SUPREME COURT STATE OF FLORIDA TALLAHASSEE, FLORIDA FRANCIS D. PETSCH, CASE NO. SC04-917 Petitioner, v. ORKIN EXTERMINATING COMPANY, INC.; ROLLINS, INC; DAVID BERNSTEIN, individually, and RICK PROTHERO, individually, Respondents. PETITIONER S INITIAL BRIEF ON JURISDICTION George A. Vaka, Esquire J. Daniel Clark, Esquire Florida Bar No. 374016 Florida Bar No. 0106471 Vaka, Larson & Johnson, P.L. Clark, Charlton & Martino, P.A. One Harbour Place 3407 W. Kennedy Blvd. 777 S. Harbour Island Blvd. Tampa, Florida 33609 Suite 300 (813) 879-0700 Tampa, Florida 33602 (813) 879-5498 (Facsimile) (813) 228-6688 (813) 228-6699 (Facsimile) ATTORNEYS FOR PETITIONER
STATEMENT OF THE CASE AND FACTS The Petitioner, FRANCIS D. PETSCH, individually and on behalf of all others similarly situated, 1 adopts the decision of the Second District Court of Appeal as his Statement of the Case and Facts. Francis Petsch would provide a summary as follows: Plaintiff entered into a contract with Orkin Exterminating Company ( Orkin ) to inspect his home for termites and treat for any infestation. (A. 2) 2 Unhappy with the services, Petsch initiated a class action against the Defendant, and in Count I, he sought money damages and attorneys fees under Florida s Deceptive and Unfair Trade Practices Act (FDUTPA); in Count II, sought restitution of all money he had paid to Orkin; and in Count III, injunctive relief under FDUTPA and a declaration that the contract s limitation of liability provision was unenforceable. (A. 2) 1 The Petitioner, Francis Petsch, will be referred to as Plaintiff or by name. The Respondents, Orkin Exterminating Company, Inc., Rollins, Inc., David Bernstein, individually, and Rick Prothero, individually, will be collectively referred to as the Defendants or by name. 2 In conformity with Fla.R.App.P. 9.120(d), the decision of the Second District Court of Appeal is attached hereto as Appendix I. All references to the Appendix will be referred to as (A) followed by citations to the appropriate page number of the Appendix. The order denying rehearing is attached as Appendix II. 1
Pursuant to a contractual arbitration provision, Orkin moved to dismiss or stay the proceedings in favor of arbitration. The circuit court denied the motion finding the agreement invalid on two grounds. First, the court found that arbitration did not provide a forum in which Petsch could exercise his statutory rights, and second, the court held that the arbitration provision was unconscionable. The Second District reversed that decision and remanded with directions to submit Petsch s claims to arbitration. (A. 2) When addressing Petsch s claim that the limitation of liability provision precluded him from bringing a FDUTPA cause of action, the court agreed that Petsch s interpretation of the limitation provision in the Orkin contract was reasonable, and the limitation of liability agreement was ambiguous. (A. 4) The court stated that it was unclear whether the waiver extended to all claims based on causes of action for breach of contract, torts or the like or only to certain damages arising from those causes of action. (A. 4-5) The court noted that Orkin had conceded in the appeal, that the limitation only addressed certain remedies and did not limit Petsch s ability from bringing an FDUTPA claim on the merits in arbitration. The Second District accepted Orkin s assertion that nothing in the arbitration clause or limitation provision prevented Petsch from raising his FDUTPA claim, or any other claim. (A. 5) The court also 2
stated that nothing in the limitation provision affected the remedies available for a violation of FDUTPA. The court stated: Section 501.211(b) provides that anyone who has suffered a loss because of a violation of FDUTPA may recover actual damages, plus attorneys fees and court costs. Although Petsch sought special, consequential and incidental damages in Count I, those damages are not available under FDUTPA. See, Ft. Lauderdale Lincoln-Mercury, Inc. v. Corgnati, 715 So.2d 311, 314-315 (Fla. 4 th DCA 1998). Section 501.211 permits a consumer to recover only the diminished value of the services received. Urling v. Helms Exterminators, Inc., 468 So.2d 451, 454 (Fla. 1 st DCA 1985). Thus in the context of an improper termite inspection, the Urling court noted that the plaintiff could only recover the cost of the erroneous certificate. Petsch s damages under FDUTPA would be recovery of the amount he paid under his contract with Orkin, plus his fees and costs. Such recovery is permitted under the limitation of liability provision in the contract. (A. 5-6) Petsch timely sought rehearing, clarification, or in the alternative, certification from the Second District. The court entered its order denying that relief on April 22, 2004. (A. II) Petsch in turn timely filed a Notice to Invoke this Court s discretionary jurisdiction. JURISDICTIONAL ISSUE WHETHER THE DECISION OF THE SECOND DISTRICT COURT OF APPEAL EXPRESSLY AND DIRECTLY CONFLICTS WITH DECISIONS FROM THIS COURT OR THE OTHER DISTRICT COURTS OF APPEAL? 3
