Newberry Square Fla. Laundromat, LLC v. Jim's Coin Laundry & Dry Cleaners, Inc.

• Decision Date: 08 June 2020
• Docket Number: No. 1D18-5158,1D18-5158
• Citation: 296 So.3d 584
• Parties: NEWBERRY SQUARE FLORIDA LAUNDROMAT, LLC, Appellant, v. JIM'S COIN LAUNDRY AND DRY CLEANERS, INC., James Cuccia and Anna Cuccia, Appellees.
• Court: Florida District Court of Appeals

296 So.3d 584

NEWBERRY SQUARE FLORIDA LAUNDROMAT, LLC, Appellant,

v.JIM'S COIN LAUNDRY AND DRY CLEANERS, INC., James Cuccia and Anna Cuccia, Appellees.

No. 1D18-5158

District Court of Appeal of Florida, First District.

June 8, 2020

Robert W. Bauer of Bauer Law Group, P.A., Gainesville, for Appellant.

No appearance for Appellees.

Jay, J.

Newberry Square Florida Laundromat, LLC ("Appellant"), appeals the trial court's order dismissing with prejudice its complaint against Jim's Coin Laundry and Dry Cleaners, Inc., and James and Anna Cuccia ("Appellees"), and barring it from filing any further complaints relating to the facts of the case. For the reasons that follow, we reverse.

I.

On May 5, 2018, Appellant filed a ten-count complaint against Appellees. Counts I-IV alleged fraud in the inducement against each Appellee.¹ Counts V-VIII alleged deceptive and unfair trade practices, also against each Appellee. Lastly, counts IX and X alleged the breach of a non-compete agreement by James and Anna Cuccia, respectively.

According to the complaint's factual allegations, in January 2016, Appellant's principal and owner, Franklin Perez, learned that Jim's Coin Laundry—owned and operated by the Cuccias—was for sale. Perez, acting as Appellant's agent, contacted Patrick Lange, the transaction broker, who provided Perez a prospectus approved by the Cuccias and containing a number of positive written disclosures concerning the business. Perez had participated in multiple meetings with the Cuccias, during which the same advantageous disclosures were made, including that the washers and dryers in the laundromat were fully operational and would remain so for years to come; that the business was debt free and netted a healthy monthly profit; that the laundromat had several large commercial accounts, which would remain with the business after the sale; that there was room to increase revenue with proper advertising; that James Cuccia would mentor Perez for a year after the sale; and that the Cuccias would not compete with the laundromat business within a ten-mile radius. Those representations were material to Perez, since he informed the Cuccias he had no experience running a laundromat; he was a software engineer who was just temporarily out of work; and he anticipated he would not have much time to spend working long hours at the laundromat. In short, Perez was looking for a turnkey operation.

Upon receipt of the prospectus and before making an offer, Perez began to conduct his "due diligence" of the business by asking Lange a number of questions. Although Lange provided Perez with general information, he repeatedly urged Perez to make an offer first, and then conduct his "due diligence." Furthermore, on one particular occasion, he informed Perez that there was another prospective buyer in New York who was prepared to make an offer if Perez did not submit his own offer by the next day.

As urged on by Lange, Appellant, through Perez, purchased the laundromat. After the sale, however, Perez discovered that there was no New York party standing in the wings, ready and willing to purchase the business. Furthermore, according to the allegations in the complaint, Perez discovered that the representations made by the Cuccias and Lange—to the effect that the laundromat business was set up to virtually run itself and earn the expected income—were false. The complaint set forth the specific misrepresentations and deceptions allegedly made by Appellees; asserted that Appellees knew the representations were false; and claimed that Appellant had spent tens of thousands of dollars in advertising, yet saw no growth in the business—contrary to the Cuccias’ assurances.

In August 2018, Appellees filed their Motion to Dismiss Counts V, VI, and VIII—the deceptive and unfair trade practices counts. As its grounds for dismissal, the motion alleged that the transaction between the parties did not qualify as a consumer transaction. Notwithstanding their motion, however, on the same day, Appellees filed their Answer, Affirmative Defenses, Counterclaims, Third Party Claims, and Demand for Jury Trial.

Afterwards, on August 17, 2018, Appellees filed an Amended Motion to Dismiss Counts from Plaintiff's Complaint, which was addressed only to counts I-VIII.² Among the grounds advanced for dismissal of counts I, II, and IV—the fraud counts against James Cuccia, Anna Cuccia, and Jim's Coin Laundry, respectively—the Appellees argued that Appellant's claims for fraud in the inducement had previously been litigated in the Alachua County Circuit Court in 2016, when a second amended complaint filed by Franklin Perez against the Cuccias was dismissed with prejudice.

