Source: http://docs.justia.com/cases/federal/district-courts/florida/flndce/3:2011cv00060/60843/97/
Timestamp: 2014-03-12 00:35:02
Document Index: 245577793

Matched Legal Cases: ['§ 287', '§ 287', '§ 287', '§ 287', '§ 287', '§ 287', '§ 287', '§ 287', '§ 287', '§ 287', '§ 287', '§ 287', '§ 287', '§ 287']

ORDER Denying 37 Motion to Dismiss for Failure to State a Claim for COMMUNITY MARITIME PARK ASSOCIATES INC v. MARITIME PARK DEVELOPMENT PARTNERS LLC :: Justia Dockets & Filings Justia.com
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Case No. 3:11cv60/MCR/CJK
MARITIME PARK DEVELOPMENT
Community Maritime Park Associates, Inc. (“CMPA”) filed this lawsuit against
Maritime Park Development Partners, LLC. (“MPDP”), alleging fraud in the inducement,
negligent misrepresentation, and violation of Florida’s competitive bidding statute, Fla. Stat.
§ 287.055, in relation to a public development contract. Pending before the court is
MPDP’s motion to dismiss for failure to state a claim (doc. 37), see Fed. R. Civ. P. 12(b)(6),
which CMPA opposes (doc. 56). MPDP was given leave of court to file a reply (doc. 71).
Having fully considered the allegations of the complaint and the arguments of the parties,
the court concludes that the motion to dismiss is due to be denied for reasons that follow.
In the First Amended Complaint (doc. 18), CMPA alleges the following facts, which
the court accepts as true and construes in the light most favorable to the plaintiff at this
stage of the proceedings. See Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir.
2008). CMPA is a publicly funded Florida non-profit corporation governed by a Board of
Trustees appointed by the Pensacola City Council; its purpose is to develop and manage
City-owned property known as the Vince Whibbs, Sr. Community Maritime Park (“Maritime
Park”). CMPA selected a developer for the Maritime Park project pursuant to the statutory
competitive process required by Florida law, known as the Consultants’ Competitive
Negotiations Act (“CCNA”), Fla. Stat. § 287.055. CMPA ultimately awarded the contract
to MPDP, which is alleged to be the successor in interest, the business continuation, or the
alter ego of Land Capital Group, Inc. (“Land Capital”) (a now-defunct Texas corporation).1
Land Capital’s president was Scott Davison and its vice president was Mark White.
Davison and White each have the title of vice president of MPDP, and Jeffrey Galt is
MPDP’s president.
Under the CCNA, CMPA was required to publicly announce a Request for
Qualifications (“RFQ”) and to competitively evaluate firms providing professional
architecture, engineering, landscape architecture, and surveying services for the project.
The CCNA requires the evaluation of a firm’s experience and qualifications through the
RFQ process, from which the most highly qualified firms are chosen for the negotiating
process. See Fla. Stat. § 287.055(4). During the competitive negotiations process, after
the most qualified candidates are identified, a Request for Proposals (“RFP”) may be
issued, and negotiations must proceed with the most qualified firm. Fla. Stat. § 287.055(5).
Pursuant to this competitive process, CMPA published an RFQ in early 2007,
inviting firms to submit their qualifications for evaluation. The RFQ listed certain minimum
qualifications, including work on previous projects, successful development of a major
mixed-use project, and a team record of satisfying clients and completing projects, among
other things. The RFQ stated that the developer selected must possess “the experience,
professional qualifications, financial resources, and willingness to enable it to undertake
and complete the development” of the park. (Doc. 18-3, at 3.) Also, the RFQ required that
all personnel shall be employees of either the firm applying to be the developer or a
collaborative partner of the firm, and expressly prohibited making contingency fee
payments to any person for successful award of the agreement. Land Capital submitted
MPDP is a Florida lim ited liability com pany whose m em bers are dom iciled in, and citizens of, the
state of Texas, and Texas is its principal place of business. Citizenship was established through an am ended
notice of rem oval (doc. 25).
an RFQ response. After reviewing all RFQ responses, four finalists were selected to make
oral presentations. Land Capital was one of the finalists and scored a number one ranking
based on its qualifications. CMPA published the RFP in early 2008, requesting proposals
from the four finalists outlining how they intended to perform the development of the park.
