BERNARD MARKO ASSOCIATES v. STEELE

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Docket Number

No. 69-462.

Attorney(S)

Lawrence I. Hollander, Miami, for appellant. Kovner, Manheimer, Greenfield Cutler, Steven J. Rose and Donald S. Rose, Miami, for appellees.

Judges

PEARSON, Chief Judge.

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Smart Summary

Factual and Procedural Background

This appeal arises from a summary final judgment entered in favor of the defendants, Morton Steele and Lester Segerman, on appellant Bernard Marko Associates, Inc.'s claim of damages for fraud and deceit. The appellees were officers and directors of Seaboard Beverages, Inc. The appellant had filed a garnishment against Seaboard, which it later dissolved pursuant to a stipulation where Seaboard agreed to pay a sum of money and issue six notes secured by an encumbrance on its mixing and refrigeration equipment. Although Seaboard paid the sum and issued the notes, it did not provide the encumbrance instrument. After partial payment on one note, Seaboard filed for voluntary bankruptcy. The appellant initiated this lawsuit in August 1968, alleging that the appellees fraudulently misrepresented that the equipment was unencumbered to induce the dissolution of the garnishment.

Legal Issues Presented

Whether the appellees can be held individually liable for fraud based on their representations regarding the encumbrance status of Seaboard's mixing and refrigeration equipment.
Whether the appellant's complaint sufficiently alleges fraud based on a false representation of a future event, namely the intent to provide security on the equipment.
Whether the trial court erred in granting summary judgment without allowing the appellant to amend its complaint.
Whether the summary judgment in favor of defendant Segerman was procedurally proper despite his failure to file a timely motion for summary judgment under Rule 1.510(c), Florida Rules of Civil Procedure.

Arguments of the Parties

Appellant's Arguments

The appellees made fraudulent representations that the mixing and refrigeration equipment was unencumbered, which was untrue and known to them.
The complaint should be construed alternatively to allege fraud based on the appellees' representation that an encumbrance would be given on the equipment when they never intended to provide such security.
The appellant should have been allowed to amend its complaint to properly allege fraud based on future conduct.
The summary judgment in favor of Segerman was procedurally defective because Segerman did not file a timely motion for summary judgment as required by Rule 1.510(c).

Appellees' Arguments

The representation that the equipment was unencumbered was true, as found by the trial court based on pleadings and discovery.
The appellant failed to allege the essential element of fraud based on future conduct, namely that the representation was made without any intention to perform it.
No evidence was presented during summary judgment proceedings to justify allowing amendment of the complaint.
Segerman's joinder in Steele's timely motion for summary judgment was procedurally acceptable, and the appellant waived any objection by failing to object at the hearing.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Home Seekers' Realty Co. v. Menear, 102 Fla. 7, 135 So. 402 (1931)	Requirement that to state a fraud claim based on a representation of future conduct, the plaintiff must allege the representation was made without any intention to perform it.	The court held that appellant's complaint lacked these essential allegations and thus failed to state a claim for fraud based on future conduct.
Hart Properties, Inc. v. Slack, 159 So.2d 236 (Fla. 1959)	Trial court should allow amendment of complaint if evidence during summary judgment reveals plaintiff misstated his position.	No evidence was offered during summary judgment proceedings to justify amendment; thus, the court did not err in denying leave to amend.
McClendon v. Key, 209 So.2d 273 (Fla.App. 1968)	Same principle as Hart Properties regarding allowing amendments during summary judgment proceedings.	Applied to affirm denial of amendment due to absence of evidence justifying it.

Court's Reasoning and Analysis

The court began by affirming the trial court's finding that the appellees' representation that the mixing and refrigeration equipment was unencumbered was true, based on the pleadings and discovery. The appellant did not dispute this factual finding. The appellant attempted to recast its complaint as alleging fraud based on a false promise regarding future conduct—specifically, that an encumbrance would be given when there was no intention to do so. However, the court noted that to state such a claim, the complaint must allege the representation was made without any intention to perform it, a requirement established in Home Seekers' Realty Co. v. Menear. The appellant's complaint lacked these essential allegations.

The court further addressed the appellant's argument that it should have been allowed to amend the complaint to include these allegations. Citing Hart Properties, Inc. v. Slack and McClendon v. Key, the court explained that amendment is appropriate only if evidence during summary judgment proceedings reveals a misstatement of the plaintiff's position. No such evidence was presented here, so the trial court did not err in denying leave to amend.

