Tag Archives: Florida Deceptive and Unfair Trade Practices Act

ALLEGING AND PROVING A FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT (FDUTPA) CLAIM

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When it comes to construction disputes, a Florida Deceptive and Unfair Trade Practices Act (known by its acronym “FDUTPA”) claim is not commonly asserted.  A FDUTPA claim is a statutory claim under Florida Statute s. 501.201 en seq.  This claim is NOT easy to prove, particularly in the construction context.  Sometimes, a party will assert a FDUTPA claim to create a basis for attorney’s fees; however, that basis cuts BOTH ways, i.e., you can be liable for fees if you fail to prove the FDUTPA claim.  In a construction dispute, a FDUTPA claim is one that really should be pled with caution after a party understands and fully considers what it MUST prove including the all-important consideration of how actual damages are determined under FDUTPA, which requires an actual loss.  Nevertheless, it is good to know what you need to prove to support a FDUTPA claim in case you believe you have facts that can support a FDUTPA claim and actual damages under FDUTPA (known as benefit-of-the-bargain damages).

A recent non-construction case out of the Eleventh Circuit Court of Appeals, Marrache v. Bacardi, U.S.A., Inc., 2021 WL 5175762 (11th Cir. 2021), demonstrates what a party needs to allege and prove to support a FDUTPA claim:

The three elements of a consumer claim under FDUTPA are: “(1) a deceptive act or unfair practice; (2) causation; and (3) actual damages.” Carriuolo v. Gen. Motors Co., 823 F.3d 977, 985–86 (11th Cir. 2016); accord City First Mortg. Corp. v. Barton, 988 So. 2d 82, 86 (Fla. Dist. Ct. App. 2008). An objective test is used to determine whether an act is deceptive under FDUTPA, and “the plaintiff must show that ‘the alleged practice was likely to deceive a consumer acting reasonably in the same circumstances.’ ” Carriuolo, 823 F.3d at 983–84 (quoting State, Office of the Att’y Gen. v. Com. Com. Leasing, LLC, 946 So. 2d 1253, 1258 (Fla. Dist. Ct. App. 2007)); accord Zlotnick v. Premier Sales Grp., Inc., 480 F.3d 1281, 1284 (11th Cir. 2007). To establish an unfair practice, the plaintiff must show that it is “one that ‘offends established public policy’ and one that is ‘immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.’ ” PNR, Inc. v. Beacon Prop. Mgmt., Inc., 842 So. 2d 773, 777 (Fla. 2003) (quoting Samuels v. King Motor Co. of Fort Lauderdale, 782 So. 2d 489, 489 (Fla. Dist. Ct. App. 2001)). Actual damages under FDUTPA “are measured according to ‘the difference in the market value of the product or service in the condition in which it was delivered and its market value in the condition in which it should have been delivered according to the contract of the parties.’ ” Carriuolo, 823 F.3d at 986 (quoting Rollins, Inc. v. Heller, 454 So. 2d 580, 585 (Fla. Dist. Ct. App. 1984)). A plaintiff, however, cannot state a cause of action under FDUTPA if the consumer fails to plead that they suffered actual damages. See Macias v. HBC of Florida, Inc., 694 So. 2d 88, 90 (Fla. Dist. Ct. App. 1997) (holding that plaintiff failed to state a cause of action under FDUTPA as she suffered no actual damages and affirming dismissal of complaint with prejudice). Indeed, “[t]he members of [a] putative class who experienced no actual loss have no claim for damages under FDUTPA.” Rollins, Inc. v. Butland, 951 So. 2d 860, 873 (Fla. Dist. Ct. App. 2006)). FDUTPA “does not provide for the recovery of nominal damages, speculative losses, or compensation for subjective feelings of disappointment.” Barton, 988 So. 2d at 86 (quoting Rollins, 951 So. 2d at 873).

Marrache, 2021 WL at *8 (explaining FDUTPA “requires an aggrieved person to suffer actual damages”).

FDUTPA further includes a safe harbor provision that “provides that FDUTPA does not apply to ‘[a]n act or practice required or specifically permitted by federal or state law.’”   Id. at *8 quoting Fla.Stat. s. 501.212(s).

