since the Arizona statute did not have an applicable attorney's fees provision, the court ruled Diamond Aircraft was not entitled under that theory either.

Diamond Aircraft sought review of its motion for attorney's fees in the Eleventh Circuit leading to the four questions being certified to the state's high court. The questions and the Court's answers are listed below.

DOES FLA. STAT. § 501.2105 ENTITLE A PREVAILING DEFENDANT TO AN ATTORNEY'S FEE AWARD IN A CASE IN WHICH A PLAINTIFF BRINGS AN UNFAIR TRADE PRACTICES CLAIM UNDER THE FDUTPA, BUT THE DISTRICT COURT DECIDES THAT THE SUBSTANTIVE LAW OF A DIFFERENT STATE GOVERNS THE UNFAIR TRADE PRACTICES CLAIM, AND THE DEFENDANT ULTIMATELY PREVAILS ON THAT CLAIM?

"We answer this question in the affirmative because Horowitch invoked FDUTPA by filing an action asserting a claim seeking recovery under that act in which Diamond Aircraft ultimately prevailed."

IF FLA. STAT. § 501.2105 APPLIES UNDER THE CIRCUMSTANCES DESCRIBED IN THE PREVIOUS QUESTION, DOES IT APPLY ONLY TO THE PERIOD OF LITIGATION UP TO THE POINT THAT THE DISTRICT COURT HELD THAT THE PLAINTIFF COULD NOT PURSUE THE FDUTPA CLAIM BECAUSE FLORIDA LAW DID NOT APPLY TO HIS UNFAIR TRADE PRACTICES CLAIM, OR DOES IT APPLY TO THE ENTIRETY OF THE LITIGATION?

"We conclude that Diamond Aircraft is entitled to fees but only for the period of litigation until the federal district court held that FDUTPA did not apply to Horowitch's claim."

DOES FLA. STAT. § 768.79 APPLY TO CASES THAT SEEK EQUITABLE RELIEF IN THE ALTERNATIVE TO MONEY DAMAGES; AND, EVEN IF IT DOES NOT GENERALLY APPLY TO SUCH CASES, IS THERE ANY EXCEPTION FOR CIRCUMSTANCES IN WHICH THE CLAIM FOR EQUITABLE RELIEF IS SERIOUSLY LACKING IN MERIT?

"We answer both parts of this certified question in the negative and conclude that section 768.79 does not apply to cases that seek both equitable relief and damages, and that section 768.79 does not provide an exception to this rule for equitable claims that lack serious merit."

UNDER FLA. STAT. § 768.79 AND RULE 1.442, IS A DEFENDANT'S OFFER OF JUDGMENT VALID IF, IN A CASE IN WHICH THE PLAINTIFF DEMANDS ATTORNEY'S FEES, THE OFFER PURPORTS TO SATISFY ALL CLAIMS BUT FAILS TO SPECIFY WHETHER ATTORNEY'S FEES ARE INCLUDED AND FAILS TO SPECIFY WHETHER ATTORNEY'S FEES ARE PART OF THE LEGAL CLAIM?

"Due to the strict construction required of Florida Rule of Civil Procedure 1.442, we answer this certified question in the negative."

Canady concurred with the majority on all but the last question.

"I would decline to answer the second certified question relating to Florida's offer of judgment law, which concerns offers of judgment that do not specify whether attorney fees are a part of the claim. That question is rendered moot by the answer to the other question regarding Florida's offer of judgment law."

The Eleventh Circuit, informed by the Florida Supreme Court on these questions, will resume deliberations.