Opinion
2D22-2922
10-11-2023
CCP HARBOUR ISLAND, LLC; CONVERGENT MANAGEMENT, LLC; SANTOSH GOVINDARAJU; NIKHIL SACHDEV; and PAUL BERAQUIT, Appellants, v. MANOR AT HARBOUR ISLAND, LLC, Appellee.
Andrew J. Ghekas and John A. Anthony of Anthony &Partners, LLC, Tampa; James C. Valenti of James C. Valenti, P.A., Lakeland, for Appellants. Brigid F. Cech Samole and Bethany J.M. Pandher of Greenberg Traurig, P.A., Miami; David B. Weinstein and Ryan Hopper of Greenberg Traurig, P.A., Tampa, for Appellee.
Appeal pursuant to Fla. R. App. P. 9.130 from the Circuit Court for Hillsborough County; Darren D. Farfante, Judge.
Andrew J. Ghekas and John A. Anthony of Anthony &Partners, LLC, Tampa; James C. Valenti of James C. Valenti, P.A., Lakeland, for Appellants.
Brigid F. Cech Samole and Bethany J.M. Pandher of Greenberg Traurig, P.A., Miami; David B. Weinstein and Ryan Hopper of Greenberg Traurig, P.A., Tampa, for Appellee.
ATKINSON, Judge.
CCP Harbour Island, LLC (CCP); Convergent Management, LLC (Convergent); Santosh Govindaraju; Nikhil Sachdev; and Paul Beraquit (collectively Appellants) appeal the trial court's order granting Manor at Harbour Island, LLC's (Manor), motion to amend complaint to add claims for punitive damages. On appeal, the Appellants argue that the trial court erred by granting Manor leave to amend its complaint to seek punitive damages as to its abuse of process and malicious prosecution claims against each of the Appellants. The Appellants also argue that the trial court erred by allowing Manor to seek an award of punitive damages as to its abuse of process claims against Sachdev and Beraquit in their personal capacities based on their approval of Govindaraju's conduct during settlement negotiations. For the reasons explained in this opinion, we agree that the trial court erred by granting Manor's motion to amend to add claims for punitive damages as to Manor's claim for abuse of process and as to Sachdev and Beraquit based on Govindaraju's conduct during settlement negotiations. However, we conclude that the trial court properly granted Manor's motion to amend to add claims for punitive damages as to the malicious prosecution claims against CCP, Convergent, and Govindaraju. Therefore, we affirm in part and reverse in part the trial court's order and remand for further proceedings consistent with this opinion.
Background
CCP is a limited liability company which invests in real estate in Tampa. CCP's managing member is Convergent, a limited liability company made up of Govindaraju, Sachdev, and Beraquit. Govindaraju is the CEO of CCP, and he handles litigation strategy and "creative, complex, highly intellectual-type issues" for CCP. Sachdev is the president of CCP and handles equity investors, debt investors, and capital resources for CCP. Beraquit handles the physical management aspects of the properties in which CCP invests.
In 2014, CCP acquired a property on Harbour Island called Knight's Point or The Pointe (The Pointe). It leases space in The Pointe to Jackson's Bar and Bistro (Jackson's) and others. In 2002, CCP's predecessor in interest had entered into a parking easement agreement (Parking Easement Agreement) with the owner of the Two Harbour Place parking garage (the Parking Garage). Pursuant to the Parking Easement Agreement, CCP's predecessor received a nonexclusive easement for ingress, egress, and use of parking spaces in the Parking Garage for the tenants of The Pointe. The Parking Easement Agreement originally provided CCP's predecessor with 201 spaces in the Parking Garage. However, the Parking Easement Agreement provided that if the lease of one of the tenants-Z-Tel-terminated or expired before the expiration or termination of Jackson's Lease, the number of parking spaces CCP's predecessor may use under the agreement would be reduced to 103 parking spaces. Z-Tel's Lease expired or was terminated prior to Jackson's; therefore, pursuant to the Parking Easement Agreement, CCP's predecessor was entitled to only 103 parking spaces in the Parking Garage. The Parking Easement Agreement also provided that "[i]n the event both the Jackson's Lease and the Z-Tel Lease have expired or terminated, this Agreement shall terminate, and [the owner of the Parking Garage] and [CCP's predecessor] shall cooperate to execute and record a Termination of Easement Agreement in the public records of Hillsborough County, Florida, to evidence such termination" (the Jackson's Lease Contingency). Consequently, if the Jackson's Lease expired, CCP would lose all 103 spaces in the Parking Garage.