Marrache involved the sale of Bombay Sapphire gin where the gin markets and labels that it contains botanical ingredients including “grains of paradise.”  A class action was filed claiming this violated FDUTPA.  The defendants moved to dismiss the lawsuit arguing that the plaintiff did not allege how grains of paradise violated FDUTPA or the actual damages suffered.  The defendants also argued that regardless of the allegations the plaintiff’s FDUTPA claim is barred by the safe harbor provision since the Food and Drug Administration identified grains of paradise as a substance generally recognized as safe.  The trial court agreed with the defendants and dismissed the complaint.

The Eleventh Circuit Court of Appeals agreed with the trial court.  The defendant failed to demonstrate how the plaintiff’s compliance with federal law falls outside of FDUTPA’s safe harbor provision when grains of paradise is generally recognized as safe by the Food and Drug Administration.  Marrache, 2021 WL at *8 (“[A]n act specifically permitted by federal law cannot serve as the basis for a FDUTPA claim….Because grains of paradise is a substance specifically permitted under federal law to be included in alcohol, FDUTPA’s safe harbor applies and [the plaintiff’s] FDUTPA claims against Defendants are barred by the safe harbor provision of FDUTPA.”).

Moreover, as an aside, the Eleventh Circuit held that the plaintiff had NOT alleged facts to state a plausible claim for suffering actual damages under FDUTPA.  Marrache, 2021 WL at *10 (“[E]ven if the sale of Bombay containing grains of paradise is illegal under Florida law, Bombay certainly is not ‘worthless’ in other states, as it is permitted to be sold under federal law and is thus not valueless under the benefit-of-the-bargain theory for actual damages under FDUTPA….Indeed, FDUTPA does not provide for the recovery of nominal damages, speculative losses, or compensation for subjective feelings of disappointment. Because FDUTPA requires an aggrieved person to suffer actual damages, we conclude that [the plaintiff] has not pled a plausible claim for actual damages under FDUTPA.’’) (internal citations and quotation omitted).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

YOU DON’T HAVE TO BE A CONSUMER TO ASSERT A FDUTPA CLAIM

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shutterstock_519663268A few years ago, the Fourth District Court of Florida rendered an opinion in Caribbean Cruise Line, Inc. v. Better Business Bureau of Palm Beach County, Inc., 169 So.3d 164 (Fla. 4th DCA 2015) regarding Florida’s Deceptive and Unfair Trade Practices Act (referred as to “FDUTPA”) (Florida Statute s. 501.201 et seq.).   This case held that a party can assert a FDUTPA claim even though the party is NOT a consumer.  The party still has to prove there was an injury to consumers in filing such claim, but again, the party can bring the claim even though it is NOT a consumer.  Caribbean Cruise Line, 169 So.3d at 169 (“[W]hile the claimant would have to prove that there was an injury or detriment to consumers in order to satisfy all of the elements of a FDUTPA claim, the claimant does not have to be a consumer to bring the claim.”).  See also Cemex Construction Materials Florida, LLC v. Armstrong World Industries, Inc., 2018 WL 905752, *15 (M.D.Fla 2018) (relying on Caribbean Cruise Line to find that even though the plaintiff does not need to be a consumer, the plaintiff still must prove an injury to consumers to satisfy elements of a FDUTPA claim).

 

“To state a claim under FDUTPA, a party must allege (1) a deceptive or unfair trade practice; (2) causation; and (3) actual damages.”  Cemex Construction Materials Florida, LLC v. Armstrong World Industries, Inc., 2018 WL 905752, *14 (M.D.Fla 2018).  

 

An unfair practice is one that is unethical, immoral, oppressive, unscrupulous, or substantially injurious to consumers.  Caribbean Cruise Line, 169 So.3d at 169 quoting PNR, Inc. v. Beacon Prop. Mgmt., Inc., 842 So.2d 773, 777 (Fla. 2003). 

 

A deceptive practice is an omission or representation that is likely to mislead a consumer acting reasonably under the circumstances to the consumer’s detriment.  Id.   

