STEWART AGENCY, INC., d/b/a EARL STEWART TOYOTA OF NORTH PALM BEACH v. ARRIGO ENTERPRISES, INC. d/b/a ARRIGO DODGE CHRYSLER JEEP RAM, etc.

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
STEWART AGENCY, INC., d/b/a
EARL STEWART TOYOTA OF NORTH PALM BEACH,
Appellant,
v.
ARRIGO ENTERPRISES, INC., d/b/a ARRIGO DODGE CHRYSLER
JEEP RAM WEST PALM BEACH, and ARRIGO FT. PIERCE, LLC,
d/b/a ARRIGO DODGE CHRYSLER JEEP RAM FIAT FT. PIERCE,
Appellees.
No. 4D18-813
[March 6, 2019]
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Peter D. Blanc, Judge; L.T. Case No.
502016CA011943XXXXMB-AB.
Jack Scarola of Searcy Denney Scarola Barnhart & Shipley, P.A., West
Palm Beach, and David J. Sales and Daniel R. Hoffman of David J. Sales,
P.A., Sarasota, for appellant.
Kevin F. Richardson and Christopher J. Ryan of Clyatt, Richardson &
Ryan, P.A., West Palm Beach, and Scott N. Richardson of the Law Office
of Scott N. Richardson, P.A., West Palm Beach, for appellees.
WARNER, J.
Appellant, Stewart Agency, Inc., a car dealership, appeals a final
summary judgment in favor of the appellees, Arrigo Enterprises, Inc., and
Arrigo Ft. Pierce, LLC, (collectively “Arrigo”) in Stewart’s claims for both
damages and declaratory and injunctive relief against Arrigo for its alleged
unfair and deceptive trade practices under the Florida Deceptive and
Unfair Trade Practices Act. The court found that there was no evidence to
support the element of causation in Stewart’s claims both for damages and
equitable relief. We agree and affirm.
The Florida Deceptive and Unfair Trade Practices Act (FDUTPA),
sections 501.201-501.213, Florida Statutes (2016), was enacted to protect
the public and businesses from unfair trade practices. § 501.202(2), Fla.
Stat. An unfair practice “‘offends established public policy’ and . . . 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, 499 (Fla. 4th DCA 2001)). Section 501.211(1) allows “anyone
aggrieved by a violation of” FDUTPA to seek declaratory or injunctive relief,
and section 501.211(2) provides that “a person who has suffered a loss as
a result of a [FDUTPA] violation . . . may recover actual damages . . . .”
Both Stewart and Arrigo are car dealerships which sell new and used
vehicles. Stewart is a Toyota dealership in West Palm Beach. Arrigo sells
Dodge, Chrysler, Jeep, Ram, and Fiat vehicles in both West Palm Beach
and Fort Pierce.
In its complaint, Stewart brought a claim for actual damages, as well
as claims for declaratory and injunctive relief under FDUTPA. Stewart
alleged that it accepts cars as trade-ins to complete new or used vehicle
sales. In 2013, the Japanese airbag supplier, Takata, publicly
acknowledged a defect in its airbag inflators that could cause the airbags
to deploy in such a way that they released shrapnel. Thus, the Takata
airbags installed in vehicles created a risk of serious injury or death to the
vehicles’ occupants. The National Highway Traffic Safety Administration
ordered a regional recall of Takata airbags in Florida, as high humidity
increased the risk of improper airbag deployment. While 34 million
vehicles in the United States were affected by the recall, only a small
percentage of those vehicles had been remediated due to the unavailability
of replacement car parts.
Stewart alleged that due to market conditions, it was required to accept
vehicles equipped with defective Takata airbags as trade-ins, but it was a
deceptive and unfair trade practice to sell such cars to consumers without
replacing the defective airbags. Thus, Stewart was forced to store the
vehicles with this condition at considerable expense until they could be
remediated, during which time the vehicles would lose resale value. This
caused Stewart to incur significant business expenses.
Arrigo, a business competitor within the same market area, also
accepted used vehicles with Takata-airbag defects. The complaint alleged
that Arrigo engaged in deceptive and unfair trade practices by selling those
vehicles, for which replacement parts were not available, to consumers
and by failing to inform prospective purchasers of the recall. It alleged
that Arrigo affirmatively misrepresented the Takata-recall status of the
vehicles and the ability to remediate the recalls. In addition, Arrigo
engaged in “bait and switch” tactics of inducing prospective customers’
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interest in Takata-airbag vehicles by advertising the cars at an attractive
price without disclosing the recall, and “then redirecting the potential
customer[s’] interest to more expensive cars by discussing the Takata
recall issues.” Through these deceptive practices, Arrigo was able to make
sales that it otherwise would have been unable to make, and it did not
incur the expense of storing the vehicles until they could be remediated.
