TRANSCAPITAL BANK v. SHADOWBROOK AT VERO, LLC.

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
TRANSCAPITAL BANK, a Florida bank;
THE PALMS I OF VERO BEACH, LLC, a Florida limited liability
company; LEONARD E. ZEDECK, an individual; and
WILLIAM E. HIMES, an individual,
Appellants,
v.
SHADOWBROOK AT VERO, LLC, a Florida limited liability company;
JOHN Q. NAIMI a/k/a HOSSEIN MOH NAIMI, individually;
DJS ENTERPRISES, LLC; and
PALM BEACH GROUP INVESTMENT, INC.,
Appellees.
No. 4D14-4650
[July 26, 2017]
Appeal and cross-appeal from the Circuit Court for the Nineteenth
Judicial Circuit, Indian River County; Cynthia L. Cox, Judge; L.T. Case
No. 312010CA073480.
Hinda Klein of Conroy Simberg, Hollywood, for appellants.
Richard H. Bergman and Harrison T. Bergman of Bergman & Jacobs,
P.A., Hollywood, for appellant Transcapital Bank.
Robin Bresky and Jonathan Mann of the Law Offices of Robin Bresky,
Boca Raton, for appellees.
GERBER, C.J.
The seller of condominium units (and the seller’s related
representatives) appeal from an order granting the buyer’s motion for new
trial on the buyer’s claims for fraud (count I) and combined claim for
conversion and civil theft (count II). The seller and its representatives
primarily argue that the trial court should have granted their motion for
directed verdict on both counts. We agree with the seller and its
representatives, and therefore reverse for entry of judgment in their favor
on both counts. We also reverse for entry of judgment on the seller’s
counterclaim for breach of guaranty against the buyer’s representative.
Procedural History
This case arose from a transaction in which the buyer, co-plaintiff
Shadowbrook, purchased 123 condominium units, out of a total of 164
units in the project, from the seller, co-defendant Transcapital.
To complete the purchase, Shadowbrook agreed to assume a prior
owner’s loans on the 123 units totaling $10,934,700, in exchange for
which Shadowbrook provided Transcapital a mortgage on the units.
As part of the transaction, Transcapital also loaned Shadowbrook an
additional $700,000 as a line of credit, of which $150,000 could be used
for renovations and the remainder used for loan payments on the primary
loan during the renovations.
The note for the $700,000 loan was signed by Shadowbrook’s principal,
co-plaintiff John Naimi, on behalf of co-plaintiffs DJS Enterprises and
Palm Beach Group Investment.
Naimi had agreed to the transaction following conversations with
Transcapital’s president, co-defendant William Himes, and Transcapital’s
general counsel, co-defendant Leonard Zedeck. Naimi formed
Shadowbrook just before the closing as the entity taking title to the units.
As part of the transaction, Naimi gave Transcapital a personal guaranty
in the amount of $1 million. Another of Naimi’s companies, co-plaintiff
DJS Enterprises, paid $8,500 for an appraisal fee.
After the closing, Shadowbrook began renovating the units, but ran out
of money. Naimi went to Transcapital, which loaned him an additional
$400,000, with a second mortgage on his Maryland home as collateral.
Unfortunately, Shadowbrook and Naimi defaulted on the mortgages.
Before Transcapital could sue Shadowbrook and Naimi for defaulting
on the mortgages, Shadowbrook, Naimi, DJS Enterprises, and Palm Beach
Group Investment sued Transcapital, Himes, and Zedeck. In the operative
complaint, all of the plaintiffs sued all the defendants for fraud (count I).
Shadowbrook and Naimi also sued defendants Transcapital, Zedeck and
Himes in the combined claim of conversion and civil theft (count II). All of
the plaintiffs also sued all of the defendants for breach of fiduciary duty
(count III).