 

Naturally, both definitions have fairly expansive scopes and applications. And, with the Caribbean Cruise Line’s confirmation that a plaintiff does not actually need to be a consumer to initiate such a claim renders FDUTPA  a powerful vehicle when it comes to unfair or deceptive trade practices.  

 

If you have questions or issues regarding the breadth and application of FDUTPA, and unfair and deceptive trade practices, consult a lawyer that understands the nuances of such claims.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

ATTORNEY’S FEES UNDER (A) FLORIDA’S DECEPTIVE AND UNFAIR TRADE PRACTICES ACT AND (B) OFFERS OF JUDGMENT

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In Florida, a party can recover attorney’s fees if it has a contractual or statutory basis. If a party has neither a contractual or statutory basis to recover attorney’s fees, another vehicle is to serve an Offer of Judgment (also known as a Proposal for Settlement).  Whether there is an argument to recover attorney’s fees is an important consideration.

 

A. Attorney’s Fees Under The Florida Deceptive and Unfair Trade Practices Act

 

The Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”) is a consumer-protection related law designed to allow parties to sue other parties for deceptive and unfair trade or business practices. FDUTPA is discussed in more detail in https://floridaconstru.wpengine.com/actual-damages-under-floridas-deceptive-and-unfair-trade-practices-act/. There are certain circumstances when asserting a FDUTPA claim is worthwhile and should be explored such as when a party is looking for a statutory basis to recover attorney’s fees.

 

FDUTPA contains a statutory basis to recover attorney’s fees. Section 501.2105 of FDUTPA provides in relevant part:

 

 “(1) In any civil litigation resulting from an act or practice involving a violation of this part, except as provided in subsection (5), the prevailing party, after judgment in the trial court and exhaustion of all appeals, if any, may receive his or her reasonable attorney’s fees and costs from the nonprevailing party.”

 

 

The reason the word “may” is highlighted is because this is permissive, not mandatory, language. In other words, it is not automatic or mandatory that attorney’s have to be awarded to the prevailing party, but they could (i.e., may) be awarded. This is an important distinction. However, recently, Florida decisions have indicated that attorney fees should be mandatorily awarded to the prevailing party in a FDUTPA action.

 

Recently, in Bull Motors, LLC v. Alicia Borders, 39 Fla. L. Weekly D28a (Fla. 3d DCA 2013), the Third District stated:

 

“FDUTPA’s attorneys’ fees provision recognizes the policy of protecting consumers from unfair and deceptive trade practices and the need to attract private attorneys to take such cases by assuring them of a legal fee proportionate to their effects if their clients prevail. Such an award requires that the client prevail by recovering a judgment and, if there are counterclaims, by recovering a net judgment in the entire case. There is no express requirement of proportionality between the amount of the FDUTPA judgment and the attorney’s fees and costs incurred in obtaining the judgment.”

Bull Motors, supra (internal quotations omitted).

 

 

Bull Motors relied on the Florida Supreme Court’s decision in Diamond Aircraft Indus., Inc. v. Horowitch, 107 So.3d 362 (Fla. 2013).  In Diamond Aircraft, a plaintiff asserted a FDUTPA claim against a defendant. However, it was determined that FDUTPA did not apply because Arizona law, not Florida law, governed the case. Thus, the defendant prevailed under the plaintiff’s FDUTPA claim. A question certified to the Florida Supreme Court to answer was whether FDUTPA entitled a prevailing party to attorney’s fees if the court determines that FDUTPA does not apply to the case because the substantive law of another state (in this case, Arizona) applied. The Court stated that it did (or answered the question in the affirmative) holding that by a plaintiff asserting a FDUTPA claim, it exposes itself to both the benefits and potential consequences of the statute. Further, the Court expressed: “Under FDUTPA, a prevailing party is entitled to reasonable attorney’s fees and costs in civil litigation arising from a violation of that act ‘after judgment in the trial court and exhaustion of all appeals.’” Diamond Aircraft, supra, at 370 quoting Fla.Stat. s. 501.2105.

