First Interstate Development Corp. v. Ablanedo
| Decision Date | 09 July 1987 |
| Docket Number | No. 67848,67848 |
| Citation | 511 So.2d 536,12 Fla. L. Weekly 341 |
| Parties | 12 Fla. L. Weekly 341 FIRST INTERSTATE DEVELOPMENT CORP., etc., et al., Petitioners, v. Carlos M. ABLANEDO, et al., Respondents. |
| Court | Florida Supreme Court |
John M. Starling of Holland, Starling & Severs, P.A., Titusville, for petitioners.
Kenneth A. Studstill of Kenneth A. Studstill, P.A., Titusville, for respondents.
This is a petition to review First Interstate Development Corp. v. Ablanedo, 476 So.2d 692 (Fla. 5th DCA 1985), concerning asserted fraud claims in a land development. The relevant district court ruling (1) upheld a compensatory damage judgment even though one of the fraud claims was improperly submitted to the jury, and (2) held punitive damages claims must be submitted to a jury where the underlying fraud claim is sufficient to warrant jury consideration. We accepted jurisdiction under article V, section 3(b)(3), Florida Constitution, based upon apparent conflict with Winn & Lovett Grocery Co. v. Archer, 126 Fla. 308, 171 So. 214 (1936), and Como Oil Co. v. O'Loughlin, 466 So.2d 1061 (Fla.1985). We quash that portion of the district court's opinion that denies petitioners a new trial on compensatory damages and approve the district court in its determination that punitive damages should have been submitted to the jury under the circumstances of this case.
The petitioner First Interstate Development Corporation developed Ocean Woods as a planned unit development consisting of single-family homes, cluster homes, and villas, totalling 300 units. Substantial areas were intentionally left undeveloped to create a natural environment. The respondents, as property owners in the development, initially instituted this action in 1980, primarily to obtain control over the homeowners association. In 1983, respondents amended their complaint to include allegations that the developers fraudulently misrepresented the entire project as an oceanfront development and that the developers fraudulently misrepresented that they would build a nature trail.
The record reflects that all of the individual respondents' properties were non-oceanfront. The oceanfront parcels were undeveloped at the time respondents purchased their subject properties. Testimony was not uniform regarding what the respondents were told or understood concerning the beachfront property. Some were told the entire project was a beachfront project; others stated that they relied exclusively on an advertising brochure, which they believed represented the planned unit development, including 600 feet of ocean frontage; others stated they were told that highrise condominiums were planned for that property; another group testified they were told there were no plans for the oceanfront property at that time, but that whatever was built would be different from the rest of Ocean Woods. The petitioners' advertising brochure is not clear whether the boundaries of the planned unit development include the oceanfront parcel in question. With regard to the nature trail, the record establishes that petitioners had constructed part of the nature trail and were constructing the balance when they were stopped by the city.
The trial court, at the end of all the evidence, found an insufficient basis for punitive damages and directed a verdict on that issue for the petitioners. The trial court submitted the alleged fraudulent claims on the oceanfront misrepresentation and the failure to complete construction of the nature trail to the jury for compensatory damages; the jury returned a compensatory damage verdict for fifty respondents in the amount of $304,600.25.
The district court affirmed the compensatory damage award, but reversed and remanded for a new trial on punitive damages. In so holding, the district court found no evidence that First Interstate had fraudulently promised to construct the nature trail and noted that petitioners had commenced construction "until they were stopped by the City." 476 So.2d at 694. The district court further stated, "[w]hile evidence on this failure to furnish the trail as promised may have been the basis for a breach of contract case, it does not in itself establish an intent to defraud." Id. After so holding, the district court rejected petitioners' contention that the jury's damage determination must be reversed because the amount attributable to the nature trail could not be separated from the alleged oceanfront fraud claim. The district court held, "where a general verdict form is submitted to the jury without objection, reversal is improper where no error is found as to one of several issues submitted to the jury on which the verdict may be properly based." 476 So.2d at 695 (citations omitted). The district court concluded, "we have no way of knowing what, if any, weight the jury placed on the testimony regarding the nature trail." Id. With regard to the development's oceanfront status, the district court found sufficient evidence to submit that issue to the jury. The district court then determined that, since the oceanfront misrepresentation was a fraudulent claim, the question of whether punitive damages were proper was for the jury, not the trial judge.
We first address the district court's holding that the compensatory damage verdict should be affirmed even though the evidence pertaining to the nature trail fraud and misrepresentation should not have been submitted to the jury. We disagree and find that the two-issue rule does not apply when two distinct claims for liability result in separate claims for damages in the same action. We previously summarized the two-issue rule as follows:
[W]here there is no proper objection to the use of a general verdict, reversal is improper where no error is found as to one of two issues submitted to the jury on the basis that the appellant is unable to establish that he has been prejudiced.
Whitman v. Castlewood International Corp., 383 So.2d 618, 619 (Fla.1980) (citing Colonial Stores, Inc. v. Scarbrough, 355 So.2d 1181 (Fla.1977). This rule applies to those actions that can be brought on two theories of liability, but where a single basis for damages applies. For instance, in products liability, the claim can be brought on both negligence and breach of implied warranty, but the measure of damages for the resulting personal injury is the same. That is not the circumstance in the instant case. Here, the fraud claim for failure to construct a nature trail and the claim for damages because of reduction in value of respondents' properties for the failure to complete the trail is distinct from the claim of diminished property values for the misrepresentation of the project as oceanfront. Each claim is distinct and has a separate measure of damages. Finding liability on one claim does not entitle the respondents to receive the total amount of damages attributable to both theories of liability. We will not presume that petitioners were not prejudiced by the improper submission of the nature trail issue to the jury. Consequently, the jury's compensatory damage award must be reversed.
The district court correctly determined that the issue of punitive damages in this case should have been submitted to the jury. In Winn & Lovett we explicitly stated that punitive damages are appropriate for any tortious conduct accomplished through fraud:
Exemplary damages are given solely as a punishment where torts are committed with fraud, actual malice or deliberate violence or oppression, or when the defendant acts willfully, or with such gross negligence as to indicate a wanton disregard of the rights of others.
....
In order to recover exemplary or punitive damages the declaration msut [sic] allege some general facts and circumstances of fraud, malice, gross negligence or oppression tending to show plaintiff's right to recover such damages in addition to damages by way of compensation.
126 Fla. at 327-28, 171 So. at 221-22 (emphasis added). The overwhelming weight of authority in this state makes it clear that proof of fraud sufficient to support compensatory damages necessarily is sufficient to create a jury question regarding punitive damages. *
This is so because intentional misconduct is a necessary element of fraud. Indeed, to prove fraud, a plaintiff must establish that the defendant made a deliberate and knowing misrepresentation designed to cause, and actually causing detrimental reliance by the plaintiff. See Lance v. Wade, 457 So.2d 1008, 1011 (Fla.1984). We conclude that the district court correctly ruled that the punitive damage issue was for the jury, not the judge, to decide once a case for fraud had been made.
For the reasons expressed, we quash that part of the district court decision regarding the two-issue rule and...
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