FORT LAUDERDALE BUSINESS LITIGATION: FLORIDA’S INDEPENDENT TORT DOCTRINE

In business litigation, claims alleging fraud and breach of contract are often filed in the same lawsuit. However, if the factual allegations or the damages sought in fraud claims are the same as those in the party’s breach of contract claim, then Florida’s independent tort doctrine may apply. Florida’s independent tort doctrine requires a fraud to be “independent of a breach of contract claim” – i.e., for the “fraud allegations” to be “separate and distinct from defendants’ performance under the contract.” Glob. Quest, LLC v. Horizon Yachts, Inc., 849 F.3d 1022 (11th Cir. 2017). The independent tort doctrine “requires proof of facts separate and distinct from the breach of contract[.]” HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 685 So. 2d 1238 (Fla. 1996). Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

Florida courts routinely apply the independent tort doctrine to dismiss tort claims that are in fact founded on contractual duty. The court typically analyzes the duties at issue in the case in deciding whether to dismiss the tort claim(s). For example, in Electronic Sec. Systems Corp. v. Southern Bell Tel. & Tel. Co., Florida’s Third District Court of Appeal analyzed whether fraud and contract claims could co-exist when a corporation entered into a contract with a telephone company for the placement of an advertisement in the yellow pages. 482 So. 2d 518 (Fla. 3d DCA 1986). That contract had a limited liability provision that limited the corporation’s remedies to liquidated damages. Id. at 519. When the advertisement did not appear in the directory, as contemplated by the contract, the corporation sued the telephone company under both contract and tort theories. The appellate court summarily dismissed each of the tort claims under the independent tort doctrine, concluding that the only duty at issue in the case was contractual.

In MidAmerica C2L Inc. v. Siemens Energy Inc., the Eleventh Circuit Court of Appeals granted summary judgment on the plaintiff’s two fraud claims because they were, in essence, simply a restatement of the plaintiff’s contract and breach of warranty claims. 25 F.4th 1312 (11th Cir. 2022). The court focused on the duties owed under the operative contract, explaining:

The fraud claims are not – and indeed could not – be premised on any fraudulent misrepresentation or omission that predated the parties’ contractual relationship. This is because the 2010 Completion Agreement that the parties signed released both parties of any claims that pre-dated that agreement. In order words, [defendant’s] claim is that the fraud post-dated the 2010 Completion Agreement and predated the 2012 Completion Agreement and 2012 LSA. The question thus becomes: before the 2012 Completion Agreement and 2012 LSA were signed, where did [plaintiff’s] duty of disclosure come from – was it the common law duty to disclose (as required for a fraud claim) or its contractual duty to perform (which would foreclose a fraud claim)? The answer is obviously the latter. . . .[Plaintiff’s] performance guarantees and disclosure guarantees were duties it owed to [defendant] by contract..

In Osan v. Verizon Florida LLC, the United States District Court for the Middle District of Florida considered arguments that the fraud was independent from the breach of contract because the party was told prior to entering into the separate agreement that his separation payment would include his banked vacation hours, and he relied on that representation in dealing to enter into the separate agreement. 2016 WL 2745001 (M.D. Fla. 2016). However, Osan found that “the alleged claim of fraud is precisely the same as the potential breach of contract claim . . . [because] the terms of the purported fraud were a part of the separate agreement . . . so any failure to comply with those terms properly results in an action for breach of contract. Osan v. Verizon Florida LLC, 2016 WL 2745001 (M.D. Fla. 2016).

Furthermore, in Lookout Mountain Wild Animal Park, Inc. v. Stearns Zoological Rescue & Rehab Ctr., Inc., the Eleventh Circuit of Appeals affirmed a directed verdict where the plaintiff failed to identify any tortious acts that were sufficiently independent of the breach of contract. 553 F. App’x 864 (11th Cir. 2014). Lookout ultimately held that it was “not persuaded that plaintiff has identified any tortious acts that are sufficiently independent of the alleged breach of contract to render the tort claims viable.”

Peter Mavrick is a Fort Lauderdale business litigation lawyer, and represents clients in Miami, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.