Counsel Beware: Considerations Before Implementing Florida’s Civil Theft Statute
It has become common practice, and something of an automatic-pilot response, to propound civil theft claims in cases where money or nonpecuniary property is wrongfully and fraudulently obtained by a third party. Florida’s statutory based civil theft cause of action1 is the popular vehicle often employed by practitioners to effect and realize the civil theft claims. Quite often, civil theft claims are asserted along side the usual garden variety, common law conversion claims.
Unfortunately, most civil theft claims are implemented without considerable forethought as to the benefits and consequences of exploiting this very unique statutory scheme. Too frequently, the civil theft statute is summoned up merely as an ancillary legal vehicle (alongside the common law conversion claim) to ensure recovery for the plaintiff. Litigators should not rashly embrace and blindly employ Florida’s civil theft statute in order to secure a “second bite at the apple.” On the contrary, counsel should afford the civil theft cause of action heightened respect, and view it as a unique conversion claim, complete with its own rigorous and precise evidentiary requirements.
When properly pleaded and proven, civil theft can reward the victorious plaintiff with treble damages. In some cases, a civil theft damages award can be more lucrative than an award secured under a common law conversion claim. Yet despite its pecuniary lure, not every conversion case lends itself to civil theft litigation. The facts of every case must be carefully considered before counsel makes a final affirmative decision to plead a civil theft cause of action.
Unlike the classic common law conversion claim, Florida’s civil theft statute enumerates numerous stringent threshold requirements that must be satisfied in order to state a viable cause of action. These requirements are:
1) Proof of proper “pre-suit” notice;
2) Scrupulous pleading of the complained of theft;
3) An accurate and correct pleading of plaintiff’s potential pecuniary losses; and
4) An accurate and correct assessment of plaintiff’s potential exposure to attorneys’ fees.
The statute’s arduous pleading requirements frequently present unexpected challenges to the unfamiliar attorney. These challenges are completely different from those issues surrounding the successful pleading of a common law conversion claim. For that reason, it is imperative that counsel ponder the facts of a potential case and evaluate all the potential ramifications and benefits that circumscribe assertion of Florida’s civil theft scheme. More importantly, that “pro and con” assessment should be undertaken before a civil theft cause of action is ever formally expounded and discussed with the client.
This article suggests various considerations and evaluations that counsel should entertain before a complaint requesting civil theft relief is ever drafted. These consideration are proffered with the goal of offering assistance to the unfamiliar attorney, so that counsel can strategically plan a successful outcome. Careful consideration to these guidelines will promote prudent and judicious implementation of the civil theft statute.
The first consideration to tackle when pleading a civil theft cause of action is the issue of “pre-suit notice.” Second, consideration should be given whether the economic loss rule (no recovery in tort where the case is purely contractual)2 may actually bar the civil theft claim. Third, a thorough analysis of the facts should be undertaken to see if the heightened “clear and convincing” evidentiary standard applicable to a civil theft cause of action3 can be satisfied. Finally, the success of proving that a defendant acted with “criminal intent” needs to be carefully evaluated.
On the issue of damages, important consideration must be given as to whether the recovery of treble damages and attorneys’ fees under the civil theft statue is potentially outweighed by the possibility of an adverse judgment award. This issue is particularly applicable in cases where the plaintiff might successfully prevail on other legal claims arising from the same fact scenario. In these cases, it is entirely possible that an attorney, for strategic reasons only, may purposely elect to omit pleading a civil theft claim, especially where pleading the civil theft cause of action could expose his client to additional, unwanted monetary exposure.
For all of the foregoing reasons, the civil theft claim should be discussed in detail with a client. The key to success with the civil theft statute is meticulous scrutiny of the facts and a sound assessment of whether the facts at hand warrant pleading of the civil theft statute.
The civil theft statute, F.S. §772.11 (1) (2001), entitled “Civil Remedy For Theft,” provides:4
Any person who proves by clear and convincing evidence that he or she has been injured in any fashion by reason of any violation of the provisions of ss. 812.012-812.037 has a cause of action for threefold the actual damages sustained and, in any such action, is entitled to minimum damages in the amount of $200, and reasonable attorney’s fees and court costs in the trial and appellate courts.
Before filing an action for damages under this section, the person claiming injury must make a written demand for $200 or the treble damage amount of the person liable for damages under this section.
If the person to whom a written demand is made complies with such demand within 30 days after receipt of the demand, that person shall be given a written release from further civil liability for the specific act of theft by the person making the written demand.
