IN THE SUPREME COURT OF FLORIDA. Case No. SC On Appeal from the First District Court of Appeal LT Case No. 1D AMEC CIVIL, LLC,

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1 IN THE SUPREME COURT OF FLORIDA Case No. SC On Appeal from the First District Court of Appeal LT Case No. 1D AMEC CIVIL, LLC, Petitioner, v. STATE OF FLORIDA DEPARTMENT OF TRANSPORTATION, Respondent. PETITIONER S JURISDICTIONAL BRIEF SMITH, CURRIE & HANCOCK LLP F. Alan Cummings Fla. Bar No S. Elysha Luken Fla. Bar No DeSoto Park Drive Tallahassee, Florida Telephone: (850) Facsimile: (850) HOLLAND & KNIGHT LLP Stephen H. Grimes Fla. Bar No Gigi Rollini Fla. Bar No P.O. Drawer 810 Tallahassee, Florida Telephone: (850) Facsimile: (850) gigi.rollini@hklaw.com Counsel for AMEC Civil, LLC

2 TABLE OF CONTENTS TABLE OF AUTHORITIES... ii STATEMENT OF THE CASE AND FACTS... 1 SUMMARY OF THE ARGUMENT... 2 ARGUMENT... 2 I. THE MAJORITY S HOLDING THAT THE RES JUDICATA IDENTITIES CAN BE ESTABLISHED BY THE EXISTENCE OF A CONTRACT ALONE IS IN EXPRESS AND DIRECT CONFLICT WITH DECISIONS OF THE FOURTH, THIRD, AND FIFTH DISTRICTS ON THE SAME POINT OF LAW II. THE MAJORITY S HOLDING THAT RES JUDICATA EXTENDS TO CLAIMS THAT DID NOT EXIST AT THE TIME THE FIRST LAWSUIT IS FILED IS IN EXPRESS AND DIRECT CONFLICT WITH DECISIONS OF THE FOURTH DISTRICT III. THIS COURT SHOULD EXERCISE ITS JURISDICTION BASED ON THE IMPORTANCE TO COMMERCIAL RELATIONSHIPS AND THE INCONGRUITY OF THE MAJORITY OPINION WITH EXISTING LAW CONCLUSION CERTIFICATE OF SERVICE CERTIFICATE OF RULE COMPLIANCE APPENDIX i

3 TABLE OF AUTHORITIES CASES Page(s) Albrecht v. State, 444 So. 2d 8 (Fla. 1984)... 6, 7 First National Bank of Hollywood v. Freedman, 244 So. 2d 183 (Fla. 1st DCA 1971)... 6 Florida Mortgage Financing, Inc. v. Flagler Plaza Corp., 308 So. 2d 571 (Fla. 3d DCA 1975)... 6 Gilbert v. Florida Power & Light Co., 981 So. 2d 609 (Fla. 4th DCA 2008)... 8 Hialeah Race Course, Inc. v. Gulfstream Park Racing Ass n, Inc., 210 So. 2d 750 (Fla. 4th DCA 1968)... 8 Inter-Active Services, Inc. v. Heathrow Master Association, Inc., 809 So. 2d 900 (Fla. 5th DCA 2002)... 4 Pipkin v. Wiggins, 526 So. 2d 1002 (Fla. 3d DCA 1988)... 5 Rosenthal v. Scott, 150 So. 2d 433 (Fla. 1961) Scovell v. Delco Oil Co., Inc., 798 So. 2d 844 (Fla. 5th DCA 2001)... 5 U.S. Project Management, Inc. v. Parc Royale East Development, Inc., 861 So. 2d 74 (Fla. 4th DCA 2003)... 2, 3, 8 OTHER AUTHORITIES Article V, 3(b)(3), Fla. Const Rule 9.210(a)(2), Florida Rules of Appellate Procedure ii

4 STATEMENT OF THE CASE AND FACTS In 2001, AMEC entered into a comprehensive contract with the Florida Department of Transportation ( DOT ) for the construction and reconstruction of major interstate interchanges in the City of Jacksonville. Op.4, 5. One month into a four and one-half year contract, AMEC claimed that DOT had breached the contract by failing to obtain permits necessary to work at night. Op.2. When DOT failed to respond to its complaint, AMEC filed suit in 2003 for breach of contract ( Night Work Lawsuit ). Op.3. As construction continued, AMEC claimed that DOT committed numerous other breaches of the contract. Op.3. AMEC ultimately obtained an $8,500, judgment against DOT in the Night Work Lawsuit. Op.4. Once this judgment was entered, DOT took the position that it no longer had any other legal obligation to AMEC. Op.4. AMEC then filed suit seeking damages for the many breaches it claimed DOT had committed after the filing of the Night Work Lawsuit. Op.4, 5. The trial court granted DOT s Summary Judgment on the premise that the Night Work Lawsuit was res judicata on all issues. Op.6. The First District Court of Appeal affirmed in a split 2-1 decision, 1 on the premise that the contract was indivisible, and the second lawsuit was barred by res judicata. 1 All facts are found within the four corners of the opinion on review, AMEC Civil, LLC v. State of Florida, Department of Transportation, No. 1D , 35 Fla. L. Weekly D864 (Fla. 1st DCA Apr. 20, 2010), and is referenced as Op. in this Brief. The opinion is attached as Appendix A. 1

