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Filing # 192455528 E-Filed 02/21/2024 04:27:53 PM
IN THE CIRCUIT COURT OF THE NINTH JUDICIAL CIRCUIT
IN AND FOR OSCEOLA COUNTY, FLORIDA
VILLAS AT EMERALD LAKE
HOMEOWNERS ASSOCIATION, INC., a
Florida not for profit corporation,
Plaintiff,
v. CASE NO.: 2020-CA-002942-ON
ROYAL OAK HOMES, LLC, a Florida
limited liability company; ADVANCED ROYAL OAK HOMES, LLC’S
WRAPPING AND CONCRETE RESPONSE AND
SOLUTIONS OF CENTRAL FLORIDA, MEMORANDUM OF LAW IN
INC., a Florida corporation; DON KING’S OPPOSITION TO PLAINTIFF’S
CONCRETE, INC., a Florida corporation; OMNIBUS MOTION FOR
HUGH MACDONALD CONSTRUCTION, PARTIAL SUMMARY
INC., a Florida corporation; IMPERIAL JUDGMENT AS TO VARIOUS
BUILDING CORPORATION, a Florida DEFENDANTS’ ECONOMIC
corporation; PREMIER PLASTERING OF LOSS RULE AFFIRMATIVE
CENTRAL FLORIDA, INC. n/k/a TGK DEFENSE
STUCCO, INC., a Florida corporation;
WEATHERMASTER BUILDING
PRODUCTS, INC., a Florida corporation;
WEINTRAUB INSPECTIONS &
FORENSICS, INC. n/k/a WEINTRAUB
ENGINEERING AND INSPECTIONS,
INC., a Florida corporation; THE DIMILLO
GROUP, LLC, a Florida limited liability
company; WOLF’S IRRIGATION &
LANDSCAPING, INC., a Florida
corporation; SUMMERPARK HOMES,
INC., a Florida corporation; BROWN +
COMPANY ARCHITECTURE, INC., a
Florida corporation;
EXPERT PAINTING & PRESSURE
WASHING, INC., a Florida corporation,
Defendants.
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/
ROYAL OAK HOMES, LLC, a Florida
limited liability company,
Crossclaim Plaintiff,
v.
ADVANCED WRAPPING AND
CONCRETE SOLUTIONS OF CENTRAL
FLORIDA, INC., a Florida corporation;
DON KING’S CONCRETE, INC., a Florida
corporation; HUGH MACDONALD
CONSTRUCTION, INC., a Florida
corporation; IMPERIAL BUILDING
CORPORATION, a Florida corporation;
PREMIER PLASTERING OF CENTRAL
FLORIDA, INC. n/k/a TGK STUCCO, INC.,
a Florida corporation; WEATHERMASTER
BUILDING PRODUCTS, INC., a Florida
corporation; WEINTRAUB INSPECTIONS
& FORENSICS, INC. n/k/a WEINTRAUB
ENGINEERING AND INSPECTIONS,
INC., a Florida corporation; WOLF’S
IRRIGATION & LANDSCAPING, INC., a
Florida corporation; BROWN + COMPANY
ARCHITECTURE, INC., a Florida
corporation; EXPERT PAINTING &
PRESSURE WASHING, INC., a Florida
corporation,
Crossclaim Defendants.
/
WEATHERMASTER BUILDING
PRODUCTS, INC., a Florida Corporation,
Third-Party Plaintiff,
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v.
ALL GLASS INSTALLATION COPRP., a
Florida corporation; CASEY HAWKINS
GLASS, INC., a Florida corporation; DEAN
NESBIT, LLC, a Florida limited liability
company; HELBERG ENGERPRISES,
LLC, a Florida limited liability company;
HOBBIT WINDOWS, LLC, a Florida
limited liability company; T&M
CONSTRUCTION OF SANFORD, INC., a
Florida corporation; WELL DONE
WINDOWS, INC., a Florida corporation;
and WELL HUNG WINDOWS & DOORS,
LLC, a Florida limited liability company,
Third-Party Defendants.
/
ROYAL OAK HOMES, LLC’S RESPONSE AND MEMORANDUM OF
LAW IN OPPOSITION TO PLAINTIFF’S MOTION FOR PARTIAL
SUMMARY JUDGMENT AS TO VARIOUS DEFENDANTS’ ECONOMIC
LOSS RULE AFFIRMATIVE DEFENSE
Defendant, Royal Oak Homes, LLC (“Royal Oak”), responds in opposition to
Plaintiff, Villas at Emerald Lake Homeowners Association, Inc.’s (“Association” or
“Plaintiff”), Motion for Partial Summary Judgment as to Various Defendants’
Economic Loss Rule Affirmative Defense (“Motion”).
Plaintiff’s argument for partial summary judgment is based on “labels”
without any appreciation for the legal reasoning behind those “labels.” For example,
the restriction of the economic loss rule to “products liability” cases by the Florida
Supreme Court in Tiara Condo. Assoc., Inc. v. Marsh & McLennan Cos., Inc., 110
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So. 3d 399 (Fla. 2013) did not turn on simplistic labeling of the subject matter of
actions. Rather, the Tiara Court limited the economic loss rule to products liability
cases because the “essence of the early holdings discussing the” economic loss rule
“is to prohibit a party from suing in tort for purely economic losses to a product or
object provided to another for consideration” because “contract principles [are]
more appropriate than tort principles without an accompanying physical injury or
property damage.” Id. at 405 (citations omitted) (emphasis added). The principle
behind the economic loss rule indisputably applies to this case. Plaintiff cites no
binding authority to the contrary in the Motion.
Another example is Plaintiff’s labeling of Royal Oak’s economic loss rule as
an “affirmative defense.” That label is incorrect. Royal Oak expressly asserted
“defenses” and expressly stated that Royal Oak did not assume the burden of proof
or persuasion “unless required by law.” Royal Oak Homes, LLC’s Answer and
Defenses to Plaintiff’s Second Amended Complaint and Second Amended
Crossclaim (“Royal Oak Answer”), p. 8. Plaintiff cites no authority in the Motion
that the economic loss rule is an “affirmative defense” placing the burden of proof
on Royal Oak because the economic loss rule is not an affirmative defense. It is a
bar to claims brought in tort for purely economic losses absent exceptions that are
inapplicable here.
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Plaintiff fails to cite in its Motion or otherwise provide this Court with any
controlling decision that holds the economic loss rule does not bar Plaintiff’s
negligence and vicarious liability claim for purely economic losses in the form of
alleged repair costs to townhomes admittedly the subject of express contracts and
warranties between Royal Oak and the townhome owners Plaintiff sues on behalf of
in this claim.
As a result, Royal Oak moved for partial summary judgment as to Count I of
Plaintiff’s Second Amended Complaint for Negligence and Vicarious Liability
(“Royal Oak’s Motion”). Royal Oak’s Motion should be granted, and the Motion
should be denied, for the reasons provided in Royal Oak’s Motion and those
provided in response to the Motion.
I. INTRODUCTION AND STATEMENT OF FACTS
Plaintiff sues Royal Oak and its subcontractors for alleged construction
defects at the Villas at Emerald Lake townhome community located in Kissimmee,
Osceola County, Florida (“Emerald Lake”), constructed by Royal Oak’s
subcontractors. Plaintiff asserts claims against Royal Oak for negligence and
vicarious liability (Count I), breach of Florida Building Code (Count II), and breach
of implied warranties (Count III), in its Second Amended Complaint. Plaintiff
asserts no breach of contract claim, even though every original townhome owner had
a written purchase agreement with Royal Oak that provided express warranties to
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those owners. Affidavit of Jeff Fellows in Support of Royal Oak Homes, LLC’s
Motion for Partial Summary Judgment as to Claims for Breach of Implied
Warranties and Consequential Damages, ¶ 7. 1
The only damages Plaintiff identifies are economic losses, that is, costs to
repair or the loss of the contractual “benefit of the bargain.” Plaintiff alleges in Count
I that Plaintiff, as the homeowners’ association, “has been and will be required to
expend large sums of money for the repair and maintenance of the Royal Oak
townhomes and common areas and for damages caused by the defects and
deficiencies.” Second Amended Complaint, ¶ 72. Plaintiff makes similar allegations
in Counts II and III. Id., ¶¶ 79, 87.