At the hearing on Appellees’ amended motion to dismiss, the trial court, sua sponte, took judicial notice of the 2016 case and announced that it already had possession of the file. The court further noted that the parties to that cause of action were Frank Perez as the plaintiff, and the Cuccias as the defendants. The second amended complaint in that cause was dismissed by another judge, and, on appeal, this Court affirmed.³

During the hearing, Appellees acknowledged that the present complaint sets forth additional counts that were not included in the 2016 case. But they argued that the principle of res judicata stands for the proposition that a judgment on the merits rendered in a former suit between the same parties upon the same cause of action was conclusive not only as to every matter that was offered and received to sustain or defeat the claim, but also as to every other matter that might have been litigated and determined in that action. They also asserted that Appellant's claim was precluded by collateral estoppel, which " ‘bars relitigation of the same issue between the same parties which has already been determined by a valid judgment.’ " Kowallek v. Lee Rehm , 183 So. 3d 1175, 1177 (Fla. 4th DCA 2016) (quoting Zikofsky v. Mktg. 10, Inc. , 904 So. 2d 520, 525 (Fla. 4th DCA 2005) ). Appellees went on to address the other grounds raised for dismissal of counts I, II, and IV, as well as their grounds for dismissal of counts V, VI, and VIII alleging deceptive and unfair trade practices.

Appellant responded by pointing out that it had not been named as a party in any of the three complaints filed in the 2016 case. It also asserted that it was not "entirely clear" what the claim was based on in any version of the three previously filed complaints. Finally, Appellant requested, as a remedy, leave from the trial court to file an amended complaint.

Ultimately, the trial court granted Appellees’ motion to dismiss, finding that in light of the previous litigation, the doctrine of collateral estoppel applied, even while acknowledging that the instant complaint had added additional counts which were not part of the complaints in the 2016 action. The court reasoned that the current action was "based on the same contract and the same underlying allegations of fraud in the inducement that were brought in the 2016 case, and all of that could have been litigated." The court opined it would not be appropriate to move forward in the case before it, given that it had "already proceeded and been dismissed with prejudice, ha[d] gone up on appeal, and ha[d] been affirmed on appeal." It added that Perez had brought suit previously "against the same defendants based on the same contract" and was "now seeking to bring essentially the same case in the name of the corporation he controls ... Newberry Square Florida Laundromat, LLC," which, the court reiterated, would be inappropriate.⁴

Counsel for Appellant suggested that were he to be granted leave to amend, he could conduct research in order to discern if there were potential claims not associated with those brought in 2016. The trial court did not relent. Instead, it ruled that collateral estoppel also prevented Appellant from bringing any claims that could have been raised in the previous action.

As a result, the trial court entered its order on Appellees’ motion to dismiss, granting the motion and dismissing counts I, II, IV, V, VI, and VIII of the complaint with prejudice and barring Appellant "from filing any further [c]omplaint in this case." Expressly omitted from the court's order are counts IX and X of the complaint alleging breach of the non-competition agreement by James and Anna Cuccia, respectively.

Appellant filed a motion for rehearing, asserting that by barring any future complaints, the trial court precluded Appellant from responding to Appellees’ counterclaims. But most significantly, Appellant reemphasized Florida's policy of liberally permitting amendments—especially as it pertains to an initial amendment—unless it is found that the privilege to amend has been abused. The trial court summarily denied the motion for rehearing, and this appeal followed.

II.

" Florida Rule of Civil Procedure 1.190(a) provides that ‘[l]eave of court [to amend pleadings] shall be given freely when justice so requires.’ " Sorenson v. Bank of N.Y. Mellon as Tr. for Certificate Holders CWALT, Inc. , 261 So. 3d 660, 662 (Fla. 2d DCA 2018) (second alteration in original). "Behind this rule is a ‘[p]ublic policy favor[ing] the liberal amendment of pleadings, and courts should resolve all doubts in favor of allowing the amendment of pleadings to allow cases to be decided on their merit.’ " Id. at 663 (alterations in original) (citations omitted). Accordingly, "a trial court should grant leave to amend, rather than dismiss a complaint with prejudice, unless a party has abused the privilege to amend, an amendment would prejudice the opposing party, or the complaint is clearly not amendable." Fla. Nat'l Org. for Women, Inc. v. State , 832 So. 2d 911, 915 (Fla. 1st DCA 2002). If a pleader " ‘may be able to allege additional facts to support its cause of action or support another cause of action under a different legal theory’ [the pleader] should be allowed to amend [its] complaint." Id. (...