||DISTRICT COURT OF APPEAL OF THE STATE OF
FLORIDA FOURTH DISTRICT January Term 2011
||April 27, 2011
||E. QUALCOM CORP., A FLORIDA CORPORATION,
GLOBAL COMMERCE CENTER ASSOCIATION, INC., A FLORIDA NON-PROFIT
||Appeal from the Circuit Court for the
Seventeenth Judicial Circuit, Broward County; Cheryl J. Aleman, Judge; L.T.
Case No. 08-001242 CACE (21).
||Samuel B. Reiner, II of Reiner & Reiner,
P.A., Miami, for appellant. Shelley H. Leinicke of Wicker, Smith, O'Hara,
McCoy & Ford, P.A., Fort Lauderdale, for appellee.
||The opinion of the court was delivered by:
||E. Qualcom Corporation ("Qualcom")
appeals various summary judgments entered against it in a foreclosure
action centered around non-payment of master association assessments owed
to Global Commerce Center Association, Inc. (the "Association").
We reverse because the Association failed to meet its burden of proving
the absence of genuine issues of material fact with regard to Qualcom's
allegations that it suffered damages as a result of the Association's
failure to provide proper maintenance and upkeep.
||The appellant, Qualcom, is a
telecommunications company that began doing business in 2003. That same
year, Qualcom purchased property in the Global Commerce Center, a
commercial building located in Weston, Florida. The appellee, the
Association, is the master homeowners' association for the Global Commerce
Center. At the time Qualcom moved into the building, the company was still
in its "start-up stage."
||In January 2008, the Association filed a
complaint against Qualcom seeking foreclosure against Qualcom for its
alleged failure to pay commercial homeowners' association assessments.
Qualcom filed an answer with affirmative defenses and a counterclaim. The
counterclaim sought damages for negligence and breach of contract,
stemming from the Association's alleged failure to maintain the roof of
Qualcom's unit. According to Qualcom's counterclaim, the failure to
maintain the roof led to water damage that irreparably damaged Qualcom's
computer hardware and other equipment necessary for Qualcom to carry on
its business. More specifically, Qualcom sought damages for loss of
personal property, loss of business opportunities, and loss of business
income. As an affirmative defense to the Association's foreclosure and
collection action, Qualcom asserted, among other defenses, that it was
entitled to a set-off in an amount equal to the damages suffered by
Qualcom due to the leaking roof.
||In July 2009, after a period of discovery
between the parties, the Association filed a motion for partial summary
judgment of foreclosure based on Qualcom's alleged failure to show proof
of payment of any and all assessments allegedly due by Qualcom to the
Association. Additionally, in August 2009, the Association filed a motion
for final summary judgment as to Qualcom's counterclaim asserting that
Qualcom had failed to prove damages to a reasonable degree of certainty as
a matter of law.
||Following a September 2009 hearing, the
trial court granted the Association's motion for partial summary judgment
of foreclosure and entered judgment against Qualcom in the amount of
$55,200.82 for unpaid assessments, attorney's fees, and costs.
Subsequently, following a hearing on the Association's motion for final
summary judgment on Qualcom's counterclaim, the trial court granted that
motion as well, writing that, "for the reasons stated in the record,
as to damages . . . there is no issue of material fact in dispute."
Qualcom timely appealed both orders.
||Review of an order granting summary judgment
is de novo. Gomez v. Fradin, 41 So. 3d 1068, 1071 (Fla. 4th DCA 2010).
"Summary judgment is proper if there is no genuine issue of material
fact and if the moving party is entitled to a judgment as a matter of
law." Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d
126, 130 (Fla. 2000). "All doubts and inferences must be resolved
against the moving party, and if there is the slightest doubt or conflict
in the evidence, then summary judgment is not available." Reeves v.
N. Broward Hosp. Dist., 821 So. 2d 319, 321 (Fla. 4th DCA 2002). "The
burden of proving the absence of a genuine issue of material fact is upon
the moving party. This burden is shifted to the nonmoving party once the
movant has successfully met his burden." Palm Beach Pain Mgmt., Inc.
v. Carroll, 7 So. 3d 1144, 1145 (Fla. 4th DCA 2009) (citations and
internal quotation marks omitted).