Plaintiff’s experts further opine only on costs to remove and replace the
building envelope, i.e. exterior stucco siding and roofs, on the townhomes in
Emerald Lake for the alleged construction installation defects. See Deposition of
Felix Martin, (“Martin Dep.”), 35:21-25, 36:1-15, 37:2-14, Ex. 6, pp. 3-4, 8-19;
Deposition of Sean Heaney, (“Heaney Dep.”), 35:3-10, 36:6-16, 37:4-7, Ex. 27. 2
Plaintiff has made no claim for personal injury or damage to other property.
Plaintiff’s “Background and Introduction” section in the Motion omits any
reference to the nature of Plaintiff’s claim for negligence and vicarious liability,
1
The Affidavit of Jeff Fellows was filed separately with this Court on January 18, 2024.
2 The deposition transcripts of Plaintiff’s experts and relevant exhibits were separately filed with
the Court on January 19, 2024.
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specifically the fact that Plaintiff seeks to recover only economic loss damages.
Motion, pp. 2-3. Plaintiff, however, indisputably seeks to recover only economic
loss damages.
II. Argument and Supporting Memorandum of Law
A. Plaintiff’s Tort Claim Fails as a Matter of Law, thus, Plaintiff’s
Motion Must be Denied.
1. Plaintiff’s Negligence and Vicarious Liability Claim is
Barred by the Economic Loss Rule.
Plaintiff’s Motion focuses entirely on the label of a case based on the Florida
Supreme Court’s conclusory statement that the economic loss rule is limited to
“cases involving products liability.” Tiara Condo. Assoc., Inc., 110 So. 3d at 407.
Plaintiff cites a host of cases, some that reference this conclusion in Tiara, involving
personal injury, negligent misrepresentation or professional malpractice, or the
application of statutory terms for purposes of the statute of repose. See Motion, pp.
8-12, 14-17.3 Most of these decisions, as discussed in more detail below, do not
even mention the economic loss rule because it has no application to the far different
facts of those cases. Plaintiff’s Motion therefore misses the point of the economic
loss rule following Tiara.
3 Plaintiff further references several trial court orders in the Motion, pp.12-14 and 16, but these
trial court orders are non-binding and inadmissible as summary judgment evidence because these
orders are not self-authenticating and were not the subject of a Request for Judicial Notice. Fla.
Stat. §90.202(6).
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The economic loss rule applies where contract and warranty principles exist
between parties to address solely economic losses that should not be circumvented
by one party bringing an action in tort to recover such losses. Tiara, at 402. (citations
omitted). As the Court explained, “[w]hen the parties are in privity, contract
principles are generally more appropriate for determining remedies for
consequential damages that the parties have, or could have, addressed through their
contractual agreement.” Id. This same principle applies in the products liability
context, even absent privity, because products are sold with warranties that cover the
expectations of the parties. As the Court further explained, “strict liability has not
replaced warranty law as the remedy for frustrated economic expectations in the sale
of goods.” Id., at 405, quoting Indemnity Ins. Co. of North America v. American
Aviation, Inc., 891 So. 2d 532, 541 (Fla. 2004).4 For this reason, the Court extended
the economic loss rule to bar tort claims in cases involving any goods where
contractual arrangements and warranties defined economic expectations even absent
direct privity between the plaintiff and the defendant. Id., at 403-406.
That is the case with Casa Clara Condo. Ass’n, Inc. v. Charley Toppino and
Sons, 620 So. 2d 1244 (Fla. 1993). Casa Clara involved tort claims of construction
defects by a homeowner who had no contract or privity with the defendant
4Plaintiff cites Indemnity Ins. Co. of North America v. American Aviation, Inc., 891 So. 2d 532
(Fla. 2004) in support of the Motion despite the fact that the case supports Royal Oak’s position,
not Plaintiff’s position. Motion, pp. 14-15.
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contractor. 620 So. 2d at 1245. The Court affirmed the bar of those claims under the
economic loss rule and further explained that the building, including its component
parts, is the relevant “product.” Id., at 1246. The Court explained why the building,
and its components, was a “product” subject to the economic loss rule, ruling “[i]f a
house causes economic disappointment by not meeting a purchaser’s expectations,
the resulting failure to receive the benefit of the bargain is a core concern of contract,
not tort, law.” Id., at 1247. Here, Plaintiff sues on behalf of homeowners who were
in privity of contract with Royal Oak, but Plaintiff fails to assert any breach of
contract claim on their behalf.
The Court in Tiara favorably cites its Casa Clara decision in its “Origin and
Development of the Economic Loss Rule” section. Tiara, 110 So. 3d at 401. Indeed,
the Court in Tiara quotes Casa Clara when it explained that “[e]conomic losses”
barred by this rule include “damages for inadequate value, costs of repair and
replacement of the defective product, or consequent loss of profits – without any
claim of personal injury or damage to other property.” Tiara, 110 So. 3d at 401
(emphasis added). Nowhere in Tiara does the Court expressly overrule or depart
from Casa Clara.
In 2711 Hollywood Beach Condo. Ass’n, Inc. v. TRG Holiday, Ltd., the
plaintiff conceded that Casa Clara was still good law following Tiara, and the Third
District must have agreed because it applied the economic loss rule when it affirmed
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a partial summary judgment for a company who supplied components of the fire
suppression system installed in the condominium building. 307 So. 3d 869, 870-71
(Fla. 3d DCA 2020). The Third District explained that the supplier’s fittings were
an integral part of the finished product – the condominium building – and thus did
not injure “other” property. Id., at 870. It held that the economic loss rule barred the
plaintiff’s negligence claims for “damages to replace the [fire suppression system]
and repair damage to the building.” Id., at 871.
The Third District’s decision applying the economic loss rule to bar plaintiff’s
tort claims did not turn on the fact that the defendant was a manufacturer or
distributor of fittings for the fire suppression system rather than its installer in the
building. Rather, the Third District followed Tiara and Casa Clara and held that the
plaintiff “Association bargained for, purchased and received, a building” and
defendant’s parts were just components of what was purchased. Id. at 870-71.
Necessarily, that purchase was the subject of a contract that defined the parties’
bargain.
The decisions in Tiara, Casa Clara, and 2711 Hollywood Beach are
controlling and bar Plaintiff’s negligence and vicarious liability claim. Plaintiff
seeks the costs to repair alleged damages to the townhome buildings themselves due
to alleged defects in the construction of the building envelopes for those buildings.
As reflected in its experts’ damages reports, the only damages claimed by the
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Association relate to repairs to the buildings themselves or their components. Thus,
Florida’s economic loss rule requires entry of partial summary judgment on
Plaintiff’s negligence and vicarious liability claim.
2. Plaintiff’s Motion Presents a False Premise that Subject
Matter Labels Control Application of the Economic Loss
Rule by Citing Cases that do not Involve Application of
the Economic Loss Rule.
Plaintiff, as noted above, cites a host of inapposite cases that Plaintiff asserts
stand for propositions like “this is not a products liability” case, and the townhomes
are an “improvement to real property” and thus, not a “product” based on labels
alone. Motion, pp. 8-12, 14-18. Plaintiff nowhere explains the factual context of
these cases, or why the economic loss rule does or does not apply, because most of
these cases fail to mention, much less apply, the economic loss rule as there is no
reason to do so in these factually inapposite cases.
Plaintiff cites several personal injury cases that address the application of
products liability case law or other doctrines applicable to personal injury tort claims
to the facts of those cases. Motion, pp.10-12. There was no reason for the courts in
those cases to even address the economic loss rule – which was not asserted by the
parties themselves – because the damages sought were not economic damages. See
e.g., Easterday v. Masiello, 518 So. 2d 260 (Fla. 1988) (applying Slavin doctrine in
wrongful death action to bar negligence and strict liability claims because alleged
defect leading to suicide was patent, not latent, to owner); Seitz v. Zac Smith & Co.,
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Inc., 500 So. 2d 706 (Fla. 1st DCA 1987)5 (personal injury action for injuries
sustained by plaintiff when he fell from tower constructed by defendant); Craft v.
