E. Qualcom Corp.. v. Global Commerce Ctr. Ass'n Inc.

• Decision Date: 27 April 2011
• Docket Number: No. 4D09–4099.,4D09–4099.
• Citation: 59 So.3d 347
• Parties: E. QUALCOM CORP., a Florida corporation, Appellant,v.GLOBAL COMMERCE CENTER ASSOCIATION, INC., a Florida non-profit corporation, Appellee.
• Court: Florida District Court of Appeals

59 So.3d 347

E. QUALCOM CORP., a Florida corporation, Appellant,

v.GLOBAL COMMERCE CENTER ASSOCIATION, INC., a Florida non-profit corporation, Appellee.

No. 4D09–4099.

District Court of Appeal of Florida, Fourth District.

April 27, 2011.

Samuel B. Reiner, II of Reiner & Reiner, P.A., Miami, for appellant.Shelley H. Leinicke of Wicker, Smith, O'Hara, McCoy & Ford, P.A., Fort Lauderdale, for appellee.CIKLIN, J.

E. Qualcom Corporation (“Qualcom”) appeals various summary judgments entered against it in a foreclosure action centered around non-payment of master association assessments owed to Global Commerce Center Association, Inc. (the “Association”). We reverse because the Association failed to meet its burden of proving the absence of genuine issues of material fact with regard to Qualcom's allegations that it suffered damages as a result of the Association's failure to provide proper maintenance and upkeep.

The appellant, Qualcom, is a telecommunications company that began doing business in 2003. That same year, Qualcom purchased property in the Global Commerce Center, a commercial building located in Weston, Florida. The appellee, the Association, is the master homeowners' association for the Global Commerce Center. At the time Qualcom moved into the building, the company was still in its “start-up stage.”

In January 2008, the Association filed a complaint against Qualcom seeking foreclosure against Qualcom for its alleged failure to pay commercial homeowners' association assessments. Qualcom filed an answer with affirmative defenses and a counterclaim. The counterclaim sought damages for negligence and breach of contract, stemming from the Association's alleged failure to maintain the roof of Qualcom's unit. According to Qualcom's counterclaim, the failure to maintain the roof led to water damage that irreparably damaged Qualcom's computer hardware and other equipment necessary for Qualcom to carry on its business. More specifically, Qualcom sought damages for loss of personal property, loss of business opportunities, and loss of business income. As an affirmative defense to the Association's foreclosure and collection action, Qualcom asserted, among other defenses, that it was entitled to a set-off in an amount equal to the damages suffered by Qualcom due to the leaking roof.

In July 2009, after a period of discovery between the parties, the Association filed a motion for partial summary judgment of foreclosure based on Qualcom's alleged failure to show proof of payment of any and all assessments allegedly due by Qualcom to the Association. Additionally, in August 2009, the Association filed a motion for final summary judgment as to Qualcom's counterclaim asserting that Qualcom had failed to prove damages to a reasonable degree of certainty as a matter of law.

Following a September 2009 hearing, the trial court granted the Association's motion for partial summary judgment of foreclosure and entered judgment against Qualcom in the amount of $55,200.82 for unpaid assessments, attorney's fees, and costs. Subsequently, following a hearing on the Association's motion for final summary judgment on Qualcom's counterclaim, the trial court granted that motion as well, writing that, “for the reasons stated in the record, as to damages ... there is no issue of material fact in dispute.” Qualcom timely appealed both orders.

Review of an order granting summary judgment is de novo. Gomez v. Fradin, 41 So.3d 1068, 1071 (Fla. 4th DCA 2010). “Summary judgment is proper if there is no genuine issue of material fact and if the moving party is entitled to a judgment as a matter of law.” Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla.2000). “All doubts and inferences must be resolved against the moving party, and if there is the slightest doubt or conflict in the evidence, then summary judgment is not available.” Reeves v. N. Broward Hosp. Dist., 821 So.2d 319, 321 (Fla. 4th DCA 2002). “The burden of proving the absence of a genuine issue of material fact is upon the moving party. This burden is shifted to the nonmoving party once the movant has successfully met his burden.” Palm Beach Pain Mgmt., Inc. v. Carroll, 7 So.3d 1144, 1145 (Fla. 4th DCA 2009) (citations and internal quotation marks omitted).

