DILSON S. URRIBARI and LA PLACITA GROCERY OF FORT PIERCE CORP. v. 52 SW 5TH CT WHSE, LLC , 266 So. 3d 1257 ( 2019 )


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  •        DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
    FOURTH DISTRICT
    DILSON S. URRIBARI, an individual, and LA PLACITA GROCERY OF
    FORT PIERCE CORP., a Florida corporation,
    Appellants,
    v.
    52 SW 5TH CT WHSE, LLC, a Florida limited liability company,
    and BASHAR M. YATAK,
    Appellees.
    No. 4D18-1539
    [March 20, 2019]
    Appeal from the Circuit Court for the Nineteenth Judicial Circuit, St.
    Lucie  County;     Janet    Croom,      Judge;    L.T.    Case     Nos.
    2017CA001209AXXXHC and 2017CC002110AXXXHC.
    Elliot B. Kula, W. Aaron Daniel and William D. Mueller of Kula &
    Associates, P.A., Miami, for appellants.
    Elaine Johnson James of Elaine Johnson James, P.A., Palm Beach
    Gardens, for appellees.
    WARNER, J.
    La Placita Grocery, a lessee of a commercial building, and its president,
    Dilson Urribari, appeal two judgments, both entered upon motions for
    judgment on the pleadings. The first resolved a complaint for breach of
    contract, fraud in the inducement, and other grounds against Bashar
    Yatak in connection with his purchase of La Placita’s right of first refusal
    on the purchase of the building. The second judgment granted eviction of
    La Placita and entered judgment on La Placita’s counterclaims against 52
    SW 5th CT WHSE, LLC, and Yatak as its manager, which mirrored the
    claims brought in the first suit. Because the trial court erred by
    considering facts outside the four corners of the pleadings and relying on
    allegations deemed false pursuant to the rules governing motions for
    judgment on the pleadings, we reverse.
    In the first lawsuit, La Placita Grocery of Fort Pierce Corporation sued
    Bashar Yatak for promissory estoppel, unjust enrichment, specific
    performance, fraud in the inducement, both intentional and negligent
    misrepresentation, and breach of contract.              The second amended
    complaint alleged that La Placita operated a grocery store on property in
    Fort Pierce, which it leased from Jose and Sandra Garcia. In 2017, Yatak
    expressed an interest in purchasing the grocery store business, and Yatak
    and La Placita entered into an oral agreement for 52 SW to purchase the
    business for $550,000 prior to the end of June 2017. Subsequent to the
    agreement, Yatak became interested in purchasing the property leased to
    La Placita. The lease gave La Placita and Urribari the right of first refusal
    to buy the Garcias’ property. La Placita agreed to waive its right of first
    refusal, so that Yatak could negotiate a sale of the building from Garcia,
    conditioned on Yatak continuing with his purchase of the grocery store
    business.     When the purchase of the grocery business was not
    forthcoming, La Placita threatened to terminate the waiver. Unbeknownst
    to La Placita, Yatak, through his corporation 52 SW, expedited the
    purchase of the building for less than the sale price of the grocery
    business. After closing on the purchase, Yatak continued to make
    representations that he would purchase the grocery business. Yatak
    knew, however, that a clause in the lease allowed the purchaser of the
    building to terminate the lease within sixty days of the purchase. La
    Placita alleged that at the time of the filing of the complaint, Yatak, through
    52 SW, was attempting to evict it from the property, thus breaching his
    agreement to purchase the grocery store business from La Placita.
    Based upon the alleged facts, La Placita sought damages for breach of
    contract, unjust enrichment, and fraud, and it also sought specific
    performance of the oral agreement to purchase the business. La Placita
    did not attach any documents to its second amended complaint, although
    the lease agreement between it and Garcia, as well as an unsigned copy of
    an Asset Purchase Agreement between La Placita and Yatak, were attached
    to the original complaint.