The RFP did not require the firms to repeat their previously given RFQ responses, but
permitted them to be supplemented.
The RFP emphasized the importance of the
developer’s experience and financial capacity.
In Land Capital’s responses to the RFQ and RFP, it made several representations
regarding the qualifications of the “Development Team,” which it claimed to have
assembled to work on the Maritime Park project. Davison, Land Capital’s president and
now a vice president of MPDP, represented in the cover letter to the RFQ response that
Land Capital “has assembled a peerless group of professionals” with a great deal of
experience. The response listed the qualifications of multiple companies and several
individuals as Land Capital’s “collaborative partners” in the venture. Land Capital identified
Silver Cloud Partners (now a defunct corporation), its CEO Harold De Blanc, and Halcyon,
Ltd., as part of the team and as having performed large development multi-use projects.
Land Capital itself was claimed to have more than 90 employees in nine different cities, 42
completed projects with 25 currently under development; projects “in the pipeline” were
said to range from $150 million to $500 million. Communication Arts Design and its CEO
Henry Beers were presented as having the role of Placemaking Visionary on the
Development Team, with 55 full-time employees and a 34-year track record of more than
30 successful development projects around the world. Land Capital identified Bruce
Cutright as its project manager.2
The developer experience for the project was
supplemented with 17 relevant projects in which Cutright had been involved, ranging in
value up to $1.5 billion. Land Capital represented that its financial resources included a
joint venture relationship with JP Morgan Asset Management, providing up to $2 billion in
The final agreem ent identified Cutright as a "key m an," who was required to spend at least one day
a week at the project and could only be replaced by CMPA’s written consent. (Doc. 18-1, at 22.)
venture capital for the Maritime Park, with Frederick Sheppard of JP Morgan listed as a key
member of the personnel and his resume was included in the statement of qualifications.
Land Capital created a special LLC (MPDP) for purposes of entering into the contract, but
Davison represented to CMPA at an oral presentation in June 2008 that Land Capital was
the managing partner for MPDP and that Land Capital would “without a doubt” be the lead
developer on the project. Davison represented that in addition to Land Capital’s lead role,
Brass Real Estate Fund and its affiliate, Magi Real Estate, would act as co-developer and
have an equity interest in the project. Based on these representations, Land Capital won
the right to negotiate and enter into a contract with CMPA. Land Capital assigned its right
to a newly created entity, MPDP (created 11 days prior to submission of the RFP
response). MPDP’s sole equity member initially was MP-LC Development Partner, LLC
(“MP-LC”), allegedly created by Land Capital to be the sole member and equity owner of
MPDP; on July 31, 2009, approximately two weeks before the contract was entered, MPDP
added another member, an LLC in Texas created with MPDP’s name.
CMPA alleges that by statute, it was required to negotiate with the highest ranking
firm. CMPA alleges that the Development Team members referenced for purposes of
qualifying for the negotiations were not collaborative partners of Land Capital, as
represented, and did not become equity members or employees of MPDP; also, CMPA
alleges that the financial resources represented were nonexistent. CMPA alleges the
Development Team referenced as existing was never actually assembled and its alleged
members were never legally committed to participate in the project, and that Land Capital
and MPDP knew these representations were false when made and were made for the
purpose of achieving the number one ranking in qualifications, which CMPA relied on, and
which, in turn, entitled MPDP (having been assigned the right from Land Capital), to
participate in the negotiation process and be awarded the Development Agreement
contract. According to CMPA, Cutright was never an employee or consultant of Land
Capital, MPDP or any collaborative partner and has never been project manager for the
defendant. CMPA further asserts that Halcyon, Communications Arts, JP Morgan Assets
Management, and Frederick Sheppard were not aware that their qualifications or
credentials had been used by the defendant to win the contract, and that no joint venture
existed between Land Capital and JP Morgan. Despite the fact that financial capacity was
a crucial component of the qualifications for the developer, MPDP’s equity members, MPLC and the Texas MPDP had no significant assets, no relevant project history, and no
employees. According to CMPA’s allegations, Land Capital and Davison also failed to
disclose material information, such as that Land Capital had been evicted from its
corporate offices and was operating with a skeleton crew at the time of a July 2008
presentation to CMPA, that it had defaulted on construction projects and been involved in
lawsuits, and that it had terminated substantially all of its employees and closed all nine
offices. CMPA also alleges that Land Capital conveyed to MPDP its right to negotiate for
the Maritime Park contract for no consideration to avoid judgment creditors of Land Capital,
and that as such, the final contract is subject to being set aside because of fraud.
