IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA

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1 IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA JUDIE BATT YARNELL, an individual, Plaintiff, v. Case No.: 2017-CA JARED N. QUARTELL, ESQ., an individual, LAW OFFICES OF JARED QUARTELL, P.A. d/b/a QUARTELL LAW FIRM, P.A., a Florida corporation, EUSTICE T. STRICKLAND, an individual, SCHOOL INVESTMENT PROPERTIES, INC., a Florida corporation, and LDR ACADEMY, INC., a Florida corporation, Defendants. / AMENDED COMPLAINT Plaintiff, Judie Batt Yarnell, sues: Jared N. Quartell, Esq. ( Quartell ) and the Law Offices of Jared Quartell, P.A. d/b/a Quartell Law Firm, P.A. (the Firm ) (together, the Attorneys ); Eustice T. Strickland ( Strickland ) and School Investment Properties, Inc. ( SIP ) (together, the Brokers ); and LDR Academy, Inc. ( Seller ), and states: JURISDICTION, VENUE, AND PARTIES 1. This is an action for damages that exceed $15,000.00, exclusive of interest, costs and attorneys fees. 2. Plaintiff is an adult individual who resides in Palm Beach County, Florida. 3. The Firm is a Florida corporation with its principal place of business in Palm Beach County, Florida. 4. Quartell is an adult individual who resides in Palm Beach County, Florida, and who was associated and practicing with the Firm at all material times.

2 5. SIP is a Florida corporation with its principal place of business in Palm Beach County, Florida. 6. Strickland is an adult individual who resides in Palm Beach County, Florida, who worked for SIP and was acting as an agent of SIP at all material times. 7. The Seller is a Florida corporation with its principal place of business in Palm Beach County, Florida. 8. Venue is proper in Palm Beach County, Florida, pursuant to Section Florida statues, because the causes of action accrued in Palm Beach County, Florida, and the Defendants are located in Palm Beach County, Florida. GENERAL ALLEGATIONS A. Plaintiff s Introduction to the Property through the Brokers. 9. In early 2015, Plaintiff, who owned a private school at that time, was solicited by the Brokers to relocate her business to another property, located at U.S. Highway One, Juno Beach, FL (the Property ), which had more space to accommodate Plaintiff s growing student body. 10. Strickland went to Plaintiff s old business location for the purpose of trying to sell her the Property. At that time, Strickland represented that he had the perfect location for Plaintiff to relocate her private school. 11. The Brokers held themselves out as having more than 28 years of experience exclusively brokering the sale of schools and claimed to be #1 in their field, with unparalleled expertise in that niche market. 12. The Brokers represented themselves as specialists in real estate transactions involving the purchase and sale of child care facilities and private schools. 2

3 13. Throughout the transaction including in a flyer provided to Plaintiffs in early 2015, initial meetings with Plaintiff, meetings with Plaintiff and staff in early 2016, and up through the date of closing Strickland represented that he had been involved in more than 12,000 real estate transactions involving the sale of schools. 14. When the Brokers first approached Plaintiff, she was not looking to purchase property to relocate her school. However, with a lot of pressure and numerous representations concerning how perfect the new location would be for her private school, the Brokers eventually convinced Plaintiff to consider the purchase. 15. In or around May of 2015, after Seller s business had closed for the day, the Brokers showed Plaintiff the Property for the first time. On that occasion, and numerous occasions thereafter, Strickland continued to represent that the Property would be the ideal location to relocate Plaintiff s private school. 16. On or about February 10, 2016, in a meeting with Plaintiff, Strickland represented that the Property was properly zoned for use as a private school. In the same meeting, Strickland stated that the Property was ideal, because, unlike other properties, it would not require a difficult rezoning process to be used for Plaintiff s school. 17. At the same meeting, Strickland represented that the Property was move-in ready and that Plaintiff would only have to complete minor interior renovations (specifically, constructing additional partition walls to separate class rooms at an approximate budget of $100,000-$150,000) to accommodate her intended use as a private school. In fact, Strickland brought a copy of site plans to the meeting to show Plaintiff how the interior build-out would look. 3

