Background
Bashar Atout, a Kuwait-based investor acting as trustee of the HHM Land Trust, owned rental homes in Apopka, Florida. The Trust contracted with One Source Management Solutions, Inc., whose employee Brenda Rozanc managed the properties. The complaint alleged that One Source and Rozanc sold four of the Trust’s eighteen homes without its knowledge or consent, including one sale by Rozanc to herself.
After recovering legal ownership through a quiet-title action, the Trust sought attorney fees, costs, lost income, and other damages. It asserted breach of contract and negligence claims against One Source and a negligence claim against Rozanc. The circuit court dismissed those claims with prejudice, reasoning in part that the management agreement concerned leasing rather than sales and that the contract foreclosed the negligence claims.
The Court’s Holding
The Sixth District reversed dismissal of the breach-of-contract claim against One Source. Although the management agreement did not expressly address property sales, One Source’s alleged unauthorized transfers deprived it of the ability to fulfill its contractual obligation to “manage, operate and lease” the homes. The complaint also identified additional alleged breaches tied directly to contractual duties, including failures involving rental-income accounting, unauthorized transfers of rental income, and security deposits.
The court affirmed dismissal of the negligence claim against One Source under Florida’s independent tort doctrine. Considering the source of the duty, the alleged conduct, the economic nature of the damages, and public policy, the court concluded that the negligence count merely repackaged the contract claim and alleged no duty or conduct independent of the management agreement.
The court also affirmed dismissal of the negligence claim against Rozanc. It held that the independent tort doctrine shields a corporation’s officers and employees, even if they are not contract signatories, when their alleged tort liability arises solely from deficient performance of the corporation’s contractual duty. The court remanded only the contract claim against One Source and certified two questions to the Florida Supreme Court concerning how to distinguish independent from dependent torts and whether the doctrine protects nonsignatory corporate officers and employees.
Key Takeaways
- A contract need not specify the precise manner of breach when the alleged conduct prevented performance of an obligation expressly imposed by the agreement.
- Florida courts assessing the independent tort doctrine may consider the source of the duty, whether the tort involves distinct conduct, the nature of the damages, and applicable public policy under the totality of the circumstances.
- The Sixth District extended the doctrine’s protection to corporate officers and employees whose alleged negligence consists solely of deficient performance of their employer’s contractual duties, while certifying that issue for Florida Supreme Court review.
Why It Matters
The decision offers a detailed framework for separating contract claims from tort claims after the Florida Supreme Court limited the economic loss rule in Tiara Condominium Association v. Marsh & McLennan Companies. It confirms that litigants cannot obtain tort remedies merely by relabeling an alleged contractual failure as negligence.
The ruling also creates or highlights tension with Fourth District precedent concerning nonsignatory corporate officers and employees. The certified questions give the Florida Supreme Court an opportunity to define both the governing independent-tort analysis and the doctrine’s reach beyond contracting parties.