2
The plaintiffs’ fraud claim alleged that the plaintiffs were misled about
the property’s value and the existence of an appraisal allegedly valuing the
property at over $90,000 per unit, when, according to the plaintiffs, the
units were worth substantially less. The combined conversion and civil
theft claim alleged that although an $8,500 appraisal fee was charged at
the closing, no appraisal was performed. The breach of fiduciary duty
claim alleged that the defendants owed the plaintiffs a fiduciary duty based
on the parties’ prior dealings in earlier transactions, and breached that
fiduciary duty by misleading the plaintiffs into purchasing the 123 units.
After the plaintiffs sued the defendants, Transcapital counterclaimed
to foreclose on the mortgages and recover on Naimi’s personal guaranty.
The Trial
The case resulted in a multi-week jury trial on the plaintiffs’ claims and
Transcapital’s counterclaim for Naimi’s alleged breach of the guaranty.
The court also agreed to simultaneously consider Transcapital’s
counterclaim to foreclose on the mortgages.
At trial, co-plaintiff Naimi testified that he had been building homes
and investing in real estate for some time, and previously had obtained
financing from Transcapital for his endeavors. In early 2008, Naimi was
approached by Himes, with whom Naimi had prior dealings, about a “very
interesting project in Vero Beach.” Although Naimi was not interested at
first, he viewed some of the units in the subject 164-unit condominium
project and ultimately decided to go forward with the transaction.
Naimi testified Himes and Zedeck told Naimi that Transcapital was
offering him a great deal and he would make a lot of money. The proposal
was that Naimi, via Shadowbrook, would purchase 123 of the units, and
Transcapital would retain twenty units. Zedeck previously had purchased
five units from the prior owner at $95,000 per unit. The remaining units
were owned by unrelated parties.
According to Naimi, during a meeting before the closing, Zedeck pointed
to an unidentified paper and said that the property had been appraised for
$14.8 million. Naimi testified that because the property was being offered
to him at $10.9 million, he believed he had a “big cushion.” Even though
Naimi was represented by counsel who reviewed all of the closing
documents before closing, Naimi testified he was never given a copy of the
appraisal, and he signed the contract and closed the transaction without
having received the appraisal or directing anyone to perform an appraisal.
3
On cross examination, Naimi admitted that although he was told the
appraised value of the entire property was $14.8 million, he also was
specifically shown two prior notes from the prior owner in the aggregate
amount of $14.8 million, and the appraisal could have been for all 164
units. Naimi further admitted that because Shadowbrook was purchasing
only 123 of the units, the price per unit worked out the same:
DEFENSE COUNSEL: And the one page you looked at was a
note for 14.8 million dollars, correct?
NAIMI: Correct.
DEFENSE COUNSEL: And that note for 14.8 million dollars
is attached as Exhibit 1A, which is the membership purchase
agreement and related documents that you signed on April 15,
2008, correct?
NAIMI: Right.
....
DEFENSE COUNSEL: . . . The note for 14.8 million
represented the note on 164 units?
NAIMI: I don’t know sir.
....
DEFENSE COUNSEL: Let’s do some math here. If you take
14.8 million and you divide by 164, what do you get? Do you
know?
NAIMI: No, sir.
DEFENSE COUNSEL: Okay. If you take 10.9 and you divide
by 123, what do you get?
NAIMI: 89,900.
DEFENSE COUNSEL: Right. Which is just about what you
get when you divide 14.8 by 164, right?
NAIMI: I guess.
4
In fact, the $14.8 million in notes referenced above (two notes of $7.4
million each), which were shown to Naimi before the closing, were the
notes signed by the prior owner for all 164 units of the property. Both of
those notes, as well as all of the loan documents executed by the prior
owner, were attached and made part of the Membership Purchase
Agreement which Naimi signed.
Naimi admitted that he had every opportunity to consult with
professionals before the purchase. Additionally, although Naimi had every
opportunity to inspect all units prior to the closing, he inspected only a
handful, some of which he noted were in “horrible condition” and
unlivable, while others were just “okay.”
