Opinion
Case No. 3D04-1354.
Opinion filed April 6, 2005.
An Appeal from the Circuit Court for Miami-Dade County, Stuart M. Simons, Judge, Lower Tribunal No. 02-30711.
Scott Alan Orth, for appellants.
Bender, Bender Chandler and Harry K. Bender, for appellee.
Before FLETCHER and CORTIÑAS, JJ., and SCHWARTZ, Senior Judge.
The plaintiffs, Biscayne Investment Group, Ltd., et al., appeal from final orders dismissing the four counts of their third amended complaint with prejudice. We affirm.
In the underlying action, the plaintiffs, the developer of the Knightsbridge Condominium Units ("Knightsbridge"), filed a third amended complaint against Guarantee Management Services, Inc. ("Guarantee"), the management company hired to manage Knightsbridge. The third amended complaint alleged breach of contract, fraud in the inducement, equitable subrogation, and negligence. The plaintiffs attached thereto a contract for management services between Guarantee and Castillo Condominium Association, Inc. ("Management Agreement"). The trial court entered orders dismissing with prejudice all four counts for failure to state a cause of action.
When considering a motion to dismiss, a trial court must look only to the four corners of the complaint including the attachments, and the allegations contained therein must be taken as true without regard to the pleader's ability to prove them.Coriat v. Global Assurance Group, Inc., 862 So. 2d 743 (Fla. 3d DCA 2003). On appeal, this court must determine de novo whether the complaint alleges sufficient ultimate facts that would entitle the plaintiff to relief. Cohen v. American Home Assurance Co., 367 So. 2d 677, 681 (Fla. 3d DCA), cert. denied, 378 So. 2d 342 (Fla. 1979). With this in mind, we examine the four counts of the plaintiffs' third amended complaint and the attached Management Agreement.
In the general allegations of the complaint, the plaintiffs alleged that they were the owners of Knightsbridge in Miami Beach, Florida, and that they were in the business of selling and renting the Knightsbridge condominium units. The plaintiffs further alleged that, as the developer in control, they were charged with operating the Knightsbridge Condominium Association ("Association") and that they were essentially its board of directors. They also alleged that, as the owner/developer in control of the Association pre-turnover, they hired Guarantee as the management company for the Knightsbridge Condominiums and the Association. Lastly, the plaintiffs alleged that they were responsible for financial shortfalls in the Association's budget.
In count one, the plaintiffs alleged breach of contract stating that they caused the Association to enter into the Management Agreement with Guarantee. The plaintiffs maintained that the Management Agreement was a means of resolving litigation between themselves as the developer and certain unit owners, and that there was an express verbal understanding that the Management Agreement would benefit the plaintiffs as the developer. The plaintiffs then detailed Guarantee's alleged breach of the Management Agreement.
Upon reviewing the allegations contained in the breach of contract count and the attached Management Agreement, we affirm the trial court's dismissal of count one with prejudice.
The underlying contract was entered into between Guarantee and Castillo Condominium Association, Inc. The plaintiffs were not parties to the contract. Unless a person is a party to a contract, that person may not sue for breach of that contract where the non-party has received only an incidental or consequential benefit of the contract. Metropolitan Life Ins. Co. v. McCarson, 467 So. 2d 277 (Fla. 1985); Caretta Trucking, Inc. v. Cheoy Lee Shipyards, Ltd., 647 So. 2d 1028 (Fla. 4th DCA 1994).
The plaintiffs, however, contend that they were intended third party beneficiaries, and as such, they are able to bring suit on the underlying contract. We disagree.
A cause of action for breach of contract brought by a third party beneficiary must include the following allegations: 1) the existence of a contract, 2) the clear or manifest intent of the contracting parties that the contract primarily and directly benefit the third party, 3) breach of the contract by a contracting party, and 4) damages to the third-party resulting from the breach. Jenne v. Church Tower, Inc., 814 So. 2d 522, 524 (Fla. 4th DCA 2002); Jacobson v. Heritage Quality Constr. Co., 604 So. 2d 17 (Fla. 4th DCA 1992), review dismissed, 613 So. 2d 5 (Fla. 1993). A non-party is the specifically intended beneficiary only if the contract clearly expresses an intent to primarily and directly benefit the third party or a class of persons to which that party belongs. Aetna Cas. Sur. Co. v. Jelac Corp., 505 So. 2d 37 (Fla. 4th DCA 1987); Security Mut. Cas. Ins. Co. v. Pacura, 402 So. 2d 1266 (Fla. 3d DCA 1981). To find the requisite intent, it must be established that the parties to the contract actually and expressly intended to benefit the third party; it is not sufficient to show only that one of the contracting parties unilaterally intended some benefit to the third party. Clark Co. v. Department of Ins., 436 So. 2d 1013, 1016 (Fla. 1st DCA 1983). None of these principles are satisfied in this case.