Any person who has a cause of action under this section may recover the damages allowed under this section from the parents or legal guardian of any unemancipated minor who lives with his or her parents or legal guardian and who is liable for damages under this section.
In no event shall punitive damages be awarded under this section.
The defendant shall be entitled to recover reasonable attorney’s fees and court costs in the trial and appellate courts upon a finding that the claimant raised a claim which was without substantial fact or legal support. In awarding attorney’s fees and costs under this section, the court shall not consider the ability of the opposing party to pay such fees and costs.
Nothing under this section shall be interpreted as limiting any right to recover attorney’s fees or costs provided under other provisions of law.
Additional civil remedies are set forth in F.S. §812.035. These remedies include injunction; divestiture; restriction on future activities or investments; dissolution or reorganization of any enterprise; suspension or revocation of any licenses, permits, or approvals issued by state agencies or departments; and revocation of corporate charters. No showing of irreparable harm is required for injunctive relief.5 Where statutory civil theft is alleged, there is no limitation on any other remedies provided for by law.6
Pre-suit Notice and Statute of Limitations
The pre-suit notice of F.S. §772.11 requires a written demand for $200 or treble the damage amount for which the potential defendant may be liable.7 Although compliance with the pre-suit notice requirements of §772.11 is mandatory, courts have permitted belated pre-suit notices where the plaintiff has satisfactorily alleged all the prerequisite conditions to state a cause of action.8
Insofar as the statute of limitations is concerned, civil theft actions must be commenced either within five years after the cause of action accrues,9 or within five years of the date the conduct complained of ceases.10 Where the state intervenes and commences a civil or criminal action against the same defendant for the same conduct, the private plaintiff’s cause of action is suspended until the state’s action is concluded.11 Thereafter, the private plaintiff has two years to file suit.12
Legally Recognized Property Interest
The tort of civil theft is not committed by the mere failure to pay monies contractually due.13 Plaintiff must establish and successfully identify “a legally recognized property interest in the items stolen.”14 Where the property interest is unidentifiable or unquantifiable, the civil theft claim fails.15 Notably, the more identifiable the property, the better the chance for survival of plaintiff’s civil theft cause of action.16
The precise extent of specificity required to satisfy the “legally recognized property interest” requirement appears to be a subject that lends itself to interpretation but is often premised on the particular facts and circumstances of each case.17
In Burr v. Norris, 667 So. 2d 424 (Fla. 2d DCA 1996), a good faith purchaser of property was denied the value of fixtures he had installed, which were intended to increase the home’s value for his benefit at a later date. Plaintiff pled that he was forced to abandon the value of the improvements due to the actions of the defendant. In allowing a claim for civil theft, the court observed that F.S. §772.11 incorporates “real property” within the definition of “property.” The court also held that all forms of real property, including rights, privileges, interests, claims and services could constitute a legally recognized property interest.18
In addition, the definition of real property also incorporated anything of value resulting from a person’s physical or mental labor, including repairs and improvements to property. Accordingly, summary judgment was denied, and the property fixtures were found to be a sufficiently “legally recognizable property interest” to support a civil theft claim.19
Most recently, in Florida Desk, Inc. v. Mitchell International, Inc., 817 So. 2d 1059 (Fla. 5th DCA 2002), the Fifth District was faced, under unusual facts, with determining whether a monetary fund was sufficiently specifically identifiable so as to support the creditor’s civil theft claim. In this somewhat controversial decision,20 the court grappled with an unspecified fund that had been placed by the purchaser, unbeknownst to the creditor, in the hands of an intermediary, Mitchell. But only the intermediary, Mitchell, was contractually obligated to make a payment for goods, to the vendor, Florida Desk, which it did not honor.
In Florida Desk, Florida Hospital engaged the defendant-intermediary, Mitchell, to procure and purchase office equipment for Florida Hospital’s new facility. Mitchell was to purchase and then sell the goods to Florida Hospital. Mitchell’s procedure was to prepare a purchase order directed to the vendor, Florida Desk, for an item or items. Florida Hospital also verified each purchase order complied with its specifications. After approval by Florida Hospital, Mitchell sent the purchase order to Florida Desk and invoiced Florida Hospital for payment of 50 percent of the purchase price, denominated as a “deposit.” These funds were placed in Mitchell’s general operating bank account, but Florida Desk had no knowledge of the payment. The funds were not specifically segregated but this was not a violation of any agreement with Florida Hospital.
