Peebles v. Puig , 223 So. 3d 1065 ( 2017 )

Third District Court of Appeal
State of Florida
Opinion filed May 10, 2017.
Not final until disposition of timely filed motion for rehearing.
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No. 3D15-2237
Lower Tribunal No. 06-8787
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R. Donahue Peebles,
Appellant,
vs.
Dora Puig, etc., et al.,
Appellees.
An Appeal from the Circuit Court for Miami-Dade County, Sarah I. Zabel,
Judge.
Berger Singerman LLP, and Michael J. Higer and Colleen A. Maranges, for
appellant.
Schlesinger & Associates, P.A., and Michael J. Schlesinger, Joshua B.
Bochner and Gal Rosenzweig; Billbrough & Marks, P.A., and Geoffrey B. Marks,
for appellees.
Before EMAS, LOGUE and SCALES, JJ.
SCALES, J.
Appellant, defendant below, R. Donahue Peebles, appeals a final judgment
awarding Appellee, plaintiff below, Dora Puig, the amount of $423,100 in
damages after a jury found Peebles liable for fraudulent misrepresentation. We
reverse the judgment because Peebles’s conduct giving rise to Puig’s fraud claim
was not independent, separate and distinct from the conduct forming the basis of
Puig’s breach of contract claim.
I. Facts
The facts are not in dispute. In 2000, Puig, a licensed Florida real estate
sales person, entered into an employment agreement with a real estate developer,
Collins Avenue Associates, LLC (“Collins Avenue”). Collins Avenue was the
developer of a high-end condominium complex located in Miami Beach, The
Residences at the Bath Club (“Bath Club”). Pursuant to that contract, Puig was to
serve as the Bath Club’s sales and marketing director. Puig was required to
develop and implement the marketing plan for the sales of Bath Club units and, in
exchange, she received a salary of $12,500 per month, plus a one percent
“override” commission on each unit sold by Collins Avenue.
After entering into this agreement, Collins Avenue restructured itself. As
part of the restructuring, PADC Marketing, LLC, a licensed real estate brokerage
firm, was formed to act as the exclusive broker to market the sale of Bath Club
units. Collins Avenue and PADC entered into a marketing/brokerage agreement
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that required Collins Avenue to pay commissions to PADC; and, in turn, PADC
was required to pay the Bath Club’s sales staff, including Puig. After extensive
negotiations involving Collins Avenue, PADC and Puig, Puig consented to the
assignment of her employment agreement from Collins Avenue to PADC. Puig
was expressly designated as an intended third-party beneficiary to those provisions
of the agreement between Collins Avenue and PADC related to Collins Avenue’s
commission obligations.
During construction of the Bath Club, several purchasers sought to re-sell
their units to other buyers. Peebles, as principal of Collins Avenue and the sole
owner of PADC, assured Puig that Puig and other Bath Club sales agents would be
paid commissions on these resale units pursuant to their employment contracts.
Puig and her sales team re-sold twenty-three condominium units. After PADC
initially paid Puig commissions on seven of the twenty-three resale units, Peebles,
on behalf of PADC, advised Puig that these payments were made in error.
According to Peebles, while PADC was entitled to – and collected – commissions
on resale units, Puig’s employment agreement provided for payment of
commissions only on units Collins Avenue initially sold to buyers, and not on units
re-sold by buyers. PADC did not pay Puig a commission for the remaining
sixteen resale units. By deducting commissions due to Puig on Bath Club units
sold by Collins Avenue, PADC recouped the commissions it claimed were
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erroneously paid to Puig. It is undisputed that Puig’s employer/broker was PADC
at the time of the resales.
Initially, Puig sued PADC and Collins Avenue, alleging breach of contract,
unjust enrichment and quantum meruit. Subsequently, Puig amended her complaint
to add Peebles as a defendant and, significantly, to add a count of fraudulent
misrepresentation as to Peebles individually.1 Essentially, Puig’s fraud claim
against Peebles alleged that Peebles knowingly made false statements to Puig that
PADC would pay Puig a commission based on the resale of Bath Club units. Puig
alleged that Peebles had no intention of paying such commissions, and that Puig
relied on Peebles’s statements to expend efforts to accomplish the twenty-three
resales. Prior to trial,2 both Collins Avenue and Peebles stipulated that Puig’s
employment agreement obligated PADC to pay Puig a commission on resale units,
and that the commissions due to Puig totaled $423,100. The trial court granted
Puig summary judgment against Collins Avenue based on Puig being a third-party
beneficiary to the brokerage agreement between Collins Avenue and PADC. In
1 Puig’s amended complaint incorporated counts of breach of contract, breach of
third-party beneficiary contract, breach of implied contract, quantum meruit, unjust
enrichment, and fraudulent misrepresentation.
2 After PADC filed for bankruptcy in April of 2009, the trial court stayed all
proceedings against all of the defendants. This Court quashed the stay order in
Puig v. PADC Marketing, LLC, 26 So. 3d 45 (Fla. 3d DCA 2009) (“Puig I”),
concluding that the automatic stay applicable to the bankruptcy debtor (i.e.,
PADC) was inapplicable to the other defendants because “Peebles, PADC, and
Collins Avenue are separate and distinct entities.” Id. at 46.
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May of 2015, the case proceeded to trial against Peebles on the fraud claim.3 The
trial court denied Peebles’s motion for directed verdict, and the jury returned a
verdict against Peebles in the amount of $423,100, the exact same amount that
Puig had obtained in her summary judgment on her third-party beneficiary claim
against Collins Avenue. The trial court denied Peebles’ post-trial motions and
entered judgment for Puig against Peebles in the amount of $423,100, plus interest.