4 18. To induce Plaintiff into making the purchase, Strickland also offered to arrange for private financing for interior renovations to the Property after closing, in order to better accommodate Plaintiff s intended use as a private school. B. Plaintiff Purchases the Property. 19. In reliance on the Brokers representations and purported specialized expertise, on or about February 21, 2016, Plaintiff entered into a Contract for Sale and Purchase for the Property from the Seller for $2,800,000 (the Contract ). [A copy of the Contract is attached as Exhibit A]. 20. Notably, the Contract specifically provided that the purpose of the purchase, and intended use of the Property, was for a private school. [Contract, VII.] 21. Moreover, although the Contract stated that Plaintiff would take title subject to certain restrictions, easements and limitations (such as land use plans, zoning and other prohibitions imposed by government authorities), it expressly provided that there would be: (a) no violation of any of the foregoing at closing; and (b) none that would prevent the use of the Property as a private school. [Id.] C. Plaintiff s Attorneys Fail to Discover that the Property Cannot be Used for a Private School Due to Zoning Restrictions. 22. On August 25, 2015, a couple of months after first viewing the Property, Plaintiff first met with the Attorneys regarding the possible purchase of the Property. 23. Notably, the Attorneys expressly advertised real estate & title as one of their primary practice areas. In addition to a J.D., Quartell also has an LL.M. in Real Property and Land Development. 24. On or about February 23, 2016, just after entering into the Contract, Plaintiff officially retained the Attorneys to represent her in the purchase of the Property. 4

5 25. The Attorneys had more than two months after being officially retained, and in reality much longer due to their earlier meetings, to conduct due diligence on Plaintiff s behalf related to the Property. 26. The Attorneys contacted the Palm Beach County Planning, Zoning and Building Department in order to run a lien search, open permit search, and code violations search on the Property. 27. The Attorneys, however, failed to research, discover and/or advise Plaintiff that the Property was not properly zoned for use as a private school prior to closing. D. Plaintiff Closes on the Property and Later Discovers the Zoning Restriction. 28. On May 10, 2016, Plaintiff and the Seller closed on the sale of the Property. 29. The timing of the transaction was critical, as Plaintiff needed to relocate the location of the school during the summer months when school was not in session in order to avoid losing business. Notably, pursuant to the Contract s attached Standards for Real Estate Transactions, timing [was] of the essence. [Contract, at letter I.] 30. Among other things, Plaintiff s lease on the old school building was expiring in June of 2016 and Plaintiff needed to be up and running at the new Property by August 18, 2016 for the new school year. 31. Plaintiff specifically advised the Brokers and the Attorneys that she would have to have the Property up and running before August 18, 2016, in order to ensure a smooth transition of her private school business from the old location to the Property. 32. Unfortunately, on May 24, 2016, a couple of weeks after closing, while Plaintiff s architect was working with the City on the planned build-out at the Property, Plaintiff learned for the first time that the Property was not properly zoned for use as a private school. 5

6 E. Plaintiff s Damages. 33. As a result, Plaintiff has incurred substantial damages to bring the Property into compliance with the as-represented and intended use, as well as to mitigate her damages related to the business itself. These general and special damages include, among other things: a. professional fees, attorney s fees and municipal fees related to rezoning the Property; b. rent, build-out costs, extra moving costs, and related additional operating expenses to set up a temporary business location while the Property was being rezoned; c. loss of use of the Property and lost profits due to the inability to house the expected number of students; d. additional architecture, construction, engineering, landscaping and surveying fees related to bringing the Property into compliance; and e. numerous other miscellaneous expenses. [A preliminary, itemized list of Plaintiff s damages is attached as Exhibit B.] 34. All conditions precedent to this action have been performed or waived. 35. Plaintiff has retained the undersigned attorneys to represent her in this action and is required to pay them a reasonable fee for their services. COUNT I BREACH OF CONTRACT (Seller) 36. Plaintiff repeats and re-alleges paragraphs 1 through 35 as if fully set forth herein. 37. Plaintiff and the Seller entered into a valid Contract for Plaintiff to purchase the Property from the Seller for $2,800,000. [Exhibit A.] 6

