Houri v. Boaziz , 196 So. 3d 383 ( 2016 )

Third District Court of Appeal
State of Florida
Opinion filed March 9, 2016.
Not final until disposition of timely filed motion for rehearing.
________________
No. 3D14-1836
Consolidated: 3D14-1512
Lower Tribunal No. 08-78374
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David Houri, Skyrise Development Group, Inc., Financial Ocean
Services, LLC, Realty Advise LLC and Central Florida Hotel
Management, LLC,
Appellants,
vs.
Mordechai Boaziz,
Appellee.
Appeals from the Circuit Court for Miami-Dade County, Herbert Stettin,
Senior Judge.
Philip D. Parrish, for appellants.
Moskowitz, Mandell, Salim & Simowitz, Michael W. Moskowitz and Scott
M. Zaslav, (Fort Lauderdale), for appellee.
Before WELLS, ROTHENBERG and EMAS, JJ.
WELLS, Judge.
Plaintiff, Mordechai Boaziz, sued Defendants, Yizhak Toledano and David
Houri, as well as a number of entities owned either individually or jointly by these
two,1 seeking to recover millions of dollars in damages for their alleged breach of
fiduciary duties, fraud, and civil conspiracy in connection with three real estate
projects: The Residence Las Vegas condominium conversion; the Villaggio on the
Lakes condominium conversion; and a transaction involving real property in
Golden Isles (the Golden Isles project). Boaziz also claimed violations of Florida’s
Uniform Fraudulent Transfer Act with respect to The Residence Las Vegas and
Villaggio projects.
The crux of Boaziz’s action, as set out in his Third Amended Complaint,
was that he, Toledano, and Houri were engaged in a joint venture and while he was
distracted by the worsening health of his elderly parents, Toledano and Houri had
deliberately set out to take advantage of the trust and confidence reposed in them,
and had devised and carried out an elaborate scheme by which they fraudulently
transferred and concealed millions of dollars generated in connection with these
projects.
1Toledano owns and used FCI and 26 Realty in his real estate transactions. Houri
owns Financial Ocean Services, LLC (“FOS”) and controls Realty Advice, LLC.
Toledano and Houri formed Skyrise Development Group, Inc. (“Skyrise”) to
engage in real estate transactions.
2
The following facts relating to the three projects at issue are relatively
uncontested and straight forward.
The Residence Las Vegas Condominium Conversion Project
This project commenced on November 1, 2004, when Boaziz, an
experienced developer with dozens of condominium conversions under his belt,
personally executed a $55,000,000 contract to purchase a 504 unit apartment
complex in Las Vegas, Nevada. The following March, Boaziz assigned this
contract to a Nevada limited liability company, The Residence Las Vegas, LLC—
an entity in which Skyrise Development Group, Inc. was to hold an 83.34%
interest and in which Boaziz was to hold a 16.66% interest.
Six weeks after the contract was assigned to The Residence Las Vegas,
LLC, its members, Skyrise and Boaziz, executed an operating agreement to govern
“the purchase, development, operation, management, marketing and resale” of this
project. This operating agreement, accorded management oversight and control of
the Las Vegas project to Skyrise, the LLC’s majority member, and clearly stated
that the parties understood and agreed that all prior representations and
understandings by and between the parties were encompassed within the operating
agreement and that the operating agreement encompassed the entire agreement
between the parties with regard to this project:
Section 14.3 Integration. This Operating Agreement sets forth
all (and is intended by all parties herein to be an integration of all) of
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the promises, agreements, conditions, understandings, warranties and
representations among the parties hereto with respect to the Company,
the Company business and the property of the Company, and there are
no promises, agreements, conditions, understanding, warranties, or
representations, oral or written, express or implied, among them other
than as set forth herein.
Section 14.8 Entire Agreement, Etc. This agreement (together
with the Exhibits hereto, or agreements provided for herein, which
constitute a part hereof, and the other documents delivered pursuant
hereto) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements and understandings of the parties with respect to the
subject matter hereof.
Approximately one month after signing this operating agreement, Skyrise
and Golan Equity Management, LLC, an entity owned by Boaziz, executed another
operating agreement relating to this project. The stated purpose of this agreement
was to form and operate a Florida limited liability company, The Residence
Florida, LLC, to either develop, operate, manage, market, and resell real property
or to acquire an interest in other entities which were engaged in such activities,
more specifically the Nevada limited liability company’s interest in the Las Vegas
condominium conversion project.