Regarding the procedural challenge to the summary judgment in favor of Segerman, the court reasoned that Segerman's counsel's oral request to join Steele's timely motion for summary judgment was permitted by the court and not objected to by the appellant. Because both defendants occupied the same legal position on the grounds asserted, the court found no prejudice to the appellant. The appellant's failure to object constituted a waiver of the time requirements under Rule 1.510(c), Florida Rules of Civil Procedure.

Holding and Implications

Affirmed.

The court affirmed the summary judgment for the appellees, holding that the appellant failed to state a claim for fraud based on either existing facts or future promises due to insufficient allegations. The court also upheld the procedural propriety of Segerman's summary judgment despite the lack of a separately filed timely motion, finding waiver by the appellant. This decision directly resolves the dispute between the parties without establishing new legal precedent.

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BERNARD MARKO ASSOCIATES, INC., A FLORIDA CORPORATION, APPELLANT, v. MORTON STEELE AND LESTER SEGERMAN, APPELLEES.

PEARSON, Chief Judge.

This appeal is from a summary final judgment entered for the defendants upon appellant's claim of damages for fraud and deceit. The appellees, Steele and Segerman, were officers and directors of a corporation known as Seaboard Beverages, Inc.

Appellant's complaint sought to impose individual liability upon the appellees for allegedly fraudulent representations they made in order to have appellant dissolve a garnishment the appellant had filed against Seaboard. Appellant dissolved the garnishment upon a stipulation whereby Seaboard agreed to give the appellant a sum of money plus six notes and to secure the notes by an encumbrance upon "all its mixing and refrigeration equipment." Seaboard gave appellant the agreed sum and the notes but gave no instrument encumbering the mixing and refrigeration equipment. Seaboard made payment on one of the notes and went into voluntary bankruptcy in October 1967. Appellant instituted the present cause in August 1968.

Appellant's complaint alleged that the appellees were guilty of fraud in that they represented to the appellant that all of Seaboard's mixing and refrigeration equipment was clear of all liens and encumbrances while this representation in fact was untrue and known by the appellees to be untrue. The trial court entered summary judgment in favor of the appellees after he correctly found (upon the pleadings and the discovery proceedings) appellees' representation that the mixing and refrigeration equipment was unencumbered was in fact true.

Appellant does not dispute the correctness of this finding. It urges however that its complaint should be construed to present an alternative statement of fraud and deceit in that it contains allegations that the appellees made the representation that an encumbrance upon the refrigeration and mixing equipment would be given when they never intended to give any type of security and knew that the security would not be given.

In order to state a claim for fraud based upon representation of a future occurrence, a plaintiff must allege that the representation was "made without any intention of performing it, or made with the positive intention not to perform it * * *." Home Seekers' Realty Co. v. Menear, 102 Fla. 7, 135 So. 402 (1931). These essential allegations are completely lacking in appellant's complaint. But appellant contends that since the summary judgment may have been based upon the insufficiency of the allegations, it should have been given an opportunity to amend its complaint. This contention was not presented to the trial court; it was first raised on appeal. It is unavailing in any event. A trial court should allow a plaintiff to amend his complaint if during the hearing on a motion for summary judgment evidence is offered which reveals the plaintiff has misstated his position. Hart Properties, Inc. v. Slack, Fla. 1959, 159 So.2d 236, 240; McClendon v. Key, Fla.App. 1968, 209 So.2d 273, 277. However in the present case no party offered such evidence. The court therefore properly entered summary judgment for the appellees without granting the appellant leave to amend its complaint.

The appellant has presented an additional point urging that the summary judgment in favor of defendant Segerman was procedurally incorrect because Segerman did not serve and file a motion for summary judgment pursuant to the time requirement of Rule 1.510(c), Florida Rules of Civil Procedure, 31 F.S.A. At the hearing on Steele's timely filed and served motion for summary judgment, Segerman's counsel orally requested permission of the court to join in Steele's motion for summary judgment. The appellant made no objection. The court permitted the joinder because the defendants occupied the same legal position relative to the grounds of the motion for summary judgment. It followed as a matter of law that if defendant Steele was entitled to a summary judgment upon the grounds asserted, defendant Segerman would also be entitled to a summary judgment. Therefore appellant was in no way prejudiced by defendant Segerman's failure to follow the provision of Rule 1.510(c). In addition we think that appellant's failure to object to Segerman's motion to join in the motion for summary judgment filed by Steele amounted to a waiver by the appellant of the time requirements of Rule 1.510(c), Florida Rules of Civil Procedure.

Affirmed.