5 SUMMARY OF THE ARGUMENT The First District majority opinion s holding that a party may only file one lawsuit for breach of contract and that subsequently occurring and factually distinct breaches of contract are barred by res judicata directly conflicts with and is fundamentally incompatible with decisions of other district courts of appeal. Art. V, 3(b)(3), Fla. Const. The majority opinion creates new law and upsets decades of well-settled commercial expectations of contractual relationships in Florida. ARGUMENT I. THE MAJORITY S HOLDING THAT THE RES JUDICATA IDENTITIES CAN BE ESTABLISHED BY THE EXISTENCE OF A CONTRACT ALONE IS IN EXPRESS AND DIRECT CONFLICT WITH DECISIONS OF THE FOURTH, THIRD, AND FIFTH DISTRICTS ON THE SAME POINT OF LAW. Applying the traditional res judicata analysis, the Fourth District has expressly rejected the one contract, one lawsuit approach as being insufficient to establish the res judicata element of identity of the cause of action. In U.S. Project Management, Inc. v. Parc Royale East Development, Inc., 861 So. 2d 74, 77 (Fla. 4th DCA 2003), the Fourth District reversed a trial court s dismissal on res judicata grounds. Although the second action involved the same agreement, between the same parties, and in their same capacities under the agreement, the plaintiff was now suing based on a subsequent breach of the Consulting Agreement (failure to pay the incentive fee), and not the same breach from the prior litigation (failure to pay the monthly consulting fees). Id. at The 2

6 court noted that though the action involves the same contract, and the evidence considerably overlaps, each claim requires additional evidence which the other does not, and therefore the defense of res judicata is inapplicable because the alleged new breach constitutes a new cause of action. Id. at 77. The Fourth District held that a suit for one breach of contract does not bar a suit for subsequent breaches of that same contract because the contract is not determinative of the identity of the cause of action : When a contract has many provisions, an unsuccessful suit for breach of one provision should not act to bar all further suits for subsequent breaches of that contract... [t]he existence of a contractual remedy allowing one to seek all expected benefits from a breached contract should not be determinative of the identity of the cause of action for res judicata purposes. Id. (emphasis added). 2 Here, the majority opinion reaches the opposite result: the existence of the contract is not only determinative of the identity of the cause of action for res judicata purposes, it is the identity. Op.10 (the identity of the cause of action element of res judicata is met because of [t]he central fact [of] the parties single, indivisible agreement ). Under the majority opinion, the existence of the contract dispenses with the need to compare the facts and evidence necessary to maintain the first suit for breach with the second. The Fifth District has also held that more than one lawsuit may be brought 2 The majority opinion attempts to distinguish Parc Royale by saying the contract was divisible. Op.14 n.12. How could the contract be divisible when the plaintiff was to be paid monthly, and then later for the same services? 3

7 on the same contract. In Inter-Active Services, Inc. v. Heathrow Master Association, Inc., 809 So. 2d 900, (Fla. 5th DCA 2002), Heathrow and Inter-Active were parties to a service contract under which Inter-Active was to install and monitor security systems in Heathrow s development. Id. at 901. When Heathrow notified Inter-Active that the contract would expire five years from the date of execution, Inter-Active sought a determination that the contract would not terminate until five years from final installation ( Inter-Active I ). Id. at The trial court found in Heathrow s favor. The Fifth District reversed, finding the contract would continue five years from final installation. After Inter-Active I, Inter-Active filed a second lawsuit against Heathrow for damages for breach of contract ( Inter-Active II ). Id. at 902. Inter-Active alleged that Heathrow improperly terminated the contract by forcing Inter-Active to vacate the property for the four-year pendency of Inter-Active I. Heathrow asserted that Inter-Active II was barred by res judicata as a result of Inter-Active I. Id. On appeal, the Fifth DCA held that the facts and evidence necessary to maintain Inter-Active I were not the same as Inter-Active II. Id. Central to the court s holding was its finding of a lack of identity of cause of action: The facts were different because Inter-Active s claim for money damages arising out of its forced removal from Heathrow s property did not even exist at the time Inter- Active filed its original injunction action. Id. at