SUMMARY OF THE ARGUMENT The decision of the Second District Court of Appeal expressly and directly conflicts with the Third District s decision in Rollins, Inc. v. Heller, 454 So.2d 580 (Fla. 3d DCA 1984). In Heller, the Third District, when construing the term actual damages under FDUTPA, held that the Act should be interpreted and actual damages measured as those damages recoverable at common law. At common law, the purpose of compensation for breach of contract is to restore the injured party to the condition which he would have been in had the contract been properly performed. The damages which are recoverable are those which are the natural and proximate result of the breach. See, e.g., Campbell v. Rawls, 381 So.2d 744 (Fla. 1 st DCA 1980). The decision of the Second District Court of Appeal in the present case limits Petsch s damages to solely the recovery of the amount he paid under his contract with Orkin, plus his fees and costs. That limitation expressly and directly conflicts with the statement of the measure of damages both in Heller and Rawls. This Court should exercise its discretion, grant review and ultimately review this case on the merits. 4
ARGUMENT THE DECISION OF THE SECOND DISTRICT COURT OF APPEAL EXPRESSLY AND DIRECTLY CONFLICTS WITH DECISIONS FROM THIS COURT OR THE OTHER DISTRICT COURTS OF APPEAL. Pursuant to Article V, 3(b)(3), Florida Constitution, (1980), this Court may exercise its discretionary jurisdiction when an appellate decision expressly and directly conflicts with the decision of another District Court of Appeal or this Court on the same question of law. This Court s constitutional authority to review an appellate decision establishing a point of law requires only that there be some statement or citation in the opinion that hypothetically could create conflict if there were another opinion reaching a contrary result. The Florida Star v. BJF, 530 So.2d 286, 288 (Fla. 1988); Persaud v. State, 838 So.2d 529, 532-33 (Fla. 2003). In the present case, the Second District stated that Petsch s damages under FDUTPA would be solely the recovery of the amount he paid under his contract with Orkin, plus his fees and costs. That statement of the law is in conflict with the Third District s decision in Rollins, Inc. v. Heller, 454 So.2d 580 (Fla. 3d DCA 1984) in which the Third District, construing the term actual damages under FDUTPA held that the Act should be interpreted, and actual damages measured, in a similar manner 5
as construed in Texas, which had held that actual damages are those damages recoverable at common law. In Rollins, Inc. v. Heller, 454 So.2d 580 (Fla. 3d DCA 1984), the Third District construed the measure of damages under the FDUTPA in a case brought against a security company by purchasers of an alarm system that failed resulting in loss of property from their home during a burglary. The Hellers brought an action claiming negligence, breach of express and implied warranties, fraud and deceit, misleading advertising, gross negligence and deceptive and unfair trade practices on behalf of Rollins. The trial court found Rollins liable for gross negligence and for violation of the Act and awarded compensatory damages of approximately $128,500.00 based upon the value of the unrecovered stolen property, and $100,000.00 in punitive damages. Rollins appealed and raised a variety of issues on appeal. As it pertained to the FDUTPA violation, the Third District affirmed the trial court s finding of a statutory violation and then determined what damages were allowable under the Act. Citing to Fla. Stat. 501.211(2), the court noted that an individual may recover actual damages, plus attorneys fees and court costs. The court explained that under Fla. Stat. 501.212(3), however, recovery of damages was limited solely to the property which was the subject of a consumer transaction. The court stated: 6
We find that the subject of a consumer transaction in the present case was the installation of the burglar alarm system and the services performed thereon, rather than the items stolen from the Hellers house. The court based its determination on the fact that Rollins was not an insurer of the customer s property. The court stated that while the FDUTPA did not define actual damages the courts of other jurisdictions have had occasion to define the term within similar statutes. Citing to the Texas Act, the court noted that the Texas Supreme Court had held that actual damages are those damages recoverable at common law. The Third District held that Florida Statutes should be interpreted and actual damages measured in a similar manner. It then cited to Raye v. Fred Oakley Motors, Inc., 