Anglo American Auto Auctions, Inc. v. Tuminello

• Decision Date: 04 June 1999
• Docket Number: No. 98-1665.,98-1665.
• Parties: ANGLO AMERICAN AUTO AUCTIONS, INC., et al., Appellants/Cross Appellees, v. Joseph TUMINELLO and Barbara Tuminello, et al. Appellees/Cross Appellants.
• Court: Florida District Court of Appeals

732 So.2d 1218

ANGLO AMERICAN AUTO AUCTIONS, INC., et al., Appellants/Cross Appellees, v. Joseph TUMINELLO and Barbara Tuminello, et al. Appellees/Cross Appellants.

No. 98-1665.

District Court of Appeal of Florida, Fifth District.

June 4, 1999.

Anthony Deglomine III, and Brandon S. Peters of Dean, Mead, Egerton, Bloodworth, Capouano & Bozarth, P.A., Orlando, for Appellants/Cross Appellees.

John F. MacLennan and Raymond R. Magley of Smith, Hulsey & Busey, Jacksonville, for Chapter 7 Bankruptcy Estate of Appellee/Cross Appellant Tuminello.

John B. Liebman and Bruce E. Chapin of O'Neill Chapin, Marks, Liebman, Cooper & Carr, Orlando, for Appellee/Cross Appellant Brody.

ON MOTION FOR CLARIFICATION

ANTOON, J.

We grant appellants' motion for clarification, withdraw our previous opinion dated April 1, 1999, and issue this opinion in its stead.

Joseph Tuminello and Ronald Brody (appellees) sued Anglo American Auto Auction Management, Inc., and Dealers Auto Auction of Sanford, Inc. (appellants), alleging fraudulent misrepresentation. The matter went to trial and the jury returned a verdict in favor of appellees. The trial court entered final judgment in accordance with the jury's verdict. This appeal timely followed. Appellants contend that they are entitled to receive a new trial because the trial court erred in striking their affirmative defense asserting the statute of frauds, and later denying their motion to amend their pleadings to conform with the evidence submitted at trial. Our review of the record reveals that the trial court should have granted the motion to amend and therefore we reverse the final judgment.

Appellees owned and operated Sanford Auto Auction, Inc. until June of 1990, when they sold the auction business to Tammy O'Donnell and Steven Levine. In consideration for the purchase O'Donnell and Levine executed, among other things, two promissory notes in favor of the appellees. Each note was for $1.4 million.

Soon after the sale of the auction closed, O'Donnell purchased Levine's interest in the auction. She then turned the management of the auction over to her father, Tommy O'Donnell. Unfortunately, the auction began to struggle financially. In an effort to solve the auction's financial difficulties, Tommy O'Donnell placed an advertisement in the Wall Street Journal seeking financing for the auction. Excel Holdings, Ltd., responded to the ad. Thereafter, Excel loaned money to the auction and sent its employee, Michael McClymont, to participate in the management of the auction in order to protect Excel's financial interests. Excel and O'Donnell also agreed that Excel would market the auction for sale. In response to Excel's marketing efforts, appellants agreed to purchase the auction. Relevant to this appeal, after the sale of the auction closed, appellees still had not received payment on the $2.8 million promissory notes which were executed in June 1990.

In an apparent effort to recover, among other things, the debt still outstanding on the promissory notes, appellees filed suit against appellants. The gravamen of the complaint was that Mr. McClymont, while acting as appellants' agent, made assurances to appellees that the debt still outstanding on the promissory notes would be paid to appellees after the sale of the auction to appellants closed. The complaint averred that these assurances constituted fraudulent misrepresentations, and that based upon Mr. McClymont's fraudulent misrepresentations appellees decided to forego their alleged right to institute legal action to enjoin the sale of the auction to appellants.

After the complaint and responsive pleadings had been filed, appellants filed a motion to amend their answer to add the affirmative defense that the action was barred by the statute of frauds. Appellants alleged that the statute of frauds provision set forth in section 725.01, Florida Statutes (1995), was an appropriate defense to appellees' claim of fraudulent misrepresentation because Mr. McClymont's assertion that appellees would be paid at closing amounted "to nothing more than an oral promise to pay the debt of another". See § 725. 01, Fla. Stat. (1995)(providing that no action shall be brought whereby to charge the defendant upon any special promise to answer or pay for the debt of another unless the promise is in writing and signed by the party to be charged). The trial court granted the motion to amend recognizing that it was irrelevant that the complaint alleged a claim of fraudulent misrepresentation and not breach of contract. See Canell v. Areola Housing Corp., 65 So.2d 849 (Fla.1953)

; Roberts Co., Inc., v. P.B.O., Ltd., 322 So.2d 633 (Fla. 3d DCA 1975); see also Puff`N Stuff of Winter Park, Inc. v. Bell, 683 So.2d 1176 (Fla. 5th DCA 1996); Ostman v. Lawn, 305 So.2d 871 (Fla. 3d DCA 1974). Appellees thereafter moved to strike the amended pleading, arguing that they were not intending to assert the value of the promissory notes as a measure of damages. Based upon this representation, the motion to strike was granted.

Prior to trial, appellants filed a motion in limine seeking a ruling prohibiting appellees from requesting the jury to award damages based upon the debt owed on the promissory notes. In arguing the motion, appellants relied on appellees' earlier assertion that they were not seeking to recover the amount owed on the note, but instead, the lost value of the business. The trial court denied the motion. During trial, the promissory notes were admitted into evidence, and appellees presented evidence that the balance still owed to appellees on...