AVANT DESIGN GROUP, INC., ETC.

v.

AQUASTAR HOLDINGS, LLC, ETC.

SCALES, J.

Appellee/cross-appellant Aquastar Holdings, LLC (“Aquastar”) purchased a condominium unit in a building in Surfside, Florida. Aquastar hired appellant/cross-appellee Avant Design Group, Inc. (“Avant”) to administer the build-out of the unit. Toward the end of the project, Aquastar, concerned about the integrity of Avant’s billings, terminated its contract with Avant. Each party sued the other on multiple bases and Aquastar also sued the three owners of Avant individually. In a detailed final judgment,¹ the trial court found in favor of Aquastar in its suit against Avant but declined to hold Avant’s three owners individually liable for Aquastar’s claims. Both parties appealed the Amended Final Judgment and Aquastar also appealed the trial court’s April 14, 2021 order denying its Florida Rule of Civil Procedure 1.530 rehearing motion. For the reasons that follow, we affirm in part, reverse in part, and remand with instructions.

I. Relevant Facts and Procedural History

A. The Contract

Aquastar is owned by Wilson De Lara, a Brazilian businessman. Aquastar used Brazilian architect Debora Aguiar to design the interior of the 2 unit. Because Aguiar is not licensed in the United States, she recommended Avant both to oversee the project’s construction and to obtain goods and services for the interior build-out. Aquastar purchased the unit and hired Avant in September 2016.

Aquastar and Avant entered into a contract known as “Proposal 27.” Proposal 27 provided a schedule of construction items along with their anticipated costs. Although the trial court focused its attention on Proposal 27 for its analysis of the terms and conditions to which the parties had agreed, the parties executed a total of ninety-two such proposals, each of which was on a form generated by Avant. These other proposals described the furnishings, goods and services to be purchased for each of the rooms in the unit. Proposal 27 and the additional proposals all followed the same format, and all contained the same contractual language. The proposals provided that Aquastar would pay the cost of the goods and services of the vendors, plus pay a “20% Interior Design & Administrative Fee” to Avant (the “20% Fee”).² The proposals contained no other contractual language regarding the amount or calculation of payment.

For approximately eighteen months, the parties mutually performed under the proposals. Avant dealt with Aquastar’s architect, and with contractors, subcontractors and vendors; presented Aquastar with vendor proposals, which Aquastar either accepted or rejected; oversaw the delivery and installation of furnishings, many of which were custom-made; served as a liaison with the condominium association; and provided written updates to Aquastar and its architect.

Monica Souza, Avant’s Vice President, testified that Avant typically provides three types of work on a project like this one and charges separately for each distinct service: design services, construction administration services, and sales of construction materials and vendor products to be installed in the condominium unit. In this instance, because Aquastar had its own architect, Avant did not charge for design services. According to Souza, tax. Any other cost, including not limited to, freight, cartage, shipping, receiving, storage and delivery are not included in the preliminary budget and will be invoiced separately. All items, materials or supplies are custom and are non-cancelable, non- returnable, non-refundable. [Avant] does not guarantee fitness or merchantability of any items, materials or supplies and does not warranty or guarantee for any functionality, use, damage, defect, wear or fading, any items, materials, or supplies, purchased for Client’s Project, including but not limited to appliances, fixtures, fabrics and flooring items.

E. The Trial

II. Analysis

A. Introduction

Avant challenges five rulings contained in the Amended Final Judgment that found Avant had (i) breached its contract with Aquastar, (ii) committed fraud, (iii) committed a FDUTPA violation, (iv) breached an implied covenant of good faith and fair dealing, and (v) filed a fraudulent construction lien. Avant also challenges the trial court’s damages calculation. Aquastar cross-appeals several rulings contained in the Amended Final Judgment: (i) that the three individual defendants bear no personal liability for Avant’s fraud and for Avant’s FDUTPA violation; (ii) that the trial court 10 erred by not discharging the fraudulent construction lien; and (iii) several trial court findings involving attorney’s fees, costs, and punitive damages.