According to CMPA, the defendant’s fraudulent inducement through misrepresented
qualifications and financial capacity placed the Maritime Park project in financial risk from
the inception of the Development Agreement.
In Count One of the First Amended Complaint, CMPA seeks rescission of the
contract based on fraud in the inducement, and CMPA requests that MPDP be required
to refund all amounts CMPA paid the defendant, less the fair market value of
improvements made prior to the contract being rescinded.
In Count Two, CMPA
alternatively seeks rescission on grounds of negligent misrepresentation. In Count Three,
CMPA alternatively seeks rescission based on a violation of Florida’s competitive award
statutes on grounds that MPDP offered a commission or reward payment in the amount
of $60,000 to a third party, Saxet Realty, Inc., as a result of the contract being awarded to
MPDP, contrary to the statute. See Fla. Stat. § 287.055(6).
MPDP moves to dismiss the complaint for failure to state a claim, asserting that the
misrepresentations alleged are insufficient to satisfy the elements of fraud and negligent
misrepresentation. MPDP also argues that the statutory count must be dismissed because
the statute referenced does not apply to a contingency fee agreement with a real estate
brokerage firm. CMPA argues that the pleading is sufficient to state a claim on all three
counts. Applying the legal standards set forth below, the court agrees with CMPA.
Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement
of the claim showing that the pleader is entitled to relief;” detailed allegations are not
required. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). A motion pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure seeks dismissal of the complaint for failure
to state a claim on which relief can be granted. In considering a Rule 12(b)(6) motion, the
court accepts all factual allegations of the complaint as true and construes them in the light
most favorable to the plaintiff. Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008).
“[T]he court limits its consideration to the pleadings and exhibits attached thereto” and
incorporated into the complaint by reference. Thaeter v. Palm Beach County Sheriff’s
Office, 449 F.3d 1342, 1352 n.7 (11th Cir. 2006) (internal marks omitted). The motion is
properly denied if the complaint “contain[s] sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its face.’” Iqbal, 129 S. Ct. at 1949 (quoting Bell
However, the court need not credit “[t]hreadbare recitals” of the legal elements of a claim
unsupported by plausible factual allegations because “the tenet that a court must accept
as true all of the allegations contained in a complaint is inapplicable to legal conclusions.”
Id. Moreover, when pleading fraud, the Federal Rules of Civil Procedure require the
pleader to “state with particularity the circumstances constituting fraud.” Fed. R. Civ. P.
To state a claim for fraud in the inducement under Florida law, the plaintiff must
allege facts from which a fact finder could plausibly find:
(1) a false statement of material fact; (2) the maker of the false statement
knew or should have known of the falsity of the statement; (3) the maker
intended that the false statement induce another's reliance; and (4) the other
party justifiably relied on the false statement to its detriment.
Rose v. ADT Sec. Servs., Inc., 989 So. 2d 1244, 1247 (Fla. 1st DCA 2008). Cf. Butler v.
Yusem, 44 So. 3d 102, 105 (Fla. 2010) (noting justifiable reliance is not a necessary
element of fraudulent misrepresentation; one may rely on a statement without investigating
its truth unless its falsity is obvious to him). While the economic loss rule ordinarily
prevents a party from recovering in tort on a breach of contract claim, where the tort is
based on acts that are independent of the contract, such as a claim of fraud in the
inducement, the independent tort action survives despite the existence of a breach of
contract action. HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 685 So. 2d 1238, 1239
(Fla. 1996) (noting that “suit on a contract and suit for fraud in inducing the contract are two
different causes of action with separate and consistent remedies” (internal marks omitted)).
