Curd v. Mosaic Fertilizer, LLC

• Decision Date: 17 September 2008
• Docket Number: No. 2D07-352.,2D07-352.
• Citation: 993 So.2d 1078
• Parties: Howard CURD, Floyd Deforest, Scott Mobley, Gary Bruce, David Laggner, Bryan Ibasfalean, Philip Johnson, and Angelo Logrande, on behalf of themselves and all others similarly situated, Appellants, v. MOSAIC FERTILIZER, LLC, Appellee.
• Court: Florida District Court of Appeals

993 So.2d 1078

Howard CURD, Floyd Deforest, Scott Mobley, Gary Bruce, David Laggner, Bryan Ibasfalean, Philip Johnson, and Angelo Logrande, on behalf of themselves and all others similarly situated, Appellants, v. MOSAIC FERTILIZER, LLC, Appellee.

No. 2D07-352.

District Court of Appeal of Florida, Second District.

September 17, 2008.

F. Wallace Pope, Jr., of Johnson, Pope, Bokor, Ruppel & Burns, LLP, Clearwater; and Andra T. Dreyfus of Andra Todd Dreyfus, P.A., Clearwater, for Appellants.

Kimberly S. Mello and David B. Weinstein of Greenberg Traurig, P.A., Tampa, for Appellee.

ALTENBERND, Judge.

Howard Curd and several other commercial fishermen (the fishermen) appeal an order dismissing their proposed class action lawsuit against Mosaic Fertilizer LLC. The fishermen claim that Mosaic's phosphogypsum storage facility polluted the waters of Tampa Bay, reducing the available supply of fish, which in turn damaged their businesses and reduced their income. We agree with the trial court that the fishermen's fourth amended complaint failed to state a cause of action and affirm the order on appeal. Because we conclude that the issue of whether commercial fishermen may recover economic losses arising from the release of pollution in Florida waters, either under principles of common law negligence or under section 376.313, Florida Statutes (2004), is a matter of great public importance, we certify two questions to the Florida Supreme Court:

DOES FLORIDA RECOGNIZE A COMMON LAW THEORY UNDER WHICH COMMERCIAL FISHERMEN CAN RECOVER FOR ECONOMIC LOSSES PROXIMATELY CAUSED BY THE NEGLIGENT RELEASE OF POLLUTANTS DESPITE THE FACT THAT THE FISHERMEN DO NOT OWN ANY PROPERTY DAMAGED BY THE POLLUTION?

DOES THE PRIVATE CAUSE OF ACTION RECOGNIZED IN SECTION 376.313, FLORIDA STATUTES (2004), PERMIT COMMERCIAL FISHERMEN TO RECOVER DAMAGES FOR THEIR LOSS OF INCOME DESPITE THE FACT THAT THE FISHERMEN DO NOT OWN ANY PROPERTY DAMAGED BY THE POLLUTION?

According to the allegations in the fishermen's complaint, Mosaic owned or controlled a phosphogypsum storage area near Archie Creek in Hillsborough County. The storage area included a pond enclosed by dikes, containing wastewater from a phosphate plant. This wastewater allegedly contained pollutants and hazardous contaminants.

The fishermen alleged that in the summer of 2004, the Hillsborough County Environmental Protection Commission and the Florida Department of Environmental Protection both warned Mosaic that the quantity of wastewater in the storage facility was dangerously close to exceeding the safe storage level. According to the complaint, on August 10, 2004, the Department of Environmental Protection warned Mosaic that a 100-foot section of the pond dike was three feet narrower than the minimum required width of 18 feet. It warned that only an inch or two of additional rain during the tropical season would raise the level of pollutants in the pond to the top of the dike. On September 5, 2004, the dike gave way and pollutants were spilled into Tampa Bay.

The fishermen claim that the spilled pollutants resulted in a loss of underwater plant life, fish, bait fish, crabs, and other marine life. They do not claim an ownership in the damaged marine and plant life, but claim that it resulted in damage to the reputation of the fishery products the fishermen are able to catch and attempt to sell. At least implicitly, they are alleging monetary damages in the nature of lost income or profits.

The complaint included three counts. Count 1 attempted to allege a claim for statutory liability under section 376.313(3), Florida Statutes (2004). Count 2 alleged common law strict liability based upon damages resulting from Mosaic's use of its property for an ultrahazardous activity. See, e.g., Cities Serv. Co. v. State, 312 So.2d 799 (Fla. 2d DCA 1975). Count 3 alleged a claim of simple negligence. The trial court concluded that the language in chapter 376 did not permit a claim by these fishermen for monetary losses when they did not own any real or personal property damaged by the pollution. After initially permitting the fishermen to proceed on their claims of negligence and strict liability, the trial court ultimately ruled that these claims were not authorized under the economic loss rule. The fishermen then appealed the dismissal of their entire fourth amended complaint to this court. We begin by addressing the fishermen's tort claims, those sounding in negligence and strict liability, which we conclude are barred by the economic loss rule and general principles of tort law.