7 38. The Seller breached the Contract by transferring title to the Property that was subject to certain restrictions; specifically, the Property was not properly zoned to be used as a private school as specified in the Contract. 39. As a result of the Seller s breach, Plaintiff has been damaged. WHEREFORE, Plaintiff demands judgment against the Seller for general and special damages, prejudgment and post-judgment interest, costs, attorney s fees pursuant to the Contract and for such other and further relief as the Court deems just and proper. COUNT II LEGAL MALPRACTICE / PROFESSIONAL NEGLIGENCE (Attorneys) 40. Plaintiff repeats and re-alleges paragraphs 1 through 35 as if fully set forth herein. 41. At all material times, the Attorneys were in the business of providing professional legal services for compensation to the general public. 42. The Attorneys owed Plaintiff a duty to use reasonable care and to render services with that degree of skill, care, knowledge, and judgment possessed and exercised by other members of the legal profession. 43. The Attorneys negligently performed the legal services and otherwise violated the professional duty of care through the actions or inactions described herein. 44. Specifically, the Attorneys breached the duty owed to Plaintiff to exercise the degree of care that would be exercised by other reasonably skilled legal professionals practicing under the same circumstances by failing to advise Plaintiff that the Property could not be used for the purpose of housing a private school and/or that zoning restrictions prohibited same. 45. As set forth above, Plaintiff has suffered significant damages as a direct and proximate result of the Attorneys failure to provide professional legal services at a level expected of reasonably competent legal professionals. 7

8 WHEREFORE, Plaintiff demands judgment for general and special damages against the Attorneys, costs, interest, and any further relief the Court deems appropriate. COUNT III BREACH OF FIDUCIARY DUTY (Attorneys) 46. Plaintiff repeats and re-alleges paragraphs 1 through 35 as if fully set forth herein. 47. Plaintiff reposed trust and confidence in the Attorneys, and the Attorneys undertook that trust and assumed the duty to advise, counsel, and protect Plaintiff s interests. 48. The Attorneys owed Plaintiff a fiduciary duty of care in providing professional legal services to carry out their responsibilities in an informed and considered manner and to act as an ordinary prudent person would act in the management of his or her own affairs, including an obligation to act in good faith, to act with undivided loyalty, and to provide full and fair disclosure of all material facts. 49. Moreover, due to the Attorneys representations that they possessed special skills i.e., practicing in the areas of real estate and title work the Attorneys owed Plaintiff a fiduciary duty to exercise those skills. 50. Through the actions and inactions set forth above, the Attorneys breached their fiduciary duty owed to Plaintiff, including by failing to exercise care in carrying out their responsibilities related to reviewing title defects and zoning restrictions that would interfere with Plaintiff s intended use of the Property and informing Plaintiff of same. 51. In addition, the Attorneys breached their fiduciary duty to Plaintiff by failing to exercise their special skills and experience in the areas of real estate transactions and title work. 52. As a direct and proximate result of the Attorneys breach of their fiduciary duty, Plaintiff has suffered damages. 8