Co-defendant Himes testified that the project’s prior owner defaulted
on its loans from Transcapital. Those loans were assumed by
Shadowbrook, and all of the documentation concerning the assumed loans
were attached to the Membership Purchase Agreement which Naimi
signed. Himes also testified that he gave Naimi every appraisal which
Transcapital had for the entire 164-unit project, including an appraisal for
$16 million performed two years before the closing.
As for the $8,500 appraisal charge which Shadowbrook paid to
Transcapital at the closing, Himes testified that the charge was a mistake.
Himes testified that although an appraisal is usually required by a
mortgagee on new loans, it was unnecessary here because Shadowbrook
assumed an existing loan from the project’s prior owner. Zedeck, who
acted as the closing agent on the transaction, testified that he charged the
$8,500 appraisal fee at closing at Transcapital’s direction. Zedeck testified
he was unaware that the appraisal had not been obtained. It was
undisputed that neither Himes nor Zedeck received the $8,500 which was
charged to Shadowbrook.
At the close of the plaintiffs’ case, the defendants moved for directed
verdict on all of the plaintiffs’ claims. As to the plaintiffs’ fraud claim, the
defendants argued that property value is an opinion and an opinion cannot
form the basis for a fraud claim. As to the plaintiffs’ combined conversion
and civil theft claim, the defendants argued, among other reasons, no
evidence existed of criminal intent regarding the $8,500 charge at closing,
these causes of action do not apply when the dealings are contractual,
and, in any event, Himes and Zedeck did not receive the $8,500. As to the
plaintiffs’ breach of fiduciary duty claim, the defendants argued no
evidence existed that the defendants were in a position of trust with the
plaintiffs. The court reserved ruling on the motion for directed verdict.
5
Transcapital, as counterplaintiff, then presented its case for Naimi’s
breach of the guaranty. Naimi identified the $1 million guaranty, and
testified that he signed it. He further testified that Shadowbrook failed to
make payments on the loan and stopped paying real estate taxes on the
property. Transcapital introduced into evidence a damage summary
detailing all damages owed, included payments for principal and interest,
real estate taxes, reimbursement for redemption of tax certificates, and
insurance. Transcapital also introduced the notice of default.
Naimi’s primary defense to the breach of guaranty counterclaim was
that if the jury found fraud as alleged in the plaintiffs’ claim, then the
breach of guaranty counterclaim would not be enforceable.
After Transcapital rested and the plaintiffs presented rebuttal evidence,
the defendants renewed their motion for directed verdict on the plaintiff’s
claims. Transcapital also moved for a directed verdict on its breach of
guaranty counterclaim. The court reserved ruling on the motions.
The jury’s verdict was mixed. On the plaintiffs’ fraud claim, the jury
found that the defendants committed fraud, but also found that the
plaintiffs released the fraud claim (based on facts not pertinent to this
opinion). On the plaintiffs’ combined conversion and civil theft claim, the
jury found for the plaintiffs. However, on the plaintiffs’ breach of fiduciary
duty claim, the jury found for the defendants. On Transcapital’s
counterclaim that Naimi breached his guaranty, the jury found for
Transcapital.
The Post-Trial Motions
After the trial, the defendants renewed all of their directed verdict
motions made at trial.
On the plaintiffs’ fraud claim, the defendants argued that
representations of property value are considered “opinion” and thus are
not representations of material fact necessary to support a fraud claim.
The defendants further argued that, even if any of them had
misrepresented the property’s value, such a representation would not be
actionable under the doctrine of caveat emptor, absent evidence that the
defendants prevented the plaintiffs from examining the property
themselves. The defendants further argued, in light of the jury’s finding
that the defendants did not breach a fiduciary duty to the plaintiffs, no
special relationship existed which would make caveat emptor inapplicable.
6
On the plaintiffs’ combined conversion and civil theft claim, the
defendants argued: no evidence existed of felonious intent by any
defendant; unsegregated funds cannot form the basis of conversion or civil
theft; the failure to comply with a contract cannot form the basis of
conversion or civil theft; and Himes and Zedeck were entitled to judgment
because they did not receive the $8,500 charged for the appraisal at
closing.
