Williams v. Peak Resorts Intern. Inc.

• Decision Date: 12 July 1996
• Docket Number: No. 95-1325,95-1325
• Citation: Williams v. Peak Resorts Intern. Inc., 676 So.2d 513 (Fla. App. 1996)
• Parties: 21 Fla. L. Weekly D1622 P. Bryce WILLIAMS and Michael J. Dwyer, Appellants, v. PEAK RESORTS INTERNATIONAL INC., et al., Appellees.
• Court: Florida District Court of Appeals

Page 513

676 So.2d 513

21 Fla. L. Weekly D1622

P. Bryce WILLIAMS and Michael J. Dwyer, Appellants, v.PEAK RESORTS INTERNATIONAL INC., et al., Appellees.

No. 95-1325.

District Court of Appeal of Florida Fifth District.

July 12, 1996.

Patrick C. Crowell of Patrick C. Crowell, P.A., Orlando, for Appellants.

Walter S. McLin, III and Phillip S. Smith of McLin, Burnsed, Morrison, Johnson & Robuck, P.A., Leesburg, for Appellees.

THOMPSON, Judge.

P. Bryce Williams and Michael J. Dwyer, appellants, appeal the partial summary judgment entered against them as to Count I (Florida's Communication Fraud Act), Count II (Common Law Fraud), and Count IV (Quantum Meruit)¹ of their counterclaims against Peak Resorts International, Inc., Peak Financial Corporation of Florida, James W. Peak, Samuel H. Simkin, and Max P. Cawal.We reverse the partial summary judgment, and remand for further proceedings.

Peak Resorts International, Inc.("Peak Resorts"), a Florida corporation having a principal place of business in Florida, was formed for the purpose of developing resort properties.Peak Financial Corporation of Florida ("Peak Financial") is a shareholder of Peak Resorts.James W. Peak("Peak") is the President and one of three shareholders of Peak Financial, and is the President of Peak Resorts.Samuel H. Simkin("Simkin") is one of three shareholders of Peak Financial, and an officer of Peak Resorts.Max P. Cawal("Cawal") is also one of three shareholders of Peak Financial, and an officer of Peak Resorts.

In 1992, Peak Resorts began contracting for and obtaining options to purchase certain real properties in Osceola and Lake Counties for the purpose of constructing a time-share resort.In April or May 1992, Peak Resorts began negotiations with appellantP. Bryce Williams("Williams") for the purpose of obtaining his services as Vice President and Chief Financial Officer of Peak Resorts.Over the course of the next few months, Simkin, Cawal, and Peak allegedly made several false representations to Williams regarding the financial status of Peak Enterprises(including Peak, Peak Financial, and Peak Resorts).Those alleged false representations included statements that Peak Enterprises was financially strong and was capable of providing compensation to Williams for his services.Williams allegedly relied on these representations and in August 1992, accepted Peak Resorts' offer of employment.Peak Resorts and Williams executed an employment agreement which provided that Williams would serve as the Executive Vice-President (EVP) and Chief Financial Officer (CFO) of Peak Resorts.The terms of the contract provided that Williams would be employed as an independent contractor from 1 September 1992 through 21 December 1992, and on 1 January 1993, he would serve as the EVP and CFO of Peak Resorts at an annual salary of $190,000.A second employment agreement was executed between Williams and Peak Resorts with an effective date of 1 April 1993.Pursuant to the second agreement, Williams was to receive an annual base salary of $140,000.

In June 1992, Peak Resorts began negotiations with Michael J. Dwyer("Dwyer"), in an effort to obtain his services as the Vice President of Sales and Marketing and Project Director for the development of the property in Osceola and Lake Counties.Dwyer also relied on the alleged representations by Simkin, Cawal, and Peak, and in June 1992, began providing services pursuant to certain letter agreements indicating that Dwyer was to receive an annual base salary of $200,000, in addition to sales bonuses.In March 1993, Peak Resorts failed to pay amounts that were owed to Williams and Dwyer pursuant to their employment contracts.