||Qualcom argues that the Association, as the
moving party, failed to meet its burden of proving the absence of a
genuine issue of material fact on Qualcom's counterclaim. We agree. In
support of its claim for damages to personal property, Qualcom produced
pictures of damaged equipment as well as various invoices, receipts and
proofs of payment evidencing Qualcom's original purchases for almost all
of the damaged equipment. Rather than submitting opposing evidence to show
that Qualcom's personal property suffered no damage or that the property
had no market value when it was damaged, the Association successfully
argued that Qualcom had failed to prove its damages to a reasonable degree
||Proving its damages to a reasonable degree
of certainty, however, was not the standard that Qualcom was required to
meet to overcome summary judgment. "Summary judgment may not be used
as a substitute for trial. If the affidavits and other evidence raise any
doubt as to any issue of material fact then a summary judgment may not be
entered." Cummins v. Allstate Indem. Co., 732 So. 2d 380, 382-83
(Fla. 4th DCA 1999).XXX 1
||Qualcom next argues that the trial court
erred in granting the Association's motion for summary judgment on
Qualcom's counterclaim for lost profits. We agree.
||The Association argued that since Qualcom
had never earned a net profit in its business, any claim for "lost
prospective profits" was too speculative. In W.W. Gay Mechanical
Contractor, Inc. v. Wharfside Two, Ltd.,
545 So. 2d 1348
(Fla. 1989), the Florida Supreme Court, however, established the standard
for the award of lost prospective profits to a business that is not
||A business can recover lost prospective
profits regardless of whether it is established or has any "track
record." The party must prove that 1) the defendant's action caused
the damage and 2) there is some standard by which the amount of damages
may be adequately determined.
||Id. at 1351; see also Fu Sheng Indus. Co. v.
T/F Sys., Inc.,
690 So. 2d 617
, 624 (Fla. 4th DCA 1997) (applying the two-part test as defined in W.W.
Gay Mechanical Contractor).
||Qualcom produced photographs of
water-damaged equipment as well as testimony that the damage led to
interruptions in service which in turn led to loss of clients and caused
Qualcom to develop a poor reputation among its target market. This
evidence was sufficient to create a genuine issue of material fact with
respect to causation, the first requirement under the W.W. Gay test.
||The second prong of the W.W. Gay test
requires that Qualcom provide "some standard by which the amount of
damages may be adequately determined." W.W. Gay, 545 So. 2d at 1351.
"Any 'yardstick' used to show the amount of profits must be
reasonable, and the loss of the profits as a result of the [breach] must
be reasonably certain." Sostchin v. Doll Enters., Inc., 847 So. 2d
1123, 1128 (Fla. 3d DCA 2003) (citing Halliburton Co. v. E. Cement Corp.,
672 So. 2d 844
(Fla. 4th DCA 1996)). An award of damages for lost profits cannot be
"based upon speculation or conjecture." Id.
||In 4 Corners Insurance, Inc. v. Sun
Publications of Florida, Inc., 5 So. 3d 780 (Fla. 2d DCA 2009), the Second
District held that the affidavit of the plaintiff corporation's owner was
sufficient to establish a genuine issue of material fact regarding whether
the corporation suffered lost profits damages under the yardstick theory.
Id. at 783-84. The affidavit attested that, according to industry
standards, the plaintiff's gross revenues would have doubled but for the
defendant's wrongful eviction. The court noted that "[w]hile this
evidence in itself might not be sufficient to sustain a verdict for lost
profits damages, it is sufficient to establish a genuine issue of material
fact on the issue." Id. at 784.
||Like the corporate plaintiff in 4 Corners,
Qualcom did in fact provide some standard by which to measure damages.
Qualcom produced evidence whereby its president explained the company's
business plan and its "conservative forecast" of having 2200
clients per year with revenues near $7 million in four years. Thus, while
Qualcom's president's testimony might not be sufficient to sustain a
verdict for lost profit damages, it was sufficient to establish a genuine
issue of material fact. See id.
||The Association points out that Qualcom's
president acknowledged multiple problems that Qualcom encountered which
may also have affected its business income. These obstacles included a
computer virus that contaminated Qualcom's equipment, better prices from
competitors, and the impact that the economic downturn had on Qualcom's
customers. These problems, however, do not affect the
"yardstick" which could be used to measure lost profit. Rather,
the evidence of these other problems goes to causation, and if anything,
just shows that there was an issue of material fact which should have
precluded summary judgment on that issue.
||The questions of causation and the amount of
"lost profit" damages are genuine issues of material fact that
remain to be decided by the finder of fact in this case. Thus, the trial
court erred in determining that the Association was entitled to summary
judgment in its favor as a matter of law with respect to Qualcom's claim
for lost profit damages.
||Next, Qualcom argues the trial court erred
in granting the Association's motion for partial final judgment of
foreclosure because the trial court failed to address Qualcom's
affirmative defense of set-off for damages incurred due to the
Association's failure to timely repair Qualcom's roof. We agree.