That is, “[w]hen fraud occurs in connection with misrepresentations, statements, or
omissions which cause the complaining party to enter into a transaction,” the claim survives
as the independent tort of fraud in the inducement. Ladner v. AmSouth Bank, 32 So. 3d
99, 105 (Fla. 2d DCA 2009) (internal marks omitted).
The court finds that the First Amended Complaint adequately alleges, with a
plausible recitation of particular facts, that MPDP, its officers, and its alter ego or
predecessor in business made knowing misrepresentations intended to induce reliance
and that did induce reliance, resulting in damage to the plaintiff. CMPA alleges that during
the competitive qualifications portion of the contract negotiation process required by law,
Land Capital and its officers, who later became officers of MPDP which was created for
purposes of negotiating the contract – a right won by Land Capital – represented that
members of a Development Team had been assembled, the qualifications of these team
members were put forward for purposes of demonstrating Land Capital’s qualifications,
knowing that the team had not yet been assembled and the members whose qualifications
were being advanced had not yet legally associated with the defendant for purposes of this
project. Some organizations and individuals represented to be team members were not
even aware that Land Capital and MPDP were using their credentials to enable it to qualify
for this contract. According to the First Amended Complaint, the representations allegedly
induced the plaintiff to place Land Capital in the number one ranked spot, entitling it to
negotiate the contract though it was not in fact the best qualified firm, as required by
MPDP argues that the claims fail because the misrepresentations were not material
to the final agreement, and CMPA’s assertion otherwise conflicts with the documents
attached to the complaint. According to MPDP, CMPA altered the negotiating process by
stating in the RFP that the draft development agreement would serve as the basis for
negotiating the final agreement, and therefore, the final negotiation stage neutralized or
erased the materiality of any representations made in the earlier RFQ and RFP stages.
The court disagrees. In the First Amended Complaint, CMPA alleges that because the
statute and RFQ required the competitive process that was followed, it was justified in
relying on Land Capital’s responses to choose the most qualified firm with which to
negotiate and that those statements (regarding the qualifications, experience, and financial
capacity of the firm) served not only as the foundational basis for the negotiations but also
as an assurance that the firm chosen would have both the experience and the financial
capability to carry the project through to completion. CMPA’s allegations of materiality and
reliance do not conflict with the exhibits, that is, the RFQ and RFP, because they
emphasize the importance of these issues. The fact that CMPA agreed to continue
working toward a final agreement does not mean that CMPA no longer relied on the
alleged earlier representations. It is clear from the statutory scheme, the published RFQ
and RFP attached to the complaint, and the allegations of the First Amended Complaint,
that the issues of qualifications and financial capacity of the applicant continued to be of
utmost importance to CMPA.3 The court finds no merit to MPDP’s argument otherwise.
Similarly lacking in merit is defendant’s assertion that there is no identity between MPDP
and Land Capital in the allegations of the First Amended Complaint.
MPDP also argues that the merger clause of the Development Agreement, section
18.08, which provides that the agreement contains the complete agreement of the parties
and controls over all prior agreements or statements, plainly contradicts the allegations that
CMPA actually relied on the earlier representations. MPDP argues that “a party cannot
recover in fraud for alleged oral misrepresentations that are adequately covered or
expressly contradicted in a later written contract.” Hillcrest Pac. Corp. v. Yamamura, 727
So. 2d 1053, 1056 (Fla. 4th DCA 1999). Under Florida law, however, the mere presence
of a merger clause is not “an impediment to a cause of action for fraud in the inducement.”