Wet N’ Wild, Inc., 489 So. 2d 1221 (Fla. 5th DCA 1986) (personal injury action for
injuries sustained by amusement park patron when riding large water slide
manufactured on site by owner); Neumann v. Davis Water and Waste, Inc., 433 So.
2d 559 (Fla. 2d DCA 1983), review denied, 441 So. 2d 632 (Fla.1983) (wrongful
death action involving child who fell into sewage treatment tank installed by
defendant in sewage treatment plant regulated by the Florida Department of
Environmental Regulation who asserted sovereign immunity as defense); Edward
M. Chadbourne, Inc. v. Vaughn, 491 So.2d 551 (Fla.1986) (personal injury and
wrongful death action involving single-vehicle accident on county road repaved by
defendant under contract with Department of Transportation); Plaza v. Fisher Dev.,
Inc., 971 So. 2d 918 (Fla. 3d DCA 2007) (personal injury action for injuries
sustained by plaintiff during course of his employment when he fell onto conveyor
system installed by defendant contractor); Simmons v. Rave Motion Pictures
Pensacola, L.L.C., 197 So. 3d 644 (Fla. 1st DCA 2016) (personal injury action for
injuries sustained by movie theater patron when theater seat broke due to failure in
welding of seat bottom to remainder of seating system installed by contractor);
5It bears emphasis that the Masiello and Seitz cases relied upon by Plaintiff in the Motion, like
others, pre-date the Florida Supreme Court decisions in Casa Clara and Tiara and thus, they have
no import here for that additional reason.
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Jackson v. L.A.W. Contracting Corp., 481 So. 2d 1290 (Fla. 5th DCA 1986)
(plaintiff sued owner of land injured when car skidded on slippery surface of newly
resurfaced road, and owner sued contractor who installed paving material for
indemnification and contribution).
Plaintiff further cites cases involving actions for damages based on personal
services provided by individuals or entities who may have owed the plaintiff duties
beyond their contracts, such as claims based on alleged fiduciary duties or negligent
or fraudulent misrepresentations. Kuehne v. FSM Capital Management, LLC, 2013
WL 1814903 (S.D. Fla. Apr. 29, 2013) (plaintiff professional golfer seeks damages
for breach of fiduciary duties, fraud, fraudulent misrepresentation, among others,
against golfer’s financial and tax manager); F.D.I.C. v. Floridian Title Grp. Inc.,
2013 WL 5237362 (S.D. Fla. Sept. 17, 2013) (FDIC, as receiver for failed bank,
asserted claims for breach of fiduciary duty and negligent misrepresentation, among
others, against closing agent on five mortgage loans for failing to make certain
disclosures, falsely completing certain forms, and other similar grievances).
Plaintiff also cites cases addressing the meaning of “improvement to real
property” under statutes that have nothing to do with the economic loss rule. Instead,
these cases address arguments about what constitutes an “improvement to real
property” because that is the statutory language that determines the applicability of
the statute of limitations and its included repose provisions. Harrell v. Ryland
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Group, 277 So. 3d 292 (Fla. 1st DCA 2019) (court tasked with determining whether
attic ladder installed at residential home was an “improvement to real property”
under Section 95.11(3)(c) (2016) because defendant contractor argued plaintiff’s
personal injury claim was barred by the statute of repose); Bernard Schoninger
Shopping Ctrs., Ltd. v. J.P.S. Elastomerics, Corp., 102 F.3d 1173 (11th Cir. 1997)
(court determined whether synthetic material attached to existing roof was an
“improvement to real property” under Section 95.11(3)(c) (1995) because defendant
installer of the material asserted plaintiff’s negligent misrepresentation, breach of
warranty and negligence claims were barred by the statute of limitations).
In addition, Plaintiff cites a case that applied the economic loss rule in granting
dismissal of a negligence claim against the developer and general contractor by a
condominium purchaser who purchased the condominium from a previous owner
who plaintiff did not sue. Mann v. Island Resorts Development, Inc., 2008 WL
5381381 (N.D. Fla. Dec. 19, 2008). The court explained this case did not involve
parties who enjoyed privity of contract. Id., at *2. Remarkably, Plaintiff also cites
Martinez v. QBE Specialty Ins. Co., 2018 WL 4354831 (M.D. Fla. Sept. 12, 2018),
arguing the economic loss rule does not bar tort actions against licensed
professionals. Motion, pp. 18-19. However, the court in Martinez granted dismissal
of the plaintiff’s negligence claims because they “are barred by the economic loss
rule.” Id., at *5. The court reasoned there was no difference between the alleged
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failure to perform under the contract and the alleged negligence and thus, the
economic loss rule barred the negligence claims. Id.
Here, Plaintiff is suing on behalf of the townhome owners, all of whom had
contracts with express warranties with Royal Oak for the purchase of the townhomes
at issue. See, pp. 5-6, supra. This supports application of the economic loss rule under
Tiara and Casa Clara even under the cases cited by Plaintiff. See, pp. 11-14, supra.
Finally, Plaintiff cites several non-binding trial court orders that Plaintiff
claims support its position that the economic loss rule does not preclude Plaintiff’s
negligence and vicarious liability claim against Royal Oak. Plaintiff first quotes a
portion of the Seventh Circuit’s decision in Islander Homeowners Ass’n, Inc. v. KB
Home Jacksonville, LLC, No CA19-0670 (Fla. 7th Cir. Ct., Oct. 15, 2019), in which
the court denied defendant contractor’s motion to dismiss the plaintiff’s negligence
claim on the basis that it was barred by the economic loss rule. Motion, p. 12.
Plaintiff, however, excludes from the quotation, the authorities cited by the court in
support of its decision – each of which are inapplicable to the facts of this case and
distinguished by Royal Oak elsewhere in this Response.6
6
The Islander court cites Kuehne and F.D.I.C., which is distinguished on page 12 of this Response
as actions for damages based on personal services provided by individuals or entities who may
have owed the plaintiff duties beyond their contracts. The court also cites Grace & Naeem Uddin,
Inc. v. Singer Architects, Inc., 278 So. 3d 89 (Fla. 4th DCA 2019), which is distinguished on page
19 of this Response as a case involving a supervising architect.
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Plaintiff next cites 22 Lantern, LLC v. Arlington Construction Services, Case
No. 2016-CA-003849 (Fla. 4th Cir. Ct. Sept. 12, 2022), in which the Fourth Circuit
granted the plaintiff’s motion for summary judgment on defendant’s economic loss
rule affirmative defense that had been previously stricken by the court. As explained
by Royal Oak below, the economic loss rule is not an affirmative defense, and Royal
Oak has not pled it as such. Response, p. 18. Plaintiff also cites Segovia at World
Commerce Homeowners’ Ass’n, Inc. v. Mattamy Florida, LLC, Case No. CA20-573
(Fla. 7th Cir. Ct. April 9, 2021) apparently for the proposition that 2711 Hollywood
is inapplicable to Plaintiff’s negligence claims because Royal Oak is not a
manufacturer. However, as explained more fully above, the decision in 2711
Hollywood did not turn on whether the defendant was a manufacturer or distributer,
rather than an installer of the fittings for the fire suppression system. Response, pp.
10-11. Further, the Seventh Circuit order in Segovia merely stated that it disagreed
with defendant’s interpretation of 2711 Hollywood “[a]t this juncture.”
Royal Oak can provide this Court with trial court orders too. 7 Florida trial
courts have concluded “that Tiara should be interpreted only as a limitation on the
economic loss rule which does not overrule Casa Clara.” Order Granting Motion
for Summary Judgment, Cent. Park LV Condo. Ass’n, Inc. v. Summit Contractors,
Inc., et al., No. 2010-CA-015748-O (Fla. Cir. Ct. May 24, 2013) (holding “the
7
These trial court orders will be filed in connection with Royal Oak’s Second Request for Judicial Notice.