Arrigo answered denying the allegations that it engaged in deceptive
practices and asserted affirmative defenses. It argued, among other
things, that Stewart’s damages were not caused by Arrigo’s conduct, as
Stewart’s decision not to sell the cars with Takata airbags pre-dated any
alleged conduct by Arrigo. Arrigo also moved to dismiss Stewart’s claim,
alleging that Stewart voluntarily decided to accept cars with unremediated
Takata airbags and did not have actual damages.
Discovery revealed that Stewart admitted that it had been selling
unremediated Takata-airbag vehicles to customers until June 1, 2016,
and it stopped doing so after a television reporter interviewed Stewart’s
representatives. Four months later, Stewart filed suit against Arrigo, and
Arrigo stopped the retail sales of the defective vehicles.
In requests for admission, Stewart admitted that Arrigo was not the
cause of Stewart’s decision not to sell at retail a used car with an
unremediated Takata airbag, and it would not sell such vehicles regardless
of whether Arrigo sold them. Further, Stewart sold unremediated Takata-
airbag vehicles to wholesalers without control or restriction as to how
those vehicles were subsequently re-sold. In answers to interrogatories,
Stewart stated that it did not know at the time of its answers of any car
sales by Arrigo that involved an unfair or deceptive trade practice.
James Arrigo, the owner and president of Arrigo Enterprises, testified
in deposition that prior to Stewart filing the lawsuit, his dealership did sell
vehicles with unremediated Takata airbags, but this practice was
discontinued “shortly after” his dealership was sued by Stewart. Although
his dealership did not have a policy of restricting the sale of such vehicles,
it did have a policy of identifying any vehicles with recalls or damage. A
window sticker on its used, for-sale vehicles identified whether the cars
were subject to any recalls, although the sticker did not detail the recalls
or indicate if they were Takata-related. Instead, the sticker instructed
purchasers to ask for a CARFAX report from the dealer. That report would
reveal to a prospective purchaser the specific recalls. Arrigo did not know
of any sales where the recall status of the cars was affirmatively
misrepresented, nor did his dealership engage in any bait-and-switch
tactics described in Stewart’s complaint.
3
Arrigo testified that there were few costs involved in remediating the
vehicles with Takata airbags. After the adoption of his policy to stop selling
cars with unremediated Takata airbags at retail, he began selling the cars
at wholesale, and his business as a whole made more profit.
Relying on Stewart’s admissions, Arrigo moved for summary judgment,
contending that there was no evidence of any of the three essential
elements of a FDUTPA claim for actual damages, including: a deceptive or
unfair trade practice; causation; or actual damages to Stewart. As to the
declaratory and injunctive relief claims, Stewart was not “aggrieved” by a
FDUTPA violation because it decided on its own not to sell unremediated
cars, and any injury to Stewart was entirely speculative. Stewart
responded, filing the aforementioned deposition of James Arrigo. The trial
court granted Arrigo’s motion on all counts. It concluded that there was
no evidence of causation for either the damages claim or the declaratory
and injunctive relief claims. From this judgment, Stewart appeals.
This Court reviews de novo a trial court’s decision to grant summary
judgment to a party. Volusia Cty. v. Aberdeen at Ormond Beach, L.P., 760
So. 2d 126, 130 (Fla. 2000) (“Summary judgment is proper if there is no
genuine issue of material fact and if the moving party is entitled to a
judgment as a matter of law.”). The moving party has the burden to show
the absence of any genuine issue of material fact, and the court must draw
every possible inference in favor of the non-moving party. Craven v. TRG-
Boynton Beach, Ltd., 925 So. 2d 476, 479-80 (Fla. 4th DCA 2006). If the
movant tenders competent evidence in support of its motion, the burden
then shifts to the non-moving party to come forward with opposing
evidence. Id. at 480.
The Florida Deceptive and Unfair Trade Practices Act (FDUTPA),
sections 501.201-501.213, Florida Statutes (2016), prohibits “[u]nfair
methods of competition, unconscionable acts or practices, and unfair or
deceptive acts or practices in the conduct of any trade or commerce . . . .”
§ 501.204(1), Fla. Stat. (2016); see Baptist Hosp., Inc. v. Baker, 84 So. 3d
1200, 1204 (Fla. 1st DCA 2012) (noting FDUTPA protects both the
consuming public and legitimate business enterprises from such
practices). FDUTPA must be “construed liberally to promote” the policy of
“protect[ing] the consuming public and legitimate business enterprises
from those who engage in unfair methods of competition, or
unconscionable, deceptive, or unfair acts or practices in the conduct of
any trade or commerce.” § 501.202(2), Fla. Stat. To bring a FDUTPA claim
for damages, a plaintiff must establish three elements: 1) a deceptive act
or unfair practice; 2) causation; and 3) actual damages. Baptist Hosp., 84
So. 3d at 1204.