The plaintiffs filed their own post-trial motions, including a motion for
new trial which primarily argued the court erred in allowing the jury to
make a finding that the plaintiffs released their fraud claim.
The trial court denied all post-trial motions except for the plaintiffs’
motion for new trial on the release of fraud argument, which the court
granted. The court ruled that a new trial should be held not only on the
plaintiffs’ fraud claim and combined conversion and civil theft claim, but
also on Transcapital’s counterclaim against Naimi for breach of guaranty.
The Appeal
This appeal followed. The defendants primarily argue the trial court
erred in denying their motions for directed verdict as to the plaintiffs’ fraud
claim and combined conversion and civil theft claim. Our review is de
novo. See Kopel v. Kopel, 2017 WL 372074 (Fla. Jan. 26, 2017) (“An order
on a motion for directed verdict or for judgment notwithstanding the
verdict is reviewed de novo.”) (citation omitted).
We agree with the defendants that the trial court erred in denying their
motions for directed verdict. We discuss our reasoning further below. The
plaintiffs also filed a cross-appeal, which we conclude, without further
discussion, lacks merit. Thus, this opinion shall discuss only our
reasoning for why the trial court should have granted the defendants’
motions for directed verdict on each of the plaintiffs’ claims, which we
address in turn.
1. The Plaintiffs’ Fraud Claim
On the plaintiffs’ fraud claim, because this was a commercial
transaction, the doctrine of caveat emptor, or let the buyer beware, is
applicable. See Wasser v. Sasoni, 652 So. 2d 411, 412 (Fla. 3d DCA 1995)
(“[T]he doctrine of caveat emptor, or ‘buyer beware,’ is still the common
law rule applied to purchasers of commercial property.”). “This doctrine
places the duty to examine and judge the value and condition of the
property solely on the buyer and protects the seller from liability for any
7
defects.” Turnberry Court Corp. v. Bellini, 962 So. 2d 1006, 1007 (Fla. 3d
DCA 2007) (citation omitted).
“Exceptions [to the doctrine of caveat emptor] arise: 1) where some
artifice or trick has been employed to prevent the purchaser from making
independent inquiry; 2) where the other party does not have equal
opportunity to become apprised of the fact; and, 3) where a party
undertakes to disclose facts and fails to disclose the whole truth.” Green
Acres, Inc. v. First Union Nat’l Bank of Fla., 637 So. 2d 363, 364 (Fla. 4th
DCA 1994) (citation omitted).
We conclude that, applying the doctrine of caveat emptor to this
transaction, the plaintiffs’ fraud claim could not survive a motion for
directed verdict. None of the exceptions to caveat emptor apply.
Shadowbrook, through Naimi, admitted that he had every opportunity to
consult with professionals before the purchase. Shadowbrook also had a
full and fair opportunity to investigate all aspects of the property, including
its value. For example, although Naimi had the opportunity to inspect all
units before the closing, he inspected only a handful, some of which he
noted were in “horrible condition” and unlivable, while others were just
“okay.” Based on these observations, Shadowbrook could have obtained
its own appraisal. Instead, Shadowbrook closed on the transaction
knowing that it had not received a copy of any appraisal, and had not
viewed a copy of the appraisal which Naimi alleged was referred to during
the negotiations.
The case upon which the plaintiffs primarily rely, Najera v. NationsBank
Trust Co., 707 So. 2d 1153 (Fla. 5th DCA 1998), is distinguishable based
on its contrasting procedural posture to this case. Najera came to our
sister court on appeal from an order granting the lender’s motion for
summary judgment where the borrower had raised a defense of fraudulent
inducement. Id. at 1155. Our sister court reversed because “the
allegations and record create[d] issues of fact concerning whether [the
borrowers] relied upon the existence of a professional appraisal to support
the loan values, and whether they would have entered into this transaction
had those representations not been made.” Id. Similarly here, a genuine
issue of material fact existed before trial as to whether the defendants
misrepresented the existence of an appraisal.
