Court Opinion

ID: 4690164
Source: CourtListenerOpinion
Date Created: 2021-05-26 15:04:32.781631+00
Date Added: 2024-06-11T08:04:58.323776
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                             FOURTH DISTRICT

              LAND & SEA PETROLEUM HOLDINGS, INC.,
                            Appellant,

                                     v.

 STEVEN LEAVITT and ATLAS OIL SUPPLY COMPANY OF FLORIDA,
                 a/k/a ATLAS OIL COMPANY,
                         Appellees.

                              No. 4D20-282

                              [May 26, 2021]

   Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Carol-Lisa Phillips, Judge; L.T. Case No. 13-007421 (25).

  Kevin Markow and Darren M. Goldman of Becker & Poliakoff, P.A., Fort
Lauderdale, and Jamie B. Dokovna of Becker & Poliakoff, P.A., West Palm
Beach, for appellant.

   William E. Grob and Sara G. Sanfilippo of Ogletree Deakins Nash
Smoak & Stewart, P.C., Tampa, for appellee Atlas Oil Supply Company of
Florida.

FORST, J.

   Appellant Land & Sea Petroleum Holdings, Inc. appeals the trial court’s
entry of final judgment arising from a non-jury trial in which the court
found in Appellant’s favor on several claims but awarded zero dollars in
damages. Appellant also appeals an order denying its motion to file a third
amended complaint, wherein Appellant sought to add a claim for punitive
damages.

   With respect to the final judgment, Appellant asserts that: (1) the court
applied the wrong legal standard in determining damages; (2) Appellant
sufficiently established both lost profit and disgorgement damages; and (3)
at a minimum, Appellant was entitled to nominal damages. As to the order
denying Appellant’s motion to amend, Appellant contends that the trial
court committed reversible error because there was a substantive basis for
the motion and any amendment would not have caused prejudice.
   We hold that the trial court erred in not awarding Appellant nominal
damages as to several of its claims. We otherwise affirm without
discussion as to all other issues concerning the final judgment and order,
as the trial court’s findings and conclusions were supported by competent,
substantial evidence and the applicable law.

                                    Background

   Appellant is a commercial fuel supplier and servicer based in South
Florida, operating as a wholly owned subsidiary of its parent company,
RKA Petroleum Holdings, Inc. (“the parent company”). “At all times,
[Appellant] operated under the same management structure as [the parent
company,] sharing the same executive management.” 1

   In June of 2012, Appellant hired Appellee Steven Leavitt (“Employee”)
as its Manager of Commercial Sales/Director of Sales and Operations,
seeking to take advantage of Employee’s wealth of experience and to
expand into the Central Florida market. As a condition of employment,
Employee signed a non-competition agreement, a confidentiality and non-
solicitation agreement, and a non-disclosure agreement.

    While employed, Employee was provided with open access to
confidential and proprietary information, and interacted directly with the
parent company’s executive management, frequently attending executive
meetings at the parent company’s Michigan headquarters. Moreover, “a
significant focus of [Employee’s] work was to evaluate, plan and prepare
for the expansion of [Appellant’s] business into [C]entral Florida.”

   To help prepare for Appellant’s entry into the Central Florida market,
Employee prepared a business plan. The business plan “contained
demographic information for the expanded market, competitive analysis,
market supply, potential customers, and suggestions for hiring additional
employees, including [a second employee] . . . who was [Employee’s] hand-
picked recommendation for the role of [C]entral Florida sales manager.”

1These facts are taken largely from the trial court’s “Final Order After Trial,” upon
which the trial court based its final judgment. Appellees did not appeal or cross-
appeal. Thus, any findings favorable to Appellant cannot be challenged. See
Cespedes v. Yellow Transp., Inc. (URC)/Gallagher Bassett Servs., Inc., 130 So. 3d
243, 249 (Fla. 1st DCA 2013) (“A cross-appeal is an appellee’s exclusive method
of obtaining relief from error in an order, and absent a cross-appeal, an appellee
may not seek affirmative relief from any part of the order; the appellee may only
defend the order.”). Moreover, these facts relate only to the nominal damages’
aspect of the case.

