Rosen v. Marlin

• Decision Date: 11 March 1986
• Docket Number: Nos. 84-2650,85-641,s. 84-2650
• Citation: 11 Fla. L. Weekly 623,486 So.2d 623
• Parties: 11 Fla. L. Weekly 623 Murray ROSEN, Appellant, v. Kenneth MARLIN, Appellee.
• Court: Florida District Court of Appeals

Page 623

486 So.2d 623

11 Fla. L. Weekly 623

Murray ROSEN, Appellant, v. Kenneth MARLIN, Appellee.

Nos. 84-2650, 85-641.

District Court of Appeal of Florida Third District.

March 11, 1986.

Rehearing Denied April 23, 1986.

Lapidus, Stettin & Frankel and Robert Frankel, Miami, for appellant.

Buchbinder & Elegant and Harris Buchbinder and Carolina A. Echarte, Miami, for appellee.

Before BARKDULL, HUBBARD and FERGUSON, JJ.

BARKDULL, Judge.

The appellant, Rosen, appeals two final judgments (entered nonjury) rendered in an action based on breach of contract, civil theft, and conversion. The first judgment in favor of plaintiff-appellee, Marlin, awarded him certain sums and denied defendant's counterclaim for partition. The second judgment awarded appellee attorney's fees.

The two parties became partners in a joint venture to develop a shopping center. Rosen put up money (not to exceed $780,000) and Marlin put up a leasehold estate and was responsible for rezoning, development, leasing, and managing the center. Approximately two years after completion a purchaser was found for the shopping center. As a condition to the closing, the parties had to provide fee simple title to the purchaser. The joint venture acquired such title ¹ (from the then fee owners, the McKenzies) and sold the center for $3,000,000, with approximately $1,450,000 being paid in cash and the balance secured by a purchase money note and mortgage. The proceeds from this sale were transferred to Rosen. He paid the monthly obligation to the vendors of the property and sent one-half of the balance to Marlin. Thereafter, several accountants reviewed Rosen's books to determine an amount owing to Marlin. ² Nobody could agree on this sum. Marlin made numerous trips to New York to confer with Rosen about discrepancies. Finally Marlin filed suit, alleging breach of contract and fraud. An amended complaint added a count seeking treble damages for theft of the purchase money note payments. ³ Rosen began to deposit these payments into the registry of the court. The trial judge awarded Marlin $138,704.82, then trebled that amount, together with interest thereon, and dismissed Rosen's counterclaim for partition. He subsequently awarded Marlin $80,000 in attorney's fees. These appeals followed.

We hold that recovery of damages for breach of contract will not support a trebling of such damages pursuant to the provisions of Sec. 812.035(7), Florida Statutes (Supp.1984), that such trebling is only warranted when there is no contractual relationship between the parties. Section 812.035(7) ⁴ is clearly a departure from common law which proscribes a penalty ⁵ which did not exist at common law and should be strictly construed and limited in its application. Nell v. State, 277 So.2d 1 (Fla.1973).

The evidence was unrefuted that before the lawsuit was filed, Marlin and Rosen disagreed on the amount owed. During the course of the lawsuit, Marlin claimed that he was owed approximately $193,000 in principal, not including management fees. In the final judgment, the court found that Marlin was owed $138,704.82 pursuant to the contract. A dispute between two persons over the amount of money that one person is owed does not become a crime of theft which is actionable under Section 812.035(7), Florida Statutes (Supp.1984). A claim for breach of contract to pay money which is not specifically identifiable cannot be the subject of conversion or theft allowing for the assessment of treble damages. Capital Bank v. G & J Investments Corporation, 468 So.2d 534 (Fla. 3d DCA 1985); Plotch v. Gregory, 463 So.2d 432 (Fla. 4th DCA 1985); Belford Trucking Co., Inc. v. Zagar, 243 So.2d 646 (Fla. 4th DCA 1971); Advanced Surgical Technologies, Inc. v. Automated Industries, Inc., 777 F.2d 1504 (11th Cir.1985). Neither the statute nor case law construing the statute provide for the assessment of treble damages for compensatory damages arising from a breach of contract to pay money. While fraud was pled, no finding of fraud was made. Under Florida law, a necessary element for establishing the crime of theft is that the defendant had, prior to the commission of the act, an intent to commit a theft. Hurd v. State, 440 So.2d 691 (Fla. 1st DCA 1983); State v. Dunmann, 427 So.2d 166 (Fla.1983); Section 812.014, Florida Statutes (1983).

