Not
final until disposition of timely filed motion for rehearing.
Appeal
and cross-appeal from the Circuit Court for the Fifteenth
Judicial Circuit, Palm Beach County; David Crow and Gregory
M. Keyser, Judges; L.T. Case No. 502005CA000709XXXXMB.
William J. Cornwell, Seth A. Kolton, and David K. Friedman of
Weiss, Handler & Cornwell, P.A., Boca Raton, for
appellants.
Bard
D. Rockenbach of Burlington & Rockenbach, P.A., West Palm
Beach; Michael A. Avenatti and Scott H. Sims of Eagan
Avenatti, LLP, Newport Beach, California; and Edward M. Ricci
of Edward M. Ricci, P.A., West Palm Beach, for appellees.
Levine, J.
The
buyers appeal, and the sellers cross-appeal, a final judgment
awarding the sellers attorney's fees incurred during the
sale of a cemetery as well as punitive damages. The issue
presented for our review is whether the sellers, after
choosing affirmation over rescission of a disputed contract,
can be awarded attorney's fees as damages. We find that
once the sellers chose affirmation of the contract, the
sellers could not be awarded attorney's fees as damages.
As such, we reverse. We affirm the sellers' cross-appeal
without discussion, finding it to be without merit.
The
sellers retained a law firm and its attorneys ("attorney
defendants") to represent them in matters relating to
the sale of a cemetery. The buyers purchased the cemetery for
$6, 125, 000. Unbeknownst to the sellers at the time, an
attorney at the law firm worked both sides of the transaction
and received a kickback of $100, 000 from the buyers after
the sale closed.
Upon
learning what transpired, the sellers filed a complaint
against the attorney defendants as well as the buyers. The
sellers alleged that the attorney defendants' actions
resulted in the sale of the cemetery for less than fair
market value. The attorney defendants settled. As to the
buyers, the operative complaint alleged counts for
intentional misrepresentation and willful non-disclosure,
breach of contract, conspiracy to breach fiduciary duty,
aiding and abetting breach of fiduciary duty, and civil
theft. The sellers also asserted a claim for punitive damages
against buyers DFG Group and Edward Falcone.
After
trial, the jury entered a verdict against the buyers on all
counts. As to damages, the jury found that the sellers
sustained $0 in "damages relating to the sale of the
business and land." The jury further found that the
sellers incurred $2, 000, 000 in "damages relating to
attorneys' fees and costs incurred in connection with the
transaction." As to punitive damages, the jury awarded
$2, 110, 000 against DFG Group and $100, 000 against Edward
Falcone.
The
buyers moved for judgment notwithstanding the verdict,
arguing that attorney's fees were not a proper element of
damages. The trial court granted the motion as to breach of
contract and civil theft. However, the court denied the
motion as to the remaining claims relating to fraud and
breach of fiduciary duty, thereby leaving the damage award
intact. The trial court applied a setoff for the amount paid
by the attorney defendants who settled and entered a final
judgment in favor of the sellers for $900, 000.
Whether
the trial court applied the correct measure of damages is a
question of law reviewed de novo. Del Monte Fresh Produce
Co. v. Net Results, Inc., 77 So.3d 667, 673 (Fla. 3d DCA
2011). "[W]here a judgment is predicated on a verdict
award that is contrary to the law and not permissible by law,
the judgment based thereon constitutes fundamental
error." Palm Beach Cty. v. Awadallah, 538 So.2d
142, 143 (Fla. 4th DCA 1989); see also Stevens v. Allegro
Leasing, Inc., 562 So.2d 380, 381 (Fla. 4th DCA 1990)
(recognizing that fundamental error occurs where a party
recovers damages to which it has no right under the law).
The
goal of damages in tort actions is to "restore the
injured party to the position it would have been in had the
wrong not been committed." Totale, Inc. v.
Smith, 877 So.2d 813, 815 (Fla. 4th DCA 2004) (citation
omitted). Damages in a tort claim depend on whether the
plaintiff rescinds rescission or affirms the contract.
Sundie v. Lindsay, 166 So.2d 152, 153 (Fla. 3d DCA
1964). If the plaintiff rescinds the contract, the plaintiff
is entitled to the expenses of preparing for performance,
including attorney's fees, to return him to the position
he was in at the time of the execution of the agreement.
Id. If, however, the plaintiff affirms the contract,
"he will be entitled to be compensated for the loss of
profits he would have earned if the agreement had been
performed, but not the cost of preparing to perform."
Id.
In the
instant case, once the sellers picked affirmance over
rescission, their damages were limited to the difference
between the sale price and the fair market value at the time
of the sale. Because the jury found no difference between the
sale price and the fair market value at the time of the sale,
the sellers, having received the benefit of the agreed-upon
bargain, were not entitled to any additional compensation.
Only if the sellers had elected rescission would they have
been entitled to their transactional attorney's fees. The
sellers could not retain the proceeds from the sale and also
recover attorney's fees associated with the transaction.
Therefore, reversal of the transactional attorney's fee
award is warranted.
The
trial court also awarded a total of $2, 210, 000 in punitive
damages. Because we reverse the transactional attorney's
fees award, there is no compensatory damage award to support
the punitive damage award. In the absence of any compensatory
damage award, the punitive damages award must also be
reversed. James Crystal Licenses, LLC v. Infinity Radio
Inc., 43 So.3d 68, 75-76 (Fla. ...