                                         2
Based on Employee’s business plan, Appellant hired the second employee
in September of 2012.

    However, the second employee resigned only two days after
commencing employment with Appellant, and Employee resigned less than
a month thereafter, having worked for Appellant just over four months.
Despite the second employee’s claim that he was resigning to work outside
of this industry, both he and Employee subsequently began working for
Appellee Atlas Oil Company (“Competitor”)—a direct competitor of the
parent company—within a month of their respective resignations, with
Employee serving as Competitor’s Florida Director of Sales and
Operations.

    The evidence adduced at trial demonstrated that even before
Employee’s resignation and ensuing position at Competitor, he had begun
to serve Competitor’s interests. Unbeknownst to Appellant, by August of
2012, Employee and Competitor were “engaged in numerous emails,
meetings, and other exchanges that centered on [Competitor’s] plans to
[also] expand into the Florida market, with Orlando being the focus.” In
fact, despite preparing the business plan for Appellant, Employee sent a
version of the draft of the plan—which contained references to Appellant—
to Competitor. Moreover, while Employee was completing the new hire
paperwork for the second employee, he was simultaneously advocating for
Competitor to hire the second employee “for the exact same sales job as
part of [Competitor’s] Florida expansion plan.”

   The improper conduct was not limited solely to Employee. Following
Competitor’s receipt of Employee’s business plan, Competitor “was alerted
that the information [Employee] was providing was improper to share
among competitors, or would-be competitors[,]” but nonetheless
“continued to seek more information from [Employee] to perfect its own
Florida plan” despite clear red-flags and knowledge that Employee was
working for Appellant. Indeed, the evidence at trial established that
Competitor was aware that Employee was working for Appellant and
attending the parent company’s management meetings.

   Even beyond recruiting Employee and the second employee, Competitor
began interviewing or recruiting several of the parent company’s
employees who “attended and contributed at [the parent company’s]
management meetings in Michigan.” These efforts “were done under a
cloak of secrecy[,]” as Competitor “had issued a directive that in-house
counsel was to be copied on all internal communications concerning
[parent company] candidates[.]”

                                   3
   It was with this factual underpinning that Appellant filed its ten-count
Second Amended Complaint, which served as the operative pleading. Four
counts requested injunctive relief and the remaining six counts sought
damages from Employee and/or Competitor. Specifically, Appellant
sought damages for Employee’s breaches of the non-competition,
confidentiality and non-solicitation, and non-disclosure agreements;
Employee’s breach of his fiduciary duties; Competitor’s aiding and abetting
Employee’s breach of his fiduciary duties; and Competitor’s tortious
interference with Appellant’s advantageous business relationships.

   The matter proceeded to a four-day non-jury trial, after which the trial
court entered a December 31, 2019 “Final Order After Trial” (“Order”). In
the Order, the trial court found that Appellant had proven that Employee
“breached each of the [three employment] Agreements and that [Appellant]
suffered damages as a result.” (emphasis added). Moreover, the trial court
found that Employee had breached his fiduciary duties, as “[t]he record
clearly established that [Employee] breached the duty of loyalty through
his pre-hire conduct carried on with [Competitor] in its ramp up and
expansion into Orlando.”

    With respect to Competitor’s conduct, the trial court found that
Competitor knew of Employee’s fiduciary duties but provided assistance
and encouragement in breaching them and that, “[a]s a result of
[Competitor’s] aid and support of [Employee’s] fiduciary breaches,
[Appellant] has suffered damages.” (emphasis added). Additionally, the
trial court found that Competitor had tortiously interfered with Appellant’s
advantageous relationships, including Appellant’s rights under the three
restrictive employment agreements signed by Employee, with Appellant
“suffer[ing] damages” as a result. (emphasis added). 2

   Based on these findings, the trial court determined that Appellant had
suffered damages as to several of its claims and was the prevailing party
on all substantive matters. However, the court also concluded that
Appellant had failed to sufficiently prove its request for lost profit or
disgorgement damages. The court then directed the parties to prepare a
final judgment incorporating the court’s findings and conclusions.

