Opinion
1D22-1535
07-26-2023
701 Palafox, LLC, Greenhut Construction Company, Inc. and Greenhut Construction & Development, LLC, Appellants, v. Scuba Shack, Inc., a Florida Corporation, Appellee.
Samuel B. Spinner, Hinda Klein, and Christopher E. Varner of Conroy Simberg, P.A., Hollywood, and Bruce D. Partington and Kia M. Goldsmith of Clark Partington, Pensacola, for Appellants. Robert O. Beasley, DeWitt D. Clark, and Phillip A. Pugh of Litvak, Beasley, Wilson &Ball, LLP, Pensacola, for Appellee.
Not final until disposition of any timely and authorized motion under Fla. R. App. P. 9.330 or 9.331.
On appeal from the Circuit Court for Escambia County. Terry D. Terrell, Judge.
Samuel B. Spinner, Hinda Klein, and Christopher E. Varner of Conroy Simberg, P.A., Hollywood, and Bruce D. Partington and Kia M. Goldsmith of Clark Partington, Pensacola, for Appellants.
Robert O. Beasley, DeWitt D. Clark, and Phillip A. Pugh of Litvak, Beasley, Wilson &Ball, LLP, Pensacola, for Appellee.
ROWE, J.
701 Palafox, LLC, Greenhut Construction Company, Inc., and Greenhut Construction &Development, LLC (Appellants) appeal a nonfinal order granting Scuba Shack, Inc's motion to amend its negligence complaint against Appellants to assert a claim for punitive damages. Appellants argue that the trial court erred when it found that Scuba Shack (1) made the required evidentiary showing to support a punitive damages claim, and (2) sufficiently alleged that Appellants' managing agents were personally involved in the alleged gross negligence or knowingly condoned the gross negligence of another. We need not address the second issue because the first issue is dispositive. We reverse because Scuba Shack did not make the required evidentiary showing to support a punitive damages claim.
Facts
Palafox bought a parcel of land that included a one-story building, an asphalt parking lot, and concrete slabs. That parcel was next to the parcel where Scuba Shack owned and operated its business. Both parcels abut a man-made canal. Palafox planned to build a multi-story luxury condominium complex on its parcel.
Because parcels in the area often contain debris-including bricks, glass, concrete, masonry, nautical equipment, wood, and ballast rock-Palafox retained Keith Jacobs of Larry M. Jacobs &Associates to conduct a geotechnical exploration of the property. In his report to Palafox, Jacobs explained that his purpose was "to determine the general subsurface conditions in the proposed building area" and "to provide recommendations for earthwork, foundation design, and pile installation and testing." After examining the soil conditions, Jacobs recommended using a pile foundation to support the proposed condominium structure to minimize settlement. Jacobs warned that debris on the proposed building site would be an issue when installing piles. And that during installation of the foundation piles, Palafox should be prepared to remove large pieces or accumulations of debris.
A pile foundation consists of long, slender columns made of various materials and designed to carry a vertical load.
Before starting construction, Jacobs suggested that Palafox should compact the soil to minimize future settlement. But Jacobs recommended against "using large vibratory compaction equipment for compaction of the existing subgrade because of the proximity of the existing structures to the north and south and the potential to cause structural damage to these structures using vibratory compaction." Due to the concern about vibrations, Jacobs suggested that auger cast in place piles should be used for the building's foundation. Those type of piles could be installed with minimal noise and vibration and would reduce the chances of damage to nearby structures.
An auger cast in place pile is created when an auger with a hole in the middle is drilled into the ground and grout is pumped into the hole. Once the auger is removed, steel reinforcement is lowered into the ground.
When it constructed the foundation, Palafox installed auger cast in place piles, just as Jacobs recommended. Palafox installed another type of piling in another part of the construction project. To create a barrier between nearby properties and to prevent soil erosion and damage to nearby structures, Palafox hired a contractor to install sheet piles along the boundary of the property next to Scuba Shack's property. But soon after installation began, cracks were observed in Scuba Shack's building. Installation of the sheet piles was halted until an engineer designed a viable alternative.
Sheet piles are used to retain soil under the foundations of buildings next to a construction site. While there are potential hazards in driving sheet piles into the ground, the main purpose of using sheet piles is to mitigate the risk of damaging nearby properties by creating a barrier to prevent erosion.
