Damages under FDUTPA.

• Author: Federbush, David J.
• Position: Florida Deceptive and Unfair Trade Practices Act

Florida's Deceptive and Unfair Trade Practices Act (FDUTPA), F.S. [subsection] 501.201 et seq., provides for recovery of "actual damages" by those suffering losses as the result of violations. In unfair methods of competition cases, where FDUTPA essentially adopts federal antitrust precedent, it is relatively clear that damages are measured by the amount of unlawful overcharge extracted from the consumer. (1) However, in deception cases district court of appeal precedent has developed so as to restrict the categories and measure of damages available. The thrust of this article is that, in so doing, the case law, without analysis or justification, has departed from general principles of compensatory damages as well as FDUTPA's purpose.

The Statutory Provisions

Section 501.202 ("Purposes; rules of construction") provides:

The provisions of this part shall be construed liberally to promote the following policies:

(2) To protect the consuming public and legitimate business enterprises from those who engage in unfair methods of competition, or unconscionable, deceptive, or unfair acts or practices in the conduct of any trade or commerce.

Section 501.211(2) ("Other individual remedies") provides: "(2) In any action brought by a person who has suffered a loss as a result of a violation of this part, such person may recover actual damages, plus attorneys' fees...."

Section 501.212(3) ("Application") provides: "This part does not apply to: A claim for personal injury or death or a claim for damage to property other than the property that is the subject of the consumer transaction."

FDUTPA Case Law

Early decisions appeared to accept implicitly that common law measures and categories of compensatory damages were available, as appropriate to the given case, under FDUTPA. In Deltona Corp. v. Jannotti, 392 So. 2d 976, 978 (Fla. 1st DCA 1981), plaintiffs had been sold a home that had inferior grades of items compared to those of a model the purchasers had been shown. The court held that the replacement cost of carpeting and sodding sought by plaintiff, rather than the diminution in value amount advocated by defendant, was the proper measure of damages. The court cited to common law misrepresentation and breach of contract cases in approving such damages under FDUTPA. (2) In Douglas v. G.E.E.N. Corp., 415 So. 2d 130, 131 (Fla. 5th DCA 1982), the court, reviewing a damage award on a FDUTPA deception claim (brought together with a truth in lending claim and) entered pursuant to a default judgment, approved "actual consequential damages" under the act without explaining what they comprised. In several other reported pre-1984 appellate decisions, courts approved or noted FDUTPA damages awards without commenting on their derivations or types. (3)

The first and only appellate opinion that attempted to analyze the issue of damages available under FDUTPA, however, was Rollins, Inc. v. Heller, 454 So. 2d 580 (Fla. 3d DCA 1984), rev. den., 461 So. 2d 114 (Fla. 1985). As explained below, numerous reported decisions outside the Third DCA which purported to follow it have not, in actuality, been faithful to it.

The Hellers had sued for deceptive practices (unspecified in the decision) (4) in the sale of a home alarm system and sought to recover the purchase price and service fees.

They additionally sought the value of items stolen from their home when the system proved defective. Citing the exemption in [section] 501.212(3), the court observed that "The Act, however, only allows recovery of damages related to the property which was the subject of the consumer transaction." 454 So. 2d at 584. It found that the installation of the system and the services performed thereon, but not the household items stolen, were the subject of the consumer transaction. It held the household items were therefore not the proper subject of a damage award. The court went on to address the measure of (remaining) actual damages:

While the FDUTPA does not define "actual damages," courts of other jurisdictions have had occasion to define the term within similar statutes. In interpreting Texas' Deceptive Trade Practices Act, Tex. Bus. & Com. Code Ann. [section] 17.41, et seq. (Vernon 1979), the Texas supreme court held that actual damages are those recoverable at common law. Brown v. American Transfer and Storage Co., 801 S.W.2d 931 (Tex.), cert. denied, 449 U.S. 1015 ... (1980). See also Lubbock Mortgage & Investment Co. v. Thomas, 626 S.W.2d 611 (Tex.App. 1981), United Postage Corp. v. Kammeyer, 581 S.W.2d 716 (Tex. App. 1979). In determining the measure of actual damages, the court in Raye v. Fred Oakley Motors, Inc., 646 S.W.2d 288, 290 (Tex. App. 1983) held: "Generally, the measure of actual damages is the difference in the market value of the product or service in the condition in which it was delivered and its market value in the condition in which it should have been delivered according to the contract of the parties. [citations omitted] A notable exception to the rule may exist when the product is rendered valueless as a result of the defect--then the purchase price is the appropriate measure of actual damages." [citation omitted]

We hold that Florida's statutes should be interpreted, and actual damages measured, in a similar manner. Therefore, the actual damages awardable to the Hellers pursuant to the FDUTPA violation should be measured in accordance with the formula set out in Raye.

