BEACON PROPERTY MANAGEMENT v. PNR, Inc.

• Decision Date: 10 November 2004
• Docket Number: No. 4D99-627.,4D99-627.
• Citation: 890 So.2d 274
• Parties: BEACON PROPERTY MANAGEMENT, INC., and Ernest W. Willis, Appellants, v. PNR, INC., a Florida corporation d/b/a Goodfellas Restaurant, Appellees.
• Court: Florida District Court of Appeals

890 So.2d 274

BEACON PROPERTY MANAGEMENT, INC., and Ernest W. Willis, Appellants, v. PNR, INC., a Florida corporation d/b/a Goodfellas Restaurant, Appellees.

No. 4D99-627.

District Court of Appeal of Florida, Fourth District.

November 10, 2004.

Rehearing Denied January 27, 2005.

David J. Maher, Lance A. Harke and Harry J. Ross of the Law Office of Harry J. Ross, Boca Raton, and Harke & Clasby, LLP., Miami, for appellants.

C. Vincent LoCurto of Brown, LoCurto, & Robert, LLP., Fort Lauderdale, and Brian F. Labovick, of Labovick, Labovick, and Wald, P.A., Jupiter, for appellee.

FARMER, C.J.

This case recurs on remand from the Florida Supreme Court. In accord with the Supreme Court's Mandate, we reconsider PNR's claim under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) in light of the supreme court's holding that the statute "applies to private causes of action arising from single unfair or deceptive acts in the conduct of any trade or commerce, even if it involves only a single party, a single transaction, or a single practice." See PNR, Inc. v. Beacon Prop. Mgt., Inc., 842 So.2d 773, 777 (Fla.2003)

.

We begin with the facts stated by the supreme court as follows.

"The instant action arises from a business dispute involving the tenancy of PNR, Inc., in a building owned by Ocean One North, Inc. (`Ocean One'). In September of 1994, PNR purchased a restaurant and was assigned a lease to the restaurant's facility which was located on the third floor of a building owned by Ocean One. At the time of purchase, approximately eight years remained on the lease, and the lease contained a clause which provided an option to extend for an additional ten years. Ocean One is equally owned by Matt Giacomino, Ernest W. Willis, and their respective spouses. Willis and his spouse also jointly own Beacon Property Management, Inc. (`Beacon').

"Prior to PNR's purchase of the restaurant, Beacon served as the property manager of the building in which the restaurant was located. The terms of the property management agreement between Beacon and Ocean One required Beacon to collect rents from tenants, pay bills on the property, provide an accounting to the owners, and act as a liaison between the owners and tenants. The written agreement did not require Beacon to maintain the premises, and actually expired by its own terms two months prior to PNR's purchase of the restaurant. Under the provisions of the lease assigned to PNR, Ocean One was responsible for keeping the major structural components of the building in good repair.

"Contractual obligations notwithstanding, Giacomino continuously referred PNR to Beacon for maintenance requests. The president of PNR testified at trial that Giacomino led him to believe that Beacon was responsible for maintenance issues such as roof leaks, tar leaks through the air conditioning system, and other adverse conditions that PNR experienced with increasing frequency from the time of purchase and possession of the real property. Giacomino testified during these proceedings that he indeed believed Beacon to be responsible for this type of maintenance on the premises.

"PNR's requests for maintenance were unattended, resulting in numerous building code violations, and, eventually, even the north wall of the building collapsed on July 1, 1995. The collapse forced PNR to cease restaurant operations for a period of seven months. The restaurant was eventually evicted from the premises and it terminated operations. Evidence adduced at trial showed that contemporaneous with the events of this case, Willis and Giacomino were embroiled in their own business dispute in which Giacomino accused Willis and Beacon of intentionally neglecting the building as part of a plan to extinguish his interest in Ocean One.[¹] Following an eight-day trial, the jury returned a verdict against Willis and Beacon on all but one of PNR's causes of action, including PNR's claim that the methods employed in the failure of Ocean One, Willis, and Beacon to properly maintain the premises constituted unfair and deceptive trade practices under the FDUTPA. The jury awarded $1.2 million in damages, including $500,000 in punitive damages, against Willis, individually, and $540,000 in damages, including $140,000 in punitive damages, against Beacon."

842 So.2d at 773-75.

After remand, we granted oral argument to consider PNR's claim that the landlord's conduct in "intentionally neglecting" the premises and in failing to make necessary repairs "causing it to violate nearly every basic building code provision" amounted to an unfair and deceptive trade act or practice under FDUTPA. We also necessarily consider defendants' contrary argument that PNR is not entitled to relief under FDUTPA as a matter of law because PNR's claim does not involve a "consumer transaction." We have carefully examined the evidence regarding the deceptive and unfair trade practices acts.