   Accordingly, Appellant submitted to the court a letter with a proposed
final judgment. Within the letter, Appellant stated: “As a result of the

2 Appellant’s requests for injunctive relief were rendered moot because Appellant
“elect[ed] not to pursue injunctive relief given the passage of time and changed
circumstances.” The court found in Appellant’s favor as to the remaining counts
requesting damages.

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Court’s Findings and Conclusions that liability had been established and
that damages had been suffered, [Appellant] would still be entitled to
nominal damages in the amount of $1.00 on each of the Counts upon
which [Appellant] prevailed.”     Appellant’s proposed final judgment
assessed $1.00 on each of the claims upon which it prevailed at trial.
However, despite Appellant requesting nominal damages and submitting
a proposed final judgment, the trial court entered a final judgment which
did not include nominal damages. Appellant thereafter timely appealed
the final judgment.

                                 Analysis

   “When a decision in a non-jury trial is based on findings of fact from
disputed evidence, it is reviewed on appeal for competent, substantial
evidence.” Acoustic Innovations, Inc. v. Schafer, 976 So. 2d 1139, 1143
(Fla. 4th DCA 2008). “However, where a trial court’s conclusions following
a non-jury trial are based upon legal error, the standard of review is de
novo.” Id.

    On appeal, Appellant argues that it is entitled to nominal damages. In
response, Competitor argues that nominal damages may be waived if not
timely requested. Competitor asserts that because Appellant did not
request nominal damages in its pleadings, or at any point during trial, the
trial court did not err in assessing zero damages. Thus, before addressing
the issue of whether Appellant is entitled to nominal damages, we first
address Competitor’s argument that Appellant’s request for nominal
damages is waived.

   A. Whether Appellant Waived Entitlement to Nominal Damages

   As a preliminary matter, we first note Competitor’s argument that
Appellant did not specifically plead nominal damages is of no moment.
This is because “[g]eneral damages . . . need not be specifically pleaded.”
Hutchison v. Tompkins, 259 So. 2d 129, 132–33 (Fla. 1972). Indeed, “[o]nly
special damages must be specifically pleaded in order to be considered as
an item of recovery.” Id. And, nominal damages do not constitute special
damages. See Ault v. Lohr, 538 So. 2d 454, 456 (Fla. 1989) (nominal
damages flow from the establishment of an invasion of a legal right, closely
matching the definition of general damages); Armistead v. Waters, 198 So.
59, 60 (Fla. 1940) (no special damages were alleged but finding the award
of nominal damages appropriate); Tedder v. Riggin, 61 So. 244, 246 (Fla.
1913) (“No recoverable special damages are alleged, and the plaintiff is
entitled on this record to a verdict and judgment only for nominal
damages.”).

                                     5
    However, Competitor’s argument that Appellant waived its entitlement
to nominal damages due to Appellant’s actions at trial warrants further
discussion. Appellant did not request nominal damages until several
weeks after the trial court’s “Final Order After Trial.” However, within that
order, the trial court stated that “[t]he parties shall prepare a Final
Judgment.” (emphasis added). Appellant thereafter sent the trial court a
letter (later filed with the court), attached to which was Appellant’s
proposed final judgment. In the letter, Appellant stated that it was entitled
to nominal damages of $1.00 on each of the Counts upon which it
prevailed at trial. And Appellant’s attached proposed final judgment
contained a corresponding assessment of $1.00 on each of those claims.
Thus, the trial court specifically requested proposed final judgments, and
Appellant raised the issue of nominal damages in the resulting letter and
the requested proposed final judgment.