||"In the absence of some proof
contradicting an affirmative defense, entry of summary judgment is
improper." Fla. Web Printing, Inc. v. Impact Adver., Inc., 723 So. 2d
884, 885 (Fla. 2d DCA 1998). As we explained in Alejandre v. Deutsche Bank
Trust Co. Ams., 44 So. 3d 1288 (Fla. 4th DCA 2010):
||When a party raises affirmative defenses, a
summary judgment should not be granted where there are issues of fact
raised by the affirmative defenses which have not been effectively
factually challenged and refuted. Thus, in order for a plaintiff to obtain
a summary judgment when the defendant asserts affirmative defenses, the
plaintiff must either disprove those defenses by evidence or establish the
legal insufficiency of the defenses. In such instances, the burden is on
the plaintiff, as the moving party, to demonstrate that the defendant
could not prevail.
||Id. at 1289. (alterations removed)
(citations and internal quotation marks omitted). Set-off is an
affirmative defense which precludes summary judgment if the moving party
does not "demonstrate that the defendant could not prevail." See
Fla. Web Printing, 723 So. 2d at 885 ("The trial court erred in
granting [the counterplaintiff's] motion for partial summary judgment
without addressing [the counterdefendant's] affirmative defense of damages
. . . which could, and did, offset the amount awarded by the summary
||Here, Qualcom raised the affirmative defense
of set-off based on its allegations that the Association had a duty to
maintain the roof of Qualcom's building, and that failure to maintain the
roof caused damages to Qualcom's personal property and business
opportunities. This set-off is based on the same operative facts and legal
principles as Qualcom's counterclaim for damages. As stated above,
however, there are issues of material fact that remain with respect to
Qualcom's counterclaim. Thus, as "there are issues of fact raised by
the affirmative defenses which have not been effectively factually
challenged and refuted," the partial summary judgment of foreclosure
should not have been granted. See Alejandre, 44 So. 3d at 1289.
||Sometime after filing its notice of appeal,
Qualcom paid the $55,200.82 judgment in order to avoid the sale of its
property. The Association argues that Qualcom waived its right to appeal
the partial summary judgment of foreclosure by paying the judgment. We
disagree. Where a party pays an adverse money judgment to avoid a forced
sale of property, the payment is deemed "involuntary" and the
payment does not result in a waiver of the right to appeal the judgment.
See Whipple v. JSZ Fin. Co., 717 So. 2d 608, 609 (Fla. 4th DCA 1998);
Ronette Commc'ns Corp. v. Lopez,
475 So. 2d 1360
, 1360 (Fla. 5th DCA 1985).
||While this appeal was pending, the trial
court granted a satisfaction of judgment. On remand, the trial court must
vacate the satisfaction of judgment as the trial court was without
jurisdiction to enter the satisfaction while this appeal was pending. See
Spencer v. DiGiacomo, 36 Fla. L. Weekly D447 (Fla. 4th DCA Mar. 2, 2011).
||Accordingly, we reverse the final summary
judgment against Qualcom on its counterclaim; we reverse the partial
summary judgment of foreclosure in favor of the Association; we order the
trial court to vacate the satisfaction of judgment; and we remand for
further proceedings consistent with this opinion.
||Reversed and remanded for further
proceedings consistent with this opinion.
||POLEN and HAZOURI, JJ., concur.
||Not final until disposition of timely filed
motion for rehearing.
1 We also note that at the hearing on the Association's
motion for summary judgment on Qualcom's counterclaim, the trial court
indicated that it was awarding summary judgment in favor of the
Association because Qualcom had failed to identify in advance, pursuant to
Florida Rule of Civil Procedure 1.510(c), any evidence on which it would
rely in opposition to the motion for summary judgment. Qualcom, however,
as the non-moving party did not have to present any evidence to prevail at
summary judgment because the Association did not first meet its burden of
proving that there were no genuine issues of material fact. Thus, entry of
summary judgment on this issue was improper.
2 The record shows that Qualcom actually did have a track
record with respect to some of the "lost profit" that it is
claiming. For example, Qualcom contends that it had two tenants that
abandoned the property because of the leaking roof before the terms of
their contracts with Qualcom expired. Qualcom claims that it lost nearly
$250,000 in unpaid rents because these tenants left. If Qualcom ultimately
proves that the tenants abandoned the property because of the
Association's failure to promptly fix the damaged roof, the measurement of
damages would be "reasonably certain." See Sostchin, 847 So. 2d