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In a ruling that gives plaintiffs a new weapon in commercial lease disputes, the Florida Supreme Court said that parties can recover damages under Florida’s Deceptive and Unfair Trade Practices Act by proving that they were cheated in a single transaction. In its March 13 decision, the high court ruled 5-2 that plaintiffs were not required to show that a defendant corporation engaged in a broad pattern of “regular and systematic” deceptive or unfair business conduct. For the first time, the high court also applied the consumer protection law to commercial landlord-tenant disputes. In PNR v. Beacon Property Management Inc., the court held that a commercial landlord who has breached a lease agreement by failing to properly maintain the premises could be found liable under the trade practices statute. The high court’s decision overturned a unanimous April 2001 ruling by the 4th District Court of Appeal in West Palm Beach. The supreme court said the 4th DCA’s opinion that the deceptive trade act was limited to cases involving “habitual and customary” consumer fraud is inconsistent with decisions in all five of Florida’s appellate courts. Even the 4th DCA had previously upheld a DUTPA case involving a single violation. “It is clear that that prohibition is broad enough to protect against instances of unfair or deceptive conduct as to a single party or under a single transaction or contract,” Justice Fred Lewis wrote for the majority. Chief Justice Harry Anstead, Justices Barbara Pariente and Peggy Quince and now-retired Leander Shaw Jr. concurred, while Justice Charles Wells and now-retired Justice Major Harding dissented. “My concern is that the practical effect of this decision will be to convert every breach of lease claim into a claim under FDUTPA,” Justice Wells wrote. Stanley Wakshlag, a shareholder at Akerman Senterfitt in Miami who handles commercial litigation, agreed that the ruling is likely to increase the number of deceptive trade claims in lawsuits over commercial leases. But that could be short-lived. “It wouldn’t surprise me if the Legislature modified the statute to make it clear that it should only apply to systemic business practices and not isolated contractual disputes,” he said. Florida’s deceptive trade act, enacted in 1991, protects the public from companies that engage in deceptive business practices and “unfair methods of competition.” It is used in lawsuits filed against entities such as car dealerships that cheat customers by concealing the accident history of an automobile and companies that solicit investors’ money under false pretenses. A major advantage of the act is that parties who sue under the statute and win are entitled to attorney fees, which allows individual consumers to pursue legal claims they could not otherwise afford. It also makes it more economically feasible for plaintiffs’ lawyers to take the case. The supreme court decision came in a lawsuit over a business dispute between a Boca Raton restaurant owner, PNR, and its landlord, Ocean One North. In September 1994, PNR’s president, James Robinson, purchased an Italian restaurant called Goodfellas and took over its lease in an oceanfront building located on State Road A1A in Boca Raton. The landlord, Ocean One, was a corporation co-owned by Boca Raton businessmen Matt Giacomino and Ernest Willis and their wives. Willis and his wife, Sunday, also jointly owned Beacon Property Management Co., which managed the Ocean One property from July 1989 to July 1994. Shortly after PNR purchased Goodfellas, the restaurant began experiencing water leaks in the ceiling, power failures and other serious problems. PNR said it repeatedly notified the owners of the problems but they were never fixed. According to PNR, Giacomino referred its repair requests to Beacon, which Giacomino said was responsible for the building’s maintenance. But Beacon said it was not required to maintain the property under its management agreement with Ocean One. The five-year management contract had only required Beacon to collect rent payments, pay bills on the property, provide accounting to the owners and act as a liaison between Ocean One and its tenants, the property management company claimed. In July 1995, the north wall of the building collapsed. PNR was forced to shut the restaurant for seven months and eventually went out of business. In March 1996, PNR filed suit in Palm Beach Circuit Court against Ocean One, Beacon, Giacomino and Willis for failing to maintain the building and failing to fulfill promises to make renovations. PNR claimed fraud, deceptive and unfair trade practices, tortious interference and wrongful eviction. It also sued Ocean One for breach of the lease and breach of covenant of quiet enjoyment, which protects tenants from undue interference from the landlord and requires the owner to maintain a safe and sanitary environment. Prior to the trial in December 1998, Giacomino settled with PNR for $22,500 and testified against Beacon and Willis. The jury found the remaining defendants liable on almost all counts and awarded PNR $800,000 in compensatory damages and $1.2 million in punitive damages. Although the jury found Ocean One shared liability for a large portion of the total damages, Ocean One had sold the building six months before the trial and had no remaining assets, said Vincent LoCurto, a partner at Brown, LoCurto & Robert in Fort Lauderdale who represented PNR. Beacon and Willis appealed the verdict to the 4th DCA. In April 2001, the 4th DCA threw out the $2.1 million award. In their decision, Judges Gary Farmer, John Dell and George Shahood ruled that there was not enough evidence to support the fraud and tortious interference claims against Beacon and Willis. On the deceptive trade practices claim, the 4th DCA said that failing to maintain property under a commercial lease did not involve “methods of competition” or “unfair trade practices” that the act sought to prohibit. It also said the trade practices act only was intended to protect consumers against multiple instances of misconduct that would constitute a pattern of “regular or systematic” deceit. “A single instance of doing something does not make it a method or practice,” Judge Farmer wrote for the panel. “Evidence that the landlord acted in a particular way with this tenant does not prove a habitual or customary action or way of doing something.” PNR appealed the 4th DCA reversal on the deceptive trade act claim. Last month, the supreme court ruled that the 4th DCA had misread the act to exclude single violations. The justices remanded the case to the 4th DCA for reconsideration. The supreme court did not explicitly instruct the lower court to reinstate the $200,000 jury award on this claim. If the 4th DCA reverses itself and grants PNR damages under the trade practices act, the restaurant owner would receive $200,000 plus post-judgment interest and attorney fees. The rest of the $2.1 million verdict remains quashed. Punitive damages cannot be recovered under the trade practices act. “The supreme court gave back important rights that were taken away by the 4th District,” LoCurto said. If the 4th DCA’s opinion had stood, he said, the trade practices act would be enforceable only through class action lawsuits, making it “basically impossible for individuals to sue.” But David Maher, attorney for Beacon Property Management, warned that the supreme court’s decision sets a dangerous precedent. The trade practices act was enacted “for unsophisticated people who can’t protect themselves in business transactions,” said Maher, an associate at Harke & Clasby in Miami. “In this case, PNR had accountants and lawyers to look at the lease agreement before they signed it. This opens the door for allowing Donald Trump to bring an action under DUTPA.” In their dissent, Justices Wells and Harding argued that the supreme court had no grounds for taking jurisdiction. No case from another district explicitly conflicted with the facts presented in the 4th DCA’s review of PNR’s commercial lease dispute, they said. The high court did not review the 4th DCA’s ruling on any of the other issues, since the part dealing with the deceptive trade act was the only one that conflicted with case law in other appellate districts. Maher has already filed a motion with the 4th DCA requesting re-argument of PNR’s right to recovery under trade practices act. Maher claims that Willis had no individual liability because he was acting in his capacity as a corporate officer. Maher also argues that Beacon has no responsibility because the jury had ruled that Beacon had not breached its duty to maintain the property under its management agreement with Ocean One. “You can’t be found liable without establishing that you had a duty to do something,” Maher said. “In this case, only Ocean One was required to perform maintenance.”

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