B. Breach of Contract

1. The Contract’s Payment Terms At the threshold, we address Avant’s principal argument that the trial court erred by finding that the parties had entered into a cost-plus contract. While the trial court did not make a specific finding that the parties’ contract was ambiguous, the trial court, nevertheless, heard testimony from both parties’ experts regarding the parties’ contractual relationship, and, after weighing the testimony of the parties’ competing experts, ultimately concluded there was no credible testimony to support Avant’s position. 10 10 As noted, the trial court did not make a specific finding that the parties’ contract was ambiguous. Generally, absent a finding of ambiguity, parol evidence is not admissible to assist the factfinder regarding the parties’ intent. See Rivero v. Rivero, 963 So. 2d 934, 938 (Fla. 3d DCA 2007). Also, because questions of law are generally within the exclusive province of the trial court, an expert is normally not allowed to give opinion testimony on legal matters. See HSBC Bank USA, Nat’l Ass’n v. Buset, 241 So. 3d 882, 886 (Fla. 3d DCA 2018). In this case, though, both parties, without objection, elicited expert testimony regarding the nature of the parties’ contract. Ordinarily, we would review de novo a trial court’s contract interpretation. See Perez-Gurri Corp. v. McLeod, 238 So. 3d 347, 350 (Fla. 3d DCA 2017) (recognizing that the review of a trial court’s contract interpretation is de novo.). Instead, we review the record to determine whether the trial court’s finding in reliance on parol evidence is supported by competent, substantial evidence. Spancrete, Inc. v. Rinker Materials Corp., 623 So. 2d 760, 760 (Fla. 3d DCA 1993); Laufer v. Norma Fashions, Inc., 418 So. 2d 437, 439 (Fla. 3d DCA 1982).

2. Damages

Avant next challenges the trial court’s damages calculation. The trial court calculated Aquastar’s damages by accepting the testimony of Aquastar’s expert witness Dana Kaufman that the full cost of the build-out of Aquastar’s condominium unit was $534,660.81. By adding Avant’s 20% Fee plus applicable sales tax to this amount, the trial court arrived at a total project cost of $656,511.70. By deducting this amount from Aquastar’s payment to Avant of $1,117,250.63, and including other damages to which Kaufman testified,¹¹ the trial court calculated Aquastar’s damages at $525,608.50. 11 This damages amount includes $40,091.87 that Aquastar paid another contractor to complete the project and $24,777.70 to reimburse Aquastar for work for which Avant charged Aquastar but failed to perform.

C. Fraud

D. The FDUTPA Claim

Avant next challenges what appears to be the trial court’s determination in the Amended Final Judgment that Avant is liable to Aquastar in an indeterminate amount for Avant’s violation of Florida’s Deceptive and Unfair Trade Practices Act. See § 501.201 et seq., Fla. Stat. (2018). 13 The problems with the Amended Final Judgment with regard to Aquastar’s FDUTPA claim are twofold: (i) the Amended Final Judgment is internally inconsistent as to whether a FDUTPA violation occurred; and (ii) 13 Aquastar’s FDUTPA claim was also brought against Monica Souza, Cristina Souza and Sonia Sun Yee Mak. See section II, F., infra. 15 the Amended Final Judgment does not quantify Aquastar’s “actual damages” occasioned by any FDUTPA violation.

As for the internal inconsistency, in the body of the Amended Final Judgment, the trial court seems to find that a FDUTPA violation occurred when Avant refused to disclose its vendor wholesale prices to Aquastar, allegedly as a part of the scheme to overcharge Aquastar. Yet, in the portion of the Amended Final Judgment that purports to adjudicate the parties’ various claims, the Amended Final Judgment reads: “9. The Court enters judgment in favor of Avant . . . on Count XI of Aquastar’s Counterclaim [alleging a FDUTPA violation].” These contrasting holdings are not reconcilable.

Equally, if not more problematic, is that, to the extent it was the trial court’s intention to enter judgment against Avant on Aquastar’s FDUTPA claim, the Amended Final Judgment does not adjudicate any “actual damages” occasioned by Avant’s alleged FDUTPA violation. Aquastar’s FDUTPA claim against Avant is a statutory cause of action premised on section 501.211(2). This statute reads, in relevant part, as follows: “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 attorney's fees 16 and court costs as provided in s. 501.2105.” (Emphasis added.)¹⁴ Despite such “actual damages” being an essential element of a FDUTPA claim brought pursuant to section 501.211(2), nowhere in the Amended Final Judgment does the trial court make a finding of any “actual damages” Aquastar suffered as a result of Avant’s alleged FDUTPA violation. Because Aquastar, as the proponent of this FDUTPA claim, bore the burden of proof on the claim, we conclude that it was incumbent upon Aquastar to seek the appropriate post-judgment relief under rule 1.530 or otherwise to assure that the judgment entered on its FDUTPA claim accurately reflected the trial court’s rulings and contained the appropriate findings. While Aquastar did file a rule 1.530 motion directed toward other alleged errors and omissions of the Amended Final Judgment, and Aquastar has cross-appealed the trial court’s denial of its rehearing motion, Aquastar’s rehearing motion did not seek to correct or clarify the issues we have identified with regard to its FDUTPA claim against Avant, nor has Aquastar cross-appealed the Amended Final Judgment in this regard. Therefore, we 14 Section 501.211(1) provides for a statutory declaratory judgment, wherein a party may seek a declaration from a court that a particular activity or conduct is violative of FDUTPA. Aquastar’s counterclaim did not seek declaratory relief under section 501.211(1) but sought only damages under subsection (2). 17 reverse the Amended Final Judgment to the extent that it purported to enter judgment against Avant on Aquastar’s FDUTPA claim. E. Implied Covenant of Good Faith and Fair Dealing Avant also appeals the trial court’s finding that, by charging Aquastar in excess of the 20% Fee, Avant breached the contract’s implied covenant of good faith and fair dealing. Every Florida contract contains an implied covenant of good faith and fair dealing that protects parties’ reasonable expectations of honest conduct in their contractual obligations. Ins. Concepts & Design, Inc. v. Healthplan Servs., Inc., 785 So. 2d 1232, 1234 (Fla. 4th DCA 2001).

