PARC ROYALE East Dev. INC. v. U.S. PROJECT Mgmt. INC.

• Decision Date: 23 June 2010
• Docket Number: No. 4D08-3256.,4D08-3256.
• Citation: 38 So.3d 865
• Parties: PARC ROYALE EAST DEVELOPMENT, INC., a Florida corporation, Appellant, v. U.S. PROJECT MANAGEMENT, INC., a Florida corporation, Appellee.
• Court: Florida District Court of Appeals

38 So.3d 865

PARC ROYALE EAST DEVELOPMENT, INC., a Florida corporation, Appellant,

v.U.S. PROJECT MANAGEMENT, INC., a Florida corporation, Appellee.

No. 4D08-3256.

District Court of Appeal of Florida,Fourth District.

June 23, 2010.

Bambi G. Blum of Bambi G. Blum, P.A., Miami, for appellant.

James D. Ryan of Ryan & Ryan Attorneys, P.A., North Palm Beach, for appellee.

MAY, J.

In a failed real estate transaction, a developer appeals a final judgment in a dispute with an architect. Multiple issues on liability and damages are raised. We find merit in the developer's argument that the trial court erred in admitting the architect's expert testimony concerning damages as it lacked a proper factual foundation. For this reason, we reverse the judgment in favor of the architect and remand the case to the trial court for entry of a judgment for the developer.

In 1994, the architect entered into a contract for the purchase of a 5.778-acre parcel of land in Juno Beach, Florida. The architect then entered into a consulting agreement, which provided for the developer to purchase the parcel and develop a condominium project. The architect assigned the original purchase contract to the developer, providing for the architect's consulting firm, U.S. Project Management, to provide services for development of the parcel. The original plan called for a twelve-story building with 87 units. The architect was to receive monthly consulting fees, reimbursement of expenses, and an incentive fee for its services upon the sale of the units. ¹ In 1995, the developer unsuccessfully attempted to obtain an easement from an adjoining landowner for a sewer line to serve the parcel. As a result, the developer purchased the adjoining 2.7 acres, and changed the project to include two buildings containing 64 units each on the larger combined parcels (the second project). A new consulting agreement was drafted, but never executed. Nevertheless, the architect continued to work on plans for the second project.

In 1997, the developer abandoned the second project in favor of a third project, which included 120 units on both parcels, new architectural plans, and a new site plan approval. At this time, the developer stopped paying the architect. The architect subsequently filed suit for breach of contract, seeking payment of the monthly and incentive fees based on anticipated net profits on the sale of units for the second project even though the second project was never built.

A non-jury trial was held in 1999. The trial court found for the developer. Specifically, the court found the architect had “not shown, by the greater weight of the evidence, that there was a breach of the contract nor causation of damages which meet the appropriate standard for recovering future profits where a contract has not been fully performed.” We affirmed the decision in U.S. Project Management, Inc. v. Parc Royale East Development, Inc., 773 So.2d 1163 (Fla. 4th DCA 2000).

After all units in the third project were sold, the architect filed another breach of contract action against the developer for the same consulting agreement. This time the architect sought incentive fees based on profits from the third project. ² The trial court found the cause of action barred by res judicata and dismissed the complaint.

The consultant appealed; we reversed. U.S. Project Mgmt., Inc. v. Parc Royale E. Dev., Inc., 861 So.2d 74 (Fla. 4th DCA 2003). In doing so, we found that, although the new complaint was based on the original consulting agreement, the claim for damages was based on a different project-the third project. “Due to the vagueness of the final judgment, as a matter of law, [we could not] say with certainty that the trial court intended the judgment to bar all claims for any possible subsequent breaches.” Id. at 77.

On remand, the architect again sought lost profits for the third project located on both parcels. Alternatively, the architect sought lost profits on the sale of units for the third project located on the original parcel. The developer moved to dismiss the complaint, arguing that the consulting agreement did not apply to both parcels, and the final judgment from the first trial collaterally estopped the architect from seeking lost profits under the incentive fee provision. The trial judge granted the motion to dismiss “to the extent the Second Amended Complaint relie[d] on the Consulting Agreement for damages based upon Project III and/or a project located on a parcel that is not located on the [original parcel]....” ³

A jury found the developer breached the contract and awarded the architect $2.2 million. The court entered a final judgment against the developer on its affirmative defenses and against the architect on its implied contract and promissory estoppel claims. The trial court then denied the developer's motions for judgment notwithstanding the verdict and for a new trial.

On appeal, the developer argues the trial court erred in various rulings on liability and damages. We agree that error occurred in the court's admission of expert testimony concerning damages.

“A trial court's decision regarding the admissibility and scope of expert testimony is reviewed for an abuse of discretion.” Wynkoop v. State, 14 So.3d 1166, 1170 (Fla. 4th DCA 2009). “[O]pinion testimony which contains conclusions or inferences not supported by the record is inadmissible.” Schindler Elevator Corp. v. Carvalho, 895 So.2d 1103, 1106 (Fla. 4th DCA 2005).

Here, the expert's opinion contained conclusions and inferences that were unsupported by the facts admitted into evidence. The expert's damage calculations were based on a profit calculation for the third project, consisting of 120 units, reduced to a profit figure for the original 87 units when the trial court previously dismissed the complaint to the extent that it was based on the third project or units built on property other than the original parcel.

During the proffer of the expert's testimony, the expert prorated the third project's 120-units to 87 units because he was told that an incentive fee might be allowed only for the 87 units that were planned for the original parcel. The developer objected to the testimony because it concerned the third project and the architect was attempting to admit evidence through the back door that the trial court had previously ruled was inadmissible. The court then stated:

Let's go back to why we're...