This operating agreement, like the operating agreement governing the
Nevada limited liability company, identified the same two members: Skyrise (an
entity owned by Houri and Toledano) with an 83.34% interest and Golan (an entity
owned by Boaziz) with a 16.66% interest. And like the operating agreement
governing the Nevada limited liability company, this agreement represented that it
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encompassed the entire agreement between the parties and that all prior
representations and understandings between the parties were encompassed within
the agreement.
After this agreement was executed, the parties amended the operating
agreement for the Nevada limited liability company, The Residence Las Vegas,
LLC, to reflect that Skyrise and Boaziz no longer were members but that now the
sole member of the Nevada company was The Residence Florida, LLC (an entity
whose members were Skyrise and Golan). The amended operating agreement, like
the two operating agreements before it, included the same integration clause and a
clause regarding the entirety of the parties’ understanding.
Purchase of the Las Vegas apartment complex was closed on June 25, 2005.
Villaggio on the Lakes Condominium Conversion Project
This project commenced in January 2005, when Houri and Toledano
identified a potential condominium conversion project in Florida, the Villaggio on
the Lakes project. In March 2005, Villaggio on the Lakes Development, LLC was
formed to purchase the Villaggio Lakes property. The sole member of this
company is Villaggio Holdings, LLC, an entity owned equally by Boaziz, Houri,
and Toledano individually. The operating agreements for both Villaggio on the
Lakes Development, LLC and Villaggio Holdings, LLC expressly state their
purpose as the purchase and development of the Villaggio Lakes condominium
5
conversion project, and like the agreements made with regard to The Residence
Las Vegas conversion, include identical or virtually identical integration clauses
and provisions regarding the entirety of the understanding between the parties.
The Golden Isles Project
The Golden Isles project involved the purchase of property in Hallandale
Beach, Florida. Boaziz located the property and invited Houri and Toledano to be
equal partners with him in the purchase and resale of the property. In October
2004, Boaziz, Houri, and Toledano purchased the property in Golden Isles for
$3,500,000. Unlike the Residence Las Vegas project or the Villaggio on the Lakes
project, no operating or other written agreements were ever executed by the parties
with regard to this project.
The Claims Made Below
Claiming the existence of an overarching joint venture agreement, Boaziz
alleged, with regard to The Residence Las Vegas project, that Toledano and Houri
breached fiduciary duties owed to him, conspired to commit fraud, and defrauded
him first by getting him to agree to take less than a one third interest in this venture
and then later by diverting funds from the project to themselves or entities
controlled by them. Boaziz also claimed that by committing these acts, Toledano
and Houri and the entities controlled by them violated Florida’s Uniform
Fraudulent Transfer Act.2
6
Again claiming a joint venture, Boaziz alleged as to the Villaggio on the
Lakes project, that Toledano and Houri had breached fiduciary duties owed to him,
conspired to commit fraud, and defrauded him by diverting funds to themselves or
entities controlled by them. He similarly claimed violation of Florida’s Fraudulent
Transfer Act as a consequence of these actions on the part of Toledano, Houri and
entities controlled by them.3
As to the Golden Isles project, Boaziz, claiming a joint venture, alleged that
Toledano and Houri breached fiduciary duties owed to him and that they had
conspired to defraud and had defrauded him.4
The Final Judgment
2 The claims as to The Residence Las Vegas were: breach of fiduciary duty against
Toledano (Count I) and Houri (Count II); fraud against Toledano and Houri (Count
III); civil conspiracy against Toledano and Houri (Count IV); and violation of
Florida’s Uniform Fraudulent Transfer Act against Toledano, Houri, Skyrise, FCI,
FOS, 26 Realty, and Realty Advice, LLC (Count V).
3 The claims as to Villaggio were: breach of fiduciary duty against Toledano
(Count IX) and Houri (Count X); fraud against Toledano and Houri (Count XI);
civil conspiracy against Toledano and Houri (Count XI [sic]); and violation of
Florida’s Uniform Fraudulent Transfer Act against Toledano, Houri, Central
Florida Hotel Management, LLC (“CFHM”), Skyrise, 26 Realty, and Realty
Advice (Count XIII).