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As we noted in Caribbean Cruise Line, Inc. v. Better Business Bureau of
Palm Beach County, Inc., 169 So. 3d 164, 169 (Fla. 4th DCA 2015):
Our supreme court has defined an “unfair practice” as “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) (emphasis added) (citations omitted)
(internal quotation marks omitted). Additionally, it has
defined “deception” as “a representation, omission, or practice
that is likely to mislead the consumer acting reasonably in the
circumstances, to the consumer's detriment.” Id. (emphasis
added) (citation omitted) (internal quotation marks omitted).
While an entity does not have to be a consumer to bring a FDUTPA claim,
it still must prove the elements of the claim, including an injury to a
consumer. Id.First, there was no evidence that Arrigo committed an unfair or
deceptive trade practice that injured a consumer. In answers to
interrogatories, Stewart could not identify any transaction where Arrigo
sold a vehicle with a Takata recall notice without disclosing that
information to the consumer. 1 Stewart’s own admissions provide evidence
in support of Arrigo’s motion. See Fla. R. Civ. P. 1.510(c) (providing parties
may rely on “affidavits, answers to interrogatories, admissions,
depositions, and other materials as would be admissible in evidence”).
Furthermore, James Arrigo’s deposition, filed by Stewart, did not create a
genuine issue of material fact as to whether Arrigo committed an unfair
trade practice that caused Stewart’s alleged damages. Because Stewart
1
With respect to the first element of unfair and deceptive trade practice, the
evidence shows that Arrigo made customers aware of recalls, but it may not have
specifically and affirmatively informed the customer of the Takata airbag recall.
Instead, on the window sticker of each vehicle for sale, it informed the customer
that there were recalls and that the customer should ask the dealer for a CARFAX
report. In Arrigo’s motion to dismiss and initial motion for final summary
judgment, Arrigo noted that the Federal Trade Commission has never prohibited
the sale of vehicles with open recall notices. The commission did not require the
disclosure of recalls on vehicles during the time period involved in this suit. See
16 CFR §§ 455.1-455.4. As shown in the record, an amendment to those
regulations in November 2016 requires that dealers notify consumers that they
should check for open recalls on vehicles that they intend to purchase by visiting
safecar.gov. Arrigo’s reporting that the vehicle is subject to a recall on the window
sticker appears to comply with the amended FTC regulations.
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did not come forward with counterevidence to create a genuine issue of
fact as to this issue, summary judgment was proper. See Navellier v.
Shortz, 207 So. 3d 287, 288 (Fla. 4th DCA 2016) (finding where party
moving for summary judgment comes forward with evidence negating
material issue of fact, non-moving party must show the existence of the
issue).
Second, the evidence was undisputed that Arrigo’s sales of cars with
unremediated Takata airbags were not the proximate cause of damages to
Stewart. Section 501.211(2), Florida Statutes (emphasis added), provides
that, “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 . . . .”
Through requests for admission, Stewart admitted that Arrigo was not the
cause of its decision to stop selling cars with unremediated airbags at
retail, and Stewart would have stopped selling those cars regardless of
Arrigo’s actions. Furthermore, Stewart conceded that it did not stop
selling the unremediated cars until June 2016, after being interviewed by
a television reporter, which was only a few months before Stewart sued
Arrigo and Arrigo also stopped selling such cars. “[C]ausation [under
FDUTPA] must be direct, rather than remote or speculative.” Lombardo v.
Johnson & Johnson Consumer Cos., Inc., 124 F. Supp. 3d 1283, 1290 (S.D.
Fla. 2015) (quoting Hennegan Co. v. Arriola, 855 F. Supp. 2d 1354, 1361
(S.D. Fla. 2012)). 2
As Stewart’s admissions showed that there was no disputed issue of
material fact as to both the existence of a violation of the statute and the
causation element of the damages claim, the court correctly entered
summary judgment on its claim for actual damages.
The court also properly granted summary judgment on Stewart’s claims
for a declaratory judgment and injunctive relief as to the unfair and
deceptive trade practices. Section 501.211(1), Florida Statutes (emphasis
added), provides:
Without regard to any other remedy or relief to which a person
is entitled, anyone aggrieved by a violation of this part may
bring an action to obtain a declaratory judgment that an act
or practice violates this part and to enjoin a person who has
violated, is violating, or is otherwise likely to violate this part.
