Comptech Intern., Inc. v. Milam Commerce Park, Ltd.

• Decision Date: 28 October 1999
• Docket Number: No. 336, No. 126., No. 93
• Citation: 753 So.2d 1219
• Parties: COMPTECH INTERNATIONAL, INC., etc., Petitioner, v. MILAM COMMERCE PARK, LTD., etc., et al., Respondents. Kennedy Electric, Inc., Petitioner, v. Carl Stallings, Jr., etc., et al., Respondents.
• Court: Florida Supreme Court

753 So.2d 1219

COMPTECH INTERNATIONAL, INC., etc., Petitioner, v. MILAM COMMERCE PARK, LTD., etc., et al., Respondents.

Kennedy Electric, Inc., Petitioner, v. Carl Stallings, Jr., etc., et al., Respondents.

Nos. 93,336, 93,126.

Supreme Court of Florida.

October 28, 1999.

Rehearing Denied January 26, 2000.

Charles M. Auslander of St. Louis, Guerra & Auslander, P.A., Miami, Florida; Joseph Pardo of Pardo & Pardo, P.A., Miami, Beach, Florida; and Jeffrey J. Pardo, Burlington, Connecticut, for Petitioner in No. 93,336.

David C. Appleby of Womack, Appleby & Brennan, P.A., Miami, Florida, for Respondents in No. 93,336.

Richard A. Solomon of Rumrell, Wagner & Costabel, LLP, Orlando, Florida, for The Florida Concrete & Products Association, Amicus Curiae in No. 93,336.

John Beranek of Ausley & McMullen, Tallahassee, Florida; and Carl B. Schwait and David A. Cornell of Dell Graham, P.A., Gainesville, Florida, for Petitioner in No. 93,126.

Paul M. Meredith and John F. Sproull, Palatak, Florida, for Respondents in No. 93,126.

Barbara Green and Roy D. Wasson, Miami, Florida, for The Academy of Florida Trial Lawyers, Amicus Curiae in No. 93,126.

QUINCE, J.

We have for review Comptech International, Inc. v. Milam Commerce Park, Ltd. 711 So.2d 1255 (Fla. 3d DCA 1998),¹ and Stallings v. Kennedy Electric, Inc., 710 So.2d 195 (Fla. 5th DCA 1998), which expressly and directly conflict with each other. We have jurisdiction. Art. V, § 3(b)(3), Fla. Const. We quash the Third District's decision in Comptech because the economic loss rule² does not preclude a statutory cause of action under the Southern Building Code, section 553.84, Florida Statutes (1995), and because the computers that were damaged during the renovations of the warehouse meet the definition of "other property" under the exception to the economic loss rule. We approve the Fifth District's decision in Stallings, holding the economic loss rule does not preclude a homeowner's claim against a subcontractor for violation of section 553.84, Florida Statutes (1995).

Comptech International v. Milam Commerce Park

Comptech International, Inc. (Comptech) was leasing warehouse space from Milam Commerce Park, Ltd. (Milam). The lease was renewed with a provision that Milam would renovate the warehouse and create an office for Comptech to use for its ongoing computer business. Comptech had previously used the warehouse to store its computers and was to continue using the warehouse for this purpose both during and after the renovations. The renewal contract contained an indemnity clause stating that Comptech agreed to hold Milam harmless for "all claims of every kind" including "damaged merchandise, equipment, fixture or other property, or damage to business or for business interruption, arising, directly or indirectly out of, from or on account of such occupancy and use, or resulting from present or future condition or state of repair thereof." Comptech, 711 So.2d at 1261. The indemnity clause did not specifically state that Milam would be held harmless for its own negligence. Milam hired a contractor to perform the renovations; however, the renovations were performed negligently, causing damage to the computers located in the warehouse. In addition, the landlord failed to obtain the required building permits for the building addition. Comptech sued Milam for: (1) negligent selection of contractor; (2) negligent construction; (3) violation of section 553.84; and (4) return of illegally collected rent. The Third District held the negligence claims were barred by the economic loss rule, despite the statutory duty created by section 553.84. The court also rejected Comptech's argument that even if the economic loss rule applied, the computers should have been exempted from the rule under the "other property" exception.

We agree with Judge Cope's dissent in Comptech, 711 So.2d at 1263 (Cope, J., dissenting), where he opines that the economic loss rule cannot be used to eliminate a statutory cause of action. Id. This, he says, is particularly true where the statute states that it is applicable "[n]otwithstanding any other remedies." The statute at issue here, section 553.84, provides:

Statutory Civil Action.— Notwithstanding any other remedies available, any person or party, in an individual capacity or on behalf of a class of persons or parties, damaged as a result of a violation of this part or the State Minimum Building Codes, has a cause of action in any court of competent jurisdiction against the person or party who committed the violation.

