Torts
— Punitive damages — Certiorari — Trial court’s order granting motion for
leave to add claim for punitive damages is not subject to certiorari review —
Independent tort rule — Appellate court’s limited certiorari jurisdiction
prevents court from quashing trial court’s order determining that independent
tort rule is not a bar to punitive damages claim, and from quashing trial
court’s determination that plaintiff made the required showing that would
subject defendant to punitive damages claim — Trial court’s application of
correct law is not reviewable by certiorari, even if appellate court were to
disagree with conclusion reached by trial court

TRG DESERT INN VENTURE, LTD., Petitioner, vs. MICHAEL
BEREZOVSKY, Respondent. 3rd District. Case No. 3D15-424. L.T. Case No. 09-4953.
Opinion filed June 15, 2016. On Petition for Writ of Certiorari from the
Circuit Court for Miami-Dade County, Barbara Areces, Judge. Counsel: Greenberg
Traurig, P.A., and Elliot H. Scherker, Brigid F. Cech Samole, and Jay A.
Yagoda, for petitioner. Bennett Aiello & Cohen, and Michael P. Bennett and
Jeremy R. Kreines, for respondent.

(Before SHEPHERD, ROTHENBERG and SCALES, JJ.)

(SCALES, J.) Petitioner TRG Desert Inn Venture, Ltd. (“TRG”)
seeks certiorari review of the trial court’s order granting Respondent Michael
Berezovsky’s motion for leave to add a claim for punitive damages against TRG
(the “Motion”).

Because our standard of review is limited to whether the
trial court conformed to the procedural requirements of section 768.72 of the
Florida Statutes, we are compelled to deny TRG’s petition.

I. Facts

In February of 2004, Berezovsky entered into a
pre-construction purchase and sale contract with TRG to purchase a condominium
unit in Sunny Isles Beach, Florida. Pursuant to the contract, Berezovsky made a
$141,780 deposit on the unit.

Almost a year later, in January of 2005, Berezovsky assigned
his interest in the contract to Boris Tarlo and Margarita Golkova, a married
couple (collectively, “Tarlo”), in exchange for $247,880 (an amount that
includes the amount of Berezovsky’s deposit).

Berezovsky then requested of TRG a written Assignment and
Assumption Agreement to memorialize Berezovsky’s assignment to Tarlo. Via
overnight courier, a TRG employee, Karen Serzen, sent TRG’s Assignment and
Assumption Agreement form to Berezovsky for his signature. This form, which did
not memorialize the terms of the alleged agreement between Berezovsky and
Tarlo, was signed and returned to TRG that same day, January 26, 2005.

Five days later, however, Berezovsky faxed TRG a document
captioned, “Disclaimed Notice of Assignment and Assumption Agreement,”
purporting to repudiate and disclaim Berezovsky’s prior signed assignment. In
this disclaimer notice, Berezovsky stated that his mother mistakenly signed the
Assignment and Assumption Agreement on his behalf.

The next day, February 1, 2005, TRG sent Berezovsky a
standard letter informing Berezovsky that the time had arrived for Berezovsky
to select kitchen cabinets and countertops, as well as countertops for the
master bathroom. Berezovsky signed off on his selections on February 9, 2005.

On February 15, 2005, TRG sent both Berezovsky and Tarlo a
fully executed copy of the Assignment and Assumption Agreement, bearing the
signatures of a TRG representative, Tarlo, and, apparently, Berezovsky.1 Berezovsky responded by re-sending
the “Disclaimed Notice of Assignment and Assumption Agreement” document to TRG.

In the ensuing months, Berezovsky and Tarlo (through their
respective attorneys) argued over several issues related to the assignment of
the condominium unit. In the meantime, TRG completed construction of the unit.

In February of 2007, TRG closed on the condominium unit by
selling the unit to Tarlo. TRG credited Berezovsky’s $141,780 deposit to Tarlo
in the transaction. Berezovsky claims that this transaction occurred
surreptitiously and without Berezovsky’s knowledge or consent.

Berezovsky sued both TRG and Tarlo. In Berezovsky’s fifth
amended complaint, Berezovsky alleges that: (i) Tarlo is liable for breach of
contract, unjust enrichment, tortious interference, negligent
misrepresentation, conversion and fraud; and (ii) TRG is liable for breach of
contract, negligence, conversion and fraud. Essentially, Berezovsky alleges
that TRG acted either in an intentional or grossly negligent manner when,
knowing that Berezovsky had disclaimed the Assignment and Assumption Agreement,
TRG sold the unit to Tarlo.

The damages sought by Berezovsky in each count against TRG
are virtually identical.2

On October 23, 2014, Berezovsky filed the Motion with the
trial court seeking leave to add a claim for punitive damages against both
Tarlo and TRG. An affidavit from TRG’s prior contract administrator, Karen
Serzen, accompanied the Motion. In that affidavit, Ms. Serzen recalls “an
issue” regarding the assignment of the unit from Berezovsky to Tarlo.
Berezovsky’s own affidavit accompanying the Motion asserts that, after TRG
received Berezovsky’s purported disclaimer of assignment, TRG assured
Berezovsky that TRG would sell the property to Berezovsky and not to Tarlo.

TRG opposed the Motion on several grounds, including its
assertion that Florida’s independent tort rule precluded Berezovsky’s punitive
damages claim.3 On February 12, 2015, the trial court
entered an order granting the Motion. The trial court’s order merely states the
conclusion that: “Plaintiff has provided a reasonable showing by proffer and/or
by evidence in the record which provides a reasonable basis for recovery of
such damages, in accordance with Section 768.72(1), Florida Statutes.”