4 The claims as to Golden Isles were: breach of fiduciary duty against Toledano
(Count V [sic]) and Houri (Count VI); fraud against Toledano and Houri (Count
VII); and civil conspiracy against Toledano and Houri (Count VIII).
7
The trial court found the parties were joint venturers in all three projects.
Without barely a mention of the parties’ numerous written agreements, the court
below found that Houri individually had breached duties owed to Boaziz, had
conspired to commit fraud, and had defrauded Boaziz with regard to all three
projects. The court below also found that Houri had fraudulently transferred funds
from the Las Vegas project to one of his companies, FOS, and that since Houri was
the “alter ego” of FOS, both he and it were liable to Boaziz. The court similarly
found that Houri had fraudulently transferred funds from the Villaggio project to
Skyrise and another of his companies, Realty Advice, LLC, and assessed damages
against Houri individually and against these companies on this claim as well.
Judgment5 was entered against Houri personally for breach of fiduciary duty,
fraud, and civil conspiracy with regard to his actions as they related to all three real
estate projects. Judgment also was entered against Houri personally for violating
Florida’s Uniform Fraudulent Transfer Act with regard to his actions as they
related to The Residence Las Vegas and the Villaggio projects. Likewise,
judgment was entered against FOS and Realty Advice, LLC, two entities owned by
Houri, as well as against Skyrise, a dissolved corporation owned by both Houri and
Toledano, finding FOS liable for violating Florida’s Uniform Fraudulent Transfer
5 The original final judgment executed on February 7, 2014, was amended on July
24, 2014, and incorporates the findings of fact and conclusions of law detailed in
the February 7 final judgment.
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Act with regard to The Residence Las Vegas project, and Skyrise and Realty
Advice liable for violating Florida’s Uniform Fraudulent Transfer Act with regard
to the Villaggio project.
Damages in the amount of $38,000,0006 were awarded against these
defendants, with over $20,000,000 of that sum being assessed against Houri
individually. Pursuant to a stipulation between the parties that no judgment would
be entered in excess of $5,000,000, an amended final judgment was entered
reducing the damage awards against Houri and FOS to $4,100,000 each, and in
total, to account for a $900,000 settlement from Toledano.7, 8
Houri and his associated companies appeal, claiming in substantial part that
the express provisions of the written agreements entered by the parties preclude
most, if not all, of the awards entered below. Because we agree that the
agreements governing The Residence Las Vegas and Villaggio projects preclude
6The Final Judgment awards including pre-judgment interest were:
Against Houri: $21,549,490.58
Against FOS: $14,897,664.00
Against Skyrise: $ 1,450,698.17
Against Realty Advice: $ 71,143.58
7Before trial, Boaziz settled for $900,000 with Toledano and the two entities,
Florida Capital Investments, LLC (“FCI”), and 26 Realty, LLC, controlled by
Toledano.
8The parties further stipulated that Boaziz’s total recovery would be limited to this
amount whether collected from any one or any combination of the defendants.
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liability from being assessed against Houri individually, we reverse the damage
awards assessed against him with regard to those entities. We also reverse the
judgment entered against FOS on The Residence Las Vegas project and the
judgment against Skyrise and Realty Advice on the Villaggio project, because, as a
matter of law, those entities could not be held legally accountable for violating
Florida’s Uniform Fraudulent Transfer Act. We do, however, affirm those
portions of the final judgment against Houri individually for breach of fiduciary
duty, fraud, and civil conspiracy, as to the Golden Isles project.