I. THE FISHERMEN CANNOT STATE A CLAIM IN NEGLIGENCE OR STRICT LIABILITY TO RECOVER FOR PURELY ECONOMIC LOSSES UNRELATED TO INJURY TO THEIR PERSONS OR PROPERTY

The trial court dismissed the negligence and common law strict liability claims within the fourth amended complaint, relying on case law discussing the economic loss rule. The fishermen argue that the Florida Supreme Court's opinion in Indemnity Insurance Co. v. American Aviation, Inc., 891 So.2d 532 (Fla.2004), has narrowed the scope of the economic loss rule and limited its application to only two scenarios, neither of which apply to their complaint. Although we recognize that the supreme court's opinion limits the application of the economic loss rule as defined in the opinion, we do not read the opinion as entirely overriding the general principle that recovery in negligence is not usually permitted for purely economic losses unconnected to injury to persons or property.

In American Aviation, American Aviation performed an inspection and maintenance on an aircraft and certified its work in the aircraft's logbook. The aircraft was then purchased by Profile Aviation Services, Inc., a company apparently insured by Indemnity Insurance Company. According to Profile's complaint, American Aviation improperly installed a critical component of the airplane and the error severely damaged the aircraft in a subsequent landing. Profile and Indemnity Insurance sought to recover the economic damages they sustained from American Aviation's error by filing a complaint in federal district court against American Aviation alleging negligence, negligence per se, negligent misrepresentation, and breach of warranty. Notably, Profile had no contractual relationship to American Aviation, and thus the warranty claim failed. 891 So.2d at 535-36.¹

The federal district court concluded the claims were barred by Florida's economic loss rule. Profile and Indemnity Insurance appealed to the Eleventh Circuit Court, which in turn certified to the Florida Supreme Court five questions intended to determine the extent to which the economic loss rule might apply to these facts. Id.

The supreme court began its analysis of the economic loss rule with a broad definition, stating, "The economic loss rule is a judicially created doctrine that sets forth the circumstances under which a tort action is prohibited if the only damages suffered are economic losses," which the court defined as "simply put, disappointed economic expectations." Id. at 536, 536 n. 1. The court continued:

In this state, the economic loss rule has been applied in two different circumstances. The first is when parties are in contractual privity and one party seeks to recover damages in tort for matters arising from the contract. The second is when there is a defect in a product that causes damage to the product but causes no personal injury or damage to other property.

Id. at 536. The court labeled these two applications as the "contractual privity economic loss rule" and the "products liability economic loss rule." The court then explained the theories and policies underlying these two applications. Id. at 536-38.

The court noted that the case before it involved neither a products liability scenario nor parties in contractual privity. Rather, the court compared the situation in American Aviation to the virtually identical scenario presented in a prior Third District case, Palau International Traders, Inc. v. Narcam Aircraft, Inc., 653 So.2d 412 (Fla. 3d DCA 1995), and then likened both cases to Moransais v. Heathman, 744 So.2d 973 (Fla.1999), a prior case in which the Florida Supreme Court had refused to apply the economic loss rule to prohibit recovery. Moransais involved a professional negligence action brought against an engineer who made a pre-purchase inspection of a home and whose report the buyers relied upon, even though they were not in privity with the engineer. Notably, each of the cases discussed in this portion of the American Aviation opinion involved the provision of services, either by a professional or by a business entity holding themselves out as competent in their chosen enterprise, and acting in a manner that would foreseeably induce reliance upon their work by third parties.

After reviewing these three scenarios, the court concluded, "We now agree that the economic loss rule should be expressly limited." American Aviation, 891 So.2d at 542. The express limitation recognized and applied the economic loss rule only in two forms, the "contractual privity economic loss rule" and the "products liability economic loss rule." Further, the court expressly confirmed that even if a case involved contractual privity or a defective product, the rule would not prevent recovery for intentional torts such as fraud, conversion, intentional interference, civil theft, and abuse of process; or for other recognized exceptions such as professional malpractice, fraudulent inducement, negligent misrepresentation,² or freestanding statutory causes of action. Id. at 543, 543 n. 3.

The fishermen interpret the reasoning in American Aviation as a syllogism that applies to their case. That is, the fishermen reason that they are not in contractual privity with Mosaic and that they are not complaining of losses due to a defective product, ergo, the economic loss rule does not apply to them. Similar reasoning is...