There was no evidence that Mitchell obligated itself to Florida Desk to obtain a deposit or hold it for Florida Desk’s benefit.21 After delivery of the goods to Florida Hospital, Mitchell was to invoice the hospital for the balance due. Mitchell’s profit was to be paid separately by Florida Hospital based on a percentage of the total purchases.22 Following this procedure, Mitchell sent three purchase orders to Florida Desk, and Florida Hospital was invoiced. Florida Desk delivered the office furniture to Florida Hospital, and invoiced Mitchell for payment. Mitchell never paid, resulting in the litigation. Among other claims, Florida Desk alleged civil theft against Mitchell based upon the deposit that Florida Desk claimed was held for its benefit, and therefore was sufficiently identifiable to support its civil theft claim. The trial court agreed and entered judgment for Florida Desk.
On appeal, the Fifth District reversed, finding it was not possible to identify specific monies that were intended for, or came from a specific client. In its decision, the court relied on Belford Trucking Co. v. Zagar, 243 So. 2d 646 (Fla. 4th DCA 1970), which identified certain criteria for a conversion claim. Although there seems to be much in the court’s own findings to the contrary, the court held that there was no evidence that there was any obligation on Mitchell’s part to keep intact or hold a specific fund to deliver to Florida Desk.
The Florida Desk court concluded that a dispute over an amount certain does not necessarily make it an “identifiable fund.” The court found it of significance that Florida Desk did not require a deposit before shipping and did not require Mitchell to hold a deposit before shipping the goods. The court found that in order to be a cognizable civil theft claim, the plaintiff would have had to prove that the same monies paid by Florida Hospital were to be held by Mitchell for the benefit of Florida Desk.
The court rejected the notion that a deposit could be considered an identifiable fund. Finally, the court based its conclusion on the risk of nonpayment by Florida Hospital falling upon Mitchell, not Florida Desk. Even though the entire deposit was intended for payment to Florida Desk, the court found that there was no ownership interest in the deposited funds even after delivery of the office equipment to Florida Hospital.
Florida Desk certainly complicates the factual analysis in advising a client of the merit of a potential civil theft claim. In view of this decision, prudent counsel would be well served in being quite careful in the assertion of civil theft claims in cases founded in monetary payments.
Felonious Intent to Steal
Another prerequisite for a viable civil theft cause of action is that plaintiff plead and prove that the defendant acted with “felonious intent to steal.” Where the pleading fails to allege “felonious intent to steal,” a civil theft cause of action fails.23
F.S. §§812.012 through 812.03724 define what constitutes “criminal intent.” In attempting to give substance to the term “felonious intent to steal,” Florida’s courts have looked to the definition of the “criminal intent” and the accompanying interpretation of that particular term of art, as guidance for giving meaning to the term “felonious intent to steal.” In fact, those analyses are often used by the courts to give substance to the definition of “felonious intent to steal,” as used in the civil theft statute.
F.S. §812.014 defines “theft” as follows:
(1) A person commits theft if he or she knowingly obtains or uses, or endeavors to obtain or to use, the property of another with intent to, either temporarily or permanently: (a) Deprive the other person of a right to the property or a benefit from the property. (b) Appropriate the property to his or her own use or to the use of any person not entitled to the use of the property.
Florida case law has borrowed the reasoning of Florida’s “criminal intent” cases and the corresponding statutes, and has applied that reasoning to determine what constitutes “felonious intent to steal” in a variety of case scenarios.25 In the absence of pleading and proof of the defendant’s felonious intent, a finding of conversion alone will not in and of itself support a finding of “felonious intent to steal.”26
Clear and Convincing Evidence
The “felonious intent to steal” requirement of the civil theft statute must be established by clear and convincing evidence.27 In Westinghouse Elect. Corp., Inc. v. Bay County Energy Systems, Inc., 590 So. 2d 986, 988 (Fla. 1st DCA 1991), the court stated:
Clear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established.
Although this standard of proof may be met where the evidence is in conflict, In re Guardianship of Browning, 543 So. 2d 258, 273 (Fla. 2d DCA 1989), approved, 568 So. 2d 4 (Fla. 1990), it seems to preclude evidence that is ambiguous.
Clearly, the civil theft cause of action is subject to a heightened evidentiary standard.28 With this standard in mind, counsel wishing to plead a civil theft cause of action must carefully evaluate all facts, with special and meticulous attention given to the specific circumstances of the case, to ensure that all the elements of proof, including the credibility of witnesses and the precision of the testimony, are adequately satisfied.