The implied covenant, though, only “comes into play ‘when a question is not resolved by the terms of the contract or when one party has the power to make a discretionary decision without defined standards.’” Speedway SuperAmerica, LLC v. Tropic Enters., Inc., 966 So. 2d 1, 3 (Fla. 2d DCA 2007) (quoting Publix Super Markets, Inc. v. Wilder Corp. of Del., 876 So. 2d 652, 654 (Fla. 2d DCA 2004)); see Cox v. CSX Intermodal, Inc., 732 So. 2d 1092, 1097-98 (Fla. 1st DCA 1999) (“[W]here the terms of the contract afford a party substantial discretion to promote the party’s self-interest, the duty to act in good faith nevertheless limits that party’s ability to act capriciously to contravene the reasonable contractual expectations of the other party.”). The 18 parties’ dispute centers on and is resolved by the meaning of the 20% Fee provision of the contract. When the trial court determined that, pursuant to the parties’ contract, Aquastar’s payment obligations were specifically defined and limited so that Aquastar was liable to Avant only for vendor services provided for, and materials incorporated into, the project, plus the 20% Fee, any discretion retained by Avant in its billing was far too limited to implicate the covenant of good faith and fair dealing. Indeed, the 20% Fee locked in Aquastar’s contractual payment obligation and afforded Avant no discretion to charge Aquastar in excess of the 20% Fee. Accordingly, in this case, the trial court’s factual findings specifically defining and limiting Aquastar’s contractual payment obligations were inconsistent with its finding that Avant breached the implied covenant of good faith and fair dealing. We therefore reverse this part of the Amended Final Judgment.¹⁵ Our reversal on this point, though, is not outcome-determinative as to damages because the trial court did not assign an amount of damages to Avant’s alleged breach of the implied covenant. F. Liability of Individual Defendants 19  In its cross-appeal, Aquastar challenges those portions of the Amended Final Judgment that found for the three individual defendants, the principals of Avant – Monica Souza, Cristina Souza and Sonia Sun Yee Mak. Aquastar’s counterclaim sought to hold the individual defendants personally liable for their conduct. In entering judgment for the individual defendants on all of Aquastar’s claims, the trial court found that the individuals had not engaged in any conduct that would render them personally liable for any of Aquastar’s claims.

We affirm the trial court’s entry of judgment for the individual defendants, as the trial court’s findings are supported by competent, substantial evidence. See Miami-Dade Cnty. Expressway Auth. v. Elec. Transaction Consultants Corp., 300 So. 3d 291, 294 (Fla. 3d DCA 2020). G. Avant’s Construction Lien After Aquastar terminated the contract, Avant recorded a construction lien against the condominium unit, claiming it was owed $66,909.21 for work performed on Aquastar’s unit. Avant’s amended complaint sought to foreclose on this lien, and, both as an affirmative defense to Avant’s foreclosure claim and as a stand-alone claim in its counterclaim, Aquastar asserted the lien was fraudulent. Making extensive findings of fact – findings supported primarily by the testimony of Aquastar’s expert – the trial court 20 determined that, under section 713.31 of the Florida Statutes, 16 Avant’s construction lien was fraudulent: “The Court finds that based on these overcharges, the lien is either willfully exaggerated or at the very least, compiled with such willful or gross negligence so as to amount to a willful exaggeration.” This conclusion in the Amended Final Judgment, and the trial court’s subsequent order denying Aquastar’s rule 1.530 rehearing motion, spurred both Avant and Aquastar to raise several issues in the appeal and cross-appeal.