Noack v. Blue Cross and Blue Shield of Fla., Inc., 742 So. 2d 433, 434 (Fla. 1st DCA
1999). Here, CMPA’s allegations of fraud do not relate to a representation that merged
into an express term of the Development Agreement but instead to the very foundation
upon which the ability to negotiate rested. Again, according to the statutory process and
the allegations of the First Amended Complaint, without a determination by CMPA that the
defendant’s qualifications and available finances for the project ranked above the others,
the defendant would not have had the privilege of engaging in the substantive negotiations
at all. This two-stage negotiation process was referenced in the final agreement, which
acknowledged that this was the process by which CMPA selected the developer. MPDP
and Land Capital were on notice that their qualifications and experience were crucial to
CMPA’s determination of which firm to select for the negotiations.
qualifications and financial capacity of the firm selected to engage in the negotiation
process were considered separately from the contract negotiations stage, the allegations
of the First Amended Complaint indicate that they were nonetheless integral to CMPA’s
MPDP’s argum ent that CMPA was not bound by the statutory m ethodology because it is not a
m unicipality or a state agency is foreclosed at this stage of the proceeding, where the court accepts as true
CMPA’s allegation that it is governed by a Board of Trustees appointed by the Pensacola City Council and
is an instrum entality of the City of Pensacola, which is a m unicipality under Florida law.
ability to fairly negotiate. Because CMPA’s alleged reliance on fraudulent representations
made in the RFQ and RFP responses does not clearly contradict “a specific and
unambiguous provision in a written contract,” Wilson v. Equitable Life Assur. Soc. of U.S.,
622 So. 2d 25, 28 (Fla. 2d DCA 1993), and the misrepresentations were not specifically
expressed or dealt with in the contract, the contract’s merger language does not preclude
a claim of fraudulent inducement in this case, as MPDP contends. Cf. Englezios v.
Batmasian, 593 So. 2d 1077, 1078 (Fla. 4th DCA 1992) (“A party may not recover in fraud
for an alleged oral misrepresentation which is adequately dealt with in a later written
MPDP also argues that the damages element is not adequately stated because the
asserted damages simply duplicate contract damages and relate to the performance of the
contract itself, and therefore do not support a claim of fraud. CMPA argues that the
economic loss rule, which requires damages attributable to fraud to be separate from
damages for breach of contract, does not apply where the fraud was inducement for the
contract; that is, because the cause of action is distinct from the breach of contract, it is of
no consequence whether there is an overlap in damages, citing La Pesca Grande
Charters, Inc. v. Moran, 704 So. 2d 710, 712 (Fla. 5th DCA 1998) (“The fact that the
measure of damages may be the same for both causes of action does not make the fraud
claim disappear.”). The damages alleged in the First Amended Complaint include that
MPDP was incapable of performing some aspects of the agreement as a result of its lack
of qualifications and lack of financial resources, which were necessary to obtain a bond,
and also, that CMPA was harmed by granting a valuable public works contract, required
by law to go to the most qualified firm, to a company that was unqualified. As the Supreme
Court of Florida has explained, “[t]he economic loss rule has not eliminated causes of
action based upon torts independent of the contractual breach even though there exists
a breach of contract action. Where a contract exists, a tort action will lie for either
intentional or negligent acts considered to be independent from acts that breached the
contract.” HTP, Ltd., 685 So. 2d at 1239. “The key is to determine the independence of
the fraud claim, not to analyze damages.” La Pesca Grande Charters, 704 So. 2d at 712
(citing Dantzler Lumber & Export Co. v. Bullington Lumber Co., 968 F. Supp. 1543
(M.D.Fla.1997) (reviewing Florida law)). The court finds the allegations of damage here
are proper because the fraudulent acts alleged are independent from a breach of contract
claim; therefore the economic loss rule does not bar the claim. Hotels of Key Largo, Inc.
v. RHI Hotels, Inc., 694 So. 2d 74, 76 (Fla. 3d DCA 1997) (noting fraudulent inducement
is a tort independent of any contractual duty, and thus it is not barred by the economic loss
rule). “[F]raud in the inducement presents a special situation where parties to a contract
appear to negotiate freely - which normally would constitute grounds for invoking the
economic loss doctrine - but where in fact the ability of one party to negotiate fair terms
and make an informed decision is undermined by the other party's fraudulent behavior.”