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economic loss rule preclude[ed] plaintiff [association] from bringing a tort claim
because the only damages it suffered were to the homes, that is, the products
themselves”). Other trial courts had similarly ruled:
• Order Granting Motion to Dismiss, Siena at Celebration Master Ass’n,
Inc. v. Winter Park Constr. Co., No. 2009-CA-6474 (Fla. Cir. Ct. Sept.
4, 2013) (dismissing a condominium association’s negligence cause of
action based on the economic loss rule because the only damages
alleged to have been suffered were to the condominium units
themselves and not damage to other property);
• Order on Motion to Dismiss, Promenades at Bella Trae Condo. Ass’n,
Inc. v. Pulte Home Corp., et al., No. 2013-CA-3556 (Fla. Cir. Ct. Jan.
28, 2014) (dismissing a negligence claim based on the economic loss
rule in a construction defect case); and
• Order on Motion for Leave to Amend, Artisan Club Condo. Ass’n, Inc.
v. The St. Joe Co., et al., No. 2009-CA-10804 (Fla. Cir. Ct. July 15,
2015) (denying a developer leave to amend to bring negligence claims
against subcontractors in a construction defect case based on the
economic loss rule).
As noted in Royal Oak’s Motion, Florida Federal District Courts, applying
Florida law, likewise have held the economic loss rule bars tort claims by owners in
construction defect cases. See, e.g., Gazzara v. Pulte Home Corp., 207 F. Supp. 3d
1306, 1309 (M.D. Fla. Sept. 8, 2016) (dismissing a homeowner’s negligence claim
based on the economic loss rule and holding “Florida’s economic loss rule bars tort
claims by owners of defective products who suffer solely economic losses”);
Goldson v. KB Home, Case No. 2017 WL 1038065, at *3 (M.D. Fla. March 17,
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2017) (finding the economic loss rule barred a homeowner’s fraud claim against a
builder).
In sum, Plaintiff cannot and has not cited this Court any District Court
authority that holds the economic loss rule does not bar Plaintiff’s negligence and
vicarious liability claim solely for economic losses or damages. That claim is barred
by the economic loss rule under the controlling precedent of Tiara, Casa Clara, and
2711 Hollywood Beach.
3. Plaintiff, not Royal Oak, labels the Economic Loss Rule as an
Affirmative Defense but Presents no Controlling Case that
the Economic Loss Rule does not Bar Plaintiff’s Tort Claim.
Plaintiff argues that the economic loss rule is an affirmative defense and,
therefore, Royal Oak bears the burden of proof. Motion, pp. 7-8. This is not true.
Royal Oak asserted “defenses,” which included the economic loss rule, but expressly
stated that Royal Oak did not assume the burden of proof or persuasion “unless
required by law.” Royal Oak Answer, p. 8. Plaintiff cites no authority in the Motion
that the economic loss rule is an “affirmative defense” placing the burden of proof
on Royal Oak because the economic loss rule is not an affirmative defense. In fact,
Plaintiff contradicts its own argument by citing Moore Meats, Inc. v. Strawn, 313
So. 2d 660, 662 (Fla. 1975) for the proposition that the economic loss rule is “not an
affirmative defense, but a restatement of various rules of contract law… .” Motion,
pp. 7-8. Florida law is clear that the economic loss rule is a bar to claims brought in
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tort for purely economic losses absent exceptions inapplicable here. See Tiara, Casa
Clara, and 2711 Hollywood Beach, supra.
4. Plaintiff did not File a Professional Negligence Claim
because No Such Claim Exists against Royal Oak.
Plaintiff alternatively moves for partial summary judgment arguing the
economic loss rule does not apply to licensed professionals. Motion, pp. 18-20. This
argument is meritless for several reasons.
First, Plaintiff did not sue the alleged “licensed professional” for any reason
in this case. Plaintiff correctly identifies that Mr. Colby Franks was a certified
general contractor for Royal Oak. Motion, p. 20. Plaintiff, however, did not sue Mr.
Franks for professional negligence.
Second, certified general contractors are not “licensed professionals” subject
to liability for professional negligence. See Broward County v. CH2M Hill, Inc., 302
So. 2d 895, 902 (Fla. 4th DCA 2020) (general contractor is not a professional subject
to apportionment liability under Section 768.81, Florida Statutes). Plaintiff cites no
case that a licensed general contractor, as opposed to a licensed engineer or architect,
is liable under a professional negligence theory.
Further, Plaintiff’s cited cases are inapposite here: Grace and Naeem Uddin,
Inc. v. Singer Architects, Inc., 278 So. 3d 89 (Fla. 4th DCA 2019) (supervising
architect); Jerue v. Drummond Co., 2017 WL 10876737 (Fla. M.D. Aug.17, 2017)
(dicta citation because case involved alleged property contamination by mining
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company and no professional liability claim); Sunset Beach Investments, LLC v.
Kimley-Horn and Associates, Inc., 207 So. 3d 1012, 1017-18 (Fla. 4th DCA 2017)
(affirming summary judgment for “engineer intern” on claim for professional
negligence). Plaintiff also cites Martinez v. QBE Specialty Ins. Co., where, as noted
above, the court granted dismissal of the plaintiff’s negligence claims because they
“are barred by the economic loss rule.” 2018 WL 43554831, at * 5.
Plaintiff cannot cite this Court any case holding a licensed general contractor
liable for professional negligence because the Florida Supreme Court held that only
professionals subject to a minimum four-year degree for their professional license
may be considered subject to professional negligence liability. Garden v. Frier, 602
So. 2d 1273, 1275 (Fla. 1992) (holding that a “profession” subject to professional
malpractice is “any vocation requiring at a minimum a four-year college degree
before licensing is possible in Florida”). Plaintiff offers no evidence that a general
contractor license requires a four-year degree because it does not. Thus, professional
negligence claims cannot be asserted against licensed general contractors like Mr.
Franks.
Third, if Plaintiff cannot sue Mr. Franks for professional negligence, Plaintiff
cannot sue Royal Oak for Mr. Franks’ alleged professional negligence. And, again,
Plaintiff has asserted no claim against Mr. Franks or Royal Oak for professional
negligence.
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For these reasons, Plaintiff’s argument on partial summary judgment that the
economic loss rule does not apply to licensed professionals is meritless. This
argument has no factual or legal basis and no real meaning in this case.
5. Plaintiff’s Argument that the Economic Loss Rule does Not
Bar Plaintiff’s Statutory Claim under Section 553.84 Ignores
Royal Oak’s Motion Seeking Partial Summary Judgment
Only for Plaintiff’s Negligence and Vicarious Liability
Claim.
Plaintiff argues that the economic loss rule does not bar statutory claims under
Section 553.84, Florida Statutes. Motion, pp. 20-21. Royal Oak did not move for
partial summary judgment on the economic loss rule on Plaintiff’s claim for breach
of the Florida Building Code under Section 553.84 in Count II of Plaintiff’s Second
Amended Complaint. Royal Oak only moved for partial summary judgment on the
economic loss rule as to Count I, Plaintiff’s negligence and vicarious liability claim
against Royal Oak. See Royal Oak Motion. Thus, the Court should deny this
argument as moot.
III. CONCLUSION
For all the foregoing reasons, Plaintiff’s Motion should be denied.
Respectfully submitted,
/s/ James Michael Walls
James Michael Walls
Florida Bar No. 706272
Luis Prats
Florida Bar No. 329096
Robin H. Leavengood
21
135200568.1
Florida Bar No. 0547751
Fiona E. Foley
Florida Bar No. 118668
Alexa M. Nordman
Florida Bar No. 1025863
CARLTON FIELDS, P.A.