The owner of the Parking Garage sold that property to CPPM THP LLC and AMP/CPL-THP Property LLC (Crocker), and Crocker obtained the prior owner's rights under the Parking Easement Agreement. When CCP purchased The Pointe property, it obtained its predecessor's rights under the Parking Easement Agreement.
In 2016, Manor purchased a parcel adjacent to the Parking Garage from Crocker. Manor began constructing a 340-unit luxury apartment building known as The Manor at Harbour Island, Icon Harbour Island, or Icon (the Manor building). Manor and Crocker entered into a shared facilities agreement in which Crocker agreed to provide Manor with 560 parking spaces in the Parking Garage (the Shared Facilities Agreement).
The Crocker Action
In 2015, CCP had filed a lawsuit against Crocker (the Crocker Action), seeking declaratory and injunctive relief as to CCP's entitlement to and the pricing of the parking spaces pursuant to the Parking Easement Agreement. In 2016, CCP amended its complaint to add Manor as a defendant and to add two additional causes of action: a claim for trespass on the case and a claim for injunctive relief. In its claim for trespass on the case, CCP alleged that Manor's site plan and Shared Facilities Agreement with Crocker would result in over-capacity utilization of the Parking Garage and thus inevitably encroach upon the parking spaces available to CCP pursuant to the Parking Easement Agreement. CCP requested that the trial court enter declaratory judgment interpreting the Parking Easement Agreement and the Shared Facilities Agreement in its favor-on a theory that the 103 spaces were not only for Jackson's but for any of CCP's tenants-an injunction against restriping spaces in the Parking Garage, and an injunction requiring Crocker to designate 103 reserved and labelled parking spaces for CCP's exclusive use. Jackson's had intervened in the Crocker Action, arguing that it was the intended beneficiary of the 103 parking spaces pursuant to the Parking Easement Agreement. CCP disputed that Jackson's was a third-party beneficiary to the Parking Easement Agreement and sought an injunction against Jackson's and Crocker infringing upon, limiting, and restricting CCP's rights under the Parking Easement Agreement.
CCP engaged in settlement negotiations with Jackson's on the one hand and with Crocker and Manor on the other hand. Jackson's and CCP settled their disagreements in the Crocker Action. Although the appendices on appeal indicate that Manor's counsel asserted at the hearing on Manor's motion to amend the complaint that Manor was the prevailing party in the Crocker Action, there is no evidence in the appendices other than counsel's statement indicating how the Crocker Action was resolved. Cf. Griffin v. State, 344 So.3d 623, 625 (Fla. 2d DCA 2022) ("Unsworn statements made by counsel cannot be considered as evidence.").
The City Action
In 2016, residents of CCP's property, The Pointe, filed a lawsuit against the City of Tampa (the City Action), seeking a declaratory judgment finding that the city had improperly issued the permit for construction of the adjacent Manor building. In 2018, CCP intervened in the City Action and added Manor and Crocker as defendants. In the City Action, CCP alleged that Manor and Crocker had fraudulently misrepresented material information related to Manor's parking needs and calculations to the city when applying for a building permit. CCP also alleged and reiterated throughout the course of the litigation that the city failed to provide CCP with meaningful notice and opportunity to be heard during the building permit proceedings. CCP sought damages, declaratory relief, and an injunction halting construction of the Manor building and demolishing the existing construction.