Further, any attempt to limit one's liability for deceptive or unfair trade practices would be contrary to public policy ... John's Pass Seafood Co. v. Weber, 369 So. 2d 616 (Fla. 2d DCA 1979) (it would be contrary to public policy to enforce an exculpatory clause that attempts to immunize one from liability for breach of a positive statutory duty); Mankap [410 So. 2d 342] (exculpatory clauses relating to fraud or intentional misrepresentation are contrary to public policy and unenforceable.) Therefore, actual damages are recoverable in full for the FDUTPA violation notwithstanding Rollins' attempt to limit its liability in the contract. (emphasis added) [454 So. 2d at 585] [The limitation referred to was to the effect that if loss or damage should result from defective performance or operation of the system, Rollins' liability would be limited to 10 percent of one year's service charge or $250, whichever is greater. 454 So. 2d at 583.] (5)

Three years later, the Third DCA cited its Rollins decision and [section] 501.211(2) in Himes v. Brown & Company Securities Corp., 518 So. 2d 937 (Fla. 3d DCA 1987). The court, affirming a judgment for defendant in a case in which FDUTPA as well as fraudulent misrepresentation and other common law claims had been brought, opined that plaintiff had not presented adequate evidence that defendant's actions had caused him lost profits. 501 So. 2d at 939. The opinion stated generally, "Suffice it to say that all of Himes' claims suffer from the same major defect ... [t]he trial court could justifiably find that Himes did not suffer any damages proximately caused by Brown's alleged [statutory or common law[ violations...." 518 So. 2d at 938-39. (6) There was no indication in the opinion that consequential damages in the form of lost profits, or other common law compensatory damages, were disallowed under FDUTPA.

Numerous subsequent decisions by other district courts of appeal (and federal courts), however, have construed Rollins as limiting allowable damages under FDUTPA to the "difference in market value" measure, and on the basis of Rollins have denied other compensatory damages sought. They have applied that measure without further analysis of the damages issue or reference to FDUTPA's consumer protection purpose. In Urling v. Helms Exterminators, Inc., 468 So. 2d 435, 454 (Fla. 1st DCA 1985), plaintiffs brought a FDUTPA claim based on a fabricated (favorable) termite inspection report, when in fact no inspection had been performed. They relied on that report in purchasing a house that in fact had extensive termite damage, and later sued for the cost of repair of that damage. The exterminator did not challenge the measure of damages sought by the Urlings. In remanding, the court nevertheless, on considering Rollins' citation of Raye and disallowance of damages for the items stolen in the burglary, stated, "It seems, therefore that the statute ... does not authorize recovery of consequential damages to other property attributable to the consumer's use of such [received] goods or services." The court then held the termite damage repair costs to be disallowed consequential damages. Accord, National Alcoholism Programs/Cooper City, Florida, Inc. v. Palm Springs Hospital Employee Benefit Plan, 825 F. Supp. 299, 304 (S.D. Fla. 1993) ("consequential damages ... are not allowable under FDUTPA"). The Himes decision had also cited Urling, but for proximate causation rather than any measure of damages. 518 So. 2d at 938.

Fort Lauderdale Lincoln Mercury v. Corgnati, 715 So. 2d 311,314-15 (Fla. 5th DCA 1998), involved a sale, with two trade-ins, of a used auto deceptively claimed to be undamaged, to have its original paint job, and to be in "showroom condition." The court cited Rollins and its Raye quotation as to difference in market value, as well as Urling's characterization of Rollins' description of disallowed consequential damages, in conclusory fashion. It then held that loan payments made to the lending institution, and (portions of) the resale value of the trade-ins, were not recoverable under FDUTPA as they did not fit into the difference in market value measure. It treated that measure as the only type of damages allowed under the act. See also Eclipse Medical, Inc. v. Hydro-Surgical Instruments, Inc., 262 F. Supp.2d 1334, 1357 (S.D. Fla. 1999), aff'd without opinion, 235 F.3d 1344 (11th Cir. 2000) (FDUTPA damages do not include lost profits as "Florida courts specifically reject the recovery of consequential damages under...