DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

HRB TAX GROUP, INC. d/b/a H&R BLOCK 

d/b/a BLOCK ADVISORS,

Appellant,

v.

FLORIDA INVESTIGATION BUREAU, INC. d/b/a 

FLORIDA INVESTIGATIONS & EXECUTIVE PROTECTION,

Appellee.

No. 4D22-2981

[May 17, 2023]

Appeal of a nonfinal order from the Circuit Court for the Fifteenth 

Judicial Circuit, Palm Beach County; Maxine Cheesman, Judge; 

L.T. Case No. 50-2020-CA-004726.

Dennis M. McClelland, Raquel R. Jefferson and Julie A. Girard of 

Phelps Dunbar LLP, Tampa, for appellant.

Jocelyne A. Macelloni, Matthew Akiba and Alfredo E. Dally of Barakat

+ Bossa, PLLC, Coral Gables, for appellee.

DAMOORGIAN, J.

HRB Tax Group, Inc. (“the defendant”) appeals an order granting 

Florida Investigation Bureau, Inc.’s (“the plaintiff”) motion for leave to 

amend its complaint to assert a claim for punitive damages against the 

defendant. We reverse because the plaintiff failed to make sufficient 

allegations or proffer sufficient evidence to establish a reasonable basis for 

recovery of punitive damages under section 768.72(3), Florida Statutes 

(2020).

The underlying complaint arises from an allegedly fraudulent financial

investment which the plaintiff made through a third party. The plaintiff

was referred to the third party by one of the defendant’s employees who 

had expertise in investments and tax planning. The defendant’s employee

allegedly advised the plaintiff’s president that he could reduce the 

company’s tax liability by investing and encouraged him to invest at least 

$250,000 with the third party. The defendant’s employee facilitated 
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communications between the plaintiff and the third party using a personal 

e-mail address, although the employee’s signature line reflected that she 

was employed by the defendant.

The plaintiff ultimately agreed to make the investment and wired more 

than $250,000 to a bank account in Hong Kong at the third party’s

direction. The plaintiff alleges that it never received any returns on the 

investment, and that the third party and the defendant’s employee ignored 

multiple requests to return the money.

The plaintiff’s original complaint alleged claims of fraud and negligence 

against the defendant’s employee, a claim of civil conspiracy against the 

defendant’s employee and the third party, and claims of vicarious liability 

and negligent supervision against the defendant. The vicarious liability 

claim against the defendant alleged “[the employee]. . . was acting within 

the scope of her employment in providing professional tax preparation 

services to [the defendant’s] customers, including, but without limitation, 

[the plaintiff],” and therefore the defendant “acted through [the employee]

when [the employee] negligently and fraudulently facilitated the theft.” The 

negligent supervision claim similarly alleged the employee “was acting 

within the scope of her employment in providing professional tax 

preparation services to [the defendant] customers” and that the defendant

“should have become aware of the fact that [the employee] was using her 

position . . . to identify and convince . . . [the plaintiff] to invest in the 

Fraudulent Investment.”

After the original complaint was filed, the plaintiff learned that the 

defendant’s employee had referred the plaintiff’s president to the third 

party as part of a reciprocal referral program implemented by the 

employee’s managers. The plaintiff also learned that the defendant’s 

employee had since been terminated from her employment for violating 

several company policies, including a policy against using personal e-mail 

addresses to communicate with clients.

Upon learning this information, the plaintiff moved for leave to amend 

the complaint to, among other things, add a new claim against the 

defendant for negligence based on its creation and handling of the 

reciprocal referral program, and to assert a claim for punitive damages on 

its existing claim against the defendant for vicarious liability. Notably, 

aside from including a request for punitive damages, the plaintiff did not 

propose any amendments to its existing vicarious liability claim against 

the defendant.
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The trial court ultimately granted the motion to amend, concluding the 

plaintiff proffered sufficient evidence to establish a reasonable basis for 

recovery of punitive damages against the defendant. In so concluding, the 

trial court reasoned as follows: 

The evidence proffered in support of the amendment to add a 

claim for punitive damages against [the defendant] consists of 

the testimony of [the defendant’s employee] and 

[the defendant’s] corporate representative found at Exhibit J 

of the Motion, which specifically states that the only goal of 

the [reciprocal referral] program was to drive business to the 

company and there was no oversigh[t] of the employees 

(i.e., [the defendant] may be found to have knowingly 

condoned or ratified the conduct or been grossly negligent).

. . . . 

[The plaintiff’s] proposed Amended Complaint alleged 

[the employee] . . . was acting within the scope of her 

employment when the action leading to the alleged Fraudulent 

Investment took place. Furthermore, the Amended Complaint 

alleges that [the defendant] failed to oversee [the employee’s] 

conduct and permitted her to facilitate the Fraudulent 

Investment and allowed her to use her personal phone and 

email addresses. As such, the Amended Complaint states 

[the defendant] was negligent because it could have uncovered 

[the employee’s] conduct, but instead chose not to address the 

issues and thus contributed to [the plaintiff’s] damages.