But a motion for directed verdict goes beyond whether a genuine issue
of material fact exists. “A trial court should grant a motion for directed
verdict when the evidence, viewed in the light most favorable to the non-
moving party, shows that a jury could not reasonably differ about the
existence of a material fact and the movant is entitled to judgment as a
8
matter of law.” Meruelo v. Mark Andrew of Palm Beaches, Ltd., 12 So. 3d
247, 250 (Fla. 4th DCA 2009) (citation omitted).
Here, the defendants were entitled to a judgment as a matter of law on
the plaintiffs’ fraud claim. Even if any of the defendants had
misrepresented the property’s appraised value, such a misrepresentation
would not be actionable under the doctrine of caveat emptor in the absence
of evidence that the defendants resorted “to some fraudulent means in
preventing a prospective purchaser from making an examination of the
property under consideration.” Farnham v. Blount, 11 So. 2d 785, 790
(Fla. 1942) (citation omitted). The plaintiffs presented no such evidence
here.
Although an exception exists to the foregoing where the seller has a
fiduciary duty to the buyer and breached that duty, see Glass v. Craig, 91
So. 332, 335 (1922), that exception does not apply here. In this case, the
jury found in the defendants’ favor on the plaintiffs’ breach of fiduciary
duty claim.
In addition to the foregoing, the evidence presented at trial belied the
plaintiffs’ allegation that the defendants had misrepresented the property’s
appraised value. On cross examination, Naimi admitted that although he
was told the appraised value of the entire property was $14.8 million, he
also was specifically shown two prior notes from the prior owner in the
aggregate amount of $14.8 million, and the appraisal could have been for
all 164 units. Naimi further admitted that because Shadowbrook was
purchasing only 123 of the units, the price per unit worked out the same.
In fact, the $14.8 million in notes referenced above (two notes of $7.4
million each), which were shown to Naimi before the closing, were the
notes signed by the prior owners for all 164 units of the property. Both of
those notes, as well as all of the loan documents executed by the prior
owners, were attached and made part of the Membership Purchase
Agreement which Naimi signed.
Based on the foregoing, the defendants were entitled to a directed
verdict on the plaintiffs’ fraud claim.
2. The Plaintiffs’ Combined Conversion and Civil Theft Claim
On the plaintiffs’ combined conversion and civil theft claim, the
defendants also were entitled to judgment as a matter of law for four
reasons.
9
First, “an action for conversion of money can only be maintained where
the money at issue has been kept separate.” Rupp v. Schon, 608 So. 2d
934, 935 (Fla. 4th DCA 1992) (citation omitted). Here, the $8,500 for the
appraisal was paid in a check with other closing funds, and the plaintiffs
presented no evidence that the $8,500 was kept separate from the other
closing funds.
Second, for a viable claim to exist for conversion or civil theft when the
parties have a contractual relationship, “the civil theft or conversion must
go beyond, and be independent from, a failure to comply with the terms of
a contract.” Gasparini v. Pordomingo, 972 So. 2d 1053, 1055 (Fla. 3d DCA
2008) (citation omitted). Here, the plaintiffs presented no evidence of any
action which went beyond, or was independent from, the contract. The
plaintiffs merely contended that they were charged for an appraisal which
they did not receive, which would be nothing more than a breach of
contract.
Third, “[t]o establish a claim for civil theft, a party must prove that a
conversion has taken place and that the accused party acted with criminal
intent.” Heldenmuth v. Groll, 128 So. 3d 895, 896 (Fla. 4th DCA 2013)
(citation omitted). Such intent must be proven by clear and convincing
evidence. Westinghouse Elec. Corp. v. Shuler Bros., Inc., 590 So. 2d 986,
988 (Fla. 4th DCA 1991). Here, the plaintiffs presented no evidence of any
criminal intent of the defendants, much less clear and convincing evidence
of any such intent. Instead, the evidence showed that charging $8,500 for
a non-existent appraisal, as part of a $10.9 million transaction, was more
likely a mere mistake.