4221 W. Boy Scout Boulevard
Tampa, FL 33607-5780
Telephone: (813) 223-7000
Facsimile: (813) 229-4133
mwalls@carltonfields.com
lprats@carltonfields.com
rleavengood@carltonfields.com
anordman@carltonfields.com
slambe@carltonfields.com
ffoley@carltonfields.com
nbonilla@carltonfields.com
krick@carltonfields.com
fgonzalez@carltonfields.com
Attorneys for Defendant/Crossclaim
Plaintiff, Royal Oak Homes, LLC
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on February 21, 2024, the foregoing was
electronically filed with the Clerk of the Court by using the E-filing Portal, which
will electronically serve this document to all registered counsel of record.
/s/ James Michael Walls
22
135200568.1
Preview
Filing # 192455528 E-Filed 02/21/2024 04:27:53 PM IN THE CIRCUIT COURT OF THE NINTH JUDICIAL CIRCUIT IN AND FOR OSCEOLA COUNTY, FLORIDA VILLAS AT EMERALD LAKE HOMEOWNERS ASSOCIATION, INC., a Florida not for profit corporation, Plaintiff, v. CASE NO.: 2020-CA-002942-ON ROYAL OAK HOMES, LLC, a Florida limited liability company; ADVANCED ROYAL OAK HOMES, LLC’S WRAPPING AND CONCRETE RESPONSE AND SOLUTIONS OF CENTRAL FLORIDA, MEMORANDUM OF LAW IN INC., a Florida corporation; DON KING’S OPPOSITION TO PLAINTIFF’S CONCRETE, INC., a Florida corporation; OMNIBUS MOTION FOR HUGH MACDONALD CONSTRUCTION, PARTIAL SUMMARY INC., a Florida corporation; IMPERIAL JUDGMENT AS TO VARIOUS BUILDING CORPORATION, a Florida DEFENDANTS’ ECONOMIC corporation; PREMIER PLASTERING OF LOSS RULE AFFIRMATIVE CENTRAL FLORIDA, INC. n/k/a TGK DEFENSE STUCCO, INC., a Florida corporation; WEATHERMASTER BUILDING PRODUCTS, INC., a Florida corporation; WEINTRAUB INSPECTIONS & FORENSICS, INC. n/k/a WEINTRAUB ENGINEERING AND INSPECTIONS, INC., a Florida corporation; THE DIMILLO GROUP, LLC, a Florida limited liability company; WOLF’S IRRIGATION & LANDSCAPING, INC., a Florida corporation; SUMMERPARK HOMES, INC., a Florida corporation; BROWN + COMPANY ARCHITECTURE, INC., a Florida corporation; EXPERT PAINTING & PRESSURE WASHING, INC., a Florida corporation, Defendants. 1 135200568.1 / ROYAL OAK HOMES, LLC, a Florida limited liability company, Crossclaim Plaintiff, v. ADVANCED WRAPPING AND CONCRETE SOLUTIONS OF CENTRAL FLORIDA, INC., a Florida corporation; DON KING’S CONCRETE, INC., a Florida corporation; HUGH MACDONALD CONSTRUCTION, INC., a Florida corporation; IMPERIAL BUILDING CORPORATION, a Florida corporation; PREMIER PLASTERING OF CENTRAL FLORIDA, INC. n/k/a TGK STUCCO, INC., a Florida corporation; WEATHERMASTER BUILDING PRODUCTS, INC., a Florida corporation; WEINTRAUB INSPECTIONS & FORENSICS, INC. n/k/a WEINTRAUB ENGINEERING AND INSPECTIONS, INC., a Florida corporation; WOLF’S IRRIGATION & LANDSCAPING, INC., a Florida corporation; BROWN + COMPANY ARCHITECTURE, INC., a Florida corporation; EXPERT PAINTING & PRESSURE WASHING, INC., a Florida corporation, Crossclaim Defendants. / WEATHERMASTER BUILDING PRODUCTS, INC., a Florida Corporation, Third-Party Plaintiff, 2 135200568.1 v. ALL GLASS INSTALLATION COPRP., a Florida corporation; CASEY HAWKINS GLASS, INC., a Florida corporation; DEAN NESBIT, LLC, a Florida limited liability company; HELBERG ENGERPRISES, LLC, a Florida limited liability company; HOBBIT WINDOWS, LLC, a Florida limited liability company; T&M CONSTRUCTION OF SANFORD, INC., a Florida corporation; WELL DONE WINDOWS, INC., a Florida corporation; and WELL HUNG WINDOWS & DOORS, LLC, a Florida limited liability company, Third-Party Defendants. / ROYAL OAK HOMES, LLC’S RESPONSE AND MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO VARIOUS DEFENDANTS’ ECONOMIC LOSS RULE AFFIRMATIVE DEFENSE Defendant, Royal Oak Homes, LLC (“Royal Oak”), responds in opposition to Plaintiff, Villas at Emerald Lake Homeowners Association, Inc.’s (“Association” or “Plaintiff”), Motion for Partial Summary Judgment as to Various Defendants’ Economic Loss Rule Affirmative Defense (“Motion”). Plaintiff’s argument for partial summary judgment is based on “labels” without any appreciation for the legal reasoning behind those “labels.” For example, the restriction of the economic loss rule to “products liability” cases by the Florida Supreme Court in Tiara Condo. Assoc., Inc. v. Marsh & McLennan Cos., Inc., 110 3 135200568.1 So. 3d 399 (Fla. 2013) did not turn on simplistic labeling of the subject matter of actions. Rather, the Tiara Court limited the economic loss rule to products liability cases because the “essence of the early holdings discussing the” economic loss rule “is to prohibit a party from suing in tort for purely economic losses to a product or object provided to another for consideration” because “contract principles [are] more appropriate than tort principles without an accompanying physical injury or property damage.” Id. at 405 (citations omitted) (emphasis added). The principle behind the economic loss rule indisputably applies to this case. Plaintiff cites no binding authority to the contrary in the Motion. Another example is Plaintiff’s labeling of Royal Oak’s economic loss rule as an “affirmative defense.” That label is incorrect. Royal Oak expressly asserted “defenses” and expressly stated that Royal Oak did not assume the burden of proof or persuasion “unless required by law.” Royal Oak Homes, LLC’s Answer and Defenses to Plaintiff’s Second Amended Complaint and Second Amended Crossclaim (“Royal Oak Answer”), p. 8. Plaintiff cites no authority in the Motion that the economic loss rule is an “affirmative defense” placing the burden of proof on Royal Oak because the economic loss rule is not an affirmative defense. It is a bar to claims brought in tort for purely economic losses absent exceptions that are inapplicable here. 4 135200568.1 Plaintiff fails to cite in its Motion or otherwise provide this Court with any controlling decision that holds the economic loss rule does not bar Plaintiff’s negligence and vicarious liability claim for purely economic losses in the form of alleged repair costs to townhomes admittedly the subject of express contracts and warranties between Royal Oak and the townhome owners Plaintiff sues on behalf of in this claim. As a result, Royal Oak moved for partial summary judgment as to Count I of Plaintiff’s Second Amended Complaint for Negligence and Vicarious Liability (“Royal Oak’s Motion”). Royal Oak’s Motion should be granted, and the Motion should be denied, for the reasons provided in Royal Oak’s Motion and those provided in response to the Motion. I. INTRODUCTION AND STATEMENT OF FACTS Plaintiff sues Royal Oak and its subcontractors for alleged construction defects at the Villas at Emerald Lake townhome community located in Kissimmee, Osceola County, Florida (“Emerald Lake”), constructed by Royal Oak’s subcontractors. Plaintiff asserts claims against Royal Oak for negligence and vicarious liability (Count I), breach of Florida Building Code (Count II), and breach of implied warranties (Count III), in its Second Amended Complaint. Plaintiff asserts no breach of contract claim, even though every original townhome owner had a written purchase agreement with Royal Oak that provided express warranties to 5 135200568.1 those owners. Affidavit of Jeff Fellows in Support of Royal Oak Homes, LLC’s Motion for Partial Summary Judgment as to Claims for Breach of Implied Warranties and Consequential Damages, ¶ 7. 1 The only damages Plaintiff identifies are economic losses, that is, costs to repair or the loss of the contractual “benefit of the bargain.” Plaintiff alleges in Count I that Plaintiff, as the homeowners’ association, “has been and will be required to expend large sums of money for the repair and maintenance of the Royal Oak townhomes and common areas and for damages caused by the defects and deficiencies.” Second Amended Complaint, ¶ 72. Plaintiff makes similar allegations in Counts II and III. Id., ¶¶ 79, 87. Plaintiff’s experts further opine only on costs to remove and replace the building envelope, i.e. exterior stucco siding and roofs, on the townhomes in Emerald Lake for the alleged construction installation defects. See Deposition of Felix Martin, (“Martin Dep.”), 35:21-25, 36:1-15, 37:2-14, Ex. 6, pp. 3-4, 8-19; Deposition of Sean Heaney, (“Heaney Dep.”), 35:3-10, 36:6-16, 37:4-7, Ex. 27. 