Opinion
Nos. 98-851, 98-589.
Opinion filed July 28, 1999.
An appeal from the Circuit Court for Dade County, Harold Solomon, Judge; L.T. No. 91-54982.
Zemel and Kaufman, and Franklin L. Zemel, for Floyd Watkins.
Holland Knight and Daniel S. Person and Linda Collins Hertz, for First Equity Corporation of Florida, Inc. and Al Pareira.
These are two consolidated appeals from a final judgment in favor of plaintiff Floyd Watkins on his claims for breach of fiduciary duty and violation of the Florida Securities and Investor Protection Act ("SIPA") against defendants First Equity Corporation of Florida Inc. and Al Pareira.
Chapter 517, Florida Statutes.
First Equity and Pareira (collectively, "First Equity") were security brokers for Watkins for a number of years. They introduced him to an investment in an Orlando limited partnership, which ultimately failed. Watkins brought suit, contending that First Equity had misrepresented material facts regarding the limited partnership. The jury returned a verdict for Watkins, and First Equity has appealed.
First Equity acknowledges that it owed a fiduciary duty to Watkins, its customer. First Equity argues, however, that Watkins' claim for breach of fiduciary duty is barred as a matter of law by the economic loss rule, because Watkins' relationship with the security brokerage was, at bottom, based on oral and written agreements between Watkins and First Equity. The trial court was entirely correct in rejecting this claim.
The Florida Supreme Court's recent decision in Moransais v. Heathman, 24 Fla. L. Weekly S308 (Fla. July 1, 1999), is dispositive. The court said:
Today, we again emphasize that by recognizing that the economic loss rule may have some genuine, but limited, value in our damages law, we never intended to bar well-established common law causes of action, such as those for neglect in providing professional services. Rather, the rule was primarily intended to limit actions in the product liability context, and its application should generally be limited to those contexts or situations where the policy considerations are substantially identical to those underlying the product liability type analysis. We hesitate to speculate further on situations not actually before us. The rule, in any case, should not be invoked to bar well-established causes of actions in tort, such as professional malpractice.
24 Fla. L. Weekly at S312 (footnote omitted).
Breach of fiduciary duty is just such a well-established cause of action in tort. Many fiduciaries are appointed pursuant to a written contract, such as a trustee under an express trust, or an escrow agent under a written escrow agreement. It is well understood that the law imposes fiduciary duties in such cases, and that liability can arise when fiduciary duties are breached. We think the Moransais opinion makes it quite clear that the economic loss rule has not abolished the cause of action for breach of fiduciary duty, even if there is an underlying oral or written contract. We therefore affirm the judgment on this issue.
We recognize that the United States Court of Appeals for the Eleventh Circuit has held that the Florida economic loss rule bars a breach of fiduciary claim. See Interstate Securities Corp. v. Hayes Corp., 920 F.2d 769, 776-77 (11th Cir. 1991). At the time of that decision, Florida law was not entirely clear.See Moransais, 24 Fla. L. Weekly at S311 ("We must acknowledge that our pronouncements on the rule have not always been clear. . . ."). After Moransais, Interstate Securities and its progeny cannot be regarded as good law on this point.
First Equity also argues that Watkins' claims of violation of the SIPA were barred by the statute of limitations. We conclude that the question of whether the lawsuit was timely initiated hinged on disputed factual issues which were properly submitted to the jury.
By cross-appeal Watkins argues that the trial court erred in directing a verdict against him on his claim pursuant to the so-called "wrongful act doctrine." See generally Canadian Universal Insurance Co. v. Employers Surplus Lines Insurance Co., 325 So.2d 29 (Fla. 3d DCA 1976). We find no error under the facts of this case and affirm.
Affirmed.
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DISPOSED OF.