In the trial court and on appeal, the Appellants' counsel asserted that at the time CCP had intervened in the City Action, the Manor building had not yet been fully constructed-the building was only the "structural components"-and no residents had been living in the Manor building. In the trial court, Manor's counsel asserted that the Manor building had been fully constructed by 2017-one year prior to CCP's intervention in the City Action. Despite these conflicting representations by counsel in the trial court and on appeal, the parties' appendices do not include any evidence to support either assertion. Cf. Griffin, 344 So.3d at 625 ("Unsworn statements made by counsel cannot be considered as evidence.").
On April 23, 2018, the trial court entered final judgment in favor of the city, Crocker, and Manor, finding, among other things, that the city did not deprive CCP of any protected rights. CCP timely appealed the judgment. This court affirmed. See CCP Harbour Island, LLC v. City of Tampa, 275 So.3d 581 (Fla. 2d DCA 2019) (table decision). Therefore, CCP did not prevail on any of its claims in the City Action.
Settlement Negotiations
Manor submitted a voluminous proffer in support of its motion to amend its complaint to add claims for punitive damages. An exhaustive recitation of the evidence on which Manor relied is not possible in this recorded opinion. However, included in what follows are excerpts from that proffer and from the record that this court finds to be representative of evidence invoked by Manor as support for its entitlement to seek punitive damages.
Throughout the Crocker Action and the City Action, Govindaraju (CCP's CEO) and CCP's attorneys engaged in settlement negotiations with Crocker, Manor, and Jackson's on behalf of CCP. Govindaraju described his settlement negotiation strategy in the Crocker Action as a "prisoner's dilemma" wherein CCP would play each of the defendants-Crocker, Manor, and Jackson's-off each other until one party took CCP's settlement offer. In his settlement negotiations with Crocker and Manor, Govindaraju proposed that CCP would voluntarily dismiss its claims against them if Crocker agreed to provide CCP with 103 reserved parking spaces and remove the Jackson's Lease Contingency from the Parking Easement Agreement. Govindaraju directed this settlement proposal both to Manor and Crocker in the hopes that Manor would protect its own interests by encouraging Crocker to agree to the settlement. Govindaraju testified in his deposition that if Manor and Crocker had accepted this proposal, CCP would "have [had] ammo to viciously remove Jackson's." On the other hand, Govindaraju proposed that CCP would voluntarily dismiss its claims against Jackson's if Jackson's agreed to support CCP's position in the Crocker Action. Govindaraju testified that if Jackson's came back to CCP's side, CCP would continue to litigate against Manor and Crocker. Although CCP sought removal of the Jackson's Lease Contingency in settlement negotiations, CCP did not request its removal in either the Crocker Action or the City Action.
Throughout the settlement negotiations, Govindaraju and CCP's attorneys sent Manor and Crocker several communications, which Manor characterizes as "extortion communications." On April 18, 2016, Govindaraju sent Crocker a letter which in relevant part stated, "It is indeed unfortunate that your actions have placed [Manor's] development at risk." (Emphasis in original.) The letter also stated, "You are in a precarious position where time and the information revealed over time have worked and will continue to work against you. You have already lost; you should cut your losses, resign from your position, and exit gracefully . . ." and "[a]sk every litigator in this market, they will confirm that this firm does not compromise on ethical positions and will go all the way to the mat with Winston[-]Churchill[-]like fervor, intent on 'Victory at all costs . . . however long and hard the road may be.' "Govindaraju stated that the Crocker Action "initially was about operating our 103 spaces in a reasonable manner and process. Yet [Crocker's] willful misconduct, lack of foresight, and poor decisionmaking skills have led [Crocker] to really screw this all up for [Crocker], [its] investors, and [Manor]." Govindaraju represented that "this firm is grateful that [Crocker] ha[d] taken the shortsighted positions [it] ha[d] to date." (Emphasis in original.) Govindaraju wrote that Crocker's "plans in [its] declaration are flawed and . . . [would result in Crocker] spending over $1 million defending [it]self and indemnifying [Manor]."