2
Because state court decisions on FDUTPA claims are rare, this Court looks at
the opinions of the United States District Courts for guidance. Caribbean Cruise
Line, Inc. v. Better Bus. Bureau of Palm Beach Cty., Inc., 169 So. 3d 164, 168 (Fla.
4th DCA 2015).
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In Ahearn v. Mayo Clinic, 180 So. 3d 165, 171 (Fla. 1st DCA 2015), the
court noted that the legislature did not define “aggrieved person.” The
statute provides that “anyone aggrieved” may obtain declaratory or
injunctive relief under subsection (1), but “a person” who suffers actual
damages may recover for a violation of FDUTPA under subsection (2). Id.Because the legislature used different terminology in the different
subsections, the court determined that principles of statutory
construction dictated that the legislature intended two different meanings.
Id. at 171-72. The court then looked to Black’s Law Dictionary for the
definition of “aggrieved”: “1. (Of a person or entity) having legal rights that
are adversely affected; having been harmed by an infringement of legal
rights. 2. (Of a person) angry or sad on grounds of perceived unfair
treatment.” Id. at 172. It adopted the second definition, because it
concluded that the first definition was “synonymous with damaged or
suffered a loss,” which would have been the same as those persons who
could recover under section 501.211(2). Id.The claimant in Ahearn, however, was an individual seeking class
standing for other individual consumers asserting claims. Here, Stewart
is a business entity, and the Black’s Law Dictionary definition utilized by
the First District applies only to persons, not entities. While corporations
are “persons” under the law, they do not share the characteristics of
humans, such as being “angry or sad.” Therefore, the definition used by
the First District does not apply to corporations. Instead, if we are to use
Black’s Law Dictionary definitions, the first definition would apply.
The requirement for an entity to show an invasion of legal rights to seek
equitable relief under section 501.211(1) is not synonymous with the
requirement to show entitlement to actual damages under section
501.211(2), because entities frequently do not suffer actual damages from
unfair and deceptive practices of competitors. Instead, their damages are
frequently special or consequential damages, and thus, not compensable
under section 501.211(2). See City First Mortg. Corp. v. Barton, 988 So. 2d
82, 86 (Fla. 4th DCA 2008) (indicating consequential or special damages
are not recoverable as “actual damages” under FDUTPA). For instance, in
Wyndham Vacation Resorts, Inc. v. Timeshares Direct, Inc., 123 So. 3d 1149(Fla. 5th DCA 2012), the court noted that an entity would be entitled to an
injunction to prevent the unauthorized use of trade secret information or
to prevent deceptive misrepresentations by a competitor which could
create consumer confusion and loss of good will, where actual damages
were not shown. See also Pepsico, Inc. v. Distribuidora La Matagalpa, Inc.,
510 F. Supp. 2d 1110, 1116 (S.D. Fla. 2007) (finding that an entity was
entitled to an injunction to prevent trademark infringement which
7
constituted unfair competition that would result in consumer confusion
and loss of goodwill).
To obtain a declaratory judgment or injunction, an entity must show
that it is “aggrieved by a violation” of FDUTPA. We held in Caribbean
Cruise Line that although a claimant does not have to be a consumer to
state a claim for actual damages under section 501.211(2), to satisfy all of
the elements of a FDUTPA claim, it must show that a consumer was
injured or suffered a detriment. Caribbean Cruise Line, 169 So. 3d at 169.
Similarly, here, under section 501.211(1), an entity may bring an equitable
claim under FDUTPA, but only if it presents evidence of the required
elements. In other words, to state a claim for equitable relief, an entity
must show (1) that it is aggrieved, in that its rights have been, are being,
or will be adversely affected, by (2) a violation of FDUTPA, meaning an
unfair or deceptive practice which is injurious to consumers. Further, “for
someone to be aggrieved, the injury claimed to have been suffered cannot
be merely speculative.” Ahearn, 180 So. 3d at 173; see Macias v. HBC of
Fla., Inc., 694 So. 2d 88, 90 (Fla. 3d DCA 1997).
Because Stewart admitted that Arrigo’s actions (even if they did
constitute unfair practices to consumers) did not cause Stewart to stop
selling the unremediated vehicles, Stewart did not show that it was
adversely affected, thus it failed to satisfy the first element. In addition,
any losses of vehicle sales suffered by Stewart would be entirely
speculative and require building an inference upon an inference. As to the
second element, there was no evidence that any consumer was injured by
any unfair practice, as there was no evidence that Arrigo made any
misrepresentations regarding the unremediated vehicles that it may have
had on its sales lot.
We therefore affirm the final summary judgment, and agree with the
trial court that no disputed issues of fact remain.
Affirmed.
DAMOORGIAN and LEVINE, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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