Fourth, a party which does not personally receive property which is the
subject of an alleged conversion or civil theft cannot be held liable for such
action. See Rupp, 608 So. 2d at 935 (even if the plaintiff had a valid claim
for conversion, such claim could be asserted against only the corporation
which received the plaintiff’s property, not the individual who was the
corporation’s sole shareholder, because the individual did not personally
receive the property). Here, the evidence showed that only Transcapital
received the $8,500 at issue. The plaintiffs presented no evidence that
Himes or Zedeck personally received the $8,500 at issue. Although Zedeck
had temporary possession of the $8,500 as the escrow agent, an escrow
agent can be responsible for conversion only if the escrow agent has put
some of the escrowed funds towards personal use. Cf. Heldenmuth, 128
So. 3d at 896-97 (purchaser of real property stated a claim for civil theft
against escrow agents by alleging that escrow agents used some of the
escrow funds which the purchaser delivered solely to purchase real
property for the escrow agents’ own use). The plaintiffs presented no
10
evidence that Zedeck put any of the $8,500 towards personal use. Thus,
both Himes and Zedeck were entitled to a directed verdict on the combined
conversion and civil theft claim.
Conclusion
Given that the defendants were entitled to directed verdicts on the
plaintiffs’ fraud claim and combined conversion and civil theft claim, no
justification exists for a new trial on Transcapital’s counterclaim against
Naimi for breach of the guaranty. The amount due on the counterclaim
was undisputed, Transcapital proved the default, and no trial errors
occurred in connection with the counterclaim.
The plaintiffs’ only argument in defense of the guaranty was that if the
plaintiffs committed fraud, then it would negate the guaranty. However,
because a directed verdict was proper on the plaintiffs’ fraud claim,
Transcapital is entitled to judgment on Naimi’s breach of the guaranty,
including interest from the date of default when Shadowbrook stopped
paying down the loan and stopped paying real estate taxes.
Based on the foregoing, we reverse the trial court’s order granting the
plaintiffs’ motion for new trial on the plaintiffs’ fraud count and combined
conversion and civil theft count. We remand for entry of a directed verdict
and final judgment in the defendants’ favor on both counts. We also
remand for entry of final judgment in Transcapital’s favor on Transcapital’s
counterclaim against Naimi for breach of his guaranty. Finally, although
the trial court did not render judgment on Transcapital’s foreclosure
counterclaims which the court considered non-jury, we would expect that,
consistent with our conclusions, the trial court will enter final judgment
in Transcapital’s favor on Transcapital’s foreclosure counterclaims against
Shadowbrook and Naimi.
Reversed and remanded for proceedings consistent with this opinion.
DAMOORGIAN, J., concurs.
CIKLIN, J., concurs in part and dissents in part with opinion.
CIKLIN, J., concurring in part and dissenting in part.
I concur in the majority’s determination that the trial court erred in not
entering a directed verdict on the conversion and civil theft claims.
Otherwise, I respectfully dissent.
11
This appeal arises from the trial court’s grant of new trial based in part
on its determination that the jury arrived at an improper compromise
verdict. Indeed, the verdict form gave rise to a suggestion of compromise:
the jury awarded damages on Naimi’s fraud claim even though the jury
found in favor of the defense by accepting an affirmative defense it had
raised. The amount awarded was almost equal to the award on
Transcapital’s breach of guaranty counterclaim, after the jury inexplicably
found the default date on the guaranty was the date of trial, thus removing
the need to award prejudgment interest.
“When reviewing the order granting a new trial, an appellate court must
recognize the broad discretionary authority of the trial judge and apply the
reasonableness test to determine whether the trial judge committed an
abuse of discretion.” Thigpen v. United Parcel Servs., Inc., 990 So. 2d 639,
644 (Fla. 4th DCA 2008) (quoting Brown v. Estate of A.P. Stuckey, 749 So.
