SOUTHERN SPECIALTIES, INC. v. FARMHOUSE TOMATOES, INC

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
SOUTHERN SPECIALTIES, INC.,
a Florida corporation,
Appellant,
v.
FARMHOUSE TOMATOES, INC.,
a Florida corporation,
Appellee.
Nos. 4D17-2933 and 4D18-507
[November 21, 2018]
Consolidated appeals from the Circuit Court for the Fifteenth Judicial
Circuit, Palm Beach County; Edward A. Garrison, Judge; L.T. Case No.
502010CA028491XXXXMB.
John R. Whittles and David R. Miller, Jr. of Mathison Whittles, LLP,
Palm Beach Gardens, for appellant.
George P. Ord of Murphy Reid, L.L.P., Palm Beach Gardens, for
appellee.
WARNER, J.
Appellant, Southern Specialties, Inc., appeals from a final judgment in
favor of the appellee, Farmhouse Tomatoes, Inc., and from an order
granting attorney’s fees and costs to Farmhouse. Southern contends that
the court erred by finding that the statute of limitations barred its claim
for unjust enrichment. As to the attorney’s fees judgment, Southern
argues that the offer of judgment, upon which the fees award was based,
was defective. We affirm the trial court’s conclusion that the statute of
limitations barred the unjust enrichment action. We reverse, however, the
award of attorney’s fees, agreeing that the offer of judgment was invalid
because it was a general offer to settle both equitable and damage claims,
which is not permitted under section 768.79, Florida Statutes.
Southern grows and distributes specialty fruits and vegetables to
retailers and food service operators. Farmhouse grows heirloom tomatoes.
Southern began buying tomatoes from Farmhouse, and in 2003, Southern
loaned Farmhouse monies for specific uses in growing tomatoes, as
evidenced by various promissory notes. In 2004, the parties entered into
a joint venture agreement and commenced operations as a joint venture,
but by 2009, their relationship had soured.
Southern sent Farmhouse a demand for repayment of the monies
borrowed in 2003. When repayment was not forthcoming, Southern filed
a complaint against Farmhouse for unjust enrichment for failing to repay
the monies loaned; tortious interference for Farmhouse contacting
Southern’s customers and excluding it from the sales; and for a permanent
injunction to enjoin Farmhouse from using Southern’s customer lists and
confidential information.
Farmhouse answered, raising as an affirmative defense that the unjust
enrichment claim was barred by the four-year statute of limitations for
legal or equitable actions not founded on a written instrument. See §
95.11(3)(k), Fla. Stat. It also filed a counterclaim, demanding payment for
outstanding invoices. Southern replied, claiming that Farmhouse had
made partial payments on its debt which tolled the statute of limitations
pursuant to section 95.051(1)(f), Florida Statutes.
Farmhouse filed an offer of judgment a few months before trial. It
offered to settle all claims for $50,000. Southern did not accept the offer.
The case proceeded to a non-jury trial. At trial, Southern withdrew its
injunction claim. After the presentation of all evidence, the court found
that the unjust enrichment claim as pled was not based upon a written
agreement, and thus, it was time barred. Even if the claim was not time
barred, the parties were operating as a joint venture. Further, the court
found that Farmhouse had not made payments on the note so as to toll
the statute of limitations, noting that Southern had to repay Farmhouse
for sums that Southern withheld from the sales proceeds. The court found
against Southern on the tortious interference claim and in favor of
Farmhouse on its counterclaim, awarding $24,870.54 as damages. Later,
Farmhouse moved for attorney’s fees based upon its denied offer of
judgment. The court found entitlement, and the parties stipulated to a
reasonable amount of fees and costs. The court entered final judgment for
fees. This appeal was brought from both judgments.
We review de novo whether a claim is barred by the applicable statute
of limitations. Beltran v. Vincent P. Miraglia, M.D., P.A., 125 So. 3d 855,
859 (Fla. 4th DCA 2013). We conclude that the court properly found that
the unjust enrichment claim was barred by the statute of limitations.