After the cracks appeared in its building, Scuba Shack contracted with an engineer to assess the damage. The engineer recommended that the building be demolished due to the damage to the foundation. And an appraisal of Scuba Shack's property suggested that the costs to repair were prohibitive. Due to the damage to its building, Scuba Shack sued Appellants in negligence. Scuba Shack alleged that Appellants breached their duty to Scuba Shack by driving the sheet piles into the ground, causing vibrations that severely damaged Scuba Shack's building.
After conducting discovery, Scuba Shack moved for leave to amend to add a claim for punitive damages based on gross negligence. In support of its motion, Scuba Shack relied on the Jacobs report and an affidavit from its expert, Kenneth Piaskowski. Scuba Shack argued that the Jacobs report warned Palafox against using large vibratory compaction equipment for compacting the existing subgrade during construction, highlighting the potential damage the vibration could cause to surrounding structures. Piaskowski reviewed the Jacobs report and concluded that Appellants were grossly negligent when they installed the sheet piles near Scuba Shack's building.
In its proposed second amended complaint, Scuba Shack alleged that Palafox's installation of steel sheet piles was "so reckless and/or wanting in care that it constituted a conscious disregard or indifference to the life, safety, and/or rights of Scuba Shack."
The court held a hearing on the motion to amend. Appellants' counsel argued that the Jacobs report could not support Scuba Shack's gross negligence claim. Two engineers-Keith Jacobs and Roger Craft-were deposed and both testified that Jacobs' geotechnical report had nothing to do with the installation of sheet piles-the act central to the gross negligence claim. Rather, Jacobs' report addressed the installation of foundation piles for the planned condominium complex and thus his recommendations as to the use of large vibratory compacting equipment was unrelated to the sheet pile installation. Even so, Scuba Shack argued that its expert's affidavit and the Jacobs report provided sufficient evidence sufficient to meet its burden to make a reasonable showing of a reasonable basis for the recovery of punitive damages.
After considering arguments on the motion and the evidence before it, the trial court granted the motion to amend. This timely appeal follows.
Jurisdiction
In January 2022, the supreme court amended Florida Rule of Appellate Procedure 9.130 to allow for appeals of nonfinal orders granting or denying a motion for leave to amend to assert a claim for punitive damages. See Fla. R. App. P. 9.130(a)(3)(G); In re Amends. to Fla. Rule of App. P. 9.130, 345 So.3d 725, 726 (Fla. 2022). The amendment went into effect on April 1, 2022. Id. The trial court rendered its order granting Scuba Shack's leave to amend on April 28, 2022. We have jurisdiction.
Analysis
Section 768.72(1), Florida Statutes (2019), provides that "no claim for punitive damages shall be permitted unless there is a reasonable showing by evidence in the record or proffered by the claimant which would provide a reasonable basis for recovery of such damages." And punitive damages are recoverable "only if the trier of fact . . . finds that the defendant was personally guilty of intentional misconduct or gross negligence." § 768.72(2), Fla. Stat. (2019); see also Bistline v. Rogers, 215 So.3d 607, 611 (Fla. 4th DCA 2017) ("[P]unitive damages are appropriate when a defendant engages in conduct which is fraudulent, malicious, deliberately violent or oppressive, or committed with such gross negligence as to indicate a wanton disregard for the rights and safety of others.").
Scuba Shack sought punitive damages based on an allegation of gross negligence. To assert such a claim, Scuba Shack had to show-by evidence in the record or by proffer-that Appellants' "conduct was so reckless or wanting in care that it constituted a conscious disregard or indifference to the life, safety, or rights of persons exposed to such conduct." § 768.72(2)(b), Fla. Stat.
The key question before this Court is whether Scuba Shack made the required evidentiary showing under section 768.72, to permit it to assert a claim for punitive damages. This Court has not yet addressed the standard applicable to review of a nonfinal order granting a motion for leave to amend to assert a claim for punitive damages. Other district courts exercising jurisdiction under the amended rule to review such orders have applied the de novo standard. See Grove Isle Ass'n, Inc. v. Lindzon, 350 So.3d 826 (Fla. 3d DCA 2022); Cleveland Clinic Fla. Health Sys. Nonprofit Corp. v. Oriolo, 48 Fla. Law Wkly. D203 (Fla. 4th DCA Jan. 25, 2023) (reviewing de novo "the trial court's purely legal ruling that plaintiff made a 'reasonable showing' under section 768.72 to recover punitive damages.").