Houri’s Individual Liability as to The Residence Las Vegas Project
a. Breach of Fiduciary Duty, Fraud, Civil Conspiracy, Violation of FUFTA
The Final Judgment against Houri individually as it relates to The Residence
Las Vegas project is predicated on the trial court’s determination that he,
Toledano, and Boaziz were engaged in a joint venture relationship and as a
consequence Houri owed his fellow joint venturers a fiduciary duty to act in good
faith. See Reaves v. Hembree, 330 So. 2d 747, 749 (Fla. 1st DCA 1976) (“There is
a fiduciary relationship between joint venturers. They owe each other the utmost
good faith, fairness, and honesty.”). The record is clear however, that in the instant
case, the three men at the center of this controversy—Houri, Toledano and
Boaziz—instead of proceeding as a joint venture, from the beginning, chose to set
out the parameters of their relationship and its accompanying obligations through
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the creation of a series of limited liability companies with governing operating
agreements. See Florida Tomato Packers v. Wilson, 296 So. 2d 536, 539 (Fla. 3d
DCA 1974) (“A joint venture has been defined as a special combination of two or
more persons, who, in some specific venture seek to profit jointly without the
existence between them of any actual partnership, corporate, or other business
entity.”); accord Florida Trading & Inv. Co. v. River Const. Servs., Inc., 537 So.
2d 600, 602 (Fla. 2d DCA 1988); see generally Creation of Joint Venture, 9 Fla.
Pl. & Pr. Forms § 72:1 (“A joint venture is a special combination of two or more
persons jointly seeking a profit in some specific venture, without any actual
partnership, corporation, or other business entity.” (footnotes omitted)).
While the agreements entered by the parties could not eliminate a general
duty of good faith, see § 608.2445, Fla. Stat. (2004), they could and did otherwise
dictate the nature of their relationship and the obligations each owed to the others.
For as we observed in Dinuro Investments, LLC v. Camacho, 141 So. 3d 731, 742-
43 (Fla. 3d DCA 2014), “limited liability is one of the paramount reasons for
forming an LLC.” Here, it is precisely those layers of protection from personal
liability accorded by the parties’ agreements that preclude Boaziz from recovering
from Houri, individually.
As reflected in The Residence Las Vegas, Nevada operating agreement, this
project was to be pursued by Skyrise (not Houri individually) and Boaziz, with
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Skyrise acting as the project’s sole managing member. The Residence Florida
agreement also was created by and between Skyrise (again not Houri) and Golan
Equity Management, and like the Nevada agreement confirmed that this project
was to be pursued by its two members: Skyrise and Golan. It was this entity,
comprised of Skyrise and Golan, which ultimately became the sole member of The
Residence Las Vegas.9 Thus, Skyrise as managing member of The Residence Las
Vegas owed a duty of loyalty and a duty of care to its sole member The Residence
Florida. See § 608.4225, Fla. Stat. (2004). Houri was not, therefore, a player in
this game at all, other than being a part owner of Skyrise.
Nowhere in Boaziz’s 45-page complaint did Boaziz seek to pierce either
Skyrise’s corporate veil or, for that matter, the corporate veil of any of the other
limited liability companies that he, Toledano, and Houri created. “The law is clear
that the mere ownership of a corporation by a few shareholders, or even one
shareholder, is an insufficient reason to pierce the corporate veil. ‘[E]ven if a
corporation is merely an alter ego of its dominant shareholder or shareholders, the
corporate veil cannot be pierced so long as the corporation’s separate identity was
lawfully maintained.’” Gasparini v. Pordomingo, 972 So. 2d 1053, 1055 (Fla. 3d
DCA 2008) (quoting Lipsig v. Ramlawi, 760 So. 2d 170, 187 (Fla. 3d DCA
9 Similarly, each of the other two agreements governing this project name
Skyrise—not Houri—as manager and accord that entity broad management and
control authority.
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2000)); Dania Jai-Alai Palace, Inc. v. Sykes, 450 So. 2d 1114, 1120 (Fla. 1984)
(“The mere fact that one or two individuals own and control the stock structure of a
corporation does not lead inevitably to the conclusion that the corporate entity is a
fraud or that it is necessarily the alter ego of its stockholders to the extent that the
debts of the corporation should be imposed upon them personally.”) (quoting
Advertects, Inc. v. Sawyer Indus., Inc., 84 So. 2d 21, 23 (Fla.1955)). With no
claims propounded and no determination made that Skryise’s corporate identity
should be disregarded, no judgment against Houri personally could be assessed for
breach of fiduciary duty, fraud, or conspiracy as to this project.
b. Boaziz’s Fraudulent Inducement and Fraud Claims
We further reject Boaziz’s claim that he is entitled to a judgment against
Houri individually for fraudulently inducing him to reduce what was to be his one
third interest in the project by half to take only a 16.66% interest. We do so first
because each of the documents executed by Boaziz establish that this project
always was contemplated to be between Skyrise and Boaziz or one of Boaziz’s
entities and not between Skyrise’s principals (Houri and Toledano) and Boaziz.
