Falsetto v. Liss

Third District Court of Appeal
State of Florida
Opinion filed May 22, 2019.
Not final until disposition of timely filed motion for rehearing.
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No. 3D18-794
Lower Tribunal No. 16-4683
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Gino Falsetto, et al.,
Appellants,
vs.
Mitchell Liss, et al.,
Appellees.
An Appeal from the Circuit Court for Miami-Dade County, Abby Cynamon,
Judge.
The Ferro Law Firm, P.A., and Simon Ferro, Jr., for appellants.
Wolfe Law Miami, P.A., and Richard C. Wolfe, for appellees.
Before EMAS, C.J., and LINDSEY and HENDON, JJ.
EMAS, C.J.
INTRODUCTION
Appellants, Gino Falsetto and Bernard Siegel, appeal an adverse partial
summary judgment on their counterclaim and third-party claim against their former
business partner, appellee Mitchell Liss.1 The trial court concluded that the parties’
2014 Settlement Agreement (which included a general release) discharged
appellants’ fraud claims, and that “there is no issue of contested fact that the
allegations of Fraud did not occur prior to the [2014 Agreement].”
We reverse, holding a genuine issue of material fact remains in dispute:
whether appellants knew or reasonably should have known about the alleged fraud
in 2014 when the release was signed—in other words, whether appellants’ fraud
claims had “accrued” at the time of the execution of the release.
FACTS AND PROCEDURAL BACKGROUND
A. The 2014 Settlement Agreement and General Release
Gino Falsetto and Mitchell Liss owned and operated three valet parking
businesses: Double Park, Paradise Systems, and South Park. By agreement, “the
parties were entitled to equal distributions and profits from the companies.”
However, the parties had a falling out and, in April 2014, Liss sued Falsetto for
injunctive relief, appointment of a receiver, judicial dissolution of the companies,
1The parties’ respective companies are also parties to the lawsuit. The appellant
companies include: Double Park, LLC, Paradise Systems, LLC, and South Park,
LLC. The appellee company is DP Systems.
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and monetary damages. In June 2014, the parties entered into the subject
Settlement Agreement (2014 Agreement), which released the parties
from any and all disputes, claims, causes of action, . . .
whether past or present, known or unknown, filed or
unfiled at present with any federal, state, or municipal
court . . . . from the beginning of the world to the
Effective Date of this Agreement.
(Emphasis added). It also provided that: “The releases contained in this
Agreement are intended to be as broad and inclusive as Florida law permits.” Both
parties were represented by counsel.
B. The Complaint, Counterclaim and Third-Party Claim
In February 2016, Liss and DP Systems sued Falsetto, Siegel, Double Park,
Paradise Parking, and South Park for breach of the 2014 Agreement, alleging that
appellants stopped making payments required under the 2014 Agreement.
Appellants, in response, filed a counterclaim and third party claim against Liss, DP
Systems, and John Battaglia2 (Liss’ business partner in DP Systems), alleging that
Liss perpetrated a fraud and stole money from Paradise Parking. According to
appellants, between 2010 and 2014 (before the 2014 Agreement was signed), Liss
used his own company (DP Systems) to enter into a lucrative parking services
contract with Latitude Condominium Association (Latitude). The “illegal
subcontract,” they explained, provided Liss $30,000 a month for his company’s
2 Battaglia was dismissed as a party in this appeal.
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services. Meanwhile, Liss was using Paradise Parking (appellant) to provide all of
the parking services to the Latitude and paying appellants only a nominal fee
($1000/month). Appellants alleged that they discovered the fraudulent
arrangement during discovery in Liss’s breach of contract lawsuit.
C. Motion for Summary Judgment
Liss moved for summary judgment on the counterclaim and defenses,
contending they were barred by the 2014 Agreement’s general release. To support
his motion, Liss relied in part on an email between Falsetto and Liss dated June 5,
2014. Liss contended that the email showed Falsetto knew or should have known
about the alleged fraud at the time the parties entered into the 2014 Agreement.3
Appellants filed a response with attachments including separate affidavits from
Siegel and Falsetto, stating that, at the time the 2014 Agreement was executed,
they did not know (nor could they have known) Liss and Battaglia were partners in
DP Systems or that they had created the company “to compete with Paradise and
Double Park” and to “steal business” by “confusing prospective customers into
3 The email read: “John Battaglia has been your partner and he still is and you and
he have been operating the Parking operations at the Latitude since inception
mostly for his benefit and yours. . . . You had always denied that John Battaglia
was involved. Then when I confronted you with facts you finally admitted that you
and John were partners. I know exactly who South Florida Management is so do
not pretend that you are not involved . . . . [P]lease be advised that we will be
addressing all of the outstanding and pending claims, lawsuit and other liabilities
that you and John are clearly responsible for as Operators of the Latitude
Account.”