Economic Loss Rule Considerations
It is important to note that civil theft claims are not per se barred by the economic loss rule.29 Under the appropriate factual circumstances, a civil theft claim can be successfully pled as an independent tort.30 Hence, under the appropriate circumstances, a plaintiff can establish a civil theft claim in addition to a breach of contract, by pleading and proving the elements of civil theft alongside the breach of contract claim.31
The availability of the civil theft remedy as an additional legal weapon has created new incentives to take “two bites from the same apple” and plead both a tort cause of action (“civil theft” or “conversion”)32 and a breach of contract claim based on the same facts. In Gordon v. Omni Equities, Inc., 605 So. 2d 538 (Fla. 1st DCA 1992), the court held a civil theft action may be maintained, notwithstanding the contractual relationship between the parties, where the plaintiffs pled that defendant “knowingly obtained plaintiff’s money [in a stock transaction] by fraud, willful misrepresentation of a future act, false promises or by false pretenses, fraud or deception, with intent to deprive them of the right to the property or the benefit therefrom in violation of Chapter 812, Florida Statutes.”33
Of significance, in Burke v. Napieracz, 674 So. 2d 756 (Fla. 1st DCA 1996),
the court found that the defendant, who was allowed access to the plaintiff’s account pursuant to a contractual agreement, did not just merely fail to perform his contractual obligation, but also willfully converted plaintiff’s funds for his own personal use. In upholding both the civil theft and the breach of contract claims, the court reasoned that from a legislative perspective, the economic loss rule was not meant “to abrogate a legislatively created scheme designed to extend a civil remedy to those harmed by alleged criminal activity.”34
In Zinn v. Zinn, 549 So. 2d 1141 (Fla. 3d DCA 1989), the court held that shareholders of a corporation, with whom plaintiff enjoyed a contractual relationship, could be held liable for conversion and for civil theft of funds, by reason of defendant’s misappropriation of corporate investments.
The Zinn court upheld a civil theft cause of action where defendant shareholders had not only personally diverted plaintiff’s invested funds to unrelated operations, but also misappropriated plaintiff’s investment for the defendants’ personal use. The Zinn plaintiff successfully argued that the shareholder defendants were personally liable for civil theft, even though his relationship with the defendants was corporate in nature. On appeal, the court expressly rejected the defendants’ argument that there could be no civil theft or conversion liability simply because the relationship between the parties was contractual. The appellate court ruled that notwithstanding the contractual relationship between the plaintiffs and the corporation, defendants were still liable to plaintiff for treble damages by reason of the defendant’s “civil theft” as clearly evidenced by the diversion of the assets from the corporation to the defendants personally and to their unrelated operations.
Similarly, in A-1 Racing Specialties, Inc. v. K & S Imports of Broward County, Inc., 576 So. 2d 421 (Fla. 4th DCA 1991), the court reversed a lower court order dismissing a civil theft claim. At issue in A-1 Racing was the conduct of the corporate officer, who stopped payment on a corporate check that was issued and signed by him. The signature did not unequivocally indicate whether he was signing the check in a corporate capacity. The court found that regardless of whether the check was signed in a corporate capacity, the corporate officer could still be held liable under the civil theft statute, if the nonpayment complained of was committed in such a manner as to evidence a “felonious intent to steal.”
Cases sounding in fraud may support a civil theft claim. In Tinwood, N.V. v. Sun Banks, Inc., 570 So. 2d 955 (Fla. 5th DCA 1990), plaintiff presented proof that former corporate directors acquired property at a vastly lower price than was represented to investors. The undisclosed difference in price was transferred to the directors and to the separate corporations they personally controlled. Supporting the “felonious intent to steal” argument was proof that the directors prepared two sets of closing statements for the transaction. In addition, the directors also entered into a management agreement with a related corporation to funnel out the misappropriated funds.