In the instant case, the plaintiffs were not parties to the Management Agreement and were nowhere mentioned in the contract. Nevertheless, the plaintiffs argue that they caused the Association to enter into the Management Agreement and that they participated in the hiring of Guarantee. We conclude that these facts are of no consequence where the Management Agreement is silent and shows no intent to confer third party beneficiary status upon them. Jenne, 814 So. 2d at 525 ("Negotiations and dealings between the parties cannot modify a written contract to create the parties' `intent' when the lack of such intent is evident from the contract.").
In count two, the plaintiffs alleged that Guarantee fraudulently induced them to cause the Association to enter into the Management Agreement by making certain verbal representations regarding their experience and future performance of their duties. The plaintiffs alleged that these material representations were false, that they relied upon them, and that they were damaged as a result. We find that the trial court properly dismissed count two with prejudice.
In order to state a cause of action for fraud in the inducement, a plaintiff must allege that: 1) the representor made a misrepresentation of a material fact, 2) the representor knew or should have known of the falsity of the statement; 3) the representor intended that the representation would induce another to rely and act on it; and 4) the plaintiff suffered injury in justifiable reliance on the representation. Samuels v. King Motor Co. of Ft. Lauderdale, 782 So. 2d 489 (Fla. 4th DCA 2001).
In the instant case, the plaintiffs made no specific allegations of misrepresentation of material facts. At most, the plaintiffs alleged a mere promise not performed, which, by itself, cannot form the predicate for actionable fraud.Alexander/Davis Props., Inc. v. Graham, 397 So. 2d 699, 706 (Fla. 4th DCA), review denied, 408 So. 2d 1093 (Fla. 1981).
In count three, the plaintiffs sought equitable subrogation alleging that Guarantee failed to collect assessments. Again, the trial court properly dismissed this count with prejudice.
To properly allege a count for equitable subrogation, a party must allege that 1) the subrogee made the payment to protect his or her own interest, 2) the subrogee did not act as a volunteer, 3) the subrogee was not primarily liable for the debt, 4) the subrogee paid off the entire debt and 5) subrogation would not work any injustice to the rights of a third party. Hollywood Lakes Country Club, Inc. v. Community Ass'n Servs., Inc., 770 So. 2d 716, 718 (Fla. 4th DCA 2000).
In the instant case, the plaintiffs failed to allege that they were not primarily liable for the debt. In fact they alleged the contrary twice. First, in the general allegations of the complaint, the plaintiffs stated, "Plaintiffs were responsible for financial shortfalls in the Association budget." Next, in paragraph 25 within the count for equitable subrogation, the plaintiffs stated, "Plaintiffs were primarily liable for this debt." Therefore, the equitable subrogation claim cannot stand.
In count four, the plaintiffs alleged that Guarantee committed certain negligent acts during the performance of the underlying contract. We find that the trial court properly dismissed this count with prejudice.
The economic loss rule precludes tort recovery for purely economic losses that are unaccompanied by physical property damage or bodily injury. Casa Clara Condominium Ass'n, Inc. v. Charley Toppino Sons, Inc., 620 So. 2d 1244, 1247 (Fla. 3d DCA 1993). In order to recover in tort, there must be a demonstration of harm above and beyond disappointed expectations. Casa Clara, 620 So. 2d at 1246. The desire to enjoy the benefit of a bargain is not one that is traditionally protected by tort law. Casa Clara, 620 So. 2d at 1246. For these reasons, the economic loss rule precludes a negligence claim arising from breach of a service contract for nonprofessional services. Moransais v. Heathman, 744 So. 2d 973, 981 (Fla. 1999) (quoting AFM Corp. v. Southern Bell Tel. Tel. Co., 515 So. 2d 180 (Fla. 1987));McDonough Equip. Corp. v. Sunset Amoco West, Inc., 669 So. 2d 300 (Fla. 3d DCA 1996).
In the instant case, the plaintiffs' negligence claim merely seeks to recover the same economic losses that they attempted to recover in their count for breach of contract. It is, in essence, a contract action disguised as a tort claim. Because there is no allegation of accompanying physical injury or property damage, the claim for negligence is barred by the economic loss rule.See GAF Corp. v. Zack Co., 445 So. 2d 350 (Fla. 3d DCA) (precluding recovery in negligence under economic loss rule even in the absence of a contract), review denied, 453 So. 2d 45 (Fla. 1984). Under the facts of this case, we find that the plaintiffs have not established a legal justification to authorize a judicial expansion of negligence law to protect purely economic expectations arising from the relationship between a condominium association and a party responsible for managing the property. See Sandarac Ass'n, Inc. v. W.R. Frizell Architects, Inc., 609 So. 2d 1349 (Fla. 2d DCA 1992) (cited with approval by Casa Clara, 620 So. 2d at 1248 n. 9),review denied, 626 So. 2d 207 (Fla. 1993).
For these reasons, we affirm the trial court's dismissal of the four counts of the plaintiffs' third amended complaint with prejudice.
Affirmed.
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DISPOSED OF.