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believing that they were contracting with Double Park and/or its affiliates.” Both
maintained they only learned of the fraud during discovery in Liss’s breach of
contract lawsuit.
At the hearing on the motion, appellants contended that the trial court could
not consider the June 5th email in support of appellees’ motion for summary
judgment, because it had not been authenticated. Appellants further contended that
the fraud claims had not yet accrued at the time the 2014 Agreement was signed
because appellants did not know nor should they reasonably have known about the
alleged fraud. The trial court did not explicitly rule on the admissibility of the June
5th email. However, in its order granting the motion, the trial court found that the
2014 Agreement released the claims of fraud because the alleged fraud occurred
before the 2014 Agreement was signed, and that the June 5th email “clearly
demonstrates that [appellants] knew or should have known of the facts supporting
the claim of fraud . . . .” This appeal followed.
DISCUSSION
Liss generally argues first, that the fraud claims are barred because the
release prohibits “known and unknown claims;” and second, that the June 5th email
shows appellants knew or should have known about the alleged fraud, specifically
Liss’s arrangement with Latitude. We find no merit in either argument.
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“[T]he courts’ willingness to enforce general releases is not absolute.”
Mazzoni Farms, Inc. v. E.I. DuPont De Nemours & Co., 761 So. 2d 306, 315 (Fla.
2000). Instead, “enforcement is premised upon the assumption that the released
claims are those that were contemplated by the agreement.” Id. Florida courts,
including this Court, have explained that “a general release . . . does not bar a
claim which had not yet accrued when the release was executed.” Hold v. Manzini,
736 So. 2d 138, 141 (Fla. 3d DCA 1999); see e.g., Schornberg v. Panorama
Custom Home Builders, Inc., 972 So. 2d 243 (Fla. 2d DCA 2007); The Plumbing
Serv. Co. v. Traveler’s Cas. and Sur. Co., 962 So. 2d 1056 (Fla. 5th DCA 2007);
Floyd v. Homes Beautiful Constr. Co., 710 So. 2d 177 (Fla. 1st DCA 1998).
Despite Liss’s argument to the contrary, a release of an “unknown” claim
does not necessarily release an “unaccrued” or future claim, as the terms are not
synonymous. For instance, in Schornberg, Traveler’s and Floyd, the reviewing
courts found that, to bar unknown claims in those cases, the claims must have
accrued at the time the release was executed. Compare Schornberg, 972 So. 2d at
244 (release language: the homeowner “releases and discharges Builder . . . from
any and all claims, . . . including, without limitation, attorneys’ fees, of any nature
whatsoever, known or unknown, suspected or unsuspected, existing at any time on
or before the Effective Date”) (emphasis added); Traveler’s, 962 So. 2d at 1057
(release language: the parties agreed to “waive, discharge and satisfy all causes of
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action whether known or unknown, demands of every kind or character and any
and all claims they have or may have whether known or unknown against THE
PLUMBING SERVICE COMPANY its employees and/or officers from the
beginning of the world through the date hereof”) (emphasis added); Floyd, 710 So.
2d at 178 (release language: the parties entered into a settlement and release
agreement releasing Homes Beautiful from “any claim or cause of action presently
existing, whether known or unknown, including but not necessarily limited to the
[1986 civil suit]”) (emphasis added); with Columbia Bank v. Columbia Devs.,
LLC, 127 So. 3d 670, 673 (Fla. 1st DCA 2013) (explaining the bank agreed to
“release, remise, acquit and forever discharge Ross, Edwards, Smith [Jr.] and
NFLG . . . from all . . . causes of action, of every kind and nature, accrued or
unaccrued, now known or hereafter discovered, at law or in equity relating in any
way to the Loan Documents and/or to the Property, . . .”) (alterations omitted)
(emphasis added); Patco Transp., Inc. v. Estupinan, 917 So. 2d 922, 923 (Fla. 1st
DCA 2005) (finding a general release precluded an employee’s petition for
workers’ compensation benefits where it barred “any and all past, present or future
claims, . . . which the Plaintiff now has, or which may hereafter accrue or
otherwise be acquired, on account of, or may in any way grow out of, or which are
the subject of the Complaint (and all related pleadings)”) (emphasis added).