Southern pled an unjust enrichment claim based upon monies loaned,
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without referencing any written instrument. Thus, a four-year statute of
limitations applied. See § 95.11(3)(k), Fla. Stat. Although Southern
contended that the statute was tolled pursuant to section 95.051(1)(f),
Florida Statutes, by partial payments on the monies loaned to Farmhouse,
that section applies only to partial payments on obligations “founded on a
written instrument.” As Southern elected to frame its claim without
reference to a written instrument, the tolling provision did not apply.
Moreover, the trial court found that Southern withheld from sales proceeds
amounts which were owed to Farmhouse; however, because Farmhouse
had objected that those amounts were improperly deducted, Southern
actually had repaid those amounts to Farmhouse. Accordingly, those
amounts did not constitute partial payments on the obligation. We thus
affirm the trial court’s judgment in favor of Farmhouse.
With respect to the order granting attorney’s fees under section 768.79,
Florida Statutes, we reverse. Farmhouse’s offer of judgment stated that it
would resolve “all claims” by either party against the other. Based upon
Southern’s complaint, those claims included both monetary and equitable
claims, including its claim for injunctive relief. Because the offer was
directed at all claims made by Southern, it was invalid.
In Diamond Aircraft Industries, Inc. v. Horowitch, 107 So. 3d 362, 374
(Fla. 2013), the supreme court held “that section 768.79 does not apply to
an action in which a plaintiff seeks both damages and equitable relief, and
in which the defendant has served a general offer of judgment that seeks
release of all claims.” There, the plaintiff brought a claim for specific
performance, breach of contract, and for deceptive and unfair trade
practices involving the sale of a jet. Id. at 365. Diamond served an offer
of judgment to resolve all claims asserted by the plaintiff, which claim was
not accepted. Id. at 365-66. Ultimately, Diamond obtained a judgment in
its favor and moved for attorney’s fees based on the offer of judgment. Id.
at 366. The trial court denied the motion, concluding that section 768.79
did not apply because the plaintiff had asserted both equitable and
damage claims. Id. Upon an appeal to the Eleventh Circuit, the court
certified questions to the Florida Supreme Court, including the
applicability of section 768.79 where the party requests both monetary
and nonmonetary relief. Id. at 366, 372.
In answering the certified question, the supreme court noted that
section 768.79 and Florida Rule of Civil Procedure 1.442 must be strictly
construed because they “are in derogation of the common law rule that a
party is responsible for its own attorney’s fees . . . .” Id. at 372. “[S]ection
768.79(1) explicitly states that the offer of judgment statute applies to ‘any
civil action for damages.’” Id. at 375 (emphasis added in Diamond). Thus,
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the offer of judgment statute does not apply if the plaintiff seeks both
damages and equitable relief. Id. at 374. There is no exception for
instances in which an equitable claim lacks serious merit. Id. Thus,
because the offer sought to settle all claims, both equitable and monetary,
the offer was invalid under the statute. Id. at 375-76. Here, the offer was
made to settle all claims, both monetary and equitable. Based on
Diamond, the trial court erred in granting fees based upon the offer of
judgment.
We distinguish MYD Marine Distributor, Inc. v. International Paint Ltd.,
187 So. 3d 1285 (Fla. 4th DCA 2016). In MYD, the complaint alleged
various causes of action for money damages, but it also included a request
for permanent injunction. Id. at 1286. The defendant made an offer of
judgment to settle only the claims for money damages. Id. It specifically
excluded the claim for injunctive relief. Id. Under those circumstances,
our court held that the “true relief” being requested by the plaintiff was
only monetary damages, and we determined that the offer was enforceable.
Id. at 1287. In this case, however, Farmhouse did not attempt to carve
out the injunctive relief claim. Its offer attempted to settle all claims.
Therefore, Diamond is controlling.
For the foregoing reasons, we affirm the final judgment in favor of
Farmhouse on Southern’s claims and Farmhouse’s counterclaim. We
reverse the award of attorney’s fees to Farmhouse and direct that the
attorney’s fees judgment be vacated.
GERBER, C.J., and FORST, J., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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