2 Plaintiff has made no claim for personal injury or damage to other property. Plaintiff’s “Background and Introduction” section in the Motion omits any reference to the nature of Plaintiff’s claim for negligence and vicarious liability, 1 The Affidavit of Jeff Fellows was filed separately with this Court on January 18, 2024. 2 The deposition transcripts of Plaintiff’s experts and relevant exhibits were separately filed with the Court on January 19, 2024. 6 135200568.1 specifically the fact that Plaintiff seeks to recover only economic loss damages. Motion, pp. 2-3. Plaintiff, however, indisputably seeks to recover only economic loss damages. II. Argument and Supporting Memorandum of Law A. Plaintiff’s Tort Claim Fails as a Matter of Law, thus, Plaintiff’s Motion Must be Denied. 1. Plaintiff’s Negligence and Vicarious Liability Claim is Barred by the Economic Loss Rule. Plaintiff’s Motion focuses entirely on the label of a case based on the Florida Supreme Court’s conclusory statement that the economic loss rule is limited to “cases involving products liability.” Tiara Condo. Assoc., Inc., 110 So. 3d at 407. Plaintiff cites a host of cases, some that reference this conclusion in Tiara, involving personal injury, negligent misrepresentation or professional malpractice, or the application of statutory terms for purposes of the statute of repose. See Motion, pp. 8-12, 14-17.3 Most of these decisions, as discussed in more detail below, do not even mention the economic loss rule because it has no application to the far different facts of those cases. Plaintiff’s Motion therefore misses the point of the economic loss rule following Tiara. 3 Plaintiff further references several trial court orders in the Motion, pp.12-14 and 16, but these trial court orders are non-binding and inadmissible as summary judgment evidence because these orders are not self-authenticating and were not the subject of a Request for Judicial Notice. Fla. Stat. §90.202(6). 7 135200568.1 The economic loss rule applies where contract and warranty principles exist between parties to address solely economic losses that should not be circumvented by one party bringing an action in tort to recover such losses. Tiara, at 402. (citations omitted). As the Court explained, “[w]hen the parties are in privity, contract principles are generally more appropriate for determining remedies for consequential damages that the parties have, or could have, addressed through their contractual agreement.” Id. This same principle applies in the products liability context, even absent privity, because products are sold with warranties that cover the expectations of the parties. As the Court further explained, “strict liability has not replaced warranty law as the remedy for frustrated economic expectations in the sale of goods.” Id., at 405, quoting Indemnity Ins. Co. of North America v. American Aviation, Inc., 891 So. 2d 532, 541 (Fla. 2004).4 For this reason, the Court extended the economic loss rule to bar tort claims in cases involving any goods where contractual arrangements and warranties defined economic expectations even absent direct privity between the plaintiff and the defendant. Id., at 403-406. That is the case with Casa Clara Condo. Ass’n, Inc. v. Charley Toppino and Sons, 620 So. 2d 1244 (Fla. 1993). Casa Clara involved tort claims of construction defects by a homeowner who had no contract or privity with the defendant 4Plaintiff cites Indemnity Ins. Co. of North America v. American Aviation, Inc., 891 So. 2d 532 (Fla. 2004) in support of the Motion despite the fact that the case supports Royal Oak’s position, not Plaintiff’s position. Motion, pp. 14-15. 8 135200568.1 contractor. 620 So. 2d at 1245. The Court affirmed the bar of those claims under the economic loss rule and further explained that the building, including its component parts, is the relevant “product.” Id., at 1246. The Court explained why the building, and its components, was a “product” subject to the economic loss rule, ruling “[i]f a house causes economic disappointment by not meeting a purchaser’s expectations, the resulting failure to receive the benefit of the bargain is a core concern of contract, not tort, law.” Id., at 1247. Here, Plaintiff sues on behalf of homeowners who were in privity of contract with Royal Oak, but Plaintiff fails to assert any breach of contract claim on their behalf. The Court in Tiara favorably cites its Casa Clara decision in its “Origin and Development of the Economic Loss Rule” section. Tiara, 110 So. 3d at 401. Indeed, the Court in Tiara quotes Casa Clara when it explained that “[e]conomic losses” barred by this rule include “damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits – without any claim of personal injury or damage to other property.” Tiara, 110 So. 3d at 401 (emphasis added). Nowhere in Tiara does the Court expressly overrule or depart from Casa Clara. In 2711 Hollywood Beach Condo. Ass’n, Inc. v. TRG Holiday, Ltd., the plaintiff conceded that Casa Clara was still good law following Tiara, and the Third District must have agreed because it applied the economic loss rule when it affirmed 9 135200568.1 a partial summary judgment for a company who supplied components of the fire suppression system installed in the condominium building. 307 So. 3d 869, 870-71 (Fla. 3d DCA 2020). The Third District explained that the supplier’s fittings were an integral part of the finished product – the condominium building – and thus did not injure “other” property. Id., at 870. It held that the economic loss rule barred the plaintiff’s negligence claims for “damages to replace the [fire suppression system] and repair damage to the building.” Id., at 871. The Third District’s decision applying the economic loss rule to bar plaintiff’s tort claims did not turn on the fact that the defendant was a manufacturer or distributor of fittings for the fire suppression system rather than its installer in the building. Rather, the Third District followed Tiara and Casa Clara and held that the plaintiff “Association bargained for, purchased and received, a building” and defendant’s parts were just components of what was purchased. Id. at 870-71. Necessarily, that purchase was the subject of a contract that defined the parties’ bargain. The decisions in Tiara, Casa Clara, and 2711 Hollywood Beach are controlling and bar Plaintiff’s negligence and vicarious liability claim. Plaintiff seeks the costs to repair alleged damages to the townhome buildings themselves due to alleged defects in the construction of the building envelopes for those buildings. As reflected in its experts’ damages reports, the only damages claimed by the 10 135200568.1 Association relate to repairs to the buildings themselves or their components. Thus, Florida’s economic loss rule requires entry of partial summary judgment on Plaintiff’s negligence and vicarious liability claim. 2. Plaintiff’s Motion Presents a False Premise that Subject Matter Labels Control Application of the Economic Loss Rule by Citing Cases that do not Involve Application of the Economic Loss Rule. Plaintiff, as noted above, cites a host of inapposite cases that Plaintiff asserts stand for propositions like “this is not a products liability” case, and the townhomes are an “improvement to real property” and thus, not a “product” based on labels alone. Motion, pp. 8-12, 14-18. Plaintiff nowhere explains the factual context of these cases, or why the economic loss rule does or does not apply, because most of these cases fail to mention, much less apply, the economic loss rule as there is no reason to do so in these factually inapposite cases. Plaintiff cites several personal injury cases that address the application of products liability case law or other doctrines applicable to personal injury tort claims to the facts of those cases. Motion, pp.10-12. There was no reason for the courts in those cases to even address the economic loss rule – which was not asserted by the parties themselves – because the damages sought were not economic damages. See e.g., Easterday v. Masiello, 518 So. 2d 260 (Fla. 1988) (applying Slavin doctrine in wrongful death action to bar negligence and strict liability claims because alleged defect leading to suicide was patent, not latent, to owner); Seitz v. Zac Smith & Co., 11 135200568.1 Inc., 500 So. 2d 706 (Fla. 1st DCA 1987)5 (personal injury action for injuries sustained by plaintiff when he fell from tower constructed by defendant); Craft v. Wet N’ Wild, Inc., 489 So. 2d 1221 (Fla. 5th DCA 1986) (personal injury action for injuries sustained by amusement park patron when riding large water slide manufactured on site by owner); Neumann v. Davis Water and Waste, Inc., 433 So. 2d 559 (Fla. 2d DCA 1983), review denied, 441 So. 2d 632 (Fla.1983) (wrongful death action involving child who fell into sewage treatment tank installed by defendant in sewage treatment plant regulated by the Florida Department of Environmental Regulation who asserted sovereign immunity as defense); Edward M. Chadbourne, Inc. v. Vaughn, 491 So.2d 551 (Fla.1986) (personal injury and wrongful death action involving single-vehicle accident on county road repaved by defendant under contract with Department of Transportation); Plaza v. Fisher Dev., Inc., 971 So. 2d 918 (Fla. 3d DCA 2007) (personal injury action for injuries sustained by plaintiff during course of his employment when he fell onto conveyor system installed by defendant contractor); Simmons v. Rave Motion Pictures Pensacola, L.L.C., 197 So. 3d 644 (Fla. 1st DCA 2016) (personal injury action for injuries sustained by movie theater patron when theater seat broke due to failure in welding of seat bottom to remainder of seating system installed by contractor); 5It bears emphasis that the Masiello and Seitz cases relied upon by Plaintiff in the Motion, like others, pre-date the Florida Supreme Court decisions in Casa Clara and Tiara and thus, they have no import here for that additional reason. 12 135200568.1 Jackson v. L.A.W. Contracting Corp., 481 So. 2d 1290 (Fla. 5th DCA 1986) (plaintiff sued owner of land injured when car skidded on slippery surface of newly resurfaced road, and owner sued contractor who installed paving material for indemnification and contribution). Plaintiff further cites cases involving actions for damages based on personal services provided by individuals or entities who may have owed the plaintiff duties beyond their contracts, such as claims based on alleged fiduciary duties or negligent or fraudulent misrepresentations. Kuehne v. FSM Capital Management, LLC, 2013 WL 1814903 (S.D. Fla. Apr. 29, 2013) (plaintiff professional golfer seeks damages for breach of fiduciary duties, fraud, fraudulent misrepresentation, among others, against golfer’s financial and tax manager); F.D.I.C. v. Floridian Title Grp. Inc., 2013 WL 5237362 (S.D. Fla. Sept. 17, 2013) (FDIC, as receiver for failed bank, asserted claims for breach of fiduciary duty and negligent misrepresentation, among others, against closing agent on five mortgage loans for failing to make certain disclosures, falsely completing certain forms, and other similar grievances). Plaintiff also cites cases addressing the meaning of “improvement to real property” under statutes that have nothing to do with the economic loss rule. Instead, these cases address arguments about what constitutes an “improvement to real property” because that is the statutory language that determines the applicability of the statute of limitations and its included repose provisions. Harrell v. Ryland 13 135200568.1 Group, 277 So. 3d 292 (Fla. 1st DCA 2019) (court tasked with determining whether attic ladder installed at residential home was an “improvement to real property” under Section 95.11(3)(c) (2016) because defendant contractor argued plaintiff’s personal injury claim was barred by the statute of repose); Bernard Schoninger Shopping Ctrs., Ltd. v. J.P.S. Elastomerics, Corp., 102 F.3d 1173 (11th Cir. 1997) (court determined whether synthetic material attached to existing roof was an “improvement to real property” under Section 95.11(3)(c) (1995) because defendant installer of the material asserted plaintiff’s negligent misrepresentation, breach of warranty and negligence claims were barred by the statute of limitations). In addition, Plaintiff cites a case that applied the economic loss rule in granting dismissal of a negligence claim against the developer and general contractor by a condominium purchaser who purchased the condominium from a previous owner who plaintiff did not sue. Mann v. Island Resorts Development, Inc., 2008 WL 5381381 (N.D. Fla. Dec. 19, 2008). The court explained this case did not involve parties who enjoyed privity of contract. Id., at *2. Remarkably, Plaintiff also cites Martinez v. QBE Specialty Ins. Co., 2018 WL 4354831 (M.D. Fla. Sept. 12, 2018), arguing the economic loss rule does not bar tort actions against licensed professionals. Motion, pp. 18-19. However, the court in Martinez granted dismissal of the plaintiff’s negligence claims because they “are barred by the economic loss rule.” Id., at *5. The court reasoned there was no difference between the alleged 14 135200568.1 failure to perform under the contract and the alleged negligence and thus, the economic loss rule barred the negligence claims. Id. Here, Plaintiff is suing on behalf of the townhome owners, all of whom had contracts with express warranties with Royal Oak for the purchase of the townhomes at issue. See, pp. 5-6, supra. This supports application of the economic loss rule under Tiara and Casa Clara even under the cases cited by Plaintiff. See, pp. 11-14, supra. Finally, Plaintiff cites several non-binding trial court orders that Plaintiff claims support its position that the economic loss rule does not preclude Plaintiff’s negligence and vicarious liability claim against Royal Oak. Plaintiff first quotes a portion of the Seventh Circuit’s decision in Islander Homeowners Ass’n, Inc. v. KB Home Jacksonville, LLC, No CA19-0670 (Fla. 7th Cir. Ct., Oct. 15, 2019), in which the court denied defendant contractor’s motion to dismiss the plaintiff’s negligence claim on the basis that it was barred by the economic loss rule. Motion, p. 12. Plaintiff, however, excludes from the quotation, the authorities cited by the court in support of its decision – each of which are inapplicable to the facts of this case and distinguished by Royal Oak elsewhere in this Response.6 6 The Islander court cites Kuehne and F.D.I.C., which is distinguished on page 12 of this Response as actions for damages based on personal services provided by individuals or entities who may have owed the plaintiff duties beyond their contracts. The court also cites Grace & Naeem Uddin, Inc. v. Singer Architects, Inc., 278 So. 3d 89 (Fla. 4th DCA 2019), which is distinguished on page 19 of this Response as a case involving a supervising architect. 15 135200568.1 Plaintiff next cites 22 Lantern, LLC v. Arlington Construction Services, Case No. 2016-CA-003849 (Fla. 4th Cir. Ct. Sept. 12, 2022), in which the Fourth Circuit granted the plaintiff’s motion for summary judgment on defendant’s economic loss rule affirmative defense that had been previously stricken by the court. As explained by Royal Oak below, the economic loss rule is not an affirmative defense, and Royal Oak has not pled it as such. Response, p. 18. Plaintiff also cites Segovia at World Commerce Homeowners’ Ass’n, Inc. v. Mattamy Florida, LLC, Case No. CA20-573 (Fla. 7th Cir. Ct. April 9, 2021) apparently for the proposition that 2711 Hollywood is inapplicable to Plaintiff’s negligence claims because Royal Oak is not a manufacturer. However, as explained more fully above, the decision in 2711 Hollywood did not turn on whether the defendant was a manufacturer or distributer, rather than an installer of the fittings for the fire suppression system. Response, pp. 10-11. Further, the Seventh Circuit order in Segovia merely stated that it disagreed with defendant’s interpretation of 2711 Hollywood “[a]t this juncture.” Royal Oak can provide this Court with trial court orders too. 7 Florida trial courts have concluded “that Tiara should be interpreted only as a limitation on the economic loss rule which does not overrule Casa Clara.” Order Granting Motion for Summary Judgment, Cent. Park LV Condo. Ass’n, Inc. v. Summit Contractors, Inc., et al., No. 2010-CA-015748-O (Fla. Cir. Ct. May 24, 2013) (holding “the 7 These trial court orders will be filed in connection with Royal Oak’s Second Request for Judicial Notice. 