Early on, at least six weeks before Boaziz surrendered one half of his contemplated
interest in this project, he assigned the contract in which he was to be the sole
purchaser of the Las Vegas apartment complex to The Residence Las Vegas,
LLC—an entity with two members, Skyrise and Boaziz. The document evidencing
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the assignment was not signed by Houri but by Toledano as president of Skyrise
Development Group, Inc. as managing member of The Residence Las Vegas, LLC.
Six weeks after this assignment, Boaziz received a check from Skyrise
Development Group, Inc., the manager of the project, bearing the notation “sale of
16.66% of Canyon Lake, NV.” Boaziz subsequently executed three operating
agreements governing the purchase, ownership, development, management of the
Las Vegas property, each of which established that the participants in this project
were Skyrise and Boaziz. As all of this confirms, at all times, Boaziz was fully
aware that as he was dealing with Skyrise and not Houri personally on this project.
Here, as with his other claims relating to this project, Boaziz neither sought to
secure nor secured any relief from Skyrise for fraudulently inducing him to
decrease his interest in The Residence Las Vegas project. Rather, Boaziz’s entire
fraudulent inducement claim rests on acts purportedly performed by Houri
individually.
A corporation can, of course, act only through its agents. See Morgan Int’l
Realty, Inc. v. Dade Underwriters Ins. Agency, Inc., 617 So. 2d 455, 459 (Fla. 3d
DCA 1993) (“[I]it is well established ‘that a corporation can only act through its
officers and agents.’ Browning v. State, 101 Fla. 1051, 1054, 133 So. 847, 848
(1931).”). And, as already stated, simply acting on behalf of a corporation or
owning most or all of its shares does not subject a corporate representative or
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shareholder to individual liability. See Gasparini, 972 So. 2d at 1055. Since
Boaziz did not allege a basis on which Skyrise’s corporate identity could be
disregarded, and since no basis for doing so was found by the court below,
judgment could not be assessed against Houri personally on these claims.
c. Boaziz’s FUFTA Claims
For the same reason, liability could not be assessed against Houri on count V
of the complaint for violation of Florida’s Uniform Fraudulent Transfer Act.
Absent a determination that Skyrise engaged in fraudulent transfers, and a
determination that evidence existed to support piercing its corporate veil, liability
could not be assessed against either FOS or Houri as the “alter ego” of FOS for
receiving a fraudulent transfer. We therefore reverse the judgment on count V
against Houri and FOS for violating Florida’s Uniform Fraudulent Transfer Act.
d. Conclusion
In sum, the multi-layered limited liability companies and their operating
agreements outlined herein (created in part by Boaziz himself), with Houri
personally neither a member nor a manager, and with many of the claims
addressing injury to the limited liability companies rather than Boaziz himself, all
preclude recovery by Boaziz from Houri, individually. Accordingly, the judgment
against Houri individually on counts II for breach of fiduciary duty, III for fraud,
IV for civil conspiracy, and V for violation of Florida’s Uniform Fraudulent
15
Transfer Act, all related to The Residence Las Vegas project, are reversed.
Similarly, the judgment against FOS on count V for violation of Florida’s Uniform
Fraudulent Transfer Act is reversed.
Houri’s Individual Liability as to the Villaggio Project
a. Breach of Fiduciary Duty, Fraud, Civil Conspiracy, Violation of FUFTA
Here, as with The Residence Las Vegas project, the finding of a joint venture
cannot be the premise for a recovery by Boaziz. The parties’ written agreements
confirm that the parties intended to operate this project, as they did with regard to
The Residence Las Vegas, pursuant to written agreements, through a series of
limited liability companies. See Florida Tomato Packers, 296 So. 2d at 539;
accord Florida Trading & Inv. Co., 537 So. 2d at 602. Also, as was the case with
the Las Vegas project, Boaziz made no attempt to pierce the corporate veil of the
entities he had helped form, and thus was bound by the limitations to liability those
entities created. See Dania Jai-Alai Palace, Inc., 450 So. 2d at 1120.
