Considerations before implementing Florida's civil theft statute.

• Author: Osherow, Mark R.

It has become common practice, and something of an automatic-pilot response, to propound civil theft claims in cases where money or nonpecuniary property is wrongfully and fraudulently obtained by a third party. Florida's statutory based civil theft cause of action(1) is the popular vehicle often employed by practitioners to effect and realize the civil theft claims. Quite often, civil theft claims are asserted along side the usual garden variety, common law conversion claims.

Unfortunately, most civil theft claims are implemented without considerable forethought as to the benefits and consequences of exploiting this very unique statutory scheme. Too frequently, the civil theft statute is summoned up merely as an ancillary legal vehicle (alongside the common law conversion claim) to ensure recovery for the plaintiff. Litigators should not rashly embrace and blindly employ Florida's civil theft statute in order to secure a "second bite at the apple." On the contrary, counsel should afford the civil theft cause of action heightened respect, and view it as a unique conversion claim, complete with its own rigorous and precise evidentiary requirements.

When properly pleaded and proven, civil theft can reward the victorious plaintiff with treble damages. In some cases, a civil theft damages award can be more lucrative than an award secured under a common law conversion claim. Yet despite its pecuniary lure, not every conversion case lends itself to civil theft litigation. The facts of every case must be carefully considered before counsel makes a final affirmative decision to plead a civil theft cause of action.

Unlike the classic common law conversion claim, Florida's civil theft statute enumerates numerous stringent threshold requirements that must be satisfied in order to state a viable cause of action. These requirements are:

1) Proof of proper "pre-suit" notice;

2) Scrupulous pleading of the complained of theft;

3) An accurate and correct pleading of plaintiff's potential pecuniary losses; and

4) An accurate and correct assessment of plaintiff's potential exposure to attorneys' fees.

The statute's arduous pleading requirements frequently present unexpected challenges to the unfamiliar attorney. These challenges are completely different from those issues surrounding the successful pleading of a common law conversion claim. For that reason, it is imperative that counsel ponder the facts of a potential case and evaluate all the potential ramifications and benefits that circumscribe assertion of Florida's civil theft scheme. More importantly, that "pro and con" assessment should be undertaken before a civil theft cause of action is ever formally expounded and discussed with the client.

This article suggests various considerations and evaluations that counsel should entertain before a complaint requesting civil theft relief is ever drafted. These consideration are proffered with the goal of offering assistance to the unfamiliar attorney, so that counsel can strategically plan. a successful outcome. Careful consideration to these guidelines will promote prudent and judicious implementation of the civil theft statute.

Preliminary Considerations

The first consideration to tackle when pleading a civil theft cause of action is the issue of "pre-suit notice." Second, consideration should be given whether the economic loss rule (no recovery in tort where the case is purely contractual) (2) may actually bar the civil theft claim. Third, a thorough analysis of the facts should be undertaken to see if the heightened "clear and convincing" evidentiary standard applicable to a civil theft cause of action (3) can be satisfied. Finally, the success of proving that a defendant acted with "criminal intent" needs to be carefully evaluated.

On the issue of damages, important consideration must be given as to whether the recovery of treble damages and attorneys' fees under the civil theft statue is potentially outweighed by the possibility of an adverse judgment award. This issue is particularly applicable in cases where the plaintiff might successfully prevail on other legal claims arising from the same fact scenario. In these cases, it is entirely possible that an attorney, for strategic reasons only, may purposely elect to omit pleading a civil theft claim, especially where pleading the civil theft cause of action could expose his client to additional, unwanted monetary exposure.

For all of the foregoing reasons, the civil theft claim should be discussed in detail with a client. The key to success with the civil theft statute is meticulous scrutiny of the facts and a sound assessment of whether the facts at hand warrant pleading of the civil theft statute.

The Statute

The civil theft statute, F.S. [section] 772.11 (1) (2001), entitled "Civil Remedy For Theft," provides: (4)

Any person who proves by clear and convincing evidence that he or she has been injured in any fashion by reason of any violation of the provisions of ss. 812.012-812.037 has a cause of action for threefold the actual damages sustained and, in any such action, is entitled to minimum damages in the amount of $200, and reasonable attorney's fees and court costs in the trial and appellate courts.

Before filing an action for damages under this section, the person claiming injury must make a written demand for $200 or the treble damage amount of the person liable for damages under this section.

If the person to whom a written demand is made complies with such demand within 30 days after receipt of the demand, that person shall be given a written release from further civil liability for the specific act of theft by the person making the written demand.

Any person who has a cause of action under this section may recover the damages allowed under this section from the parents or legal guardian of any unemancipated minor who lives with his or her parents or legal guardian and who is liable for damages under this section.

In no event shall punitive damages be awarded under this section.

The defendant shall be entitled to recover reasonable attorney's fees and court costs in the trial and appellate courts upon a finding that the claimant raised a claim which was without substantial fact or legal support. In awarding attorney's fees and costs under this section, the court shall not consider the ability of the opposing party to pay such fees and costs.

Nothing under this section shall be interpreted as limiting any right to recover attorney's fees or costs provided under other provisions of law.

Additional civil remedies are set forth in F.S. [section] 812.035. These remedies include injunction; divestiture; restriction on future activities or investments; dissolution or reorganization of any enterprise; suspension or revocation of any licenses, permits, or approvals issued by state agencies or departments; and revocation of corporate charters. No showing of irreparable harm is required for injunctive relief. (5) Where statutory civil theft is alleged, there is no limitation on any other remedies provided for by law. (6)

Pre-suit Notice and Statute of Limitations

The pre-suit notice of F.S. [section] 772.11 requires a written demand for $200 or treble the damage amount for which the potential defendant may be liable. (7) Although compliance with the pre-suit notice requirements of [section] 772.11 is mandatory, courts have permitted belated pre-suit notices where the plaintiff has satisfactorily alleged all the prerequisite conditions to state a cause of action. (8)

Insofar as the statute of limitations is concerned, civil theft actions must be commenced either within five years after the cause of action accrues, (9) or within five years of the date the conduct complained of ceases. (10) Where the state intervenes and commences a civil or criminal action against the same defendant for the same conduct, the private plaintiff's cause of action is suspended until the state's action is concluded. (11) Thereafter, the private plaintiff has two years to file suit. (12)

Legally Recognized Property Interest

The tort of civil theft is not committed by the mere failure to pay monies contractually due. (13) Plaintiff must establish and successfully identify "a legally recognized property interest in the items stolen." (14) Where the property interest is unidentifiable or unquantifiable, the civil theft claim fails. (15) Notably, the more identifiable the property, the better the chance for survival of plaintiff's civil theft cause of action. (16)

The precise extent of specificity required to satisfy the "legally recognized property interest" requirement appears to be a subject that lends itself to interpretation but is often premised on the particular facts and circumstances of each case. (17)

In Burr v. Norris, 667 So. 2d 424 (Fla. 2d DCA 1996), a good faith purchaser of property was denied the value of fixtures he had installed, which were intended to increase the home's value for his benefit at a later date. Plaintiff pled that he was forced to...