This cause was commenced when Peak Resorts filed a complaint against Williams and Dwyer alleging extortion, conversion and conspiracy causes of action.Williams and Dwyer timely filed their answers, affirmative defenses and counterclaims.This appeal concerns the counterclaims brought by Williams and Dwyer against Peak Resort, Peak Financial, Peak, Simkin, and Cawal, which are as follows: (1) Count I--violation of Florida's Communications Fraud Act, section 817.034, Florida Statutes(1991);(2) Count II--common law fraud; (3) Count III--breach of agreement; (4) Count IV--quantum meruit; and (5) Count V--breach of de facto employment agreement as to Williams only.The allegations as to all counts arose from the formation and performance of the employment contracts between Peak Resorts, Dwyer and Williams.The fraud claims are based on alleged misrepresentations by Peak Resorts, Peak Financial, Peak, Simkin and Cawal regarding Peak Resorts' ability to meet its obligations under the employment contracts.The record also contains affidavits of Dwyer and Williams detailing the damages they suffered as to the fraud claims, which damages are separate from the damages incurred as a result of Peak Resorts' breach of the employment contracts.According to their affidavits, Dwyer and Williams suffered the following damages in addition to the salaries agreed to: moving expenses; damage to credit; medical expenses; lost employment and opportunity for employment; and the sale of their homes.

Peak Resorts filed a motion for Partial Summary Final Judgment as to Counts I, II, and IV of the appellant's counterclaims.After a hearing on the motion, the trial court entered an order granting partial summary judgment for Peak Resorts as to Counts I, II, and IV of the appellants' counterclaims.In so doing, the trial court specifically found that the allegations in Count I were not separate from the allegations in the breach of contract claim; and that there being no genuine issue as to any material fact as to the interdependence of the facts supporting Count I and their claim for breach of contract, Dwyer and Williams were limited to obtaining and proving the right to recovery under their claim for breach of contract.As to Count II, the trial court found that Williams and Dwyer could not recover for purely economic losses absent evidence of physical injury or property damage; that their tort cause of action was identical to and inextricable from the evidence and facts arising from an alleged employment contract; and that there being no genuine issue as to any material fact regarding liability of Peak Resorts, Peak Financial, Peak, Simkin, and Cawal for common law fraud, Dwyer and Williams were limited to obtaining and proving the right to recovery under their claim for breach of contract.

Peak Resorts admitted breaching the employment contracts with Dwyer and Williams during a jury trial on Peak Resorts' Complaint against Williams and Dwyer, and on Counts III & V of their counterclaims.Accordingly, the trial court entered a judgment in favor of Dwyer and Williams and against Peak Resorts for breach of contract damages.

On appeal, Williams and Dwyer contend that the trial court erroneously granted summary judgment as to their fraud counterclaims against Peak Resorts, based upon its finding that the facts and evidence supporting their fraud claims arose out of and were not separate from the allegations supporting their breach of contract claims.We agree.In their counterclaims against Peak Resorts, Williams and Dwyer specifically alleged that during the negotiations regarding employment opportunities within Peak Resorts, Simkin, Cawal and Peak made false representations in an effort to induce them to enter into employment contracts.The alleged false representations included remarks that the Peak Enterprises(Peak Resorts, Peak Financial, and Peak) had a strong financial status and was able to pay the negotiated salaries to Williams and Dwyer.In addition, Williams and Dwyer alleged that Peak fraudulently represented that he had a net worth of $21 million in an effort to induce their employment and assure them that they would be compensated for their services.Further, as to Count I only, Williams and Dwyer alleged that Peak Resorts violated Florida's Communications Fraud Act by making false representations through "the transmission or transfer of signs, signals, writing, images, sounds, data, or intelligences of any nature in whole or in part by the mail, or by wire, radio, electromagnetic, photo-electronic, or photo-optical systems."These allegations, which have not been disputed by Peak Resorts, when viewed along with the record evidence indicate that there are genuine issues of material fact.Therefore, the trial court erroneously granted summary judgment as to Counts I and II of the counterclaims.

This court recently decided a similar issue in Acadia Partners v. Tompkins, 673 So.2d 487, (Fla. 5th DCA1996).There, Acadia filed two actions against Tompkins Investment Group Incorporated: (1) a breach of credit agreement claim (the 319 action); and (2) a fraud in the inducement to enter the agreement claim, among other claims (the 320 action).The trial court entered summary judgment as to Acadia's breach of contract action based on the recommendation of a special master that the facts necessary to establish the claims in the fraud action were identical to the underlying facts and circumstances which were presented to the jury in the breach of contract case.On appeal, this court reversed the summary judgment, specifically rejecting the argument that the fraud action was barred by the election of remedies principle.In so doing, this court agreed with Ashland Oil, Inc. v. Pickard, 269 So.2d 714, 723(Fla. 3d DCA1972), cert. denied, 285 So.2d 18(Fla.1973), that

'... (O)ne who has been fraudulently induced into a contract may elect to stand by that contract and sue for damages for the fraud.When this happens and the defrauding party also refuses to perform the contract as it stands, he commits a second wrong, and a separate and distinct cause of action arises for the breach of contract.The same basic transaction gives rise to distinct and independent causes of action which may...