 

Hence, even though the statute contains permissive language, there is strong legal authority that would mandatorily entitle a prevailing party to recover attorney’s fees. This cuts both ways. This means that a plaintiff could expose itself to attorney’s fees by improperly asserting a FDUTPA claim without facts to support a deceptive or unfair trade practice or without evidence to support actual damages as provided under the statute.  Plaintiffs need to be cognizant of this before asserting a FDUTPA claim.

 

B. Attorney’s Fees By Serving Offers of Judgment

 

 

 

Moreover, Bull Motors discussed the vehicle to create an argument for the recoverability of attorney’s fees known as offers of judgment or proposals for settlement (“Offer of Judgment”). The Offer for Judgment statute in Florida Statute 768.79 provides in material portion:

 

“In any civil action for damages filed in the courts of this state, if a defendant files an offer of judgment which is not accepted by the plaintiff within 30 days, the defendant shall be entitled to recover reasonable costs and attorney’s fees incurred by her or him or on the defendant’s behalf pursuant to a policy of liability insurance or other contract from the date of filing of the offer if the judgment is one of no liability or the judgment obtained by the plaintiff is at least 25 percent less than such offer….If a plaintiff files a demand for judgment which is not accepted by the defendant within 30 days and the plaintiff recovers a judgment in an amount at least 25 percent greater than the offer, she or he shall be entitled to recover reasonable costs and attorney’s fees incurred from the date of the filing of the demand.”

 

 

In a nutshell, a defendant can recover its attorney’s fees if it serves an Offer of Judgment and the plaintiff gets a $0 judgment against the defendant or the plaintiff gets a judgment of at least 25% less than the offer. For example, and using simple math, let’s say the defendant serves an Offer of Judgment for $100,000 and the plaintiff obtains a net judgment against the defendant for $50,000. In this situation, the defendant could be entitled to its attorney’s fees from the date of the Offer of Judgment and forward since the plaintiff obtained a judgment of at least 25% less than its $100,000 Offer.

 

And, if a plaintiff serves an Offer of Judgment, it can recover its attorney’s fees if gets a net judgment of at least 25% greater than the Offer. Let’s say the plaintiff serves a $100,000 Offer of Judgment and recovers a net judgment against the defendant for $150,000. In this situation, the plaintiff could be entitled to its attorney’s fees from the date of the Offer of Judgment and forward since the plaintiff obtained a judgment of at least 25% greater than its $100,000 Offer.

 

However, serving Offers of Judgment are not sure-things under Florida law that will guarantee a party to attorney’s fees even if the math (shown above) works. There are numerous Florida decisions that find defects in Offers of Judgment (including technical defects) that ultimately prevent a party from recovering its attorney’s fees. Both Bulls Motor and Diamond Aircraft are examples of decisions whereby the Courts found flaws in the Offers of Judgment. Offers of Judgment do not apply to claims for equitable relief, only claims for damages. Thus, parties need to be crystal clear that the Offers only apply to claims for damages. But it is unfortunately not that simple. The Florida Supreme Court in Diamond Aircraft stated:

 

“Courts have also held that when a plaintiff seeks both monetary and nonmonetary relief, and a party makes a general offer of settlement, section 768.79 is not applicable. The reasoning adopted in those decisions is that strict construction of the phrase “any civil action for damages” in the offer of judgment statute does not include a claim for equitable relief, or one that involves claims for both monetary and nonmonetary relief.
***
We hold that section 768.79 does not apply to an action in which a plaintiff seeks both damages and equitable relief, and in which the defendant has served a general offer of judgment that seeks release of all claims.”
Diamond Aircraft, 107 So.3d at 373-74 (internal citations omitted); accord Bull Motors, supra (“The offer of judgment statute, section 768.79…does not apply to cases that, as here, involve a general offer seeking release of all claims in the case, both equitable and monetary.”).