8 In Scovell v. Delco Oil Co., Inc., 798 So. 2d 844, 846 (Fla. 5th DCA 2001), a commercial tenant, Delco, was sued in Seminole County by the Scovells for breach of a lease agreement for failing to install new petroleum lines. Id. at 845. The Scovells obtained a judgment that the lease had been breached and a writ of possession. Id. The Scovells sued again, claiming two different breaches of the lease. Id. at 846. The trial court held that the second suit was barred by res judicata. The Fifth District reversed, holding that the second cause of action for breach of the lease contract was not barred by res judicata or the rule against splitting a cause of action, because the failure to install the new petroleum lines which led to the eviction was an act separate from the subsequent failure to remove the petroleum equipment. Id. The Third District has also concluded that a second lawsuit arising out of the same contractual agreement was not barred by res judicata. In Pipkin v. Wiggins, 526 So. 2d 1002, 1003 (Fla. 3d DCA 1988), the Third District approved a trial court s denial of a motion to dismiss on res judicata grounds, because the causes of action were different. The first lawsuit involved breach of obligations under a joint venture agreement. The second litigation was held not to be barred, notwithstanding prior litigation, because [t]he instant litigation is based on a different cause of action arising from subsequent interference with that agreement, therefore res judicata principles are not applicable. Id. 5

9 As Judge Kahn explained in his dissent, DOT does not cite a Florida case upholding the principle of one contract, one lawsuit for true serial breaches of a contract. Op.19 (dissent). Moreover, the two cases cited by the majority on indivisibility of contracts are not on point. First National Bank of Hollywood v. Freedman, 244 So. 2d 183 (Fla. 1st DCA 1971), did not even involve res judicata, and in Florida Mortgage Financing, Inc. v. Flagler Plaza Corp., 308 So. 2d 571 (Fla. 3d DCA 1975), indivisibility of the contract was irrelevant, because the second cause of action was already in existence when the first lawsuit was filed. 3 The majority holds that identity of the cause of action element of res judicata, is satisfied by the mere existence of a contract between the parties regardless of factual differences, timing, and the nature of the breaches of that contract and that the identity of the thing sued for exists because both actions seek money damages. The majority even went so far as to suggest that AMEC breached the contract by bringing the Night Work Lawsuit. This Court has directed that a fact-based, as opposed to a transaction-based, analysis is required to determine whether res judicata applies. Albrecht v. State, 444 So. 2d 8, 12 (Fla. 1984), superseded by statute on other grounds as recognized in Bowen v. Fla. Dep t of Envtl. Regulation, 448 So. 2d 566 (Fla. 2d DCA 1984). In Albrecht, this 3 The majority reasons that AMEC s more than four-year contract to construct and reconstruct multiple interstate exchanges was not a continuing contract, in an effort to distinguish AMEC s reliance on 50 C.J.S. Judgments 767 (1997). Op.13. 6

10 Court held that [t]he determining factor in deciding whether the cause of action is the same is whether the facts or evidence necessary to maintain the suit are the same in both actions. 444 So. 2d at 12. Under the majority opinion, the existence of a contract between the parties determines on its face that the cause of action is the same. This new interpretation abandons Albrecht s fact-based analysis and disregards whether subsequent breaches occurred. Under this bright-line rule, when a presumptively indivisible contract exists, res judicata bars the second lawsuit, regardless of whether the second suit alleges different and subsequent breaches and seeks different damages than the first suit. Op.3-4, 9 (noting that AMEC argued that DOT breached the contract in multiple ways and that a suit for one breach does not bar suit for subsequent breaches of the same contract[,] and that the damages flowing from different breaches are different ). II. THE MAJORITY S HOLDING THAT RES JUDICATA EXTENDS TO CLAIMS THAT DID NOT EXIST AT THE TIME THE FIRST LAWSUIT IS FILED IS IN EXPRESS AND DIRECT CONFLICT WITH DECISIONS OF THE FOURTH DISTRICT. The First District s majority opinion conflicts with decisions of the Fourth District holding that res judicata extends only to those claims which existed when the first lawsuit was filed. Under the majority opinion, filing a lawsuit for breach of a presumptively indivisible contract and obtaining a judgment thereon forecloses breaches regardless of when they occurred or accrued, as well as those 7