Moreover, because of the agreements in place, Boaziz could not recover on
claims that Houri improperly diverted funds from the Villaggio project to entities
that Houri owned or controlled (Skyrise and Realty Advice).10 This is so because
Boaziz had no ownership interest to protect in Villaggio on the Lakes
10Although Boaziz also sought to impose liability on FOS in the counts relating to
the Villaggio project, no liability was assessed in the final judgment against this
entity, in connection with that project.
16
Development, LLC, the entity that “purchased, developed, operated, marketed,
maintain[ed]/ and or [sold] the parcels of real property”11 at issue here. To the
contrary, that entity was wholly owned not by Boaziz, Toledano, and Houri but
solely by Villaggio Holdings, LLC. Thus, it was to that entity, Villaggio Holdings,
that a duty of care was owed. see § 608.2445, Fla. Stat. (2005).
This action was not, however, brought by Villaggio Holdings, LLC, the
“injured” party, but individually by Boaziz (one of the three members of that
entity). “Generally, a shareholder cannot sue in the shareholder’s name for injuries
to a corporation unless there is a special duty between the wrongdoer and the
shareholder, and the shareholder has suffered an injury separate and distinct from
that suffered by other shareholders.” Braun v. Buyers Choice Mortg. Corp., 851
So. 2d 199, 203 (Fla. 4th DCA 2003); see also Dinuro, 141 So. 3d at 738
(confirming that a shareholder may bring suit to address an injury separate and
distinct from that sustained by other stockholders, however, if the injury is
primarily against the corporation, then the action belongs to the corporation).
In this case, any “wrongdoer” was one or more of three managing members
of a wholly owned subsidiary company, Villaggio on the Lakes Development,
whose purported wrongs resulted in injury to its sole shareholder/member,
Villaggio Holdings LLC, its parent holding company. As one of three members of
11This statement was in the recitals portion of the Villaggio on the Lakes
Development, LLC Operating Agreement.
17
that entity (Villaggio Holdings), Boaziz only suffered a harm that flowed from an
initial harm to Villaggio Holdings. He was, therefore, without authority to bring
this action directly, and certainly could not tag Houri, individually. Thus, and
primarily, this action was brought against the wrong party—Houri, individually,
rather than the LLC responsible for the wrongs alleged. Additionally, the action
was brought by the wrong party—Boaziz—rather than the LLC, he and his
business cohorts had created to be the sole owner of the Villaggio on the Lakes
Development. With no effort to pierce the corporate shields carefully erected by
these parties, the trial court was not at liberty to ignore the corporate entities they
had chosen to employ to conduct their business. See Dania Jai-Alai Palace, Inc.,
450 So. 2d at 1120. Either or both of these errors support the conclusion we reach
herein.
b. Fraud in the Inducement
We write separately to address a claim similar to that made as to the Las
Vegas Project—that but for Houri’s (and Taledano’s) mis-statements, Boaziz
would have struck a better deal for himself. Here, Boaziz claims he was
fraudulently induced to contribute most of the equity to the Villaggio project but
accept only a 33% interest in the project. To establish fraud in the inducement,
Boaziz had to allege and prove (1) that Houri made a statement concerning a
material fact; (2) that he knew or should have known was false when made; (3) that
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he intended that Boaziz act on his false statement; and (4) that Boaziz reasonably
acted thereon and was damaged as a result. See Gimini Inv’rs III, L.P. v. Nunez,
78 So. 3d 94, 97 (Fla. 3d DCA 2012); see also Rhodes v. O. Turner & Co., LLC,
117 So. 3d 876 (Fla. 4th DCA 2013) (stating the element of fraud as (1) a false
statement of specific material fact; (2) known to be false when made; (3) made for
the purpose of inducing reliance; and (4) on which another justifiably relied to his
detriment). While a fraudulent statement generally must concern a past or existing
fact, a promise to act in the future may be actionable if made with no intention of
performing. Id.; Mejia v. Jurich, 781 So. 2d 1175, 1177 (Fla. 3d DCA 2001)
(confirming that an action for fraud usually must be predicated on a statement
concerning a past or existing fact, however, “if the plaintiff can demonstrate that
the person promising future action does so with no intention of performing or with
a positive intention not to perform”).
