There are limited circumstances in Florida where a plaintiff can proceed with a civil theft claim when there is a contractual relationship between the parties. To prove civil theft, the plaintiff is required to show that the action goes outside and is an independent breach of the terms of a contract.

Many cases alleging breach of contract do not meet the standards of civil theft, therefore not qualifying for its remedy of additional damages. In order to recover any civil theft damages, those claimed by the Plaintiff must be separate and apart from the ones suffered as a result of the contract. Under certain circumstances, a plaintiff can allege breach of contract in addition to a civil theft, by simultaneously pleading and evidencing both the civil theft and breach of contract claims.

Courts began to address lawsuits that claimed damages for both civil theft and breach of contract about forty years ago. This new claim for civil theft could be alleged alongside breach of contract to open up treble damages for Florida businesses. The issue in Futch v. Head, was an agreement to pay a commission on the sale of a property. The court found that there was enough evidence of an enforceable oral commission agreement between a broker and a co-broker in order to determine a breach of contract and that the money was identifiable because it was delivered ‘at one time, by one act and in one mass, or where the deposit is special, and the identical money is to be kept for the party making the deposit.’” 511 So.2d 314 (Fla. 1st DCA 1987).

The civil theft claim must prove a separate loss, apart from the terms of the contract that are not fulfilled. The case in Rolls v. Bliss involved a dispute between architects and builders in a construction project. The court found that where the compensatory damages for tort are identical to the contractual compensatory damages, then the compensatory damages and punitive damages for the tort are not recoverable.  408 So.2d 229 (Fla.3d DCA 1981).

If the parties are in a contract dispute over the money owed and no fraud is shown, then there cannot be a claim for civil theft. In Rosen v. Marlin, the Plaintiff sued Rosen for breach of contract, civil theft, and conversion involving a dispute over the profits of a property sale. The dispute was over money where one person owed the other money. The court determined that the breach was caused by a good faith belief that the party was entitled to the property and the requisite criminal intent necessary to form the basis for a claim of civil theft was, therefore, not present. While “fraud was pled, no finding of fraud was made,” 486 So. 2d 623 (Fla. 3d DCA 1986). In cases when an amount of money for breach of contract is not identifiable, there cannot be a claim of conversion or theft which would open up the possibility for treble damages.

Civil theft cannot be alleged for recovery of damages when it is only a breach of contract claim. In Ginsberg v. Lennar Fla. Holdings, Inc., the plaintiff purchased a mortgage and then asserted various breaches of contract against the mortgagee. The court found that the defendant had not committed a breach of duty separately from the breach of contract and therefore, the tort action was meritless. “Where damages sought in tort are the same as those for breach of contract a plaintiff may not circumvent the contractual relationship by bringing an action in tort.” 645 So. 2d 490, 495 (Fla. 3d DCA 1994).

The case of Gambolati v. Sarkisian, 622 So.2d 47 (Fla. 4th DCA 1993), demonstrates a claim where civil theft is not involved when there is a contractual relationship.  Sarkisian was seeking to enforce an obligation to pay money. The court determined that Gambolati was not required to pay to Sarkisian the monies he collected. Gambolati’s breach of contract in paying a portion of the monies to Sarkisian did not constitute civil theft, because the claim lacked substantial evidence. Sarkisian’s civil theft claim was deficient because the basis of the tort action was whether or not there was a contract, creating a bona fide contractual dispute negating a claim for civil theft.

The courts look to the terms of the contract, when the parties are in privity, to determine consequential damages that the parties may have as expressed in their contractual agreement. The court in Kay v. Katzen discussed whether a party is able to bring both claims for civil theft and breach of contract. This case involved breach of contract and civil theft involving bonuses as per the employment contract. The court denied the civil theft claim because it “was clearly a contractual claim, not a tort claim, and accordingly the actions for conversion, civil theft, and punitive damages did not lie.” 568 So. 2d 960 (Fla. Dist. Ct. App. 1990).

When disputed property is involved in a valid contract case, the plaintiff must show an intentional act outside of the contract in order to have a civil theft claim. In order to succeed, the action must extend beyond the damages that would be expected from a breach of contract. The plaintiff, in Sanchez v. Encinas, 627 So.2d 489 (Fla. 3d DCA 1993), brought forth a claim to recover damages for breach of a contract and civil theft of a professional recording which was listed in the agreement. The courts declined the theft claim because the evidence showed a bona fide contractual dispute over the property in question, negating the intent required for a claim for theft.

