Caretta Trucking, Inc. v. Cheoy Lee Shipyards, Ltd.

• Citation: 647 So.2d 1028
• Decision Date: 21 December 1994
• Docket Number: No. 93-1267,93-1267
• Parties: 20 Fla. L. Weekly D20 CARETTA TRUCKING, INC., Appellant, v. CHEOY LEE SHIPYARDS, LIMITED, U.S. Paint Corporation, and Tom Fexas Yacht Design Corporation, Appellees.
• Court: Court of Appeal of Florida (US)

Page 1028

647 So.2d 1028

20 Fla. L. Weekly D20

CARETTA TRUCKING, INC., Appellant, v. CHEOY LEE SHIPYARDS, LIMITED, U.S. Paint Corporation, and Tom Fexas Yacht Design Corporation, Appellees.

No. 93-1267.

District Court of Appeal of Florida,

Fourth District.

Dec. 21, 1994.

Barry R. Cohen and Leo J. Spivack of Kleinfeld & Spivack, Miami, for appellant.

Anthony J. Carriuolo and Alan D. Danz of Fine Jacobson Schwartz Nash & Block, Fort Lauderdale, for appellee U.S. Paint Corp.

Joseph L. Mannikko of Frasier & Mannikko, Stuart, for appellee Tom Fexas Yacht Design, Inc.

ALVAREZ, RONALD V., Associate Judge.

Appellant Caretta Trucking, Inc. (Caretta), the plaintiff below, brings this appeal from an order that dismissed with prejudice Count III, breach of a third party beneficiary contract, of its amended complaint against defendant U.S. Paint Corp. (U.S. Paint), and entered final judgment in favor of that defendant.

STATEMENT OF FACTS AND CASE

Caretta contracted with Colonial Yacht Sales, Inc., (Colonial) to purchase a yacht. An order for the yacht was then placed by Colonial with Cheoy Lee Shipyards, Ltd., (Cheoy Lee), who manufactured the yacht according to the design, plans and specifications drafted by Fexas, the architect. According Following the dismissal of its original complaint, Caretta filed an amended complaint which contains six counts. Only one of the counts is relevant to this appeal:

to the specifications for this particular model, the exterior of the yacht was to be painted by Cheoy Lee with "Awlgrip # 6001, Off White," which was a paint product manufactured by U.S. Paint. As set forth in Caretta's amended complaint, no patent defects were visible when the yacht was delivered. However, as time and experience with the vessel were gained, numerous defects became apparent to Caretta. Among those defects was the "Awlgrip # 6001, Off White," paint with which the yacht had been painted. When Caretta informed the soon-to-be defendants of the alleged defects, each defendant asserted that the other defendants were responsible for the repairs. As a result of the position taken by the defendants, Caretta filed suit against Colonial, Cheoy Lee, Fexas and U.S. Paint seeking damages for the defects contained in the yacht purchased by Caretta.

Count III, breach of a third party beneficiary contract, directed against Defendant U.S. Paint.

Count III alleges that U.S. Paint breached a third party beneficiary contract:

58. At some time prior to March 31, 1989, the exact time being unknown to Plaintiff herein [Caretta], Defendant U.S. Paint and Defendant Cheoy Lee entered into an agreement, whether written or oral being unknown to Plaintiff herein, whereby Defendant U.S. Paint agreed to sell for a valuable consideration to Defendant Cheoy Lee, and Defendant Cheoy Lee agreed to buy one of its paint products, to wit "Allgrip [sic] # 6001, Off White".

59. Defendant U.S. Paint knew, at all times pertinent hereto, that Defendant Cheoy Lee purchased its said product for the purpose of painting and/or finishing hulls and superstructures which it was constructing for its customers, including Plaintiff herein.

Based on these allegations, the amended complaint states that "[Caretta] became by operation of law a third party beneficiary of the contract between" Cheoy Lee and U.S. Paint. The complaint goes on to allege that U.S. Paint breached its obligation under its contract with Cheoy Lee, "and its obligation to Plaintiff as third party beneficiary thereof," by manufacturing the paint in a defective manner and then delivering a defective batch to Cheoy Lee for use on Careta's yacht. As a result of U.S. Paint's breach, Caretta claimed to have been damaged to the extent of the cost of repainting the yacht, and sought that amount as relief.

U.S. Paint responded by moving to dismiss Count III with prejudice. This defendant argued that this count contained the same allegations as Count III of the original complaint, which was previously dismissed for failing to state a cause of action. The trial court had previously ruled that as a matter of law, Caretta was not a third party beneficiary of the contract between Cheoy Lee and U.S. Paint. The trial court agreed that the allegations contained in Count III of the amended complaint remained unchanged from those contained in the original complaint. Consequently, the trial court granted U.S. Paint's motion to dismiss with prejudice. It is noted that the trial court stated in its order that "At best, [Caretta] was an incidental third party beneficiary of the alleged contractual relationship between [U.S. Paint and Cheoy Lee], and [Caretta] therefore fails to state a cause of action against [U.S. Paint]." Caretta contends that the trial court erred by dismissing Count III with prejudice because this count contains all of the elements required to state a cause of action for breach of a third party beneficiary contract. Finally, Caretta requests that this court reverse the trial court's order.

THE LAW

On a motion to dismiss, the trial court is required to treat the factual allegations of the complaint as true. Also, the trial court is constrained to consider the factual allegations of the complaint in the light most favorable to the nonmoving party. Warren v. Monahan Beaches Jewelry Ctr., 548 So.2d 870 (Fla. 1st DCA 1989).

A person who is not a party to a contract may not sue for breach of that contract Thus, in order to plead a cause of action for breach of a third party beneficiary contract, the following elements must be set forth:

where that person receives only an incidental or consequential benefit from the contract. Metropolitan Life Ins. Co. v. McCarson, 467 So.2d 277 (Fla.1985). The exception to this rule is where the entity that is not a party to the contract is an intended third party beneficiary of the contract. Jacobson v. Heritage Quality Constr. Co., 604 So.2d 17 (Fla. 4th DCA 1992), dismissed, 613 So.2d 5 (Fla.1993). A party is an intended beneficiary only if the parties to the contract clearly express, or the contract itself expresses, an intent to primarily and directly benefit the third party or a class of persons to which that party claims to belong. Aetna Casualty & Surety Co. v. Jelac Corp., 505 So.2d 37 (Fla. 4th DCA 1987); Warren; Security Mut. Casualty Ins. Co. v. Pacura, 402 So.2d 1266 (Fla. 3d DCA 1981).

(1) a contract between A and B;

(2) an intent, either expressed by the parties, or in the provisions of the contract, that the contract primarily and directly benefit C, the third party (or a class of persons to which that party belongs);

(3) breach of that contract by either A or B (or both); and

(4) damages to C resulting from the breach.

Additionally, in order to find the requisite intent, it must be shown that both contracting parties intended to benefit the third party. It is insufficient to show that only one party unilaterally intended to benefit the third party. See Clark and Co. v. Department of Ins., 436 So.2d 1013, 1016 (Fla. 1st DCA 1983). Based upon the foregoing, the initial issue presented is whether, taking the well-pleaded allegations as true and viewing them in the light most favorable to Caretta, the allegations of Count III sufficiently pleads all of these elements.

ANALYSIS

An examination of Count III reveals that elements (1), (3) and (4) are sufficiently alleged. However, element (2), i.e., an intent, either expressed by the parties, or in the provisions of the contract, that the contract primarily and directly benefit C, the third party or a class of persons to which that party belongs, is absent.

At the outset, it is noted that Caretta...