Qualcom argues that the Association, as the moving party, failed to meet its burden of proving the absence of a genuine issue of material fact on Qualcom's counterclaim. We agree. In support of its claim for damages to personal property, Qualcom produced pictures of damaged equipment as well as various invoices, receipts and proofs of payment evidencing Qualcom's original purchases for almost all of the damaged equipment. Rather than submitting opposing evidence to show that Qualcom's personal property suffered no damage or that the property had no market value when it was damaged, the Association successfully argued that Qualcom had failed to prove its damages to a reasonable degree of certainty.

Proving its damages to a reasonable degree of certainty, however, was not the standard that Qualcom was required to meet to overcome summary judgment. “Summary judgment may not be used as a substitute for trial. If the affidavits and other evidence raise any doubt as to any issue of material fact then a summary judgment may not be entered.” Cummins v. Allstate Indem. Co., 732 So.2d 380, 382–83 (Fla. 4th DCA 1999).¹

Qualcom next argues that the trial court erred in granting the Association's motion for summary judgment on Qualcom's counterclaim for lost profits. We agree.

The Association argued that since Qualcom had never earned a net profit in its business, any claim for “lost prospective profits” was too speculative. In W.W. Gay Mechanical Contractor, Inc. v. Wharfside Two, Ltd., 545 So.2d 1348 (Fla.1989), the Florida Supreme Court, however, established the standard for the award of lost prospective profits to a business that is not well-established:

A business can recover lost prospective profits regardless of whether it is established or has any “track record.” The party must prove that 1) the defendant's action caused the damage and 2) there is some standard by which the amount of damages may be adequately determined.

Id. at 1351; see also Fu Sheng Indus. Co. v. T/F Sys., Inc., 690 So.2d 617, 624 (Fla. 4th DCA 1997) (applying the two-part test as defined in W.W. Gay Mechanical Contractor ).

Qualcom produced photographs of water-damaged equipment as well as testimony that the damage led to interruptions in service which in turn led to loss of clients and caused Qualcom to develop a poor reputation among its target market. This evidence was sufficient to create a genuine issue of material fact with respect to causation, the first requirement under the W.W. Gay test.

The second prong of the W.W. Gay test requires that Qualcom provide “some standard by which the amount of damages may be adequately determined.” W.W. Gay, 545 So.2d at 1351. “Any ‘yardstick’ used to show the amount of profits must be reasonable, and the loss of the profits as a result of the [breach] must be reasonably certain.” Sostchin v. Doll Enters., Inc., 847 So.2d 1123, 1128 (Fla. 3d DCA 2003) (citing Halliburton Co. v. E. Cement Corp., 672 So.2d 844 (Fla. 4th DCA 1996)). An award of damages for lost profits cannot be “based upon speculation or conjecture.” Id.

In 4 Corners Insurance, Inc. v. Sun Publications of Florida, Inc., 5 So.3d 780 (Fla. 2d DCA 2009), the Second District held that the affidavit of the plaintiff corporation's owner was sufficient to establish a genuine issue of material fact regarding whether the corporation suffered lost profits damages under the yardstick theory. Id. at 783–84. The affidavit attested that, according to industry standards, the plaintiff's gross revenues would have doubled but for the defendant's wrongful eviction. The court noted that “[w]hile this evidence in itself might not be sufficient to sustain a verdict for lost profits damages, it is sufficient to establish a genuine issue of material fact on the issue.” Id. at 784.

Like the corporate plaintiff in 4 Corners, Qualcom did in fact provide some standard by which to measure damages. Qualcom produced evidence whereby its...