RANGER CONST. v. MARTIN COMPANIES

• Decision Date: 27 August 2004
• Docket Number: No. 5D02-4056.,5D02-4056.
• Citation: 881 So.2d 677
• Parties: RANGER CONSTRUCTION INDUSTRIES, INC., Appellant, v. MARTIN COMPANIES OF DAYTONA, INC., et al., Appellees.
• Court: Florida District Court of Appeals

881 So.2d 677

RANGER CONSTRUCTION INDUSTRIES, INC., Appellant, v. MARTIN COMPANIES OF DAYTONA, INC., et al., Appellees.

No. 5D02-4056.

District Court of Appeal of Florida, Fifth District.

August 27, 2004.

Jack J. Aiello and Paul A. Turk, Jr. of Gunster, Yoakley & Stewart, P.A., West Palm Beach, for Appellant.

John H. Dannecker of Shutts & Bowen, Orlando, for Appellees.

Kimberly A. Ashby of Akerman Senterfitt, Orlando, for Appellees.

SAWAYA, C.J.

Ranger Construction Industries, Inc. appeals the final summary judgment entered in favor of Martin Companies of Daytona, Inc., Martin, Ward & Martin, Inc., Robert Martin, Robert Ward, and Richard Martin (collectively "Martin") on the third-party complaint filed by Ranger against Martin. Ranger argues that the trial court erred by essentially dismissing its third-party complaint against Martin with prejudice, contending that Ranger's third-party claim complied with the Florida Rules of Civil Procedure and that even if the claim was defective, the trial court should have granted Ranger at least one opportunity to amend the pleading.¹

Prior to 1997, Ranger and Martin were separate entities engaged in, among other things, road building and site development projects. Martin had performed work on Phases II and III of a manufactured home community project in Ormond Beach owned by Aberdeen at Ormond Beach, L.P. In late 1997, Ranger purchased the assets of Martin pursuant to an Asset Purchase Agreement (APA) that governed the transaction. In December 1998, approximately one year after execution of the APA, Ranger entered into a contract with Aberdeen to perform work on Phase III of the project. When Ranger completed its work, Aberdeen refused to pay the full amount due, which prompted Ranger to file an action to obtain a lien and payment of the balance. Aberdeen's response to the suit was a counterclaim that alleged that Ranger had performed defective work on the project. The counterclaim was the impetus for Ranger's third-party complaint against Martin based on the indemnity provisions of the APA. The third-party complaint consisted of two counts: one alleged common law indemnity, which is not at issue in these proceedings, and the other asserted contractual indemnity, which is the basis of the instant proceedings.

Attached to the third-party complaint was a copy of the APA, which sets out in Article V the indemnification provisions. Specifically, section 5.1 states that Martin

shall jointly and severally indemnify, defend and hold harmless the Buyer [Ranger] ... from and against any direct or indirect damage, claim, loss, cost or expense suffered (or deemed suffered, as hereinafter provided) by the Buyer, in whole or in part, as a consequence of:

(1) the Retained Liabilities;

(2) any breach or violation by the Sellers of the representations or warranties of the Sellers in this Agreement or any certificate or instrument delivered at the Closing; and

(3) any other breach or violation of this Agreement by the Sellers.

"Retained Liabilities" is defined in the APA to include "all liabilities of the Sellers in respect of customer warranty claims and products liability claims on products shipped and services provided on or prior to the Closing Date." Section 5.1 also made Martin liable for

all costs, expenses and reasonable attorneys' and paralegals' fees (including those for arbitrations, trials, appeals and administrative and bankruptcy proceedings) incurred by the Buyer in connection with the defense of any third party claim asserted against the Buyer [but only to the extent that the Sellers shall not provide a timely defense thereto as contemplated by Subsection 5.1(c) hereof] and (B) all costs, expenses and reasonable attorneys' and paralegals' fees (including those for arbitrations, trials, appeals and administrative and bankruptcy proceedings) incurred by the Buyer in connection with the enforcement against the Sellers of the Buyer's indemnity rights under this Agreement.

Martin moved for summary judgment on both counts of the third-party complaint. It was successful in obtaining judgment on the common law indemnity claim (Count II). That ruling is not challenged. Martin subsequently filed a renewed motion for summary judgment seeking judgment on Count I, the contractual indemnity claim. Towards the end of the hearing on the renewed motion, the trial court inquired whether Ranger had alleged any breach of warranty by Martin. Ranger admitted that it may not have used the word "warranty," but asserted that the facts alleged described a breach of warranty under the APA. Martin stepped up and labeled the court's query as "interesting" because nowhere was there a claim that Martin had breached its warranty as defined in the retained liability section of the APA. The court concluded the hearing by granting summary judgment in Martin's favor:

I'm going to grant the motion and the basis for that is that the contract, article five, describing indemnity, the specific area we're dealing with is retained liability.

The definition of a retained liability, I've read it and it goes on, the only area I see that possibly could apply would be, all liabilities of the sellers in respect to customer warranty claims and product liability claims on the products shipped and services provided on or prior to the closing date, but Count I, the contractual liability, talks about — does not really describe any warranty.

I could not see any warranty referenced in any of the allegations of the third party complaint. I do see in paragraph 47 the allegation of Ranger being solely, vicariously or constructively or derivatively liable, and I can't stretch this to show how these facts would fit such liability. Anyway, I think what I'm going to do is just grant the motion.

Ranger requested leave to amend so that it could properly allege warranty and remove the derivative statement. The court denied the request. The summary final judgment rendered by the trial court stated that "Ranger shall not have leave to amend its pleadings to state additional or restated causes of action against the Martin Parties because this Court finds it is too late in the proceedings to do so. Ranger shall take nothing by this action as against the Martin Parties."

The basis for the trial court's ruling was that Ranger failed to plead or make appropriate reference to a warranty in the third party complaint and, therefore, it failed to state a cause of action upon which relief could be granted. Ranger contends that it was error for the trial judge to base its ruling on such a hyper-technical pleading requirement and that its third-party complaint did properly plead a cause of action for indemnity against Martin. We agree.

Unlike the pleading requirements in the federal courts where notice pleading is the prevailing standard, the Florida Rules of Civil Procedure require fact pleading. See Continental Baking Co. v. Vincent, 634 So.2d 242, 244 (Fla. 5th DCA 1994)

. However, while a complaint must allege sufficient facts to properly state a cause of action, the Florida courts long ago abandoned the intricate maze and complex structure of common law and equity pleading whereby the preparation of complaints and answers devolved into a rather unique and abstruse science, as though the correct manner of framing a litigant's allegations in writing was an end in itself. These rules were so venerated by some courts and crafty pleaders that a departure from any one of them could prove fatal and deprive an unwary but otherwise deserving litigant of rights actually due him or her. The ferment created by strict adherence to these technical rules aroused the courts in most jurisdictions to simplify procedure to reduce technicalities to a minimum and adopt procedural rules that allowed cases to be decided on their merits as expeditiously as possible.

In Florida, "[f]orms of action and technical forms for seeking relief and of pleas, pleadings, or motions are abolished." Fla. R. Civ. P. 1.110(a). The rules of civil procedure further...