 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

 

“ACTUAL DAMAGES” UNDER FLORIDA’S DECEPTIVE AND UNFAIR TRADE PRACTICES ACT

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u dec prUnder Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”), a party can only recover in principal what the statute refers to as “actual damages.” See Fla. Stat. s. 501.211(2) (“In any action brought by a person who has suffered a loss as a result of a violation of this part, such person may recover actual damages, plus attorney’s fees and court costs….”) However, the statute does not define the term actual damages and, thus, parties need to analyze Florida caselaw to understand the meaning of actual damages. This is important so parties know the damages covered under FDUTPA. A claim under FDUTPA is sometimes asserted in a construction-related dispute. Sometimes, it is asserted if a party is seeking an avenue to potentially recover attorneys’ fees.

 
Florida courts (or federal courts interpreting Florida law) have maintained that “actual damages” refer to the “difference in the market value of the product or service in the condition it was delivered and its market value in the condition in which it should have been delivered according to the contract of the parties. A notable exception to the rule may exist when the product is rendered valueless as a result of the defect-then the purchase price is the appropriate measure of damages.” Rollins, Inc. v. Butland, 951 So.2d 860, 869 (Fla. 2d DCA 2006) quoting Rollins, Inc. v. Heller, 454 So.2d 580, 585 (Fla. 3d DCA 1984).

 
This is similar to benefit of the bargain damages – the market value of the product represented minus the market value of the product delivered. See Gastaldi v. Sunvest Resort Communities, LC, 709 F. Supp. 2d 1299, 1304 (S.D.Fla. 2010).
Based on the way Florida cases define actual damages under FDUTPA, a party needs to prove its damages in accordance with this definition by analyzing the market value of the product represented versus the market value of the product actually received / delivered.

 

Examples of cases discussing the measure of actual damages under FDUTPA are as follows:

 

– Rollins v. Heller, 454 So.2d 580, 585 (Fla. 3d DCA 1984) – measure of damages would be the market value of the alarm system and the services alarm company agreed to provide [as represented] minus the market value of the alarm system and services actually provided [as delivered];

 

–Ft. Lauderdale Lincoln Mercury, Inc. v. Corgnati, 715 So.2d 311, 315 (Fla. 4th DCA 1998) –measure of damages would be the market value of the used BMW that was never in an accident and with a remote infrared opener [as represented] minus the market value of the BMW which had been in an accident and without remote infrared opener [as delivered];

 

– H&J Paving of Fla., Inc. v. Nextel, Inc., 849 So.2d 1099, 1102 (Fla. 3d DCA 2003) –measure of damages “would be the value of the product at the time of the sale based upon a useful life of approximately eight years [as represented] and [minus] the value of the product which would become obsolete within a few years [as delivered];”

 

– Gastaldi v. Sunvest Resort Communities, LC, 709 F. Supp. 2d 1299, 1307 (S.D.Fla. 2010)– measure of damages would be the difference in the market value of the condominium units with the condominium having a luxury sports club in 2009 [as represented] minus the market value of the condominium units without the condominium having a luxury sports club in 2009 [as delivered].

 

Notably, actual damages under FDUTPA does not include consequential-type damages (or damages other than those established by the measure provided above). See Dorestin v. Hollywood Imports, Inc., 45 So.3d 819, 824-25 (Fla. 4th DCA 2010) (FDUTPA does not allow for consequential damages or any other damages outside of actual damages); Orkin Exterminating Co., Inc. v. DelGuidice, 790 So.2d 1158, 1162 (Fla. 5th 2001) (actual damages do not include actual consequential damages). For example, lost profits or interest on payments would not be a recoverable consequential damage. See Rodriguez v. Recovery Performance & Marine, LLC, 38 So.3d 178 (Fla. 3d DCA 2010) and Siever v. BWGaskets, Inc., 669 F.Supp.2d 1286, 1294 (M.D.Fla. 2009).

 

Understanding actual damages in a FDUTPA claim is important prior to asserting a claim so that a party knows what is recoverable and what is not recoverable under FDUTPA. It is also important so that a party knows how to prove actual damages.

 

 

For more information on FDUTPA, please see:

https://floridaconstru.wpengine.com/attorneys-fees-under-a-floridas-deceptive-and-unfair-trade-practices-act-and-b-offers-of-judgment/

 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.