A recent court decision describes the necessary criminal intent that the plaintiff must prove in order to establish the requisite intent for civil theft. Bayuk v. Prisiajniouk involved a family dispute regarding various items of property. To prove the civil theft claim it had to be shown that that Bayuk “(1) knowingly obtained or used, or endeavored to obtain or use, (2) Prisiajniouk’s property (3) with the “felonious intent” either temporarily or permanently to: (a) deprive Prisiajniouk of her right to or a benefit from the property or (b) appropriate the property to Bayuk’s own use or to the use of any person not entitled to the property. To establish her claim for civil theft, Prisiajniouk must also demonstrate that she has “a legally recognized property interest in the items [allegedly] stolen.” Case No. 8:18-cv-00163-T-SPF (M.D. Fla. Dec. 30, 2019). The court determined that it was as a breach of contract, where there was “no identifiable account or piece of property from which money was to be paid, an action for civil theft did not lie,” which lacked clear and convincing evidence of “an intricate sophisticated scheme of deceit and theft.”

Oftentimes, parties seek to profit where a party to a contract attempts to evade the terms by making a claim for economic loss. In an attempt to limit these contractual privity actions, the courts bar actions that claim only to recover economic damages in tort. A civil theft claim was brought forth in in Gilman Yacht Sales v. First Nat. Bank of Chicago, to decide an action for breach of a brokerage contract. In that case, the plaintiff was alleging breach of contract and civil theft for a commission against the purchaser of a vessel. The court declined to the claim for civil theft since the economic loss rule applies as a bar to a statutory action for civil theft.

When a plaintiff cannot prove substantial factual or legal support in a civil theft case, the claimant can be liable for legal fees and costs to the opposing party. In a recent case in the District Court, Island Travel & Tours Ltd. Co. v. MYR Indep., Inc., the court ruled on a defendant’s motion for attorneys’ fees.  The defendant had previously proved the plaintiff lacked evidence of criminal intent, yet the trial court denied the defendant’s request for attorneys’ fees.  The District Court reversed, concluding that since the civil theft claim was “without substantial fact or legal support under the Fla. Stat. § 772.11, and the defendant should be awarded attorneys’ fees”. 3D16-2085, 2020 WL 5223767 (Fla. 3d DCA Sept. 2, 2020).

Before filing a claim for civil theft, the Plaintiff is first required to make a written demand including the amounts owed or treble damages. The Defendant then has 30 days to respond. This is a prerequisite to filing in order to encourage settlements. If there is no response or settlement within (30) days, then the Plaintiff can file a complaint. If a response received, then the Defendant is served with a written release of civil liability for the specific act of theft. It is important to note that the civil theft claim statute of limitations is five years, which starts from the time of the conversion or when the conversion should have been discovered.

Civil theft claims in contractual relationships are quite complex and vary with each case. Those with extensive litigation experience and knowledge in Florida civil theft can assist in navigating this area of law. It is imperative to seek guidance and advice from a qualified expert, who can assess your individual needs.

Brendan A. Sweeney, Esq., L.L.M., of Sweeney Law, P.A., a boutique firm in Fort Lauderdale, Florida, regularly handles complex litigation that involves civil theft claims throughout Florida. Brendan A. Sweeney, Esq., LL.M. is an AV Preeminent Martindale Rated Attorney, that has been recognized as a Florida Super Lawyer in 2020 and 2019, Florida Legal Elite in 2020 and 2019, and as a Florida Super Lawyer Rising Star in 2018, 2017, 2016, 2015, and 2014. If you have any questions and/or issues regarding civil theft claims then contact Sweeney Law, P.A. at (954) 440-3993 immediately to protect your rights.

Fla. Stat. § 812.014 provides for the crime and states:

A person commits theft if he or she knowingly obtains or uses, or endeavors to obtain or to use, the property of another with intent to, either temporarily or permanently:

• (A) Deprive the other person of a right to the property or a benefit from the property.
• (B) Appropriate the property to his or her own use or to the use of any person not entitled to the use of the property.

Further, Fla. Stat. § 772.11 provides the civil remedy for theft which permits a litigant to prosecute the theft claim on their own behalf. This section is an attractive option for many potential claims because this statutory remedy provides for treble damages, however, one must be careful as the statute also requires the injured party to serve a demand letter upon the party that committed the wrongdoing. The statutory authority demands strict compliance for this letter as it is a pre-requisite for filing a claim with the court. This is done in an attempt to settle these disputes without relying on the court system, which is usually overwhelmed to begin with. If the letter goes unanswered or the demand has not been met within (30) days, it is then permissible to file a complaint.

But what if the claim for theft appears to stem from a contractual relationship between the parties? The aggrieved party could seek a remedy by bringing a Breach of Contract action. If this contractual relationship exists, is it still appropriate to bring a civil action for theft under Fla. Stat. § 772.11? The short answer, of course, is: It depends.