Treble damages are recoverable by way of a properly entered civil judgment, or where defendant has pled guilty to grand theft.35 A treble damages award and attorneys’ fees are mandatory upon a jury’s verdict finding that the defendant committed civil theft.36 However, a treble damages award precludes any other punitive damages award.37
Under the civil theft statute, attorneys’ fees and court costs are automatically awarded to a successful plaintiff.38 Note, however, that F.S. §772.11 conversely (and simultaneously) discourages civil theft claims that lack legal or factual substance. This “baseless pleading” penalty is realized by way of a loose standard for the award of “reverse” attorneys’ fees. The applicable standard is more elastic than even the “bad faith” standard set forth in F.S. §57.105(1).39
Thus, a prevailing defendant is entitled to an award of fees upon a showing that the civil theft claim “was without substantial fact or legal support.”40 In the absence of an express finding that there was no substantial fact or legal support to support plaintiff’s civil theft claim, no reverse attorneys’ fees will be awarded.41 A defendant will be entitled to reverse attorneys’ fees where there is no justiciable issue of law or fact to support any civil theft claim when the complaint was filed.42
In addition, plaintiff’s success on any other additional claims does not preclude defendant’s statutory right to attorneys’ fees under the civil theft provisions.43 Fees may also be justified under F.S. §57.105(1), even where the plaintiff voluntarily dismissed the civil theft claim.44
Undoubtedly, the civil theft statute is a “sword that cuts both ways.” While treble damages are an attractive lure for plaintiff attorneys, the facts and evidence upon which a case will be formulated must be credible and clear. Attorneys who “stretch” the facts of a case in order to propound a civil theft claim are strongly urged to use caution. Caution is warranted simply because the absence of precise pleading and credible, supportable evidence can backlash and result in a reverse attorneys’ fee award.
The civil theft statute is an effective and lucrative legal weapon if, and only if, it is implemented with forethought and precision. Attorneys are forewarned to employ strategy when considering a civil theft cause of action. The civil theft claim must be supported by credible evidence. If not, the careless or overzealous attorney may not only find himself or herself confronting an adverse judgment, but also facing reverse attorneys’ fees as well.
1 Fla. Stat. §772.11 (2002).
2 See section entitled “Economic Loss Rule Considerations” infra .
3 See section entitled “Clear and Convincing Evidence” infra .
4 The statute, Fla. Stat. §772.11 (2001), has been separated into separate paragraphs by the author for clarity. Effective April 29, 2002, Fla. Stat. §772.11 was amended to include remedies under §825.103(1) for the exploitation of an elderly person or disabled adult, in addition to other principally nonsubstantive changes.
5 Fla. Stat. §812.035 (6).
6 Fla. Stat. §812.035 (11).
7 It is unclear from the statute whether the return of stolen or misappropriated property or monies during the 30-day period after receipt of the pre-suit demand is received terminates the right to treble damages. The case law does not address this issue, but a reasonable interpretation, notwithstanding a literal reading of the statute, implies that tender would vitiate any entitlement to treble damages. However, strict interpretation would mandate that since the violation is alleged to have already occurred, defendant’s payment of the treble damages amount is required in order to avoid suit on the civil theft claim.
8 See, e.g., Nerbonne, N.V. v. Lake Bryan Int’l Properties , 689 So. 2d 322 (Fla. 5th D.C.A. 1997) (where the complaint did not allege compliance with the pre-suit notice requirement, but did allege that all prerequisite conditions prior to filing suit had been satisfied, plaintiff was granted time to comply with the pre-notice requirements). A key consideration in Nerbonne was that the statute of limitations had not expired; thus “allowing” the court to permit the late pre-suit filing. Clearly if the statute of limitations had expired, the pleading would have failed in its entirety. See also Naturally Beautiful Nails, Inc. v. Wal-Mart Stores, Inc. , 262 B.R. 131 (Bankr. M.D. Fla. 2001) (defendant unsuccessfully moved for summary judgment arguing that the civil theft cause of action was precluded by the plaintiff’s failure to comply with the 30-day written demand requirement required by Fla. Stat. §772.11); Korman v. Iglesias , 736 F. Supp. 261 (S.D. Fla. 1990) (Although the plaintiff did not satisfy the statutory “pre-notice” requirement because the demand for payment was sent to the defendant the same day suit was filed, the bankruptcy court denied summary judgment, citing Nerbonne, holding that since the written demand was made before the expiration of the five-year statute of limitations, the civil theft cause of action was still viable).