This appeal follows.

“We review de novo the trial court’s decision on a motion for leave to 

amend a complaint to add a punitive damage claim.” Progressive Select 

Ins. Co. v. Ober, 353 So. 3d 1190, 1192 (Fla. 4th DCA 2023) (citing Bistline 

v. Rogers, 215 So. 3d 607, 610 (Fla. 4th DCA 2017)).

Section 768.72(1), Florida Statutes (2020), provides that “no claim for 

punitive damages shall be permitted unless there is a reasonable showing 

by evidence in the record or proffered by the claimant which would provide 

a reasonable basis for recovery of such damages.” See also Fla. R. Civ. P. 

1.190(f). “A defendant may be held liable for punitive damages only if the 

trier of fact, based on clear and convincing evidence, finds that the 

defendant was personally guilty of intentional misconduct or gross 

negligence.” § 768.72(2), Fla. Stat. To impute an employee’s conduct on 
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an employer under the punitive damages statute, a plaintiff must establish 

that the employee’s conduct constituted “intentional misconduct” or “gross 

negligence,” and establish one of the following: 

(a) The employer, principal, corporation, or other legal entity 

actively and knowingly participated in such conduct;

(b) The officers, directors, or managers of the employer, 

principal, corporation, or other legal entity knowingly 

condoned, ratified, or consented to such conduct; or

(c) The employer, principal, corporation, or other legal entity 

engaged in conduct that constituted gross negligence and that 

contributed to the loss, damages, or injury suffered by the 

claimant.

§ 768.72(3)(a)–(c), Fla. Stat.

We reverse the portion of the order granting the plaintiff leave to assert 

a claim against the defendant for punitive damages for two reasons. First, 

the trial court improperly considered allegations and evidence not relevant 

to the claim for which punitive damages were sought. As noted in the 

facts, the proposed amended complaint sought to add a claim for punitive 

damages to the existing vicarious liability claim only. Nonetheless, in 

concluding the plaintiff proffered sufficient evidence to establish a 

reasonable basis for recovery of punitive damages, the trial court partially 

relied on evidence relating to the direct negligence claim asserted against 

the defendant, which was based on the defendant’s creation and handling 

of the reciprocal referral program. The direct negligence claim, however, 

did not include a request for punitive damages. See generally Schneider 

v. First Am. Bank, 336 So. 3d 43, 47 (Fla. 4th DCA 2022) (a trial court 

lacks authority to grant relief that was not requested in the pleadings or 

tried by consent); see also Varnedore v. Copeland, 210 So. 3d 741, 745 

(Fla. 5th DCA 2017) (“In order to perform its function as a gatekeeper, the 

trial court must understand the specific claim proposed by the plaintiff 

that may justify an award of punitive damages.”); Grove Isle Ass’n v. 

Lindzon, 350 So. 3d 826, 831 (Fla. 3d DCA 2022) (“Here, the amended 

complaint does not specify whether [the] claim for punitive damages was 

based on direct or vicarious liability.”).

Second, the vicarious liability claim in the amended complaint contains 

no allegations of wrongdoing by the defendant. For example, the vicarious 

liability claim does not allege that: (1) the defendant “actively and 

knowingly participated in” the employee’s conduct; (2) the defendant’s 
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officers, directors, or managers “knowingly condoned, ratified, or 

consented to” the employee’s conduct; or (3) the defendant engaged in its 

own conduct that constituted “gross negligence” and contributed to the 

plaintiff’s damages. Instead, the vicarious liability count alleges

misconduct only by the employee. See Varnedore, 210 So. 3d at 745 

(“Absent sufficient allegations, there would be neither a reason nor a 

framework for analyzing the proffered evidentiary basis for a punitive 

damages claim.”); Grove Isle, 350 So. 3d at 831 (holding the trial court 

erred in granting leave to amend the complaint to a assert a claim for 

punitive damages on the theory of vicarious liability, in part because 

“a review of the negligence and fraudulent misrepresentation claims 

(for which punitive damages is sought) reveals no allegation of wrongdoing 

by the [employer]”).

Likewise, the proffered evidence here failed to demonstrate that the 

defendant and/or its officers, directors, or managers knowingly 

participated in or condoned, ratified, or consented to the employee’s

conduct, or that the defendant engaged in conduct constituting gross 

negligence. See § 768.72(2)(b), Fla. Stat. (defining gross negligence as 

meaning “that the defendant’s conduct was so reckless or wanting in care 

that it constituted a conscious disregard or indifference to the life, safety, 

or rights of persons exposed to such conduct”).

Accordingly, we reverse the order granting the plaintiff’s motion for 

leave to amend its complaint to assert a claim against the defendant for 

punitive damages based on the theory of vicarious liability.

Reversed.

CIKLIN and CONNER, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.