9 WHEREFORE, Plaintiff demands judgment for general and special damages against the Attorneys, costs, interest, and any further relief the Court deems appropriate. COUNT IV INFORMATION NEGLIGENTLY SUPPLIED FOR GUIDANCE OF OTHERS (Brokers) 53. Plaintiff repeats and re-alleges paragraphs 1 through 35 if fully set forth herein. 54. The Brokers, in the course of their business, profession, or employment, supplied false information for the guidance of Plaintiff. 55. Specifically, the Brokers misrepresented that the Property would be the ideal location for Plaintiff s private school and could be used for that purpose, including stating that: The Property was properly zoned for use as a private school. The Property was ideal for Plaintiff s school. The Property would not require a difficult rezoning process to be used for Plaintiff s school. The Property was move-in ready and that Plaintiff would only have to complete minor interior renovations (constructing additional partition walls to separate class rooms) to accommodate her intended use as a private school. 56. The Brokers, as purported specialists in the field of private schools real estate transactions, had superior knowledge and knew, or should have known, that said information provided to Plaintiff was false. 57. The Brokers had a pecuniary interest in the real estate transaction. 58. The Brokers failed to exercise reasonable care or competence in obtaining or communicating said information to Plaintiff. 59. The Brokers intended for Plaintiff to rely on said information, intended to influence Plaintiff into buying the Property, or knew that Plaintiff intended to rely on same. 9

10 60. Plaintiff justifiably relied on the information provided by the Brokers when purchasing the Property. 61. As a direct and proximate result of the Brokers negligently supplied information, Plaintiff has been damaged WHEREFORE, Plaintiff demands judgment for general and special damages against the Brokers, costs, interest, and any further relief the Court deems appropriate. COUNT V NEGLIGENT MISREPRESENTATION (Brokers) 62. Plaintiff repeats and re-alleges paragraphs 1 through 35 if fully set forth herein. 63. As set forth above, the Brokers made misrepresentations of material fact to induce Plaintiff into purchasing the Property. 64. Specifically, the Brokers misrepresented that the Property would be the ideal location for Plaintiff s private school and could be used for that purpose, including stating that: The Property was properly zoned for use as a private school. The Property was ideal for Plaintiff s school. The Property would not require a difficult rezoning process to be used for Plaintiff s school. The Property was move-in ready and that Plaintiff would only have to complete minor interior renovations (constructing additional partition walls to separate class rooms) to accommodate her intended use as a private school. 65. The Brokers held themselves out as experts in real estate transactions, specifically in brokering the sale of schools. 10

11 66. The Brokers were negligent in making these misrepresentations because they knew or should have known they were false and/or made the misrepresentations without knowledge of their truth or falsity. 67. The Brokers intended to induce Plaintiff into relying and acting on these misrepresentations. 68. Plaintiff justifiably relied on the Broker s misrepresentations by, among other things, purchasing the Property believing that it was an ideal location to relocate her private school business. 69. As a direct and proximate result of the Broker s negligent misrepresentations, Plaintiff has been damaged. WHEREFORE, Plaintiff demands judgment for general and special damages against the Brokers, costs, interest, and any further relief the Court deems appropriate. COUNT VI NEGLIGENCE (Brokers) 70. Plaintiff repeats and re-alleges paragraphs 1 through 35 as if fully set forth herein. 71. Pursuant to Fla. Stat (2), the Brokers owed Plaintiff, among other duties, the duty to (a) deal honestly and fairly; and (b) use skill, care, and diligence in the transaction. transactions. 72. Moreover, the Brokers held themselves out as experts in private school real estate 73. The Brokers breached the aforementioned duties by selling Plaintiffs a school that could not be used for her desired purpose and making numerous misrepresentations regarding the property, when, in fact, the Property was not properly zoned for Plaintiff s intended use. 11

12 damaged. 74. As a direct and proximate result of the Broker s breach, Plaintiff has been WHEREFORE, Plaintiff demands judgment for general and special damages against the Brokers, costs, interest, and any further relief the Court deems appropriate. DEMAND FOR JURY TRIAL Plaintiff demand trial by jury on all issues so triable. MORGAN & MORGAN, P.A. Business Trial Group /s/ Roger C. Brown Roger C. Brown Florida Bar No James E. Fakhoury Florida Bar No N. Flagler Dr., Ste West Palm Beach, Florida Telephone: (561) Facsimile: (561) RBrown@forthepeople.com JFakhoury@forthepeople.com Attorneys for Plaintiff 12