9 Fla. Stat. §812.035 (10).
10 Fla. Stat. §772.17; see Huff Groves Trust v. Caulkins Indiantown Citrus Co. , 27 Fla. L. Weekly D 2027 (Fla. 4th D.C.A. 2002). Fla. Stat. §772.17 provides: “Notwithstanding any other provision of law, a civil action or proceeding under this chapter may be commenced at any time within 5 years after the conduct in violation of the provision of this act terminates or the cause of action accrues.” A cause of action is said to accrue when the last element constituting the cause of action occurs. Fla. Stat. §95.031 (1). An action is not barred by the five-year statute of limitations where misrepresentations delay discovery of the tort. The “delayed discovery” doctrine “provides that a cause of action does not accrue until the plaintiff either knows or reasonably should know of a tortious act giving rise to the cause of action.” Hearndon v. Graham , 767 So. 2d 1179, 1184 (Fla. 2000). Therefore, once the plaintiff knows or reasonably should know of a tortious act, the action accrues and the statute of limitations is triggered. Id. ; Huff Groves , 27 Fla. L. Weekly D 2027, *5. However, it is not necessary that the plaintiff know all the elements of the alleged cause of action at that time. See Korman v. Iglesias , 825 F. Supp. 1010, 1014 (S.D. Fla. 1993); see also Keller v. Reed , 603 So. 2d 717 (Fla. 2d D.C.A. 1992).
11 Fla. Stat. §772.17.
12 Id .
13 See Gambolati v. Sarkisian , 622 So. 2d 47 (Fla. 4th D.C.A. 1993); Belford Trucking Co. v. Zagar , 242 So. 2d 646 (Fla. 4th D.C.A. 1970).
14 Balcor Property Management, Inc. v. Ahronovitz , 634 So. 2d 277, 279 (Fla. 4th D.C.A. 1994).
15 See, e.g., Miles Plastering & Associates v. McDevitt , 573 So. 2d 931 (Fla. 2d D.C.A. 1991) (court concluded that where the amount in controversy was unknown by the parties and there was no identifiable account or piece of property from which money was to be paid, an action for civil theft did not lie).
16 See, e.g., Escudero v. Hasbrun , 689 So. 2d 1144 (Fla. 3d D.C.A. 1997) (court held that a civil theft claim survived and was properly pled where plaintiff identified a specific sum of money from an identifiable source).
17 Compare, e.g., Lewis v. Heartsong , 559 So. 2d 453 (Fla. 1st D.C.A. 1990) (inventory); Gordon v. Omni Equities, Inc. , 605 So. 2d 538 (Fla. 1st D.C.A. 1992) (stock transaction); Burke v. Napieracz , 674 So. 2d 756 (Fla. 1st D.C.A. 1996) (bank account); Burr v. Norris , 667 So. 2d 424 (Fla. 2d D.C.A. 1996) (property fixtures); Zinn v. Zinn , 549 So. 2d 1141 (Fla. 3d D.C.A. 1989) (corporate investment); A-1 Racing Specialties, Inc. v. K & S Imports of Broward County, Inc. , 576 So. 2d 421 (Fla. 4th D.C.A. 1991) (stop payment on check); Russo v. Heil Construction, Inc. , 549 So. 2d 676 (Fla. 5th D.C.A. 1989) (construction dispute); and Tinwood, N.V. v. Sun Banks, Inc. (real estate).
18 Burr v. Norris , 667 So. 2d at 425.
19 See also Russo v. Heil Construction, Inc. , 549 So. 2d 676 (Fla. 5th D.C.A. 1989) (court held it was error to dismiss a civil theft claim in the context of a construction project failure, where defendant contractor removed the door he installed in plaintiff’s home).
20 One of the three judges dissented. The court’s reasoning makes assumptions that may be questioned. In particular, the payment at issue to the debtor-intermediary, while not known to the creditor, can be viewed as an “identifiable fund” ultimately intended for the benefit of the creditor. Although the payment was not segregated, the obvious intention of the payment by the purchaser was that the payment was made for the benefit of the vendor, and to induce the debtor to request delivery from the creditor-vendor to the purchaser. The debtor, in essence, served as the agent of the creditor for purposes of holding the payment. The court’s finding that the debtor had no obligation to the vendor-creditor to hold an identifiable fund seems to neglect the intent of the payment made by the purchaser.
21 This would seem to be contrary to the fact that the payment by Florida Hospital, as recognized by the court, was denominated as a “deposit.” The court seems to rely primarily upon the fact that Florida Desk did not know, at that time, that a deposit was held by Mitchell.
22 This would tend to suggest to this author that the deposit was, in fact “earmarked” for the benefit of Florida Desk. At least this is an additional factor that is not sufficiently addressed by the court.
23 Lewis v. Heartsong , 559 So. 2d 453 (Fla. 1st D.C.A. 1990) (court ruled that the complaint was deficient where a store owner failed to allege that defendants, who removed inventory and property from the store without consent, and then refused to return the property or tender payment, acted with a “felonious intent to steal” ).