1. Fraudulent Lien

Avant argues that its lien was not fraudulent as it was not the consequence of willful exaggeration or willful inclusion of work not performed, but rather, that it was the product of Avant’s good faith belief that, pursuant to its contract with Aquastar, it was owed additional funds from

2. Discharge of Lien

In its cross-appeal, Aquastar maintains that the trial court erred by not discharging Avant’s construction lien after the trial court found it to be fraudulent. Post-appeal, Aquastar filed a motion requesting the trial court to enter an order discharging the lien, but the trial court declined to adjudicate the motion because of its belief that the pendency of this appeal deprived it of jurisdiction to entertain the motion.

Upon a finding that a lien is fraudulent, section 713.31(2)(b) empowers the trial court to declare the lien unenforceable. On remand, the trial court 23 shall enter such a declaration. Additionally, irrespective of Aquastar’s claim – and the trial court’s finding – that Avant’s lien was fraudulent, Avant did not prevail on its claim seeking to enforce its lien, thereby entitling Aquastar, pursuant to 713.29 Florida Statutes, 17 to those reasonable attorney fees Aquastar incurred defending against Avant’s lien claim. On remand, the trial court shall conduct whatever proceedings the trial court deems appropriate to determine those reasonable attorney’s fees to which Aquastar is entitled pursuant to section 713.29.

H. Aquastar’s Rule 1.530 Rehearing Motion Shortly after the trial court entered its initial final judgment, Aquastar filed a Florida Rule of Civil Procedure 1.530 rehearing motion requesting, among other things, that (i) the trial court revisit its determinations that the individual defendants were not liable for the claims asserted in Aquastar’s counterclaim, and (ii) consistent with the trial court’s fraudulent lien determination, the trial court award Aquastar section 713.31(2)(c) prevailing party attorney’s fees, costs and punitive damages. On April 14, 2021, the trial court entered an order denying Aquastar’s rule 1.530 rehearing motion. 24  We affirm, without further elaboration, those portions of the trial court’s April 14, 2021 order denying Aquastar’s request to revisit its findings that the individual defendants have no liability for Aquastar’s claims (see section II.F., supra), and denying Aquastar’s claim for punitive damages. With regard to that portion of Aquastar’s rehearing motion arguing that the trial court erred by not awarding it reasonable attorney’s fees and costs pursuant to section 713.31(2)(c), to the extent that Aquastar seeks recovery of such fees that would not be duplicative of fees the trial court may award pursuant to section 713.29 (see section II.G.2., supra), on remand the trial court shall conduct whatever proceedings it deems necessary to determine whether, in light of the holdings contained in this opinion, Aquastar is the prevailing party on the significant issues in the case, and thus entitled to reasonable attorney’s fees and costs pursuant to section 713.31(2)(c). See Newman v. Guerra, 208 So. 3d 314, 319 (Fla. 4th DCA 2017).

III. Conclusion

We affirm the trial court’s determinations in the Amended Final Judgment that: (i) the parties entered into a cost-plus contract limiting Aquastar’s payment obligations as set forth therein; (ii) Avant breached the parties’ contract; and (iii) as a result, Aquastar is entitled to $525,608.50 in breach of contract damages from Avant. We also affirm the trial court’s 25 determination in the Amended Final Judgment that Avant’s construction lien was fraudulent, and remand to the trial court to: (i) enter an order discharging the lien; (ii) conduct those proceedings it deems necessary to determine those reasonable attorney’s fees to which Aquastar is entitled under section 713.29; and (iii) to determine, in light of the holdings in this opinion, whether Aquastar is the substantially prevailing party entitled to reasonable fees and costs pursuant to section 713.31(2)(c), to the extent that these fees are not duplicative of section 713.29 fees.

We reverse the Amended Final Judgment to the extent that it concluded that Avant committed a FDUTPA violation. We also reverse those portions of the Amended Final Judgment insofar as it determines Avant is liable to Aquastar for fraud and breach of the covenant of good faith and fair dealing.

We affirm the trial court’s findings that Avant’s owners, Monica Souza, Cristina Souza and Sonia Sun Yee Mak, bear no individual personal liability to Aquastar and that Avant is not liable to Aquastar for punitive damages. After conducting the proceedings on remand, the trial court shall enter a Revised Final Judgment that reflects the result of those proceedings and that is consistent with this opinion’s holdings. 26 Affirmed in part, reversed in part, and remanded with instructions.

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