    Yatak moved to dismiss the complaint or for judgment on the pleadings
    of the second amended complaint, relying on two documents. The first
    document was the unsigned Asset Purchase Agreement attached to the
    initial complaint. The other document was the “Waiver of Right to
    Purchase,” which La Placita signed. Neither document was attached to
    the pleadings. Yatak argued that the second amended complaint failed to
    state a cause of action for breach of contract and specific performance
    because Yatak had not executed the Asset Purchase Agreement attached
    to the initial complaint. Yatak also contended that the counts for fraud,
    intentional and negligent misrepresentation, unjust enrichment, and
    promissory estoppel all failed due to the existence of the written waiver
    agreement. Yatak also raised the affirmative defense that the statute of
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    frauds barred the oral agreement to buy La Placita’s grocery store
    business.
    La Placita responded that the Asset Purchase Agreement and written
    waiver were not attached to the second amended complaint, and Yatak
    could not rely on them for dismissal. Further, La Placita and Urribari had
    fully performed their portion of the bargain, which prevented application
    of the statute of frauds. La Placita raised other grounds as to why the
    statute of frauds did not apply.
    In the meantime, after La Placita had filed its original complaint, 52 SW
    filed a complaint in county court for eviction of La Placita and Urribari,
    alleging that it was entitled to terminate the lease and evict them based
    upon the provision in the lease allowing a new owner to terminate the lease
    upon sixty days’ notice. 52 SW did not attach a deed, an assignment of
    the lease, or other evidence of its status as landlord. La Placita answered
    the eviction complaint and argued that the property had been sold by the
    Garcias, but it denied that 52 SW owned the property. It alleged that Yatak
    had fraudulently induced La Placita to waive the right of first refusal. As
    a result, La Placita contended that 52 SW and Yatak should be estopped
    from enforcing the sixty-day termination of the lease based on their
    misconduct. It sought to enjoin Yatak and 52 SW from evicting them.
    La Placita filed a counterclaim against 52 SW and Yatak, which
    contained the same allegations as in the subsequently filed second
    amended complaint addressed above. It did not attach any documents to
    its counterclaim. Yatak and 52 SW responded to La Placita’s counterclaim
    to the eviction action by filing an answer and affirmative defenses. They
    attached a copy of La Placita’s original complaint in the circuit court
    action, including the attached Asset Purchase Agreement and the Garcia
    lease. They also attached the written waiver of the right of first refusal.
    After the filing of the second amended complaint, the county court
    entered an agreed order transferring 52 SW’s eviction case to circuit court
    and consolidating it with La Placita’s fraud action. 52 SW and Yatak
    moved for judgment on the pleadings on La Placita’s counterclaim in the
    eviction action. For reasons that do not appear in the record, 52 SW
    withdrew its affirmative defenses to La Placita’s counterclaim, and then it
    moved for judgment on the pleadings in the eviction action.
    The court heard all three motions for judgment on the pleadings, and,
    after argument, ruled on each of them. The court dismissed the second
    amended complaint based upon its review of the Asset Purchase
    Agreement and waiver. It granted judgment of eviction based upon 52
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    SW’s ownership of the property, the lease term allowing a new owner to
    terminate the lease, and written notice to La Placita, all of which it referred
    to as undisputed. The court also found that the affirmative defenses were
    not legal defenses to the complaint for eviction under Florida law. As to
    La Placita’s counterclaim, the court relied on the unsigned Asset Purchase
    Agreement, as well as the written waiver of the right of first refusal, to find
    that Yatak and 52 SW were entitled to judgment on the pleadings. From
    these rulings, La Placita appeals.
    Preliminarily, we note that although the court consolidated the two
    cases, a motion to dismiss for failure to state a cause of action or a motion
    for judgment on the pleadings must be determined solely by the
    examination of the complaint and its related documents, not the
    documents in the consolidated case.            In Santiago v. Mauna Loa
    Investments, LLC, 
    189 So. 3d 752
     (Fla. 2016), the supreme court discussed
    the effect of consolidation in ruling on a dismissal for failure to state a
    cause of action.      The Third District had reversed a judgment in
    consolidated cases, determining that the complaint against the defendant
    in one of the consolidated cases did not state a cause of action by relying
    on documents attached to the complaint in the other consolidated case.
    
    Id. at 754-55
    . On petition for review, the Florida Supreme Court quashed
    the Third District Court of Appeal’s opinion because that court had
    improperly gone outside the four corners of the complaint in determining
    the sufficiency of the complaint to state a cause of action:
    The district court's examination of one complaint and its
    attachments to determine the sufficiency of a separate
    complaint to state a cause of action clearly contravenes the
    longstanding four-corners rule explained above. And to the
    extent that the district court reached this conclusion based
    on the consolidation of the cases, the district court also
    improperly merged the [complaints from the two consolidated
    cases]. “Consolidation does not merge suits into a single
    cause or change the rights of the parties, or make those who
    are parties in one suit parties in another. Rather, each suit
    maintains its independent status with respect to the rights of
    the parties involved.”
