Newsom v. Dean Witter Reynolds, Inc.
Decision Date | 16 March 1990 |
Docket Number | No. 89-01424,89-01424 |
Citation | 558 So.2d 1076 |
Parties | 15 Fla. L. Weekly D721 Otho S. NEWSOM, Jr., Appellant, v. DEAN WITTER REYNOLDS, INC., Appellee. |
Court | Florida District Court of Appeals |
Charles P. Pillans, III, of Bedell, Dittmar, DeVault & Pillans, P.A., Jacksonville, for appellant.
Nicholas V. Pulignano, Jr., of Marks, Gray, Conroy & Gibbs, Jacksonville, for appellee.
This cause is before us on appeal of an order awarding attorney fees pursuant to a jury verdict finding violations of Florida's Blue Sky Act but awarding no damages due to appellee's successful presentation of its affirmative defenses. For the following reasons, we reverse.
Appellant is a retired person who invested more than $320,000 into a retirement investment account with appellee. Appellee managed the money for more than two years and managed to lose more than $38,000 during that time. Appellant closed the account and sued for damages under a variety of statutory and common-law theories, including fraud, negligence, breach of fiduciary duty, and violation of Chapter 517, the Florida Blue Sky Act.
A jury eventually disposed of the cause, finding by special verdict that appellee was guilty of negligence and had violated Section 517.301(1), Florida Statutes. Regarding the statutory count, the jury was instructed that both "churning" (excessive trading on the account) and lack of suitability of the trades to appellant's investment objectives, would be a violation. Because the jury also found that appellant had not brought suit within the time required by the statute of limitations, and further found that appellant had ratified the transactions by failing to timely protest, appellee nevertheless escaped liability.
Appellee argues that because there is no way to tell which violation the jury found, this court cannot assume that the jury found it guilty of churning the account and, therefore, of fraud. 1 This argument must be rejected because it assumes that making trades unsuitable to appellant's investment objectives was a mere technical violation. The statute's very title, however, denominates all covered, prohibited acts as "fraudulent transactions." Contrary to appellee's argument, an unsuitable trading violation of Section 517.301(1), Florida Statutes, is not merely technical. Just like churning, it is statutory fraud.
Because appellee successfully escaped liability on all counts, however, it was the prevailing party in the suit. Section 517.211(6), Florida Statutes, provides that "[i]n any action brought under this section, including an appeal, the court shall award reasonable attorney's fees to the prevailing party unless the court finds the award of such fees would be unjust." After a hearing below, the trial court ordered appellant to pay the $43,053.50 in attorney fees that appellee incurred in its defense. Appellant argued below, and continues to maintain on appeal, that this award was unjust under the circumstances.
There is little Florida authority construing what the word "unjust" means within the context of this statute, and none of it is helpful sub judice. However, certain factors indicate that this is a situation where a fee award would be obviously unjust....
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Black v. State, 1D99-3682.
...of churning, or trading in disregard of its customers' interests, in order to "earn" commissions. See Newsom v. Dean Witter Reynolds, Inc., 558 So.2d 1076, 1077 n. 1 (Fla. 1st DCA 1990) ("`Churning' has been described as `a particularly vicious and fraudulent course of conduct,' In re Behel......
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...the same extent as plaintiffs. Pirretti v. Dean Witter Reynolds, Inc., 578 So.2d 474, 475 (Fla.App.1991); Newsom v. Dean Witter Reynolds, Inc., 558 So.2d 1076, 1077 (Fla.App.1990) ("Because [defendant] successfully escaped liability on all counts, ... it was the prevailing party in the suit......
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Shoreline Found., Inc. v. Brisk
...Florida authority construing what the word ‘unjust’ means within the context of this statute ...." Newsom v. Dean Witter Reynolds, Inc. , 558 So. 2d 1076, 1077 (Fla. 1st DCA 1990). Black's Law Dictionary defines "unjust" as "[c]ontrary to right and justice, or to the enjoyment of his rights......
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Durden v. Citicorp Trust Bank
...and “would result in the defrauded plaintiffs owing a beneficiary of the fraud over $100,000”); Newsom v. Dean Witter Reynolds, Inc., 558 So.2d 1076, 1077–78 (Fla. 1st DCA 1990) (finding fee award against plaintiff would be unjust where plaintiff's claims had merit but defendant was ultimat......
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Statutory damages under the Florida Securities and Investor Protection Act: how to calculate and apply rescission damages.
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