The court in Kay v. Katzen was confronted with this issue in deciding whether a party is able to bring both claims for civil theft and breach of contract. In that case, the plaintiff was alleging breach of contract and civil theft for his employer not providing him with bonuses as per the employment contract. In the end, the court declined to entertain the claim for civil theft stating that, “[t]he claim sued upon was clearly a contractual claim, not a tort claim, and accordingly the actions for conversion, civil theft, and punitive damages did not lie.” This is not to say that it is never appropriate to bring a civil theft claim where a contractual relationship exists, however.

The court in Moore Business Forms v. Iberoamerican Electronics pointed out that the Economic Loss Rule can bar a claim for civil theft, where a contract is the basis of the claim. Under this rule, where there is a contract between the parties, and the damages alleged are economic damages based on one party not meeting the expectations of the contract, there can be no claim in tort law absent a showing of a tort independent of the breach of contract. While the court in that case found no such independent action, the court did comment on the Economic Loss Rule stating that:

The economic loss rule has not eliminated causes of action based upon torts independent of contractual breach even though there exists a breach of contract action. Where a contract exists, a tort action will lie for either intentional or negligent acts considered to be independent from acts that breached the contract. Thus, in the proper circumstance, no doubt, claims for civil theft and breach of contract can coexist.

Colonial Penn Insurance Co. v. Value Rent-A-Car, Inc. is a good example of the proper circumstances under which both claims may be successfully made. In this case, a car rental company and an insurance company contracted for a blanket insurance policy to cover the rental company’s fleet of vehicles. Pursuant to the agreement, the calculation for the premium was to be a percentage of the gross receipts per rental vehicle. The insurance company brought the claims for breach of contract and civil theft against the rental company, alleging that the rental company submitted fraudulent data regarding the gross receipts, which resulted in the insurer issuing a reimbursement on the policy’s premium. The insurer further alleged the fraudulent reports understated the actual gross receipts received per vehicle, which the insurer relied on in issuing the improper premium reimbursement.

When the rental company brought a motion to dismiss the civil theft claim, the court needed to decide whether the both claims for breach and civil theft could be brought, since after all, the claims both stem from the contractual relationship. The court ruled in favor of the insurer stating:

Florida law does not bar a civil theft claim simply because a contractual relationship is involved. Masvidal v. Ochoa, 505 So. 2d 555 (Fla. 3d DCA 1987). However, where a contractual relationship exists, the alleged loss which results from the theft, must be separate and distinct from any loss alleged to have resulted from the breach of contract. O’Donnell v. Arcoiries, Inc., 561 So. 2d 344 (Fla. 4th DCA 1990).

The court in Escudero v. Hasbun came to the same conclusion but the reasoning differs slightly as the court added additional guidance on the issue. This dispute, between an estranged husband and wife, involved a certificate of deposit (“C.D.”) with a principal amount of $60,000. Pursuant to the separation agreement, the wife was to be allocated the funds in this C.D. After the maturity date, however, the husband withdrew the funds and placed them into his own account. This prompted the wife filed an action against the husband for civil theft and sought an injunction to enjoin the husband from making further dispositions of the funds.

In appealing the granted injunction, the husband argued that the right to the funds is contractual, stemming out of the separation agreement, and therefore, a civil theft action is improper. In support of this, the husband relied on Colonial Penn and several other cases. The court took them all into consideration but stated:

We read the cases relied upon by Escudero to mean that a civil theft claim will not lie where there is a contractual dispute over an uncertain or unspecified amount of money alleged to be owed and there is not an identifiable account or piece of property from which the money is to be paid.

The court determined the damages that the wife alleged were separate and distinct, just like the other decisions, but in finding this, the court considered the facts that the monies were certain and the account was identifiable. To illustrate, if the husband just never turned the money over to the wife and left the C.D. to renew, the wife’s only recourse would be on the contract. But here, the wife showed that she was entitled to a certain amount, the value of the C.D., and that the husband took steps to misappropriate the money by withdrawing it and putting it into his own account. This approach helped the court in making the distinction between the breach and the tort.

Gersh v. Cofman was a dispute between cousins involving the disposition of several dividend checks from a company they had invested in. The plaintiff brought a civil action for theft alleging, that the defendant had misappropriated dividend checks for himself and failed to pay the plaintiff his share. The court said that this action was proper, even though the dividends were subject to a contract. The court pointed out that the plaintiff showed that he did not sign the checks and that his signature was forged. Further, it was also shown that the checks were deposited into accounts controlled by the defendant. The court found that these facts were important in establishing an “intricate sophisticated scheme of deceit and theft”; which was separate and independent from the breach of contract.