24 Effective April 29, 2002, Fla. Stat. §825.103 (1), providing criminal penalties for the exploitation of an elderly or disabled adult, was added as an additional violation under Fla. Stat. §772.11.
25 See Gersh v. Cofman , 769 So. 2d 407 (Fla. 4th D.C.A. 2000) (appellate court reversed finding “felonious intent to steal” where evidence supplied by the plaintiff proved an elaborate scheme to steal); City of Cars, Inc. v. Simms , 526 So. 2d 119 (Fla. 5th D.C.A.), rev. denied , 534 So. 2d 401 (Fla. 1988); St. John v. Kuper , 489 So. 2d 833 (Fla. 3d D.C.A. 1986).
26 Bertoglio v. American Savings & Loan Assoc. of Florida , 491 So. 2d 1216 (Fla. 3d D.C.A. 1986); see also Pathway Financial v. Miami Int’l Realty Co. , 588 So. 2d 1000 (Fla. 3d D.C.A. 1991) (where Third District reversed a jury’s finding of civil theft citing the jury’s independent determination that no fraud or misrepresentation occurred).
27 See Westinghouse Elect. Corp., Inc. v. Bay County Energy Systems, Inc. , 590 So. 2d 986 (Fla. 1st D.C.A. 1991); Senfeld v. Bank of Nova Scotia Trust Co. , 450 So. 2d 1157 (Fla. 3d D.C.A. 1984); Anthony Distributors, Inc. v. Miller Brewing Co., Inc. , 941 F. Supp 1567, 1575 (M.D. Fla. 1996).
28 In support of such proof, a judgment or decree in a separate criminal case can often serve as a basis for successfully pleading a civil theft cause of action. See, e.g., Star Tyme v. Cohen , 659 So. 2d 1064, 1067 (Fla. 1995) (“Under the plain language of §772.14, all that is necessary to collaterally estop a defendant in a Chapter 772 civil suit is ‘a final judgment or decree rendered in favor of the state’ in a prior prosecution addressing the conduct at issue in the civil suit.”); Paterno v. Fernandez , 569 So. 2d 1349 (Fla. 3d D.C.A. 1990) (upholding summary judgment for victims of civil theft in subsequent civil proceeding).
29 On the economic loss rule generally, see, e.g., Moransais v. Heathman , 744 So. 2d 973 (Fla. 1999); HTP Ltd. v. Lineas Aereas Costarricenses, S.A. , 685 So. 2d 1238 (Fla. 1996); and Casa Clara Condominium Ass’n. v. Charley Toppino & Sons, Inc. , 620 So. 2d 1244 (Fla. 1993).
30 See Pershing Indus., Inc. v. The Estate of Victoria Sanz , 740 So. 2d 1246 (Fla. 3d D.C.A. 1999).
31 See City of Cars, Inc. v. Simms , 526 So. 2d 119 (Fla. 5th D.C.A. 1988), rev. denied , 534 So. 2d 401 (Fla. 1988); American Int’l Land Corp. v. Hanna , 323 So. 2d 567 (Fla. 1975). Beware, however, that Florida precedent exists holding that pleading contract and civil theft claims in the same pleading is inherently flawed because both are mutually exclusive causes of action. See, e.g., Rosen v. Marlin , 486 So. 2d 623 (Fla. 3d D.C.A. 1986) (treble damages awardable in a civil theft action were not available in an action sounding in breach of contract); cf. Sarkis v. Pafford Oil Co. , 697 So. 2d 524 (Fla. 1st D.C.A. 1997) (where court barred civil theft and RICO claims under the economic loss rule, but allowed Florida Unfair and Deceptive Trade Practices Act claim in case arising out of supplier’s contractual obligation to deliver gasoline, which was allegedly breached when supplier delivered inferior gas).
32 A plaintiff seeking treble damages should plead claims for conversion and civil theft claims in separate counts. See City of Cars, Inc. v. Simms , 526 So. 2d 119 (Fla. 5th D.C.A.), rev. denied , 534 So. 2d 401 (Fla. 1988); see also Le Dauphin Condominium Assoc., Inc. v. Groundwork of Palm Beach County, Inc. , 719 So. 2d 13 (Fla. 2d D.C.A. 1998) (court affirmed dismissal of claim for civil theft because it could not find sufficient evidence of “felonious intent to steal,” yet reversed the final judgment in favor of the defendant on the common law conversion claim). Treble damages in favor of a plaintiff are not discretionary under the civil theft statute, but the practitioner should not be beguiled into seeking such relief, where the chances of meeting the evidentiary standard, as discussed in this article, are met by relative uncertainty as to the ultimate outcome.