646 S.W.2d 288, 290 (Tex. App. 1983) as the proper measure of damages in the case before it. In Raye, the court stated: Generally, the measure of actual damages is the difference in market value of the product or service and the condition in which it was delivered and its market value in the condition in which it should have been delivered according to the contract of the parties. A notable exception to the rule may exist when the product is rendered valueless as a result of the defect then the purchased price is the appropriate measure of actual damages. [citations omitted] The decision of the Second District in the present case expressly and directly conflicts with Heller concerning the measure of damages under the FDUTPA. Heller 7
itself says that the measure of damages is actual damages as recoverable at common law. They are not limited, as stated by the Second District in the present case, to solely the purchase price of the Orkin contract. At common law, the purpose of compensation for breach of contract is to restore the injured party to the condition which he would have been in had the contract been properly performed. The damages which are recoverable are those which are the natural and proximate result of the breach. See, e.g., Campbell v. Rawls, 381 So.2d 744 (Fla. 1 st DCA 1980). The statement of the measure of damages in a FDUTPA case by the Second District is simply irreconcilable with the common law measure of damages and as such, is in conflict with Rawls. Based upon the conflict, the next question is whether the court should exercise its constitutional discretion. We most strongly urge the court to do so. The issue of the proper measure of damages under FDUTPA has become more than confusing just because of the conflict in the present case. As recently explained by one author, the damages aspect of FDUTPA is now in contradiction, both to many cases construing the federal Act and in contradiction to the remedial purpose which is the whole basis for the Act. See, Damages Under FDUTPA, Federbush, David, Fla. Bar Journal, Vol. LXXVII, No. 5, May 2004, p. 20. Here, the Second District, without any analysis whatsoever, erroneously applied a measure of damages which Florida s 8
District Courts of Appeal have appeared to apply for 20 years limiting damages available under the FDUTPA when the legislature has expressed no intent at such a restrictive measure of damages. This statute applies to a wide variety of consumer transactions and affect literally millions of consumers within the state of Florida every year. Most respectfully, this Court should exercise its discretion, review this case on the merits and issue an opinion on the measure of damages consistent with the intent of the remedial purpose of the statute. CONCLUSION The decision of the Second District expressly and directly conflicts with other reported decisions. This Court should exercise its discretion, grant review, and address the case on the merits. Respectfully submitted, George A. Vaka, Esquire VAKA, LARSON & JOHNSON, P.L. One Harbour Place, Suite 300 777 S. Harbour Island Blvd. Tampa, Florida 33602 (813) 228-6688 (813) 228-6699 (Fax) Florida Bar No. 374016 ATTORNEYS FOR PETITIONER 9
CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and accurate copy of the foregoing has been furnished by U.S. MAIL to J. Daniel Clark, Esquire, 3407 W. Kennedy Blvd., Tampa, Florida 33609; Michael W. Davis, Esquire, Bank One Plaza, 10 S. Dearborn Street, Chicago, Illinois 60603; and Douglas B. Brown, Esquire, Post Office Box 1873, Orlando, Florida 32802-1873, on June 18, 2004. George A. Vaka, Esquire CERTIFICATE OF COMPLIANCE I hereby certify that Petitioner, FRANCIS PETSCH s, Initial Brief on Jurisdiction complies with font requirements pursuant to Fla.R.App.P. 9.100(l) and 9.210(a)(2). George A. Vaka, Esquire 10
TABLE OF CONTENTS PAGE STATEMENT OF THE CASE AND FACTS 1 JURISDICTIONAL ISSUE 3 SUMMARY OF THE ARGUMENT 4 ARGUMENT 5 CONCLUSION 9 APPENDIX I APPENDIX II CERTIFICATE OF SERVICE 10 CERTIFICATE OF COMPLIANCE 10 i
TABLE OF AUTHORITIES CASES PAGE Campbell v. Rawls, 381 So.2d 744 (Fla. 1 st DCA 1980) 4, 8 Ft. Lauderdale Lincoln-Mercury, Inc. v. Corgnati, 715 So.2d 311, 314-315 (Fla. 4 th DCA 1998) 3 Persaud v. State, 838 So.2d 529, 532-33 (Fla. 2003) Raye v. Fred Oakley Motors, Inc., 646 S.W.2d 288, 290 (Tex. App. 1983) 7 Rollins, Inc. v. Heller, 454 So.2d 580 (Fla. 3d DCA 1984) 4, 5, 6 The Florida Star v. BJF, 530 So.2d 286, 288 (Fla. 1988) 5 Urling v. Helms Exterminators, Inc., 468 So.2d 451, 454 (Fla. 1 st DCA 1985) 3 Fla. Stat. 501.211 STATUTES Fla. Stat. 501.211(b) 3 Fla. Stat. 501.211(2) 6 Fla. Stat. 501.212(3) 6 MISCELLANEOUS ii
Article V, 3(b)(3), Florida Constitution, (1980) 5 Damages Under FDUTPA, Federbush David, Fla. Bar Journal, Vol. LXXVII, No. 5, May 2004, p. 20 8 Fla.R.App.P. 9.100(1) 10 Fla.R.App.P. 9.120(d) 1 iii