    We conclude Appellant’s actions did not constitute a waiver of its
entitlement to nominal damages. In Bluth v. Blake, 128 So. 3d 242 (Fla.
4th DCA 2013), and H & U Foods, Inc. v. Ellison, 439 So. 2d 923 (Fla. 4th
DCA 1983), this Court held that a party’s entitlement to nominal damages
may be waived if such damages are not requested during closing
argument, or as part of a jury instruction. Bluth, 128 So. 3d at 246; H &
U Foods, Inc., 439 So. 2d at 924. However, unlike in Bluth and H & U
Foods, Inc.—cases in which the jury as the trier of fact had no opportunity
to impose nominal damages because such damages were not requested
prior to the verdict—here, the trial court had sufficient opportunity to
consider Appellant’s request for nominal damages, and Appellant
adequately placed the issue before the trial court as the trier of fact. While
a jury could not have considered the issue of nominal damages after
retiring to deliberate, the trial court had the inherent authority to consider
and assess nominal damages in the final judgment but did not do so.
Consequently, Appellant did not waive the issue for our consideration.

   B. The Propriety of Nominal Damages

   We must next consider whether Appellant was entitled to nominal
damages. “It is well established in Florida that where the allegations of a
complaint show the invasion of a legal right, the plaintiff on the basis
thereof may recover at least nominal damages . . . .” Hutchison, 259 So.
2d at 132. “[N]ominal damages are in effect zero damages and are defined
as those damages flowing from the establishment of an invasion of a legal
right where actual or compensatory damages have not been proven.” Ault,
538 So. 2d at 456. A party may be entitled to nominal damages,
“notwithstanding the absence of evidence regarding the correct measure

                                      6
of damages.” Onontario of Fla., Inc. v. R.P. Trucking Co., 399 So. 2d 1117,
1118 (Fla. 4th DCA 1981) (quoting Muroff v. Dill, 386 So. 2d 1281, 1283
(Fla. 4th DCA 1980)); see also Stevens v. Cricket Club Condo., Inc., 784 So.
2d 517, 519 (Fla. 3d DCA 2001) (“[N]ominal damages can be awarded when
a legal wrong has been proven, but the aggrieved party has suffered no
damages . . . or where . . . recoverable damages were not proven.”
(alterations in original) (quoting Continuum Condo. Ass’n v. Continuum VI,
Inc., 549 So. 2d 1125, 1127 (Fla. 3d DCA 1989))).

   Despite Hutchison’s permissive language that a plaintiff may recover at
least nominal damages, some uncertainty exists as to whether nominal
damages are truly permissive. In MSM Golf, L.L.C. v. Newgent, 853 So. 2d
1086 (Fla. 5th DCA 2003)—though involving solely an action for breach of
contract—the Fifth District held that “[i]t is a fundamental principle of
contract law that once liability for a contract breach is established, an
injured party is entitled as a matter of right to compensatory damages[,]”
or “[a]t the very least,” to nominal damages. Id. at 1087.

    But in Wilson v. University Community Hospital, Inc., 101 So. 3d 857
(Fla. 2d DCA 2012), the Second District stated “nominal damages may be
recovered in cases where there is proof of injury but there is no evidence
or insufficient evidence to show the actual amount of damages.” Id. at 859
(emphasis in original). The Second District therefore certified conflict with
MSM Golf, “reject[ing] the [] argument that nominal damages must be
awarded as a matter of law because it conflicts with the rule delineated by
the Florida Supreme Court in Hutchison” concerning nominal damages’
permissive nature. Id. at 859. The Florida Supreme Court accepted
jurisdiction but dismissed the petition for review upon the parties’
stipulation for dismissal. Brooker v. Univ. Cmty. Hosp., Inc., 116 So. 3d
1259 (Fla. 2013) (accepting jurisdiction); Brooker v. Univ. Cmty. Hosp., Inc.,
115 So. 3d 998 (Fla. 2013) (dismissing).

