Background
9740 W Bay Harbor Dr, LLC and Sina, LLC, along with their principals, sold two contiguous waterfront lots to Bay Harbour Investment, Inc. for $9 million. The sellers required the buyer to waive a general due-diligence period, and the contracts stated that the buyer was purchasing the properties “as is,” while retaining a limited right to terminate if environmental and zoning confirmations were unsatisfactory.
Before closing, the buyer learned through a title and lien search that the Town of Bay Harbor Islands had received an engineering report finding the properties’ seawall in critical condition and had repeatedly asked the sellers to repair it. The buyer’s engineer also found seawall defects. After the sellers denied that a problem existed and threatened breach-of-contract litigation if the buyer did not close, the buyer closed under protest. The buyer later replaced the seawall and sued for fraudulent inducement, negligent misrepresentation, and FDUTPA violations.
A jury found the sellers liable on all three claims and awarded approximately $300,000. The sellers appealed, arguing that caveat emptor required a directed verdict in their favor and that the trial court improperly allowed diminution-in-value damages that had not been specially pleaded.
The Court’s Holding
The Third District affirmed. The court held that the sellers did not preserve their challenge to the denial of their directed-verdict motion because they failed to file a timely post-verdict motion under Florida Rule of Civil Procedure 1.480(b). A pre-verdict directed-verdict motion alone did not preserve the issue for appellate review.
The court also rejected the sellers’ damages argument. In a real-property fraud action, damages may be measured by either out-of-pocket loss or benefit of the bargain. A decline in market value is general damages, not unpled special damages.
Key Takeaways
- A party challenging the sufficiency of the evidence after a jury verdict must file the required timely post-verdict Rule 1.480 motion.
- Failure to file that post-verdict motion waives appellate review of the directed-verdict issue.
- Diminution in value is general damages in a fraud action involving real property.
Why It Matters
The decision underscores that preservation rules can control an appeal even where a party raised the issue during trial. Litigants seeking review of a jury verdict must follow through with the applicable post-trial motion.
For real-estate fraud claims, the opinion confirms that market-value loss may be recoverable as general damages under the recognized out-of-pocket or benefit-of-the-bargain measures.