Allen v. Stephan Co., 784 So. 2d 456, 458 (Fla. 4th DCA 2000) (internal marks omitted).
The acts causing the damage alleged were independent of contract performance; the
integrity of the public statutorily required two-stage competitive process was allegedly
compromised by the misrepresentations, and this is sufficiently separate from the contract
performance to support a tort claim. See Pinellas Suncoast Transit Authority v. Mincom,
Inc., 8:06cv2042, 2007 WL 2225812, at *4-5 (M.D. Fla. 2007).
MPDP contends that because nearly 27 months elapsed between the first alleged
misrepresentations and the damage, proximate cause is lacking. However, according to
the allegations, the misrepresentations so infected the selection process as to cause the
plaintiff to negotiate with the wrong party – an unqualified party. The length of that
negotiating process therefore is not a factor that affects proximate cause.
circumstances undoubtedly are subject to change over an extenuated length of time, as
MPDP asserts, “Florida law recognizes that fraud can occur by omission and places a duty
on one who undertakes to disclose material information to disclose that information fully.”
ZC Ins. Co. v. Brooks, 847 So. 2d 547, 551 (Fla. 4th DCA 2003). MPDP suggests the
allegations and RFQ show no duty to disclose, but this is contradicted by the
circumstances alleged and discussed above, which emphasize the importance of the
bidder disclosing its relevant qualifications, experience, and finances. MPDP’s assertion
that the published RFQ imposed no ongoing duty to disclose regarding these material facts
lacks merit at this stage where the allegations of the complaint are taken as true, and there
is no apparent irreconcilable inconsistency to the contrary between the allegations of the
First Amended Complaint and the written documents attached to it.
The claim of negligent misrepresentation alleged in Count Two requires the plaintiff
to show that a party transmitted false information but at the time was not aware of the
falsehood. See Butler, 44 So. 3d at 105. Justifiable reliance is required for a negligent
misrepresentation claim.
To satisfy this element, a recipient of information is
responsible for investigating information that a reasonable person in that position would
be expected to investigate; otherwise, reliance may not be justified. Id. (stating “a recipient
of an erroneous representation cannot hide behind the unintentional negligence of the
misrepresenter when the recipient is likewise negligent in failing to discover the error”
(internal marks omitted)). The court finds that the allegations sufficiently to state a claim
that misrepresentations were made and CMPA’s alleged reliance was justified. The
published RFQ and RFP plainly indicated the importance of the applicants’ qualifications,
experience, and financial capability to be selected to negotiate with CMPA through the first
stage and also to bring the project to completion. Having published this criteria, CMPA was
justified in relying on the responses submitted.
Count Three alleges, as another basis for rescission, the violation of Florida’s
competitive bidding statute. See Fla. Stat. § 287.055. Section 287.055(6) expressly
provides that a person or entity who obtains a contract to provide “professional services,”
such as professional engineering, architectural, or surveying services, through the
competitive bidding process, is prohibited from offering to a third party non-employee a
payment, gift, or commission contingent on or resulting from the award of the contract.
The First Amended Complaint asserts that the RFQ expressly called for responding
development firms to anticipate providing the type of professional services referenced in
§ 287.055 and required any members of a Development Team providing those services
to be duly licensed; also, the RFQ required personnel to be either employees of the
development firm or a collaborative partner. MPDP argues that the statutory claim should
be dismissed because the statute does not apply to a contingency fee with a real estate
brokerage firm, as allegedly paid here, citing Rotemi Realty, Inc. v. Act Realty Co., 911 So.
2d 1181, 1187 (Fla. 2005) (holding “section 287.055 applies only to the specific contracts
it mentions,” and a real estate brokerage contract is not within its coverage). MPDP also
asserts that the agreement is a “design-build” contract, exempt from § 287.055(6).
First, the court finds the case of Rotemi Realty, cited by MPDP, to be inapplicable.