    In the instant case, we need not decide the issue of whether nominal
damages are permissive (under breach of contract or any claim allowing
for nominal damages). While Wilson argued nominal damages are
permissive and not mandatory, that opinion specifically noted the case did
not involve a situation “where the evidence did not exist or [where the
evidence] was insufficient to show the amount of actual damages[,]” and
instead involved an instance in which “the presented evidence supported
a finding of zero damages[.]” Id. That is not the case here.

   In the instant case, Appellant sought three counts of breach of contract
and one count of breach of fiduciary duty against Employee. Appellant
also sought one count of aiding and abetting breach of fiduciary duty and

                                      7
one count of tortious interference with advantageous business
relationships against Competitor.          A nominal damages award is
appropriate when there is a breach of contract, breach of fiduciary duty,
or an aiding and abetting a breach of fiduciary duty cause of action. See
Beverage Canners, Inc. v. Cott Corp., 372 So. 2d 954, 956 (Fla. 3d DCA
1979) (nominal damages were applicable in a case involving a breach of
contract, where the plaintiff failed to prove lost profit damages); Minotty v.
Baudo, 42 So. 3d 824, 836 (Fla. 4th DCA 2010) (nominal damages are
available “[w]here a breach of fiduciary duty is shown but no actual
damages are proved”); In re Basil Street Partners, No. 9:11-bk-19510-FMD,
2013 WL 3209481, at *1, *3 (Bankr. M.D. Fla. Mar. 4, 2013) (applying
Florida law and implying the same as to a claim for aiding and abetting a
breach of fiduciary duty). However, “because proof of actual damages is
an element of a cause of action for tortious interference,” nominal damages
are not available when a party fails to prove actual damages in such an
action. Imperial Majesty Cruise Line, LLC v. Weitnauer Duty Free, Inc., 987
So. 2d 706, 708 (Fla. 4th DCA 2008).

   Although the trial court found that Appellant failed to sufficiently prove
lost profit or disgorgement damages, the trial court expressly found
Appellant “suffered damages” under his breach of contract, aiding and
abetting breach of fiduciary duty, and tortious interference causes of
action. And, while the trial court did not specifically find that Appellant
suffered damages under its breach of fiduciary duty claim, the context and
express finding that Appellant suffered damages through Competitor’s role
in aiding and abetting Employee’s breach of fiduciary necessarily implied
that Appellant suffered damages as to the breach of fiduciary duty claim
as well.

   Thus, we need not address the conflict between MSM Golf and Wilson
as to whether nominal damages are permissive, because the law allows for
nominal damages when a party fails to adequately prove damages for the
breach of a contract, the breach of a fiduciary duty, or the aiding and
abetting of a breach of fiduciary duty. Here, unlike in Wilson, the trial
court actually found (either specifically or indirectly) Appellant had
suffered damages as to those causes of action. Thus, we conclude the trial
court erred in failing to award nominal damages on those specific claims.
However, because tortious interference requires proof of actual damages
and Appellant failed to sufficiently prove actual damages at trial, we hold
the trial court did not err in awarding zero damages on Appellant’s tortious
interference claim.

                                      8
                               Conclusion

    Because Appellant raised the issue of nominal damages in a non-jury
trial before the issuance of final judgment, and because the trial court
found (either specifically or indirectly) that Appellant suffered damages
under its breach of contract, breach of fiduciary duty, and aiding and
abetting breach of fiduciary causes of action—but awarded zero damages
despite nominal damages being appropriate for such—we hold the trial
court erred in not imposing nominal damages as to those causes of action.
We therefore reverse and remand for the imposition of nominal damages
concerning those claims. We otherwise affirm on all issues.

   Affirmed in part, reversed and remanded in part.

CIKLIN and GERBER, JJ., concur.

                           *        *        *

   Not final until disposition of timely filed motion for rehearing.

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