33 See also Burke v. Napieracz , 674 So. 2d 756 (Fla. 1st D.C.A. 1996) (the court held that plaintiff’s allegations of defendant’s wrongful misappropriation of money from the plaintiff’s account for plaintiff’s personal use amply supported plaintiff’s civil theft claim); Duncan v. Kasim, Inc. , 810 So. 2d 968 (Fla. 5th D.C.A. 2002) (applying analysis that civil theft claim will lie where there is a claim that the defendant misappropriated or embezzled trust funds and such claim amounts to an independent tort, where the claim is that partnership property was converted to personal use).
34 Burke , 674 So. 2d at 759.
35 Anton v. Anton , 763 So. 2d 404 (Fla. 4th D.C.A. 2000).
36 Aagaard-Juergensen, Inc. v. Lettellier , 579 So. 2d 404 (Fla. 5th D.C.A. 1991).
37 Fla. Stat. §772.11; Greenberg v. Grossman , 683 So. 2d 156 (Fla. 3d D.C.A. 1996); see also Snyder v. Bell , 746 So. 2d 1096 (Fla. 2d D.C.A. 1999); City of Cars, Inc. v. Simms , 526 So. 2d 119 (Fla. 5th D.C.A.), rev. denied , 534 So. 2d 401 (Fla. 1988); McArthur Dairy, Inc. v. Original Kielbs, Inc. , 481 So. 2d 535 (Fla. 3d D.C.A. 1986).
38 Fla. Stat. §772.11.
39 Ciaramello v. D’Ambra , 590 So. 2d 946 (Fla. 2d D.C.A. 1991).
40 Fla. Stat. §772.11; Bronson v. Bronson , 685 So. 2d 994 (Fla. 5th D.C.A. 1997); Standafer v. Schaller , 726 So. 2d 352 (Fla. 2d D.C.A. 1999).
41 Skubal v. Cooley , 650 So. 2d 169, 170 (Fla. 4th D.C.A. 1995); see also Schellenbarger v. Merlich , 622 So. 2d 148 (Fla. 3d D.C.A. 1993) (since plaintiff’s original claim was not without substantial fact or legal support, the trial court’s award of attorneys’ fees to the defendant was incorrect); Le Dauphin Condominium Assoc., Inc. v. Groundwork of Palm Beach County, Inc. , 719 So. 2d 13 (Fla. 2d D.C.A. 1998) (denying defendant’s claim for attorneys’ fees under Fla. Stat. §772.11 and §57.105 (1993)).
42 Marcus v. Miller , 663 So. 2d 1340 (Fla. 4th D.C.A. 1995) (award of fees upon voluntarily dismissal of civil theft and RICO claims where the record showed a lack of factual support for the claims); Skubal v. Cooley , 650 So. 2d 169 ( Fla. 4th D.C.A. 1995) (trial court’s order dismissing civil theft claim and awarding reverse fees upon finding that the claim was without substantial fact or legal support).
43 See Skubal , 650 So. 2d 169 (defendant’s statutory right to attorney’s fees under the civil theft provisions upheld irrespective of plaintiff’s success on other claims); see also Friedman v. Lauderdale Medical Equip. Serv., Inc. , 591 So. 2d 328, 329 (Fla. 4th D.C.A. 1992).
44 Capital Partners Inv. v. American Inv. Group , 500 So. 2d 249 (Fla. 4th D.C.A. 1986); Douglas v. Braman Porche Audi, Inc. , 451 So. 2d 1039 (Fla. 3d D.C.A. 1984); Belford Trucking Co. v. Zagar , 243 So. 2d 646 (Fla. 4th D.C.A. 1971).
Mark R. Osherow is the shareholder of Mark R. Osherow. P.A., a boutique litigation firm with a principal office in Boca Raton, and satellite locations in West Palm Beach, Ft. Lauderdale, and New York City. He is a graduate of the Benjamin N. Cardozo School of Law in New York City. He is admitted to practice before all Florida state and federal courts, and is also a member of the New York, New Jersey, and Connecticut bars. He concentrates in business litigation, products liability, medical negligence and other professional liability claims, insurance coverage disputes, and personal injury claims.