11 that had not even yet occurred at the time of filing the first suit. 4 Foreclosing claims that did not exist at the time of the filing of the first suit conflicts with Hialeah Race Course, Inc. v. Gulfstream Park Racing Ass n, Inc., 210 So. 2d 750 (Fla. 4th DCA 1968), which limited res judicata to bar only those claims that existed when the first lawsuit was filed. New causes of action are not barred. Parc Royale, 861 So. 2d at 77; accord Gilbert v. Fla. Power & Light Co., 981 So. 2d 609, 614 (Fla. 4th DCA 2008) ( [U]nder the rule against splitting a cause of action, a new claim for damages is not barred if the underlying cause of action had not accrued at the time of filing the previous suit. ) (emphasis added). Contrary to the decisions in Hialeah and Gilbert, the majority decision here uses res judicata to punish AMEC for bringing a premature lawsuit, Op.5, 5 instead of using the doctrine for its intended purpose to bar multiple lawsuits based on the same facts and evidence previously heard. The doctrine is not intended to bar claims that did not exist as of the time of filing the prior lawsuit. III. THIS COURT SHOULD EXERCISE ITS JURISDICTION BASED 4 The majority opinion provides that the Night Work Lawsuit was filed in August 2003, Op.3, but also observes that a second DRB was not formed until March 2004, and that additional claims were presented in part from March 2005 through February 2006, and thereafter in September Op.3 n.2. 5 The majority opinion states that supplements under Rule 1.190(d) are not mandatory. Op.8 n.6. Yet, the majority holding is that the failure to supplement pleadings with subsequently occurring transactions or events results in a res judicata bar. But see Fla. R. Civ. P (d) (party at its option may supplement pleadings setting forth transactions or occurrences or events which have happened since the date of the pleading sought to be supplemented ). 8

12 ON THE IMPORTANCE TO COMMERCIAL RELATIONSHIPS AND THE INCONGRUITY OF THE MAJORITY OPINION WITH EXISTING LAW. The majority s new one contract, one lawsuit rule fundamentally alters the landscape of Florida law on contracts and the application of res judicata principles. Indeed, no Florida court, in the context of an extended and complex commercial relationship, has ever gone so far in depriving a contracting party of recourse. Op.22 (dissent). The majority s decision is not just a $20-million decision affecting AMEC. It impacts every construction contract, public or private, large or small, and arguably all contracts subject to Florida law. The most devastating impacts will be to parties to multi-year, multi-obligation contracts, including, for example, parties to the $21.3 billion worth of construction contracts that FDOT, alone, plans to enter between 2009 and The decision provides no guidance on how to rebut the new presumption that a contract is indivisible for res judicata purposes, creating uncertainty when a party is faced with a substantial breach early on in a contractual relationship. The choice either will be to suffer substantial losses until the end of a lengthy contract term or to terminate business relationships that previously might have been salvaged. 7 Neither option is satisfactory. The 6 See State of Florida, Department of Transportation, Program and Resource Plan for Fiscal Years 2008/ /14 (March 2009) 1, available at 7 A contractor s decision to terminate due to an owner s substantial breach of contract would prove difficult for public works contracts as provisions in said 9

13 public policy is questionable: if a defendant commits multiple wrongful acts the law should protect the rights of the wronged party, not the convenience of the putative wrongdoer. Rosenthal v. Scott, 150 So. 2d 433, 439 (Fla. 1961). CONCLUSION This Court has and should exercise jurisdiction, grant review, resolve the conflict and quash the decision below. Respectfully submitted this 10th day of September, HOLLAND & KNIGHT LLP /s/ Stephen H. Grimes Stephen H. Grimes, FBN Gigi Rollini, FBN P.O. Drawer 810 Tallahassee, Florida Telephone: (850) Facsimile: (850) SMITH, CURRIE & HANCOCK LLP F. Alan Cummings, FBN S. Elysa Luken, FBN DeSoto Park Drive Tallahassee, Florida Telephone: (850) Facsimile: (850) Counsel for AMEC Civil, LLC contracts generally, as here, require that the contractor is to continue work during the pendency of disputes over payment and breaches. Op.3 n.1. 10

14 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of Petitioner s Jurisdictional Brief has been furnished to Gregory G. Costas, counsel for Respondent State of Florida, Department of Transportation, MS-58, 605 Suwannee Street, Tallahassee, Florida , by U.S. Mail this 10th day of September, /s/ Stephen H. Grimes Attorney CERTIFICATE OF RULE COMPLIANCE I HEREBY CERTIFY that this brief complies with the font requirements of Rule 9.210(a)(2), Florida Rules of Appellate Procedure. /s/ Stephen H. Grimes Attorney 11

15 INDEX TO APPENDIX A Opinion filed April 20,