The question there was whether a contingency fee paid by a government in a real estate
brokerage contract (through which a school district had purchased real property) was
contrary to public policy. The court held, in part, that this brokerage agreement did not
conflict with the public policy announced in Fla. Stat. § 287.055, because the legislature
limited the scope of that statute, which prohibits contingency fees for the award of a public
contract in certain instances, to the specific contracts mentioned therein; the statute does
not mention real estate brokerage contracts. Rotemi Realty, 911 So. 2d at 1187. Here,
the RFQ seeking bids from development firms explicitly indicated that the services
anticipated of the developer would include the type of professional services that are within
the scope of the statute, namely, architecture, engineering, site planning, and landscape
architecture, and that any architects, engineers or landscape architects must be registered
as required by Florida law. (Doc. 18-3, at 3-4.) Moreover, the RFQ explicitly provided, “By
responding to this solicitation, each applicant warrants that it and will not employ or retain
any company or person, other than a bona fide employee working solely for the firm, to
solicit or secure an agreement pursuant to this solicitation and that it has not and will not
pay or agree to pay any person . . . any fee, commission, percentage, gift, or other
consideration contingent upon or resulting from the award or making of an agreement.”
(Doc. 18-3, at 5.) Section 287.055 requires this express prohibition to be included in any
agreement entered into by a public agency for the professional services listed in the statute
and provides that upon a violation of this provision, “the agency shall have the right to
terminate the agreement.” Fla. Stat. § 287.055(6)(a). CMPA sufficiently alleges that
MPDP paid a contingency fee to another firm as a reward for securing the developer
agreement and that the RFQ and agreement contemplate that the developer would provide
the type of professional services mentioned in the statute. Contrary to MPDP’s argument,
it is of no consequence that the prohibited contingency fee was allegedly paid to a
Second, MPDP alleges that Count Three fails to state a claim because the
developer agreement is a design-build contract, exempt from the statutory prohibition on
contingency fees. This argument also fails. Although, as MPDP contends, § 287.055(9)
provides that, “[e]xcept as provided in this subsection, this section is not applicable to the
procurement of design-build contracts by any agency,” in this case, the agreement at issue
is a development agreement contemplating the provision of professional services, not a
“design-build” contract.4 The court recognizes that the agreement between MPDP and
CMPA states that the developer (MPDP) may act as the design-build contractor if CMPA
agrees it is in the City’s best interest for it to do so; however, at the same time, the court
notes that the agreement also provides that, if this occurs, a design-build contract would
be negotiated, plainly implying such a contract did not yet exist. (See Doc. 18-1, at 24
(stating, “certain efficiencies and cost-savings may be realized by the Developer acting as
the Design-Build Contractor on the Site Preparation Project or the Public Improvements
or both,” but any “decision by CMPA to engage the Developer as the Design-Build
Contractor shall be subject to negotiation of a design-build contract.”).) In addition, an
express provision in the agreement represents that it was procured in accordance with Fla.
Stat. § 287.055, and another provision prohibits a broker commission, consistent with the
Subsection (9) further provides that if an agency enters into a professional services contract for a
"design criteria package," then the com petitive bidding statute applies. Fla. Stat. § 287.055(9). MPDP seem s
to argue that the agreem ent at issue is a design-build contract because there were references in the RFQ and
RFP to an anticipated design criteria package. The court sees no relevance to this in determ ining the
character of the contract at hand; the design criteria package referenced is not the subject of the agreem ent
statute.5
As noted above, the RFQ similarly included an express contingency fee
prohibition and anticipated the provision of professional services within the scope of the
statute. The court finds that the allegations of Count Three – i.e., that the defendant
offered a contingency fee to a brokerage company as a reward for the public contract
being awarded to the defendant – are sufficient to state a claim under § 287.055(6).
Accordingly, it is hereby ORDERED that MPDP’s Motion to Dismiss (doc. 37) is
DONE and ORDERED this 14th day of July, 2011.
Further, the agreem ent defines “Project Professionals” as m eaning architects and engineers,
am ong others, “retained or em ployed by the Developer.” (Doc. 18-1, at 10.) Those professional services,
as noted above, are within the scope of the statute.