TRG timely filed the instant petition seeking certiorari
review of the trial court’s order. The parties’ briefs and oral argument
focused on whether the trial court departed from the essential requirements of
law by allowing Berezovsky’s punitive damages claim to proceed against TRG,
which is a legal entity (that is, whether Berezovsky had made the requisite
evidentiary showing required by section 768.72(3) of the Florida Statutes to
assert a punitive damages claim against a legal entity).

After oral argument, we ordered the parties to provide
supplemental briefing on a different issue: whether the torts alleged in
Berezovsky’s complaint constituted “independent torts” that are distinct from
TRG’s alleged breach of its contract with Berezovsky.

II. Standard of Review

Certiorari is the appropriate remedy to challenge a trial
court’s order allowing a punitive damages claim to proceed when the essential
requirements of law, as embodied in section 768.72, have not been followed. Globe
Newspaper Co. v. King, 658 So. 2d 518 (Fla. 1995); Coronado Condo. Ass’n
v. La Corte, 103 So. 3d 239 (Fla. 3d DCA 2012).

Certiorari relief is appropriate, however, only when the record
establishes that a trial court applied the incorrect law; certiorari relief is
not available to remedy an incorrect application of the correct law. See
Haines City Cmty. Dev. v. Heggs, 658 So. 2d 523 (Fla. 1995).

III. Analysis

In their supplemental briefs to this Court, both TRG and
Berezovsky commendably recognize that the issue identified by this Court in its
supplemental briefing order is simply not subject to certiorari review. As
stated previously, on certiorari review our inquiry is limited to whether the
trial court conformed with the procedural requirements of section 768.72. Globe
Newspaper Co., 658 So. 2d at 519-20.

Although in Club Eden Roc, Inc. v. Fortune Cookie
Restaurant, Inc., 490 So. 2d 210 (Fla. 3d DCA 1986), this Court entertained
a petition for certiorari to review an order denying a motion to dismiss a
claim for punitive damages based on Florida’s independent tort rule, this
decision predates both section 768.72 and the Florida Supreme Court’s
determination that certiorari jurisdiction is reserved for orders granting
leave to plead punitive damages claims when the trial court has failed to
comply with the statute’s procedural requirements. Martin-Johnson, Inc. v.
Savage, 509 So. 2d 1097, 1098-99, 1098 n.1 (Fla. 1987) (holding that
certiorari is not a proper vehicle for reviewing a denial of a motion to strike
a claim for punitive damages, notwithstanding that such a claim can serve as a
basis for an inquiry into protected matters).

Consequently, although we might quarrel with the trial
court’s determination that Florida’s independent tort rule is not a bar to
Berezovsky’s punitive damage claim, our limited certiorari jurisdiction
prevents us from quashing the trial court’s order on this basis.

These same restraints on our certiorari jurisdiction prevent
us from quashing the trial court’s order on the basis initially argued by TRG:
that Berezovsky had failed to make the required, reasonable showing that would
subject TRG, a legal entity, to a punitive damages claim. While section
768.72(3) requires a specific evidentiary showing that TRG, a legal entity,
either (i) actively or knowingly participated in intentional misconduct, (ii)
ratified such misconduct, or, (iii) itself engaged in conduct that constituted
gross negligence and that contributed to Berezovsky’s loss4 (for which the record contains scant
evidence), we are unable to conclude on this record that the trial court failed
to apply the correct law.

Simply put, a trial court’s application of the correct law
is not reviewable by certiorari, even if the appellate court were to disagree
with the conclusion reached by the trial court. Ivey v. Allstate Ins. Co.,
774 So. 2d 679 (Fla. 2000). Therefore, we deny TRG’s petition.5

So ordered.

__________________

1As indicated, supra,
Berezovsky claimed that his mother inadvertently signed and returned the form.

2In Berezovsky’s Fifth Amended
Complaint, his demand for damages as to TRG in his tort counts — Counts V, VII
and IX — is essentially the same as those sought in his breach of contract
claim against TRG (Count III). Specifically, Berezovsky seeks recovery of his
$141,780 deposit, plus benefit-of-the-bargain damages (i.e., the difference
between the fair market value of the unit and the contract price).

3Florida’s independent tort rule
precludes the recovery of punitive damages for a breach of contract claim
unless the claimant has asserted a tort independent of the alleged breach of
contract. Ferguson Transp., Inc. v. N. Am. Van Lines, Inc., 687 So. 2d
821, 822-23 (Fla. 1996). TRG argues that Berezovsky’s breach of contract claim
and tort claims arise from the same conduct; thus, Berezovsky may not recover
identical damages in both tort and contract. Ghodrati v. Miami Paneling
Corp., 770 So. 2d 181 (Fla. 3d DCA 2000).

4Coronado Condo Ass’n,
103 So. 3d at 240-41.

5From a practical perspective, the
granting of a motion for leave to amend a complaint to add a punitive damages
claim can be a “game changer” in litigation. Allowing a plaintiff to proceed
with a punitive damages claim subjects the defendant to financial discovery
that would otherwise be off limits, Walt Disney World Co. v. Noordhoek,
672 So. 2d 98, 99 (Fla. 3d DCA 1996), and potentially subjects the defendant to
uninsured losses. Morgan Int’l Realty, Inc. v. Dade Underwriters Ins.
Agency, Inc., 617 So. 2d 455, 459 (Fla. 3d DCA 1993) (“[P]ublic policy in
Florida prohibits liability insurance coverage for punitive damages assessed
against a person because of his own wrongful conduct.”). We urge the Florida
Bar’s Appellate Court Rules Committee to review rule 9.130(a)(3) of the Florida
Rules of Appellate Procedure to consider whether to include in the rule’s
catalogue of appealable, non-final orders a trial court’s order granting a motion
for leave to add a punitive damages claim.

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