Land & Sea Petroleum Holdings, Inc. v. Leavitt

• Decision Date: 26 May 2021
• Docket Number: No. 4D20-282,4D20-282
• Citation: 321 So.3d 810
• Parties: LAND & SEA PETROLEUM HOLDINGS, INC., Appellant, v. Steven LEAVITT and Atlas Oil Supply Company of Florida, a/k/a Atlas Oil Company, Appellees.
• Court: Florida District Court of Appeals

321 So.3d 810

LAND & SEA PETROLEUM HOLDINGS, INC., Appellant,

v.Steven LEAVITT and Atlas Oil Supply Company of Florida, a/k/a Atlas Oil Company, Appellees.

No. 4D20-282

District Court of Appeal of Florida, Fourth District.

[May 26, 2021]

Kevin Markow and Darren M. Goldman of Becker & Poliakoff, P.A., Fort Lauderdale, and Jamie B. Dokovna of Becker & Poliakoff, P.A., West Palm Beach, for appellant.

William E. Grob and Sara G. Sanfilippo of Ogletree Deakins Nash Smoak & Stewart, P.C., Tampa, for appellee Atlas Oil Supply Company of Florida.

Forst, J.

Appellant Land & Sea Petroleum Holdings, Inc. appeals the trial court's entry of final judgment arising from a non-jury trial in which the court found in Appellant's favor on several claims but awarded zero dollars in damages. Appellant also appeals an order denying its motion to file a third amended complaint, wherein Appellant sought to add a claim for punitive damages.

With respect to the final judgment, Appellant asserts that: (1) the court applied the wrong legal standard in determining damages; (2) Appellant sufficiently established both lost profit and disgorgement damages; and (3) at a minimum, Appellant was entitled to nominal damages. As to the order denying Appellant's motion to amend, Appellant contends that the trial court committed reversible error because there was a substantive basis for the motion and any amendment would not have caused prejudice.

We hold that the trial court erred in not awarding Appellant nominal damages as to several of its claims. We otherwise affirm without discussion as to all other issues concerning the final judgment and order, as the trial court's findings and conclusions were supported by competent, substantial evidence and the applicable law.

Background

Appellant is a commercial fuel supplier and servicer based in South Florida, operating as a wholly owned subsidiary of its parent company, RKA Petroleum Holdings, Inc. ("the parent company"). "At all times, [Appellant] operated under the same management structure as [the parent company,] sharing the same executive management."¹

In June of 2012, Appellant hired Appellee Steven Leavitt ("Employee") as its Manager of Commercial Sales/Director of Sales and Operations, seeking to take advantage of Employee's wealth of experience and to expand into the Central Florida market. As a condition of employment, Employee signed a non-competition agreement, a confidentiality and non-solicitation agreement, and a non-disclosure agreement.

While employed, Employee was provided with open access to confidential and proprietary information, and interacted directly with the parent company's executive management, frequently attending executive meetings at the parent company's Michigan headquarters. Moreover, "a significant focus of [Employee's] work was to evaluate, plan and prepare for the expansion of [Appellant's] business into [C]entral Florida."

To help prepare for Appellant's entry into the Central Florida market, Employee prepared a business plan. The business plan "contained demographic information for the expanded market, competitive analysis, market supply, potential customers, and suggestions for hiring additional employees, including [a second employee] ... who was [Employee's] hand-picked recommendation for the role of [C]entral Florida sales manager." Based on Employee's business plan, Appellant hired the second employee in September of 2012.

However, the second employee resigned only two days after commencing employment with Appellant, and Employee resigned less than a month thereafter, having worked for Appellant just over four months. Despite the second employee's claim that he was resigning to work outside of this industry, both he and Employee subsequently began working for Appellee Atlas Oil Company ("Competitor")—a direct competitor of the parent company—within a month of their respective resignations, with Employee serving as Competitor's Florida Director of Sales and Operations.

The evidence adduced at trial demonstrated that even before Employee's resignation and ensuing position at Competitor, he had begun to serve Competitor's interests. Unbeknownst to Appellant, by August of 2012, Employee and Competitor were "engaged in numerous emails, meetings, and other exchanges that centered on [Competitor's] plans to [also] expand into the Florida market, with Orlando being the focus." In fact, despite preparing the business plan for Appellant, Employee sent a version of the draft of the plan—which contained references to Appellant—to Competitor. Moreover, while Employee was completing the new hire paperwork for the second employee, he was simultaneously advocating for Competitor to hire the second employee "for the exact same sales job as part of [Competitor's] Florida expansion plan."