16 135200568.1 economic loss rule preclude[ed] plaintiff [association] from bringing a tort claim because the only damages it suffered were to the homes, that is, the products themselves”). Other trial courts had similarly ruled: • Order Granting Motion to Dismiss, Siena at Celebration Master Ass’n, Inc. v. Winter Park Constr. Co., No. 2009-CA-6474 (Fla. Cir. Ct. Sept. 4, 2013) (dismissing a condominium association’s negligence cause of action based on the economic loss rule because the only damages alleged to have been suffered were to the condominium units themselves and not damage to other property); • Order on Motion to Dismiss, Promenades at Bella Trae Condo. Ass’n, Inc. v. Pulte Home Corp., et al., No. 2013-CA-3556 (Fla. Cir. Ct. Jan. 28, 2014) (dismissing a negligence claim based on the economic loss rule in a construction defect case); and • Order on Motion for Leave to Amend, Artisan Club Condo. Ass’n, Inc. v. The St. Joe Co., et al., No. 2009-CA-10804 (Fla. Cir. Ct. July 15, 2015) (denying a developer leave to amend to bring negligence claims against subcontractors in a construction defect case based on the economic loss rule). As noted in Royal Oak’s Motion, Florida Federal District Courts, applying Florida law, likewise have held the economic loss rule bars tort claims by owners in construction defect cases. See, e.g., Gazzara v. Pulte Home Corp., 207 F. Supp. 3d 1306, 1309 (M.D. Fla. Sept. 8, 2016) (dismissing a homeowner’s negligence claim based on the economic loss rule and holding “Florida’s economic loss rule bars tort claims by owners of defective products who suffer solely economic losses”); Goldson v. KB Home, Case No. 2017 WL 1038065, at *3 (M.D. Fla. March 17, 17 135200568.1 2017) (finding the economic loss rule barred a homeowner’s fraud claim against a builder). In sum, Plaintiff cannot and has not cited this Court any District Court authority that holds the economic loss rule does not bar Plaintiff’s negligence and vicarious liability claim solely for economic losses or damages. That claim is barred by the economic loss rule under the controlling precedent of Tiara, Casa Clara, and 2711 Hollywood Beach. 3. Plaintiff, not Royal Oak, labels the Economic Loss Rule as an Affirmative Defense but Presents no Controlling Case that the Economic Loss Rule does not Bar Plaintiff’s Tort Claim. Plaintiff argues that the economic loss rule is an affirmative defense and, therefore, Royal Oak bears the burden of proof. Motion, pp. 7-8. This is not true. Royal Oak asserted “defenses,” which included the economic loss rule, but expressly stated that Royal Oak did not assume the burden of proof or persuasion “unless required by law.” Royal Oak Answer, p. 8. Plaintiff cites no authority in the Motion that the economic loss rule is an “affirmative defense” placing the burden of proof on Royal Oak because the economic loss rule is not an affirmative defense. In fact, Plaintiff contradicts its own argument by citing Moore Meats, Inc. v. Strawn, 313 So. 2d 660, 662 (Fla. 1975) for the proposition that the economic loss rule is “not an affirmative defense, but a restatement of various rules of contract law… .” Motion, pp. 7-8. Florida law is clear that the economic loss rule is a bar to claims brought in 18 135200568.1 tort for purely economic losses absent exceptions inapplicable here. See Tiara, Casa Clara, and 2711 Hollywood Beach, supra. 4. Plaintiff did not File a Professional Negligence Claim because No Such Claim Exists against Royal Oak. Plaintiff alternatively moves for partial summary judgment arguing the economic loss rule does not apply to licensed professionals. Motion, pp. 18-20. This argument is meritless for several reasons. First, Plaintiff did not sue the alleged “licensed professional” for any reason in this case. Plaintiff correctly identifies that Mr. Colby Franks was a certified general contractor for Royal Oak. Motion, p. 20. Plaintiff, however, did not sue Mr. Franks for professional negligence. Second, certified general contractors are not “licensed professionals” subject to liability for professional negligence. See Broward County v. CH2M Hill, Inc., 302 So. 2d 895, 902 (Fla. 4th DCA 2020) (general contractor is not a professional subject to apportionment liability under Section 768.81, Florida Statutes). Plaintiff cites no case that a licensed general contractor, as opposed to a licensed engineer or architect, is liable under a professional negligence theory. Further, Plaintiff’s cited cases are inapposite here: Grace and Naeem Uddin, Inc. v. Singer Architects, Inc., 278 So. 3d 89 (Fla. 4th DCA 2019) (supervising architect); Jerue v. Drummond Co., 2017 WL 10876737 (Fla. M.D. Aug.17, 2017) (dicta citation because case involved alleged property contamination by mining 19 135200568.1 company and no professional liability claim); Sunset Beach Investments, LLC v. Kimley-Horn and Associates, Inc., 207 So. 3d 1012, 1017-18 (Fla. 4th DCA 2017) (affirming summary judgment for “engineer intern” on claim for professional negligence). Plaintiff also cites Martinez v. QBE Specialty Ins. Co., where, as noted above, the court granted dismissal of the plaintiff’s negligence claims because they “are barred by the economic loss rule.” 2018 WL 43554831, at * 5. Plaintiff cannot cite this Court any case holding a licensed general contractor liable for professional negligence because the Florida Supreme Court held that only professionals subject to a minimum four-year degree for their professional license may be considered subject to professional negligence liability. Garden v. Frier, 602 So. 2d 1273, 1275 (Fla. 1992) (holding that a “profession” subject to professional malpractice is “any vocation requiring at a minimum a four-year college degree before licensing is possible in Florida”). Plaintiff offers no evidence that a general contractor license requires a four-year degree because it does not. Thus, professional negligence claims cannot be asserted against licensed general contractors like Mr. Franks. Third, if Plaintiff cannot sue Mr. Franks for professional negligence, Plaintiff cannot sue Royal Oak for Mr. Franks’ alleged professional negligence. And, again, Plaintiff has asserted no claim against Mr. Franks or Royal Oak for professional negligence. 20 135200568.1 For these reasons, Plaintiff’s argument on partial summary judgment that the economic loss rule does not apply to licensed professionals is meritless. This argument has no factual or legal basis and no real meaning in this case. 5. Plaintiff’s Argument that the Economic Loss Rule does Not Bar Plaintiff’s Statutory Claim under Section 553.84 Ignores Royal Oak’s Motion Seeking Partial Summary Judgment Only for Plaintiff’s Negligence and Vicarious Liability Claim. Plaintiff argues that the economic loss rule does not bar statutory claims under Section 553.84, Florida Statutes. Motion, pp. 20-21. Royal Oak did not move for partial summary judgment on the economic loss rule on Plaintiff’s claim for breach of the Florida Building Code under Section 553.84 in Count II of Plaintiff’s Second Amended Complaint. Royal Oak only moved for partial summary judgment on the economic loss rule as to Count I, Plaintiff’s negligence and vicarious liability claim against Royal Oak. See Royal Oak Motion. Thus, the Court should deny this argument as moot. III. CONCLUSION For all the foregoing reasons, Plaintiff’s Motion should be denied. Respectfully submitted, /s/ James Michael Walls James Michael Walls Florida Bar No. 706272 Luis Prats Florida Bar No. 329096 Robin H. Leavengood 21 135200568.1 Florida Bar No. 0547751 Fiona E. Foley Florida Bar No. 118668 Alexa M. Nordman Florida Bar No. 1025863 CARLTON FIELDS, P.A. 4221 W. Boy Scout Boulevard Tampa, FL 33607-5780 Telephone: (813) 223-7000 Facsimile: (813) 229-4133 mwalls@carltonfields.com lprats@carltonfields.com rleavengood@carltonfields.com anordman@carltonfields.com slambe@carltonfields.com ffoley@carltonfields.com nbonilla@carltonfields.com krick@carltonfields.com fgonzalez@carltonfields.com Attorneys for Defendant/Crossclaim Plaintiff, Royal Oak Homes, LLC CERTIFICATE OF SERVICE I HEREBY CERTIFY that on February 21, 2024, the foregoing was electronically filed with the Clerk of the Court by using the E-filing Portal, which will electronically serve this document to all registered counsel of record. /s/ James Michael Walls 22 135200568.1