Because the Agreement in this case mutually released the parties from claims “past
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or present, known or unknown”—but did not release future or unaccrued claims—
its plain language requires us to hold that the parties were only released from
causes of actions that had accrued at the time the parties signed the 2014
Agreement.
Liss relies on Breamer Isle Condominium Association, Inc. v. Boca Hi, Inc.,
632 So. 2d 707 (Fla. 4th DCA 1994) to suggest that because the 2014 Agreement
released all “known or unknown” claims, it does not matter whether appellants
knew or did not know about the alleged fraud. This reliance is misplaced. In
Breamer, the condominium association “released all of the appellees for all claims
(both known and unknown, as to one, and all future claims as to the others), which
arose out of the construction of the condominium.” Id. at 707 (emphasis added).
The Second District held that the release of all claims in a prior lawsuit was
enforceable in the second lawsuit even though the defects alleged in the second
case “were not discoverable at the time it settled its prior lawsuit and executed
releases to these defendants.” Id. Unlike here, however, the contract in Breamer
released the appellees from “all future claims.” See Floyd, 710 So. 2d at 179
(distinguishing Breamer because the agreement in that case released “future”
claims). The language in the 2014 Agreement renders the instant case
distinguishable.
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Because we conclude that the release does not bar unaccrued (or future)
claims, we reach appellants’ second argument—that the trial court erred in
granting summary judgment in favor of appellee because a genuine issue of
material fact remains in dispute: Whether the fraud claims had “accrued” at the
time the parties executed the 2014 Agreement. We find there is a genuine issue of
material fact, and therefore the trial court erred in granting summary judgment on
appellants’ fraud claims.
“The essential elements of a fraud claim are: (1) a false statement
concerning a specific material fact; (2) the maker's knowledge that the
representation is false; (3) an intention that the representation induces another’s
reliance; and (4) consequent injury by the other party acting in reliance on the
representation.” Lopez-Infante v. Union Cent. Life Ins. Co., 809 So. 2d 13, 15
(Fla. 3d DCA 2002). A fraud action accrues when the last element occurs or
“when the plaintiff knew, or through the exercise of due diligence should have
known, of the facts constituting the fraud.” Smith v. Bruster, 151 So. 3d 511, 514
(Fla. 1st DCA 2014). The question then is whether appellants knew or should have
known about the fraud at the time the parties signed the 2014 Agreement.
In answering this question, we first hold that the trial court erred in relying
on the unauthenticated June 5th email. See Bryson v. Branch Banking & Tr. Co.,
75 So. 3d 783, 786 (Fla. 2d DCA 2011) (holding: “The unauthenticated copies of
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default letters purportedly sent to Bryson by BB & T were insufficient for
summary judgment purposes because only competent evidence may be considered
in ruling on a motion for summary judgment”) (citing Tunnell v. Hicks, 574 So. 2d
264, 266 (Fla. 1st DCA 1991) (explaining that the court could not consider certain
documents in its summary judgment decision because “Tunnell failed to attach
either document to affidavits that presumably would have ensured their
admissibility”)); see also Bifulco v. State Farm Mut. Auto. Ins. Co., 693 So. 2d
707, 709 (Fla. 4th DCA 1997) (holding: “Merely attaching documents which are
not ‘sworn to or certified’ to a motion for summary judgment does not, without
more, satisfy the procedural strictures inherent in Fla. R. Civ. P. 1.510(e).”)
Because the June 5th email should not have been considered, the evidence
before the court on this question consisted of the allegations contained in the
Falsetto and Siegel affidavits. The affidavits generally asserted that: Neither Siegel
nor Falsetto knew or could have known that, at the time they executed the 2014
Agreement, Liss and Battaglia were partners in DP Systems and created the
company “to compete with Paradise and Double Park and steal business from
Paradise and Double Park by . . . confusing prospective customers into believing
that they were contracting with Double Park and/or its affiliates,” or that they
“actually had a lucrative $30,000+ per month contract with Latitude.” Falsetto and
Siegel also averred they discovered the alleged fraud during discovery in Liss’s
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2016 breach of contract lawsuit. These affidavits created a genuine issue of
material fact on the question of whether Falsetto knew or reasonably should have
known of the alleged fraud when he entered into the 2014 Agreement with Liss.
CONCLUSION
The 2014 Agreement’s plain language released the parties only from
“known or unknown” claims, not future or unaccrued claims. Because there is a
genuine issue of material fact as to whether the fraud claim had accrued— that is,
whether Falsetto knew or through the exercise of due diligence should have known
about the alleged fraud at the time the 2014 Agreement was executed—the trial
court erred in granting summary judgment on those fraud claims. We reverse and
remand for further proceedings.
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