    
    Id. at 757
     (citation omitted). The court explained that the sufficiency of a
    complaint to state a cause of action must be determined solely by the
    examination of the complaint and its related documents, not the
    documents in the consolidated case. 
    Id.
     These principles of law apply to
    the complaints in these consolidated cases, and we address each
    complaint separately.
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    Standard of Review
    An order on a motion to dismiss for failure to state a cause of action is
    reviewed de novo. See Rivera v. Torfino Enters., Inc., 
    914 So. 2d 1087
    , 1088
    (Fla. 4th DCA 2005). “When ruling on a motion to dismiss for failure to
    state a cause of action, the trial court must ‘treat as true all of the . . .
    complaint’s well-pleaded allegations, including those that incorporate
    attachments, and look no further than the . . . complaint and its
    attachments.’” Morin v. Fla. Power & Light Co., 
    963 So. 2d 258
    , 260 (Fla.
    3d DCA 2007) (footnote omitted) (quoting City of Gainesville v. Fla. Dep’t of
    Transp., 
    778 So. 2d 519
    , 522 (Fla. 1st DCA 2001)). In ruling on a motion
    to dismiss a complaint for failure to state a cause of action, “[t]he court
    ‘must confine itself strictly to the allegations within the four corners of the
    complaint.’” Pizzi v. Cent. Bank & Tr. Co., 
    250 So. 2d 895
    , 897 (Fla. 1971)
    (quoting Kest v. Nathanson, 
    216 So. 2d 233
    , 235 (Fla. 4th DCA 1968)).
    “A motion for judgment on the pleadings is governed by the same legal
    test as a motion to dismiss for failure to state a cause of action.” Lutz v.
    Protective Life Ins. Co., 
    951 So. 2d 884
    , 889 (Fla. 4th DCA 2007). To grant
    a judgment on the pleadings, a trial court must find that based on the
    pleadings, the movant is entitled to judgment as a matter of law. Krieger
    v. Ocean Props., Ltd., 
    387 So. 2d 1012
    , 1013-14 (Fla. 4th DCA 1980). It is
    improper to enter judgment on the pleadings if there are factual issues to
    be resolved. 
    Id. at 1014
    . And in considering a motion for judgment on the
    pleadings, the court is precluded from relying on matters outside the
    pleadings. 
    Id. at 1013
    .
    La Placita’s Second Amended Complaint
    The trial judge entered both a dismissal of La Placita’s second amended
    complaint for failure to state a cause of action and a judgment on the
    pleadings on the same complaint. It relied on the unsigned Asset Purchase
    Agreement and the waiver of La Placita’s right of first refusal. Neither
    document was attached to the amended complaint. Thus, the court erred
    in entering judgment on documents on matters outside the pleadings.
    This case is similar to Oceanside Plaza Condominium Ass’n v. Foam
    King Industries, Inc., 
    206 So. 3d 785
    , 787 (Fla. 3d DCA 2016). There, a
    condo association sued a roofing company, alleging faulty roofing
    materials and installation. 
    Id. at 786
    . The original complaint and first
    amended complaint were dismissed because of a statute of limitations bar.
    
    Id.
     A second amended complaint was filed that changed the allegations so
    that the faulty roofing was discovered the day before the limitations period
    expired. 
    Id.
     The roofer filed a motion to dismiss the second amended
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    complaint. 
    Id.
     The trial court reviewed the first amended complaint along
    with the second amended complaint, and it determined that the facts
    contradicted the facts of the second amended complaint. 
    Id.
     Because of
    the variance, the trial court granted the motion to dismiss. 
    Id.
     The
    appellate court reversed. The court noted that the filing of an amended
    complaint constituted an abandonment of the original complaint. 
    Id. at 787
    . As the first amended complaint was superseded, it “could no longer
    be viewed as a pleading.” 
    Id.