A co-owner of a joint bank account cannot be guilty of the theft of funds taken from the account since the co-owner is in lawful possession of the joint property, Hinkle v. State, 355 So.2d 465 (Fla. 3d DCA 1978) cert. dism., 359 So.2d 1220 (Fla.1978). Here, both parties were signatory to the joint venture bank accounts. They both had the right to control the funds. The closing proceeds were paid to Rosen. The closing expenses were paid by Rosen. All remaining monies were taken by Rosen with Marlin's consent and knowledge. Accountants analyzed the books to determine the expenses of the venture, the contributions of the defendant, and the amount necessary to equalize the draws. It took forty hours of accounting time to determine the exact figures. There was no theft of any money as a matter of law. Hinkle v. State, supra. Under the undisputed facts, there was no theft. Crawford v. State, 453 So.2d 1139 (Fla. 2d DCA 1984); Adams v. State, 443 So.2d 1003 (Fla. 2d DCA 1983); Martin v. State, 379 So.2d 179 (Fla. 1st DCA 1980); Ricard v. State, 181 So.2d 677 (Fla.3d DCA 1966). The trial court found that Rosen's refusal to pay monies determined to be due and owing in accordance with the partnership agreement constituted conversion and theft. As a matter of law, no conversion occurred. In Belford Trucking Co., Inc. v. Zagar, supra, the court held:

"[A] mere obligation to pay money may not be enforced by a conversion action (citations omitted); an action in tort is inappropriate where the basis of the suit is contract, either express or implied."

A debt which may be discharged by the payment of money in general cannot form the basis of a claim for conversion. Capital Bank v. G & J Investment Corporation, supra; Schimmel v. Merrill Lynch Pierce Fenner & Smith, Inc., 464 So.2d 602 (Fla.3d DCA 1985); Plotch v. Gregory, supra; Douglas v. Braman Porsche Audi, Inc., 451 So.2d 1038 (Fla.3d DCA 1984).

This is not a case where a party intentionally received a specifically identifiable sum of money knowing that he had no right to take it and who refused to give it back as was the case in Senfeld v. Bank of Nova Scotia Trust Company Cayman Ltd., 450 So.2d 1157 (Fla.3d DCA 1984). This is not a case where a party refused to pay over to the demanding party a specific fund capable of separate identification required to be deposited into a special account as was the case in Aero International Corp. v. Florida National Bank of Miami, 437 So.2d 156 (Fla.3d DCA 1983) pet. for rev. den., 449 So.2d 264 (Fla.1984). A breach of contract to pay money in general does not constitute conversion under the law of Florida. Douglas v. Braman Porsche Audi, Inc., supra.

The trial court found no separate compensatory damages stemming from a conversion or theft apart from the $138,704.82 found to be due and owing as payment pursuant to the contract and the claim for breach of contract contained in count I. Accordingly, the finding of an independent tort cannot stand as a matter of law. Overseas Equipment Company, Inc. v. AcerosArquitectonicos, 374 So.2d 537 (Fla.3d DCA 1979).

Where the compensatory damages requested in a count for tort are identical to the compensatory damages sought in a count for breach of contract, compensatory damages and punitive damages for the tort are not recoverable. Rolls v. Bliss & Nyitray, Inc., 408 So.2d 229 (Fla.3d DCA 1981), cert. dism.'d, 415 So.2d 1359 (Fla.1982); Schimmel, supra.

Punitive damages are not recoverable for breach of contract, notwithstanding the oppressive nature of the breach. Waltman v. Prime Motor Inns, Inc., 446 So.2d 185 (Fla.3d DCA 1984); Mobile Chemical Company, A Division of Mobil Corporation v. Hawkins, 440 So.2d 378 (Fla. 1st DCA 1983), rev. den., 449 So.2d 264 (Fla.1984); Guthartz v. Lewis, 408 So.2d 600 (Fla. 3d DCA 1981), aff'd, 428 So.2d 222 (Fla.1983). In Waltman, one co-joint adventurer sued another co-joint adventurer for compensatory and punitive damages for failure to distribute a rightful share of the proceeds resulting from a sale of a joint venture asset. The trial court directed a verdict in favor of the defendant on the punitive damage claim for conversion. The jury returned a verdict for the plaintiffs' share of the proceeds. The trial court granted a new trial. The appellate court reversed and reinstated the jury verdict, but affirmed the directed verdict on the punitive damage claim. In the case at bar, the trial court trebled the compensatory damages due and owing on the breach of contract claim. This was error. ⁶ Even if trebling would be permitted when damages are recovered from a contracting party, they should not be warranted when the amount is in dispute. Advanced Surgical Technologies, Inc. v. Automated Instruments, Inc., supra.

The appellee relies on the following authorities to support the trebling of the damage award, which we find not to be applicable under the facts in the instant record. Senfeld v. Bank of Nova Scotia Trust Company (Cayman), Limited, supra, (trust company brought civil suit pursuant to the theft statute against corporation president who had erroneously received $10,000 from trust company which managed corporation's account); Aero International Corporation v. Florida National Bank of Miami, 437 So.2d 156 (Fla.3d DCA 1983) (action brought against bank for converting funds entrusted to it under escrow agreement); Restivo v. Anderson & Anderson, P.A., 453 So.2d 1167 (Fla. 4th DCA 1984) (client entitled to sum held in trust by attorneys which was not in dispute and retention of said amount was a conversion).

The attorney's fees having been awarded pursuant to the provisions of Sec....