Raben Builders, Inc. v. First American Bank and Trust Co.

• Decision Date: 09 May 1990
• Docket Number: No. 88-2333,88-2333
• Citation: 561 So.2d 1229
• Court: Florida District Court of Appeals
• Parties: 15 Fla. L. Weekly D1261 RABEN BUILDERS, INC., a Florida corporation, and Pastal Construction Company, Inc., a Florida corporation, d/b/a Raben-Pastal, a joint venture, Appellants, v. FIRST AMERICAN BANK AND TRUST COMPANY, a Florida state banking corporation, Peat, Marwick, Mitchell, & Co., a partnership, Kathryn I. Rockwell and Paul S. Pariser, Appellees.

Page 1229

561 So.2d 1229

15 Fla. L. Weekly D1261

RABEN BUILDERS, INC., a Florida corporation, and Pastal Construction Company, Inc., a Florida corporation, d/b/a Raben-Pastal, a joint venture, Appellants, v. FIRST AMERICAN BANK AND TRUST COMPANY, a Florida state banking corporation, Peat, Marwick, Mitchell, & Co., a partnership, Kathryn I. Rockwell and Paul S. Pariser, Appellees.

No. 88-2333.

District Court of Appeal of Florida Fourth District.

May 9, 1990.

Rehearing and Rehearing En Banc Denied July 2, 1990.

Phillip C. Gildan of Nason, Gildan, Yeager & Gerson, P.A., West Palm Beach, for appellants.

Edward A. Marod of Edward A. Marod, P.A., and Gunster, Yoakley, Criser & Stewart, P.A., West Palm Beach, for appellee Peat, Marwick, Mitchell & Co.

PER CURIAM.

Appellant, Raben-Pastal, timely appeals the trial court's final summary judgment. We affirm.

Raben-Pastal ("Raben") is a real estate developer in south Florida. During the period between November 1981 and October 1982 Raben's bookkeeper forged the signature of Raben's chief executive on 135 checks embezzling $650,000.00. As a result, Raben filed suit against its accountant, Peat Marwick, for accounting malpractice/negligence in failing to safeguard against or discover the embezzlement and against its depository bank, First American Bank & Trust ("First American"), for accepting forged checks drawn on Raben's account (R. 1-18).

Subsequently Raben settled with First American for its liability on the embezzlement, and a number of other dealings between the two parties, for over two million dollars. First American was dismissed from this action by stipulation, based on the settlement. The stipulation dismissed "all of the claims filed in this matter by the Plaintiffs against only the Defendant, First American Bank and Trust with prejudice."

Raben proceeded on its amended complaint against Peat Marwick. Peat Marwick counterclaimed against Raben for accounting services rendered under an agreement entered after discovery of the embezzlement. The trial court granted Peat Marwick's motion for partial summary judgment on grounds that Raben had been fully compensated for its $650,000 loss by way of settlement with First American and therefore Raben could not be compensated again for the same damages flowing from the embezzlement. Subsequently the trial court entered a final summary judgment finding that Raben Builders was not entitled to any recovery from Peat Marwick and awarding Peat Marwick the sum of $20,136.68 on its counterclaim.

Raben raises three issues on appeal two of which we address: (1) the lower court's judgment, finding that, based on Raben's settlement with First American, Raben may not collect damages for the embezzlement from Peat Marwick, which would in effect be a double recovery of $650,000 for the forged checks; (2) the judgment of $20,136.68 entered in favor of Peat Marwick on its counterclaim for accounting services against Raben.

Raben alleges that the case relied on by the court to support its grant of partial summary judgment, Dantzler Lumber & Export Co. v. Columbia Casualty Co., 115 Fla. 541, 156 So. 116 (1934), was inappropriately applied by the trial court; that there is no "subrogee" and therefore the trial court improperly applied the equitable doctrine of subrogation.

In this case the trial court found that First American and Peat Marwick were "consecutive" tortfeasors. The court also made the finding that although one was responsible for banking malpractice and the other for accounting malpractice, the singular loss incurred by Raben was $650,000 for the embezzlement. As the court stated, "even if the number of dollars recoverable by plaintiff from bank and Peat Marwick were not identical, all the damages recoverable by plaintiff from Peat Marwick were also recoverable by plaintiff from bank."

Peat Marwick contends that the trial court's decision is supported by the law of setoff and that section 46.015(2) Fla.Stat. (1987) ¹ provides authority for the trial court to set off the settlement paid by First American. We agree. Raben had a choice of whether to settle with either of the defendants or go to trial against both, but, in either case, its total damages flowing from the embezzlement remained the same. The trial court rightly found that Raben was entitled to but one recovery for $650,000. Raben elected to receive full compensation for its loss from the embezzlement from the settlement with First American. It is not entitled to a double recovery. Kingswarf, Ltd. v. Kranz, 545 So.2d 276 (Fla. 3d DCA 1989); Besett v. Basnett, 437 So.2d 172 (Fla. 2d DCA 1983); Atlantic Coastline R.R. v. Saffold, 130 Fla. 598, 178 So. 288 (Fla.1938).

As for whether Raben realized additional and distinct damages from Peat Marwick's alleged negligence, the trial court provided Raben with an opportunity to establish that it was entitled to pursue Peat Marwick for damages which were separate, distinct, and in excess of $650,000, Raben failed to demonstrate that there was any genuine issue remaining on this point and therefore summary judgment was proper.

Raben contends that Peat Marwick has been unjustly enriched by this because it will not have to pay for the alleged wrongful failure to detect the embezzlement. Here, again, it appears that Raben elected the extent of recovery it would require from each of the defendants at the time it settled with First American. Raben effectively released Peat Marwick from liability by settling for the full amount of the embezzlement and then failing to establish, in the trial court, that Peat Marwick was responsible for separate or additional damages above $650,000.

We find no error in the equitable remedy fashioned by the trial court which effectively set off the proceeds from the Raben-First American settlement against the total compensation Raben would potentially receive in an action against Peat Marwick for the embezzlement. See 80 C.J.S. Set-Off and Counterclaim § 5--Equitable Set-Off, (1953).

With regard to the counterclaim, Peat Marwick alleged Raben engaged Peat Marwick to perform special accounting services in connection with the embezzlement in the fall of 1982; that Peat Marwick fully performed the services and therefore Raben became obligated to pay Peat Marwick for the services. Raben asserted three defenses to the counterclaim, in particular, that the special audit was necessitated by the malpractice, breach of contract and/or negligence of Peat Marwick in performing the regular audit and review of Raben's books, and Peat Marwick was therefore not...