Section 768.72 "create[s] a substantive legal right not to be subject to a punitive damages claim and ensuing financial worth discovery until the trial court makes a determination that there is a reasonable evidentiary basis for recovery of punitive damages." See Globe Newspaper Co. v. King, 658 So.2d 518, 519 (Fla. 1995). When the issue is presented on appeal of a final judgment, we review de novo a trial court's determination of whether a plaintiff has made a reasonable showing under section 768.72. Tiger Point Golf and Country Club v. Hipple, 977 So.2d 608 (Fla. 1st DCA 2007). The same purely legal question is presented here, albeit in a nonfinal order. And thus, we conclude that the standard of review should be no different here. Our review is de novo.
In reviewing whether the trial court's ruling that Scuba Shack made the necessary showing under section 768.72 to allow it to assert a claim for punitive damages, we view the evidence in the light most favorable to Scuba Shack. See Wayne Frier Home Ctr., 16 So.3d at 1009 ("When a claim for punitive damages is made, the trial court must decide, after the submission of evidence, whether there is a legal basis for the recovery of punitive damages shown by any interpretation of the evidence favorable to the plaintiff."). Even so, we need not take Scuba Shack's allegations of gross negligence at face value. See Fla. Hosp. Med. Servs., LLC v. Newsholme, 255 So.3d 348, 351 (Fla. 4th DCA 2018). On the record here, Scuba Shack did not come close to making the required showing that Appellants were grossly negligent.
When it moved to amend the complaint, Scuba Shack alleged that Appellants were grossly negligent because "[d]espite the clear warnings and recommendations in [the Jacobs report], [Appellants] moved forward with their plans, choosing to employ the large vibratory compaction equipment in reckless disregard of the report's findings." As a result, Scuba Shack alleged that it sustained damage to its building. Scuba Shack relied exclusively on the Jacobs report and the testimony of its expert. But this reliance was misplaced because there is no evidence in the record, or even a proffer, that Appellants ever used large vibratory compaction equipment in the construction project.
Abandoning its initial theory, Scuba Shack offered a new theory in its proposed second amended complaint: the damage to its building was caused not by vibrations from large compaction equipment, but vibrations from the installation of the sheet piles. Scuba Shack argued that the warning in the Jacobs report against using large vibratory compaction equipment put Appellants on notice that the installation of the sheet piles was "likely to create an imminent or clear and present danger, and their conduct was so reckless and/or wanting in care that it constituted a conscious disregard or indifference to the life, safety, and/or rights" of Scuba Shack. But here, too, Scuba Shack failed to make the required evidentiary showing to support a claim of gross negligence and to assert a claim of punitive damages.
Scuba Shack insists that the Jacobs report warned against using any vibratory equipment, including vibratory equipment used to install sheet piles. But the report never addresses the use of or installation of sheet piles. In fact, no reference to sheet piles can be found in the report. Jacobs explained in his deposition that the vibratory compaction equipment referenced in his report was a type of large vibratory roller seen on highway construction sites. Jacobs warned Appellants against large vibratory compaction equipment in his recommendations on the compaction of the site to prepare for the construction of the foundation of the condominium. Jacobs explained that the driving of sheet piles was not compaction activity.
Read together, the Jacobs report and deposition testimony offer no evidentiary support for Scuba Shack's claim that Jacobs warned Appellants against using vibratory equipment in the installation of sheet piles. Scuba Shack's expert's affidavit, which draws illogical conclusions from the Jacobs report, similarly offers no support for Scuba Shack's gross negligence claim. Scuba Shack offered nothing else to support its claim that Appellants were warned that installation of the sheet piles could cause damage to Scuba Shack's property.
Notably absent from the record is any testimony from a representative of the company that installed the sheet piles.
Because Scuba Shack failed to meet its burden to make the reasonable showing necessary to entitle it to assert a claim for punitive damages under section 768.72, the trial court erred when it granted Scuba Shack's motion for leave to amend to add a punitive damages claim. We reverse and remand for further proceedings consistent with this opinion.
REVERSED and REMANDED.
LEWIS and LONG, JJ., concur.