     (quoting Babb v. Lincoln Auto Fin. Co., 
    133 So. 2d 566
    , 568 (Fla. 3d DCA 1961)). Thus, because the court improperly
    considered pleadings outside the second amended complaint, it erred in
    granting the motion to dismiss. 
    Id.
    In this case, the court relied on the Asset Purchase Agreement attached
    to the original complaint. The original complaint was dismissed, and the
    exhibit was not attached to the second amended complaint. The waiver
    also relied on by the court was not attached to any pleading in this case.
    Therefore, the court erred in considering these documents when granting
    the motion to dismiss and motion for judgment on the pleadings. As to
    the motion to dismiss, the complaint stated a cause of action for each of
    the counts.
    Judgment of Eviction
    La Placita argues that the court erred in granting judgment on the
    pleadings in 52 SW’s complaint for eviction because the allegations of the
    complaint were disputed in the answer. “In ruling on a motion for
    judgment on the pleadings[,] material allegations of the moving party
    which have been denied are taken as false.” First Fin. USA, Inc. v. Steinger,
    
    760 So. 2d 996
    , 997 (Fla. 4th DCA 2000) (quoting Windle v. W.W. Windle
    Co., 
    731 So. 2d 36
    , 37 (Fla. 4th DCA 1999)). “Judgment on the pleadings
    may be granted only if, on admitted facts, the moving party is clearly
    entitled to judgment as a matter of law.” Krieger, 
    387 So. 2d at 1013-14
    (emphasis added).
    The eviction complaint alleged that 52 SW owned real property leased
    by La Placita. However, La Placita responded in its answer to the eviction
    complaint that it was “without knowledge and [could] neither deny nor
    admit” this ownership allegation. Florida Rule of Civil Procedure 1.110(c)
    requires these allegations to “operate as a denial.” Thus, for purposes of
    the motion for judgment on the pleadings, the allegations should have
    been taken as false. La Placita also denied that it had been notified of the
    sale of the property and contested 52 SW’s standing to evict, contending
    that it was not a party to the lease. As there was a plethora of facts which
    were required to be taken as false for the purposes of the motion for
    6
    judgment on the pleadings, the court erred in entering the judgment for
    eviction based upon the motion for judgment on the pleadings.
    La Placita’s Counterclaim against 52 SW and Yatak
    The counterclaim of La Placita against 52 SW and Yatak was nearly
    identical to the consolidated complaint filed by La Placita. Unlike the
    consolidated complaint, the Asset Purchase Agreement and waiver were
    attached to the answer filed by 52 SW and Yatak, as they attached the
    entire original complaint filed by La Placita in the consolidated case. While
    the court’s judgment on the pleadings in this case was not based upon
    documents outside the pleadings, that does not allow the trial court to
    grant judgment on the pleadings based upon the answer and affirmative
    defenses.
    “In considering such a motion, all material allegations of the
    opposing party’s pleading are taken as true, and all of the
    movant’s allegations which have been denied are taken as
    false. Since the answer requires no responsive pleading, all
    allegations contained therein are deemed denied.” Butts v.
    State Farm Mut. Auto. Ins. Co., 
    207 So. 2d 73
    , 75 (Fla. 3d DCA
    1968) (citations omitted). Where, as here, there has been no
    reply to the affirmative defense of res judicata, it is deemed to
    be denied, and therefore false.
    Jaramillo v. Dubow, 
    588 So. 2d 677
    , 677-78 (Fla. 3d DCA 1991); accord
    Ferris v. Ferris, 
    660 So. 2d 418
    , 418 (Fla. 4th DCA 1995). Thus, in this
    case, the allegations in appellees’ answer and affirmative defense to La
    Placita’s counterclaim must be deemed denied and false. Therefore, the
    trial court could not rely on them and the attached documents, as it did,
    in granting judgment on the pleadings. It also could not rely on the
    affirmative defenses, as they had been withdrawn by 52 SW by the time of
    the hearing on the motions.
    In conclusion, in entering each judgment on the pleadings, the court
    erred in considering matters outside the pleadings, as well as in relying on
    allegations deemed false for purposes of the motion. We therefore reverse
    and remand for further proceedings in both of the consolidated cases.
    DAMOORGIAN and LEVINE, JJ., concur.
    *        *         *
    Not final until disposition of timely filed motion for rehearing.
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