The improper conduct was not limited solely to Employee. Following Competitor's receipt of Employee's business plan, Competitor "was alerted that the information [Employee] was providing was improper to share among competitors, or would-be competitors[,]" but nonetheless "continued to seek more information from [Employee] to perfect its own Florida plan" despite clear red-flags and knowledge that Employee was working for Appellant. Indeed, the evidence at trial established that Competitor was aware that Employee was working for Appellant and attending the parent company's management meetings.

Even beyond recruiting Employee and the second employee, Competitor began interviewing or recruiting several of the parent company's employees who "attended and contributed at [the parent company's] management meetings in Michigan." These efforts "were done under a cloak of secrecy[,]" as Competitor "had issued a directive that in-house counsel was to be copied on all internal communications concerning [parent company] candidates[.]"

It was with this factual underpinning that Appellant filed its ten-count Second Amended Complaint, which served as the operative pleading. Four counts requested injunctive relief and the remaining six counts sought damages from Employee and/or Competitor. Specifically, Appellant sought damages for Employee's breaches of the non-competition, confidentiality and non-solicitation, and non-disclosure agreements; Employee's breach of his fiduciary duties; Competitor's aiding and abetting Employee's breach of his fiduciary duties; and Competitor's tortious interference with Appellant's advantageous business relationships.

The matter proceeded to a four-day non-jury trial, after which the trial court entered a December 31, 2019 "Final Order After Trial" ("Order"). In the Order, the trial court found that Appellant had proven that Employee "breached each of the [three employment] Agreements and that [Appellant] suffered damages as a result." (emphasis added). Moreover, the trial court found that Employee had breached his fiduciary duties, as "[t]he record clearly established that [Employee] breached the duty of loyalty through his pre-hire conduct carried on with [Competitor] in its ramp up and expansion into Orlando."

With respect to Competitor's conduct, the trial court found that Competitor knew of Employee's fiduciary duties but provided assistance and encouragement in breaching them and that, "[a]s a result of [Competitor's] aid and support of [Employee's] fiduciary breaches, [Appellant] has suffered damages. " (emphasis added). Additionally, the trial court found that Competitor had tortiously interfered with Appellant's advantageous relationships, including Appellant's rights under the three restrictive employment agreements signed by Employee, with Appellant "suffer[ing] damages " as a result. (emphasis added).²

Based on these findings, the trial court determined that Appellant had suffered damages as to several of its claims and was the prevailing party on all substantive matters. However, the court also concluded that Appellant had failed to sufficiently prove its request for lost profit or disgorgement damages. The court then directed the parties to prepare a final judgment incorporating the court's findings and conclusions.

Accordingly, Appellant submitted to the court a letter with a proposed final judgment. Within the letter, Appellant stated: "As a result of the Court's Findings and Conclusions that liability had been established and that damages had been suffered, [Appellant] would still be entitled to nominal damages in the amount of $1.00 on each of the Counts upon which [Appellant] prevailed." Appellant's proposed final judgment assessed $1.00 on each of the claims upon which it prevailed at trial. However, despite Appellant requesting nominal damages and submitting a proposed final judgment, the trial court entered a final judgment which did not include nominal damages. Appellant thereafter timely appealed the final judgment.

Analysis

"When a decision in a non-jury trial is based on findings of fact from disputed evidence, it is reviewed on appeal for competent, substantial evidence." Acoustic Innovations, Inc. v. Schafer , 976 So. 2d 1139, 1143 (Fla. 4th DCA 2008). "However, where a trial court's conclusions following a non-jury trial are based upon legal error, the standard of review is de novo ." Id.

On appeal, Appellant argues that it is entitled to nominal damages. In response, Competitor argues that nominal damages may be waived if not timely requested. Competitor asserts that because Appellant did not request nominal damages in its pleadings, or at any point during trial, the trial court did not err in assessing zero damages. Thus, before addressing the issue of whether Appellant is entitled to nominal damages, we first address Competitor's argument that Appellant's request for nominal damages is waived.

A. Whether Appellant Waived Entitlement to Nominal Damages

As a preliminary matter, we first note Competitor's argument that Appellant did not specifically plead nominal damages is of no moment. This is because "[g]eneral damages ... need not be specifically pleaded."...