2d 490, 497-98 (Fla. 1999)). “Moreover, a stronger showing has usually
been required to reverse an order allowing a new trial than to reverse an
order denying a motion for new trial.” Id. at 645. Based on the verdict
form and the record as a whole, I find it difficult to conclude that the trial
court abused its discretion in granting a new trial based on improper jury
compromise. See Street v. H.R. Mortg. & Realty Co., 949 So. 2d 1158, 1162
(Fla. 4th DCA 2007) (recognizing that “case law does not require actual
proof that the jury did compromise its verdict,” and that it is enough if
there is ‘“some suggestion’ that the jury may have compromised on the
verdict in light of the ‘hotly contested evidence of liability’ and the jury’s
decision to give just a small award of damages” (citation omitted)).
Against this backdrop, I respectfully dissent with respect to Naimi’s
fraud claim. The crux of his claim was that the defendants tricked him by
charging him and collecting payment for an appraisal that was never
performed, and then by asserting that this nonexistent appraisal valued
the property Naimi was purchasing at more than $14.8 million, much
more than its worth.
I believe there was minimally sufficient evidence for the jury to
determine the merits of the claim. Naimi testified that after decades in the
nightclub business, he became involved in real estate investing in 2001.
He began by purchasing lots for the construction of single-family homes.
In 2005, he obtained financing for construction of four of the homes from
Transcapital after meeting with Himes. Around the same time, Himes and
Zedeck assisted him in obtaining a loan from Transcapital for DJS
Enterprises to purchase a home in Palm Beach County. In 2007, Naimi
obtained financing from Transcapital in relation to three parcels of land
owned by DJS Enterprises. He did not have representation at any of the
12
closings related to the purchases by DJS Enterprises; instead, Zedeck
handled all of the closing documents.
Naimi testified that in 2008, Himes suggested that Naimi take a look at
the condominium in Vero Beach. Naimi was not interested but Himes
called him repeatedly. After touring the property, Naimi met with Himes
and Zedeck. Himes and Zedeck represented that they were going to “keep”
twenty condominium units “for [Transcapital],” that Zedeck would “have
five unit[s] himself,” and that Transcapital and Naimi would essentially be
involved in a “partnership” and “make a lot of money together.” Naimi
testified that Zedeck told him the appraisal for 123 units came in at more
than $14.8 million. There was no such appraisal and it was undisputed
that an appraisal was never performed even though Naimi was required to
pay for an appraisal.
The majority contends that the principles of caveat emptor apply in this
matter and Naimi therefore is without recourse. In my opinion, the
evidence was sufficient for the jury to determine whether “some artifice or
trick has been employed to prevent the purchaser from making
independent inquiry.” Green Acres, Inc., 637 So. 2d at 364. Here, there
was evidence that Himes and Zedeck indicated they were also investing in
the property, that they were all going to make a lot of money together, and
that Zedeck represented that 123 units were appraised at more than $14.8
million, well over their true worth. This evidence, coupled with evidence
that Transcapital collected an appraisal fee from Naimi even though no
appraisal was ever performed, was more than sufficient for the jury to
determine the merits of the fraud claim.
The majority also asserts that any evidence of a fiduciary relationship
between the parties could not be considered by the trial court in
determining the motion for directed verdict on the fraud claim because,
the majority reasons, the jury found for the defense on the breach of
fiduciary duty count. I disagree.
The trial court, being in the front row of the courtroom, was in the best
position to determine if the jury’s entire verdict could not stand, in light of
its finding of an improper jury compromise. Accordingly, the trial court
was free to consider the evidence related to a fiduciary relationship
between the parties in determining whether it should grant a directed
verdict on the fraud count. The majority usurps the trial court’s broad
authority and discretion to act as it did. The trial court was in a superior
position to determine if a new trial was warranted in this case and that is
precisely what it concluded. I would not undercut the trial court’s
prerogative in that regard and therefore I respectfully dissent.
13
* * *
Not final until disposition of timely filed motion for rehearing.
14