Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—11thCir: Condominium Purchaser Did Not State Florida Deceptive Practices Claim Against Developer, (May 7, 2013)

By Tobias J. Gillett, J.D., LL.M.

A condominium purchaser failed to state a claim under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) against a condominium developer over its refusal to rescind the contract to purchase the condominium or to return the purchaser’s deposit, because the purchaser did not show that the developer’s allegedly misleading statement regarding rates the purchaser could obtain on title insurance from the developer’s subsidiary had caused the purchaser any of its alleged damages, the U.S. Court of Appeals in Atlanta has ruled (Dolphin LLC v. WCI Communities, Inc., May 1, 2013, Per Curiam). The court upheld a ruling of the district court granting summary judgment on the claim for the developer.

On September 7, 2004, Dolphin, LLC entered into a contract to purchase a condominium unit at One Sugar Island from WCI Communities Inc., and placed a deposit in an escrow account. When closing time on the property arrived, however, Dolphin declined and demanded return of the deposit. WCI refused.

Dolphin filed suit against WCI, asserting claims under the FDUTPA, among other claims, and seeking rescission of the contract, return of the deposit, and attorneys’ fees. WCI filed a counterclaim for breach of contract, seeking a judgment for the amount of the deposit and attorneys’ fees. The district court granted summary judgment to WCI, and later awarded WCI attorneys’ fees. Dolphin appealed.

Dolphin asserted that WCI had violated the FDUTPA by misleadingly stating in an exhibit to the contract that if Dolphin purchased title insurance from a WCI subsidiary, then Dolphin would be charged the "[m]inimum rate promulgated by the Florida Department of Insurance." According to Dolphin, the Florida Department of Insurance only issued a "promulgated rate" that title insurance agents could negotiate down from, and did not publish legally binding minimum title insurance rates. Dolphin claimed that WCI’s statement could mislead purchasers "into believing that the rate charged by [WCI’s] affiliated business is the bare minimum available charged by all title companies."

The court explained that a FDUTPA claim required a plaintiff to allege "(1) a deceptive or unfair trade practice; (2) causation; and (3) actual damages." Here, Dolphin did not allege or provide any evidence that WCI’s statement had caused any of Dolphin’s claimed damages. As Dolphin had thus failed to establish a required element of a FDUTPA claim, the court upheld the district court’s grant of summary judgment to WCI.

The court also upheld the district court’s grant of summary judgment to WCI on a claim under the federal Interstate Land Sales Full Disclosure Act and its award of attorneys’ fees to WCI.

The case is No. 12-14068.

Attorneys: James Daniel Ryan (Ryan Law Group, LLC) for Dolphin LLC. David M. Pernini (Wargo & French, LLP) for WCI Communities, Inc.

Companies: Dolphin LLC; WCI Communities, Inc.

Cases: StateUnfairTradePractices AlabamaNews FloridaNews GeorgiaNews