While the facts and circumstances of these cases are unique in their own ways, the courts either permitted or declined to allow civil theft actions on similar grounds. Essentially, in order to bring a civil theft action where the property in dispute is under a valid contract, the party bringing the cause must show an act and intent, that would be actionable, outside of the contract. That is, some action that goes beyond the damages that one would expect to naturally flow from a simple breach of contract. Otherwise, a claim for civil theft is not appropriate.

Sweeney Law, P.A. Has Vast Experience Litigating Civil Theft Claims

Brendan A. Sweeney, Esq., LL.M., of Sweeney Law, P.A., a boutique firm in Fort Lauderdale, Florida, regularly handles complex litigation that concerns civil theft claims throughout Florida. Brendan A. Sweeney, Esq., LL.M. is an AV Preeminent Martindale Rated Attorney, that has been recognized as a Florida Super Lawyer in 2020 and 2019, Florida Legal Elite in 2020 and 2019, and as a Florida Super Lawyer Rising Star in 2018, 2017, 2016, 2015, and 2014. If you have any questions and/or issues regarding civil theft claims then contact Sweeney Law, P.A. at (954) 440-3993 immediately to protect your rights.

www.sweeneylawpa.com

Sources

1. Fla. Stat. § 812.014

2. Fla. Stat. § 772.11

3. Kay v. Katzen, 568 So. 2d 960 (Fla. 3d DCA 1990)

4. Moore Bus. Forms v. Iberoamerican Elecs., S.R.L., 698 So. 2d 611 (Fla. 3d DCA 1997)

5. Colonial Penn Ins. Co. v. Value Rent-A-Car, Inc., 814 F. Supp. 1084 (S.D. Fla. 1992)

6. Escudero v. Hasbun, 689 So. 2d 1144 (Fla. 3d DCA 1997)

7. Gersh v. Cofman, 769 So. 2d 407 (Fla. 4th DCA 2000)

Florida’s civil theft statute is an incredibly effective tool in retaining possession of items or increasing claims. Here is how it works, prior to filing a lawsuit for civil theft, a party must serve a pre-suit demand letter to the person liable for the damages.  See § 772.11, Fla. Stat.  The demand letter must demand $200 or the treble damage amount of the claim.  If the recipient of the demand letter complies and pays the money within 30-days of receipt of the letter, the person is relieved of any further civil liability and shall be given a written release of the claim. Under our scenario, assume the custom-made motorcycle was worth $50,000.00, that means the civil theft demand will request triple this amount, $150,000.00 to be paid in order to avoid further litigation on the claim.

The penalties for civil theft are enormous, triple the amount of damages incurred. A such, there are heightened requirements that must be proved in order for a Plaintiff to prevail on its civil theft claim. Rather than the traditional clear and convincing evidence burden that civil Plaintiffs are customarily charged with, in a civil theft claim a Plaintiff must prove it claim by the heightened clear and convincing evidence standard. As the appellate court stated in Slomowitz v. Walker, 429 So. 2d 797 (Fla. 4^th DCA 1983), “clear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established.” Furthermore, civil theft claims require proof of “felonious intent.” Simply put, this means a plaintiff must prove that one “knowingly obtained or used or endeavored to obtain or use” plaintiff’s property with felonious intent to either temporarily or permanently deprive plaintiff of its use of the property.

Recently Sweeney Law, P.A. was retained to represent an individual to retain possession of a custom-made motorcycle, that was priceless due to the extensive family history and sentimental value. Payment of monies for the motorcycle was never the goal, getting the motorcycle back was the primary objective. We prosecuted the claims very aggressively and were happy to get the custom-made motorcycle back to its rightful owner. Despite the contentious litigation, our result was obtained rather quickly. Which in turn, led to yours truly spending a Sunday morning out of town, retaking possession of the custom-made motorcycle, and getting my picture taken along the way.

Sweeney Law, P.A. Regularly Prosecutes and Defends Civil Theft Claims

Brendan A. Sweeney, Esq., of Sweeney Law, P.A., has prosecuted and defended millions of dollars of civil theft claims throughout Florida. Brendan A. Sweeney, Esq., is an AV Preeminent Martindale Rated Attorney, that has been recognized as a Florida Super Lawyer in 2019 and as a Florida Super Lawyer Rising Star in 2018, 2017, 2016, and 2014. If you have any Florida civil litigation questions and/or issues then contact Sweeney Law, P.A. at (954) 440-3993 immediately to protect your rights. www.sweeneylawpa.com.