In its review, the supreme court limited itself to the issue whether FDUTPA applies to a single act of deception. Its conclusion was, as we have just indicated, that it does. We now proceed with that understanding and turn to the questions described. The argument that FDUTPA applies only to a consumer transaction, if valid, implicates an asserted threshold for relief under the statute, and so we begin with it. As originally drafted, FDUTPA outlawed "[u]nfair methods of competition, and unfair or deceptive acts or practices in the conduct of any trade or commerce...." § 501.202, Fla. Stat. (1973). Although the general proscription of FDUTPA just quoted did not contain any indication that it was intended to be limited to a consumer transaction, the legislature included a definitional provision saying that:

"(1) `Consumer transaction' means a sale, lease, assignment, award by chance, or other disposition of an item of goods, a consumer service, or an intangible to an individual for purposes that are primarily personal, family, or household or that relate to a business opportunity that requires both his expenditure of money or property and his personal services on a continuing basis and in which he has not been previously engaged, or a solicitation by a supplier with respect to any of these dispositions."

§ 501.203(1), Fla. Stat. (1973). Then in 1979, the legislature added a definition of "consumer" saying:

"`Consumer' means an individual; child, by and through its parent or legal guardian; firm; association; joint adventure; partnership; estate; trust; business trust; syndicate; fiduciary; corporation; or any other group or combination."

Ch. 79-386, Laws of Fla.

We note that the definition of consumer includes several business entities, which would seem to extend its meaning beyond the traditional understanding of a consumer transaction as embracing the dealings of individuals and their families in matters affecting their personal or household use. If corporations, firms, joint ventures and business trusts are consumers for purposes of FDUTPA, it would also seem at first blush that they are equally entitled to its protections in business dealings, at least when they are themselves acting as consumers. On the other hand, it seems unnecessary to have any definition of consumer transaction if the act was not limited to personal or household dealings. And so, while the plain language of the statute did not appear to require that unfair or deceptive acts necessarily involve a "consumer transaction," that was the understanding reached in several federal cases.² See Monsanto Co. v. Campuzano, 206 F.Supp.2d. 1252, 1269 (S.D.Fla.2002)

(denying standing to a manufacturer under FDUTPA because it had previously engaged in the business involved, thus holding that the injury could not have arisen out of a consumer transaction); Big Tomato v. Tasty Concepts Inc., 972 F.Supp. 662, 663 (S.D.Fla.1997) (interpreting claim under prior version of statute because cause of action arose before amendment); Bryant Heating & Air Conditioning Corp. Inc. v. Carrier Corp., 597 F.Supp. 1045, 1053 (S.D.Fla.1984) (finding no consumer transaction based on the wording of the statutory definition); LJS Co. v. Marks, 480 F.Supp. 241, 244 (S.D.Fla.1979) (noting that Florida courts strictly construe definition of "consumer transaction").

In 1993, the legislature made some significant changes to FDUTPA. For one, it deleted FDUTPA's definitions of consumer transaction and supplier. See Ch. 93-38, § 2, Laws of Fla. At the same time, the legislature expanded the definition of consumer to add several business entities, including a catch-all "any commercial entity". Id. These changes coincided with an amendment to the statute adding the words "unconscionable acts or practices" to the general proscription. Ch. 93-38, § 3, Laws of Fla.

The logical implication by these definitional deletions is that they were intended to further a purpose of making the state statute at once different by offering some state law protection to purely commercial entities, yet consistent with its federal counterpart in its well established protection of personal, individual household dealings. We therefore conclude that the 1993 amendments to FDUTPA made clear that the statute is not limited to purely consumer transactions. It is now intended by its plain text to apply to any act or practice occurring "in the conduct of any trade or commerce" [e.s.] even as between purely commercial interests. § 501.204, Fla. Stat. (1993).

In this action, PNR used FDUTPA to sue defendants Beacon and Willis for damages. At least two state court decisions — rare events in FDUTPA litigation — have held that business entities may not use FDUTPA for damages actions unless they involve transactions in which the business entity was itself acting as a consumer. See N.G.L. Travel Assoc. v. Celebrity Cruises Inc., 764 So.2d 672 (Fla. 3d DCA 2000)

; and Warren Tech., Inc. v. Hines Interests Ltd. P'ship, 733 So.2d 1146 (Fla. 3d DCA 1999); see also § 501.211(...