This statutory provision provides a cause of action when a person or entity is injured by a defendant who is engaged in construction without obtaining the required building permits or who violates the building code. The statute uses language that makes it unmistakably clear that the remedy provided therein is in addition to any other remedies that may be available.

As Judge Cope points out, the Third District addressed this statutory construction issue in Rubio v. State Farm Fire & Casualty Co., 662 So.2d 956 (Fla. 3d DCA 1995),³ where the court reached the opposite conclusion from that reached in the instant case. In Rubio, the trial court dismissed a bad faith action brought pursuant to section 624.155, Florida Statutes (1993), because the statutory cause of action arose out of the breach of contract and was therefore barred by the economic loss rule. The district court reversed, finding courts could not "willy nilly" strike down legislative enactments and abrogate the rights granted under statutes and the common law. Rubio, 662 So.2d at 957 & n. 2; see also State ex rel. Second District Court of Appeal v. Lewis, 550 So.2d 522, 526 (Fla. 1st DCA 1989) ("[C]ourts cannot willy nilly strike down legislative enactments or acts of executive officers because they do not comport with judicial notions of what is right or politic or advisable."). It is undisputed that the Legislature has the authority to enact laws creating causes of action. If the courts limit or abrogate such legislative enactments through judicial policies, separation of powers issues are created, and that tension must be resolved in favor of the Legislature's right to act in this area. See Holly v. Auld, 450 So.2d 217 (Fla.1984); City of Jacksonville v. Bowden, 67 Fla. 181, 64 So. 769 (1914).

Since the decision in Rubio, other district courts have followed the rationale espoused therein and found that the economic loss rule is not a bar to various statutory enactments. For example, in Delgado v. J.W. Courtesy Pontiac GMC-Truck, Inc., 693 So.2d 602 (Fla. 2d DCA 1997), the Second District addressed the applicability of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA)⁴ in a situation involving a written sales contract. In holding that the judicial policy pronouncement embodied in the economic loss rule has no application to a statutory action brought under the FDUTPA, the court stated:

[C]ourts do not have the right to limit and, in essence, to abrogate, as the trial court did in this case, the expanded remedies granted to consumers under this legislatively created scheme by allowing the judicially favored economic loss rule to override a legislative policy pronouncement and to eliminate the enforcement of those remedies.

Delgado, 693 So.2d at 609.

Similarly, in Stallings v. Kennedy Electric, Inc., 710 So.2d 195 (Fla. 5th DCA 1998), the Fifth District addressed the dismissal of a claim brought under section 553.84, Florida Statutes (1995), based on the economic loss rule. The court opined that the economic loss rule does not apply to statutory causes of action, especially when the statute provides that the remedy exists "notwithstanding any other remedies available." 710 So.2d at 197.

More recently, in Facchina v. Mutual Benefits Corp., 735 So.2d 499 (Fla. 4th DCA 1999), the Fourth District reviewed the same issue in the context of an unauthorized publication action brought pursuant to section 540.08, Florida Statutes (1993).⁵ In ruling that the plaintiff's cause of action under the statute was not barred by the economic loss rule, the court said:

When the legislature creates a statutory cause of action, as it has expressly done in section 540.08, it is presumed to know the common law of contract and tort and the limitations on such remedies created by judges. ELR is one of those judicial limitations on the common law remedies in tort and contract. In crafting new statutory causes of action, the legislature is master of the elements and boundaries on the new cause of action. Hence, the legislature's use of unqualified terms-"any person" and "any loss of injury"-in the text of such a statute evidences to us its intent not to apply judicial limits on common law remedies to the new statutory cause of action. Therefore we agree with plaintiff that ELR does not bar his cause of action under section 540.08 for unauthorized use of his likeness in ads directed to homosexuals with AIDS.

Facchina, 735 So.2d at 502.

Thus, the Second, Fourth, and Fifth District Courts of Appeal have held that statutory causes of action are not limited by the economic loss rule. We agree. Based on our holding that the economic loss rule does not bar statutory causes of action, we quash the decision of the Third District on this issue and remand for further proceedings.

The district court also held the computers that were damaged during the course of the warehouse renovations did not fall into the "other property" exception to the economic loss rule, as that term was explained in Florida Power & Light Co. v. Westinghouse Electric Corp., 510 So.2d 899 (Fla.1987), and Casa Clara Condominium Ass'n v. Charley Toppino & Sons, Inc., 620 So.2d 1244 (Fla.1993). In order to appreciate and understand the use of the term "other property," we must examine the genesis of the economic loss rule.

From a doctrine that has its roots in the products liability arena, see East River...