UNRAVEL THE FACTS BEFORE ASSERTING FDUTPA AND TORTIOUS INTERFERENCE CLAIMS

CMR Construction and Roofing, LLC v. UCMS, LLC, 2022 WL 3012298 (11th Cir.  2022) is an interesting opinion where a contractor asserted a Florida’s Deceptive and Unfair Trade Practices Act (known by its acronym “FDUTPA”) claim and tortious interference claims (with a contract and with an advantageous business relationship) against another contractor, i.e., a competitor, that were dismissed from the get-go. It is an opinion worthy of interest based on the claims asserted against a competitor.  Throwing around FDUTPA and tortious interference may sound good from an intimidation standpoint, but pleading and then proving these claims are a lot different than loosely throwing around these claims.  Before filing a lawsuit for FDUTPA and tortious interference, spend time unraveling the facts and the chronology. Do not rely on conclusory allegations simply to check the box regarding required elements to plead while ignoring the actual facts that support the allegations. These are fact-based claims and it is imperative the facts are fully known from on the onset so that they can be strategically pled and pursued.

In this matter, a contractor, the plaintiff, was hired by a condominium association around April 2018 to repair damage caused by a hurricane which included roofing work. The association was going to have its insurer pay its contractor. In May 2020, the association hired a new contractor to perform the same work (the “new contractor”).  The association then directed the plaintiff to cease work since it hired the new contractor.

The plaintiff filed a lawsuit against the new contractor asserting claims for tortious interference and FDUTPA.  The allegations for these claims were as follows:

In support of [plaintiff’s] FDUTPA claim, [plaintiff] alleged that [new contractor] “wrongfully and unjustifiably interfere[d] with and procure[d] the breach” of [plaintiff’s] contractual and business relationships with the Association. In so doing, [plaintiff] relied on similar allegations to the ones supporting its claims for tortious interference—i.e., that [the new contractor] negotiated and contracted with the Association to perform work that [plaintiff] had a pre-existing contract to perform. [Plaintiff] further alleged that [the new contractor’s] conduct harmed [plaintiff] because [plaintiff] expended money and resources to perform its contractual obligations. As remedies for its FDUTPA claim, [plaintiff] sought both monetary damages and injunctive relief. [Plaintiff] also asserted a separate “cause of action” for temporary and permanent injunctions to prohibit [the new contractor] from performing any of the work that [plaintiff] was contracted to perform.

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In support of [plaintiff’s] tortious interference claims, [plaintiff] alleged that [the new contractor] submitted a bid, as part of “a competitive bidding process,” to perform the same construction work [plaintiff] had a preexisting contract to perform. But, according to [plaintiff], [the new contractor] knew of [plaintiff’s contractual and business relationships with the Association. And, despite that knowledge, [the new contractor] negotiated and contracted with the Association to perform, and submitted building applications for, the same construction repair work that [plaintiff] had a pre-existing contract to perform. [Plaintiff] further alleged that [the new contractor] “did not have [a] justification or privilege in procuring” the Association to breach its contract with [plaintiff]. But [plaintiff] did not allege facts in support of [the new contractor’s] alleged knowledge or lack of justification.

CMR Construction and Roofing, supra.

 The trial court dismissed the plaintiff’s complaint leading to an appeal to the Eleventh Circuit Court of Appeals.

FDUTPA Claim

There were two components to the plaintiffs FDUTPA claim: injunctive relief and monetary damages. The Eleventh Circuit affirmed the trial court’s dismissal of the plaintiff’s FDUTPA claim.

To state a claim for injunctive relief under FDUTPA, a plaintiff must allege: (1) “a deceptive [or unfair] act or practice in trade”; and (2) “that [p]laintiff is a person ‘aggrieved’ by the deceptive act or practice. And to state a claim for damages under FDUTPA, a plaintiff must allege: “(1) a deceptive act or unfair practice; (2) causation; and (3) actual damages.” CMR Construction and Roofing, supra (citations omitted).

To satisfy the first element for injunctive relief OR damage regarding a deceptive or unfair practice, “the plaintiff must allege that the relevant act or practice was harmful to a consumer. CMR Construction and Roofing, supra.

Here, the new contractor–the competitor–was NOT a consumer.  The new contractor was a service provider “that sought to provide, and provided, construction services to the Association.” CMR Construction and Roofing, supra.  Also, the plaintiff alleged harm or damage to itself (also a provider of construction services) and not to any consumer of its construction services.

Tortious Interference Claims

The Eleventh Circuit also affirmed the trial court’s dismissal of the plaintiff’s tortious interference claims.  A main reason was that the plaintiff’s claims agianst the new contractor were conclusory allegations with no supporting facts. The plaintiff’s facts merely supported a competitive bidding process by a condominium association but did not support that the new contractor intentionally and unjustifiably interfered with plaintiff’s relationship or contract. This was fatal to the plaintiff’s tortious interference claims:

To establish a claim for tortious interference with a business relationship under Florida law, the plaintiff must establish the following elements: “(1) the existence of a business relationship[;] (2) knowledge of the relationship on the part of the defendant; (3) an intentional and unjustified interference with the relationship by the defendant; and (4) damage to the plaintiff as a result of the breach of the relationship.’ ”  And the elements of a cause of action for tortious interference with a contractual relationship under Florida law are: “(1) [t]he existence of a contract, (2) [t]he defendant’s knowledge of the contract, (3) [t]he defendant’s intentional procurement of the contract’s breach, (4) [a]bsence of any justification or privilege, [and] (5) [d]amages resulting from the breach.”

CMR Construction and Roofing, supra (internal citations omitted).

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To support either claim, [plaintiff] was required to allege that [the new contractor] had knowledge of, and intentionally and unjustifiably interfered with, [plaintiff’s] relationship (either contractual or business) with the Association. As to the element of intentional and unjustifiable interference, if “a defendant interferes with a contract [or business relationship] in order to safeguard a preexisting economic interest of his own, the defendant’s right to protect his own established economic interest outweighs the plaintiff’s right to be free of interference, and his actions are usually recognized as privileged and nonactionable.”  But the defendant cannot do so by improper means.  “In other words, the privilege [to interfere] does not encompass the purposeful causing of a breach of contract” or business relationship. 

CMR Construction and Roofing, supra (internal citations 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.

 

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Posted in Florida Deceptive and Unfair Trade Practices Act and tagged , , , .