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Florida Appeals Court Rules that Damages Imposed Against Real Estate Developer Were Too High

MiamiThere are many different ways you can win (or lose) the issue of liability in a commercial litigation action in Florida. You can win or lose on summary judgment, if the trial judge decides that there are no relevant factual issues in dispute. You can win or lose after a full trial. You can also win or lose based on a default judgment. Certainly, the optimal path is to retain experienced Florida commercial litigation counsel from the start. However, if you’ve lost on liability, you still should not give up, since you may still be able to challenge the issue of damages.

A recent ruling from the Third District Court of Appeal in Miami demonstrated how this process works. The underlying events that eventually spawned the case began in 2003, when a high-rise condominium developer met with a information technology company. The IT company had created an online system for what it called a “smart building,” which included communication between the front desk, individual condo units, valet parking, and outside entities like dry cleaners, cafeterias, and so forth. The developer inked a deal for the company’s BeCruising system.

Condo unit purchasers were not obligated to purchase a BeCruising system, but, under the terms of the contract, the developer was, according to the IT company, obligated to sell a system to every unit purchaser. This problem eventually led to a breakdown in the relationship and to the IT company’s decision to sue the developer for a breach of contract.

It is very important to take prompt action whenever you have a contract dispute. If you are the party that has been allegedly harmed by the breach, it is essential to move in a timely fashion to ensure that you can, if necessary, bring your claims in court within the time period allowed by the statute of limitations. If you are the party being sued for allegedly breaching the contract, it is also vital to act in a speedy fashion. If you do not, you could risk the plaintiff obtaining what’s called a default judgment, in which the court rules in favor of the plaintiff on its claims based solely upon your failure to participate in the case.

That happened in this case, with the IT company obtaining a default judgment against the developer. The trial court eventually conducted a trial on damages. The IT company argued, and the trial court concluded, that the amount of the IT company’s damages was the price of each BeCruising system ($3,900), multiplied by the total number of units in the high-rise (1,512). The court set the damages at $1,360,800.

The developer appealed, and the appeals court concluded that this damages award was too high. The developer was not actually obligated to purchase a BeCruising system for each unit, but it was only responsible for promoting the systems to unit buyers. The only way that the IT company’s damages could be $1,360,800 was if the contract called for a sale in each unit. Since it didn’t, the damages award was clearly excessively large.

The developer won its appeal because, even though it lost the liability question through a default judgment, it did not give up but instead went to court and made its case on damages. Whether you are pursuing or defending a breach of contract dispute in Florida, reach out to the skilled South Florida contract litigation attorneys at Stok Folk + Kon. Our team has been helping businesses protect their rights and interests for many years and is ready to talk to you about your case.

Contact us online or by calling (305) 935-4440 to schedule your consultation and find out how this firm can help you protect your interests.

More blog posts:

South Florida Business Defeats Attempt to Have Court Disqualify its Attorney in Breach of Contract Case, Florida Business Lawyers Blog, Nov. 22, 2017

Your Commercial Contract’s Damages Clause and Your Florida Breach of Contract Case, Florida Business Lawyers Blog, April 11, 2017

Photo Credit: milivanily, [CC0 License], via Pixabay