This appeal timely ensued.
II. Standard of Review
Peebles seeks review of the trial court’s denial of his motion (i) to dismiss
Puig’s fraud claim, (ii) for summary judgment, and (iii) for directed verdict.
Because our review involves questions of law, we employ the de novo standard of
review. Health Options, Inc. v. Palmetto Pathology Servs., P.A., 983 So. 2d 608,
613 (Fla. 3d DCA 2008); Sierra v. Shevin, 767 So. 2d 524, 525 (Fla. 3d DCA
2000).
III. Analysis
It is well settled in Florida that, where alleged misrepresentations relate to
matters already covered in a written contract, such representations are not
3 After obtaining her summary judgment against Collins Avenue, but prior to
proceeding to trial against Peebles, Puig dismissed her implied contract and
quantum meruit claims, while the trial court dismissed Puig’s unjust enrichment
claim. The trial court also entered judgment in favor of Collins Avenue on the
breach of contract claim. Thus, the sole, remaining count for trial was Puig’s fraud
claim against Peebles.
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actionable in fraud. La Pesca Grande Charters, Inc. v. Moran, 704 So. 2d 710, 712-
13 (Fla. 5th DCA 1998) (explaining the difference between fraud in the
inducement and fraud in the performance, the latter not constituting a separate
cause of action from that of a concurrent breach of contract action). It is similarly
well settled that, for an alleged misrepresentation regarding a contract to be
actionable, the damages stemming from that misrepresentation must be
independent, separate and distinct from the damages sustained from the contract’s
breach. Rolls v. Bliss & Nyitray, Inc., 408 So. 2d 229, 237 (Fla. 3d DCA 1981).
Both of these legal principles are rooted in the notion that, when a contract is
breached, the parameters of a plaintiff’s claim are defined by contract law, rather
than by tort law.4
In this case, Puig alleged, and the jury obviously found, that Peebles made
fraudulent misrepresentations that, to a certain extent, led Puig to continue to
perform her contractual employment duties by re-selling Bath Club units.
Peebles’s company, PADC, declined to pay Puig commissions for those resales;
instead, Peebles retained these funds. There is no dispute that Puig’s employment
contract predated the alleged misrepresentations by Peebles (and, therefore, fraud
in the inducement to contract is not at issue in this case). There is also no dispute
that the damages sought by Puig and awarded to Puig by the jury are the identical
4We do not evaluate this case under the economic loss rule. See Tiara Condo.
Ass’n v. Marsh & McLennan Cos., 110 So. 3d 399 (Fla. 2013).
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damages Puig sustained as a result of PADC’s failure to pay her commissions for
resales.
While we have scoured the record in this case to find evidence supporting
the jury’s verdict, we can find no evidence of a tort or tort damages, independent
and distinct from PADC’s breach of contract.5 Puig’s breach of contract claim is
premised entirely on Puig’s contractual entitlement to commissions on resold Bath
Club units. Peebles’s alleged misrepresentations, luring Puig into performing under
her contract certainly explain – and plainly prove – PADC’s breach of contract
with Puig. In our view, however, Peebles’s inducement to Puig to perform her
existing contract is not separate and distinct from the contract breach itself as to
give rise to an independent fraud claim against Peebles. When, as here, a contract
has been breached, a tort action lies only for acts independent of those acts
establishing the contract’s breach. Ginsberg v. Lennar Fla. Holdings, Inc., 645 So.
2d 490, 494 (Fla. 3d DCA 1994) (“It is well established that breach of contractual
terms may not form the basis for a claim in tort. Where damages sought in tort are
the same as those for breach of contract a plaintiff may not circumvent the
contractual relationship by bringing an action in tort.”) As reprehensible as the jury
may have found Peebles’s actions to be, those actions neither converted Puig’s
5 We note that the trial court instructed the jury that “there can be no fraud where
the alleged misrepresentations relate to matters already covered in the written
employment agreement.”
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claim for contract damages into a claim for tort damages, nor imposed on Peebles
personal liability for PADC’s contractual obligations.
There is nothing in the record indicating that Puig suffered any distinct
damages separate and apart from the damages she suffered as a result of PADC’s
failure to honor its contract with Puig. Therefore, any dispute regarding the
applicability of the contract’s commission provision to resales existed irrespective
of anything Peebles might have said to Puig. The parties’ contractual obligations –
and whether Puig was entitled to commissions for resale units – were based on the
language of the employment contract between Puig and PADC, to which Peebles
was not a party.
At the end of the day, Puig was damaged not because of Peebles’s
misrepresentations, but because PADC failed to honor its contractual obligations.
Under such circumstances, Florida does not allow a party damaged by a breach of
contract to recover the exact same contract damages via a fraud claim. Ghodrati v.
Miami Paneling Corp., 770 So. 2d 181, 183 (Fla. 3d DCA 2000) (“A plaintiff . . .
may not recover damages for fraud that duplicate damages awarded for breach of
contract.”).
III. Conclusion
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Puig’s damages resulted from, and were occasioned by, PADC’s breach of
contract, and not by any independent, separate or distinct conduct of Peebles.
Therefore, the trial court should have entered a directed verdict for Peebles on
Puig’s fraud claim.6
Reversed and remanded for proceedings consistent with this opinion.
6 We need not, and do not, reach the issue of whether Puig’s fraud claim is
precluded by the application of section 475.42(1)(d) of the Florida Statutes.
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