Fraud must be pled with particularity and must not only specifically identify
a misrepresentation of fact but also identify when, where, or the manner in which it
was made. Cedars Healthcare Grp., Ltd. v. Mehta, 16 So. 3d 914, 917 (Fla. 3d
DCA 2009) (“The factual basis for a claim of fraud must be pled with particularity
and must specifically identify misrepresentations or omissions of fact, as well as
time, place or manner in which they were made”); Robertson v. PHF Life Ins. Co.,
702 So. 2d 555, 556 (Fla. 1st DCA 1997) (“Florida Rule of Civil Procedure
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1.120(b) requires that allegations of fraud be pled with specificity” and must
identify the time, place or manner in which the representations were made).
Count XI alleging fraud in the inducement against Houri as to the Villaggio
project satisfies none of these requirements. In its entirety, the complaint as to this
claim states only that at some unspecified time and under some unidentified
circumstances, Houri “misrepresented” that he and Boaziz were making the same
contribution to this project for the same interests:
As described above, Toledano and Houri each misrepresented
to Boaziz that each partner and co-venturer would make equal equity
contributions to the Villaggio Project so that Boaziz would agree to
take only a 1/3 interest in the project. Toledano and Houri made such
representations to induce Boaziz to enter into a limited liability
company operating agreement relating to the Villaggio Project
reflecting such an ownership interest. Boaziz would not have entered
into such agreement had he known such representations by Toledano
and Houri.
This falls far short of alleging with particularity when this representation was made
and under what circumstances it was made—that is, in January of 2005 when this
project was first identified, three months later when operating agreements were
signed, or sometime in between when the parties were putting the project together.
This also fails to state that when the representation was made that Houri either
knew or should have known that he was not going to contribute the same or
substantially the same as Boaziz for a similar interest. In sum, Boaziz failed to
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state a claim for fraudulent inducement with regard to this project on which he
could recover.
The final judgment entered below underscores these shortcomings and
confirms that fraud in the inducement was not established. The judgment finds
only that “Houri knew [the representation that he would invest one-third of all
required equity for the Villaggio Project] was false since the greater weight of the
evidence reflects that he invested far less than one-third of all required funds.” The
fact Houri invested fewer funds in this project than did Boaziz establishes neither
that Houri’s representation about his intended contribution was false when it was
made or that he had no intention of making the promised contribution. To the
contrary, this determination confirms only that at some point in time the parties
contemplated making equal or substantially equal capital contributions for receipt
of equal interests in this project and that ultimately Houri did not contribute the
same amount of cash as did Houri. As this confirms, no fraud in the inducement
was proved to exist. Nor was any alleged. Boaziz is, therefore, bound by the
terms of the agreements he entered with regard to this project.
c. Conclusion
The judgment entered against Houri on counts X for breach of fiduciary
duty, count XI for fraud, count XI [sic] for civil conspiracy, and count XIII for
violation of Florida’s Uniform Fraudulent Transfer Act, all related to the Villaggio
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project, is, therefore, reversed. Because Boaziz enjoyed no individual right of
action stemming from Houri’s alleged wrongdoing, we reverse the judgment
against Skyrise and Realty Advise on count XIII for violation of Florida’s Uniform
Fraudulent Transfer Act.
Houri’s Individual Liability as to the Golden Isles project
A different result obtains with regard to the Golden Isles project. With no
operating agreements in place as to the Golden Isles project, we cannot say the trial
court erred either in finding that a joint venture existed as to that project or as to
the duties associated with that designation. We therefore affirm that portion of the
final judgment holding Houri personally liable for breach of fiduciary duty, fraud,
and civil conspiracy as alleged in counts VI, VII, and VIII of the third amended
complaint relating to the Golden Isles project.
Conclusion
In light of our other rulings herein reversing the awards entered below with
regard to The Residence Las Vegas and the Villaggio projects, we remand for
recalculation of the amount of damages to be awarded on the Golden Isles project
with the caveat that the amount awarded take into consideration the Toledano
settlement.12
12The total amount awarded on these counts before reduction to account for the
Toledano settlement was $907,888.58 which sum included prejudgment interest.
22
Affirmed in part, reversed in part, and remanded for proceedings consistent
with this opinion.
23