Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—11thCir.: Statute of Limitations Bars Deceptive and Unfair Trade Practices Act Claims Based on Failure to Disclose Yacht Repairs, (Feb 1, 2013)

By Tobias J. Gillett, J.D., LLM.

A yacht owner could not proceed with Florida Deceptive and Unfair Trade Practices Act claims against a yacht manufacturer, a yacht dealer, and other parties over an alleged failure to disclose faulty repair work on the yacht because a four-year statute of limitations on actions based on Florida statute barred its claims, the United States Court of Appeals in Atlanta has ruled (Marlborough Holdings Group, Ltd. v. Azimut-Benetti, SpA, January 31, 2013, Per Curiam).

In 1999, Italian yacht manufacturer Azimut-Benetti, SpA (“Benetti”) damaged the hull of a yacht while it was still under construction. The hull was repaired, and the yacht was sold to United States yacht dealer Richard Bertram Yachts, Inc. (“Bertram”). Benetti disclosed the damage, and agreed to provide a ten-year warranty.

Bertram then sold the yacht to Atlantic Coast Yacht Charters, LLC (“Atlantic Coast”), which owned the yacht for approximately seven years before selling it to Marlborough Holdings Group, Ltd. Marlborough later discovered a crack in the yacht’s bow, and an inspection following an accident revealed the prior repairs as well as the fact that many of the repairs were failing. Benetti refused to pay to fix the repairs, and Marlborough brought suit against Benetti, Bertram, Atlantic Coast, and other individuals and entities asserting various claims including violations of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA).

The district court concluded that Marlborough’s FDUTPA claims were time-barred, since the FDUTPA contained a four-year statute of limitations and Atlantic Coast purchased the yacht in 2001 but Marlborough did not bring suit until 2008.

The Eleventh Circuit Court of Appeals affirmed the district court’s decision. The court explained that the FDUPTPA prohibits “[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce,” but that Florida law provides a four-year statute of limitations for both “action[s] founded on a statutory liability” and “legal or equitable action[s] founded on fraud.”

The court determined that the statute of limitations for actions “founded on a statutory liability” applied to Marlborough’s claims. The court also noted that Marlborough waived an argument that its cause of action did not accrue until Marlborough purchased the yacht in 2008 by failing to raise the argument until its reply brief.

However, Marlborough contended that Florida’s delayed discovery rule, which provided that a plaintiff must bring an “action founded on fraud” within four years “from the time the facts giving rise to the cause of action were discovered or should have been discovered with the exercise of due diligence,” applied to its claims. According to Marlborough, the defendants’ behavior had delayed discovery of their allegedly unfair and deceptive actions, thus rendering Marlborough’s claims timely.

The court of appeals disagreed, observing that Marlborough’s claims were “founded on a statutory liability.” The court declined to find that the delayed discovery rule applied to FDUTPA claims premised on fraud, noting that the delayed discovery rule provision contained language paralleling the language of the “founded on fraud” limitations provision, but not the “founded on a statutory liability” provision. The court presumed that the statute’s omission of the “founded on a statutory liability” language reflected legislative intent.

Moreover, the court of appeals found that Marlborough could not “avoid the running of the limitations period by relying on its allegations that the Appellees conspired to conceal the yacht’s grounding, repairs, and ten-year warranty.” Marlborough’s allegations that the defendants had conspired with a yacht inspection company “amounted only to unsupported factual allegations or pure speculation.” Therefore, the court of appeals held that the district court had not erred in granting summary judgment to Bertram and Benetti on the FDUTPA claims.

The case is No. 11-14932.

Attorneys: Gordon C. Watt for Marlborough Holdings Group, Ltd. Adam Blakely Cooke (McIntosh Schwartz, PL) for Atlantic Coast Yacht Charters, LLC. Frank Joseph Ciano (Goldberg Segalla, LLP) for Azimut-Benetti, SpA. Barbara Ehrich Locke (Ehrich Locke Law, PA) for Platinum Yacht Collection No.Two, Inc.

Companies: Marlborough Holdings Group, Ltd.; Azimut-Benetti, SpA; Platinum Yacht Collection No. Two, Inc.; Pliske Marine, Inc.; Atlantic Coast Yacht Charters, LLC

Cases: StateUnfairTradePractices AlabamaNews FloridaNews GeorgiaNews