On April 18, 2016, Govindaraju emailed representatives from Crocker and Manor, in relevant part stating that, "[a]t present, the acts by the folks at Crocker do not motivate [CCP] to do anything but to go for the jugular, which we are very adept at doing." In his deposition testimony, Govindaraju testified that when saying "go for the jugular," he meant that he would file a lawsuit, "go[ing] for pure victory and scorched earth" against Crocker since Crocker refused to cooperate. In a separate email to Manor sent on the same day, Govindaraju informed Manor that "as a result of [Crocker's] bad faith acts, [CCP was] in a position to attack [Crocker's] entire plan," and expressed hope that Manor would "be the force that gets [Crocker and CCP] around a round table to resolve."
On June 6, 2016, attorneys on behalf of CCP sent Manor a confidential settlement proposal, in which CCP proposed that it would voluntarily dismiss the Crocker Action in exchange for 103 identifiable and exclusive parking spaces and removal of the Jackson's Lease Contingency. In other words, CCP wanted 103 reserved parking spaces regardless of whether Jackson's remained a tenant. In the settlement letter, CCP warned that if Crocker and Manor were "unable to execute this Proposal by this deadline, then [CCP] is intent on advancing the litigation to the more advanced, and higher profile stage, which is certain to create significant risk and expense to the defendant parties." CCP's attorneys also stated, "[W]e hope that a resolution can be reached, but if not, our client has stated that they have 'prepared for war, and plan[] to conquer.' "
On July 11, 2016, in response to an email sent by a city attorney indicating the city's position regarding the approval of Manor's building permit and the associated parking plan, Govindaraju replied to the mayor of Tampa that the city attorney was "being an ass," requested that the city "Do the Right Thing," and told the city that he "d[id]n't want this to be a bad fight that embarrasses the city and its administration, but [he was] very close to exposing this for what it is."
On August 10, 2016, Govindaraju sent an email to a representative of Manor, in relevant part stating the following:
Crocker has really led you down the wrong path[,] and I don't want to harm [Manor]. We only seek to protect our rights which Crocker has attempted to steal to conceal their errors. Not sure how familiar you are with this. However[,] I consider the folks at [Manor] our friends[,] and I prefer an outcome that benefits us mutually.
On August 17, 2016, Govindaraju sent an email to a representative of Manor, indicating that CCP believed that there were "mathematical errors in the parking analysis" Crocker and Manor provided to the city to support its request for a building permit. Govindaraju suggested that Manor work with CCP to find a solution.
On September 29, 2016, Govindaraju emailed a representative of Manor, stating that CCP's "position has been that [Manor] and Crocker submitted falsified studies to the city of Tampa in order to obtain the [building] permits." Govindaraju told Manor "[i]t is important that you own your mistakes and work towards a resolution that satisfies us .... If you can own the mistake, a resolution can be had."
On November 9, 2016, after unsuccessful settlement negotiations in October 2016, Govindaraju emailed a representative from Manor, stating that
[y]ou are all aware of the short comings and short circuitry that was taken to approve your project. You are now testing a resilient opponent who also has the pedigree of a winner and who only plays to win, and only knows victory. My spiritual side always seeks to find solutions first, but when faced with a stonewall, then the same spiritual energy is used to destroy ignorance.
Govindaraju attached a copy of CCP's intervenor complaint in the City Action and informed Manor that "[i]t summarizes the deception pretty well. You may want to send it to the appropriate parties (i[.]e[.] mortgagee and investors) and be cautious how you spend money on the project. You may be obliged at some point to decide whether you reduce the scope of your project or tear it down."
On January 4, 2017, Crocker emailed CCP, indicating that Crocker and CCP's settlement negotiations had progressed positively. In relevant part, Crocker stated that it was "willing to provide CCP with the 103 spaces for it to use or permit others to use, as it chooses, for the remaining term of the easement, with the ability to park in any of the remaining unreserved spaces in the garage." In response, Govindaraju stated that Crocker's proposal provided for "the only things [CCP] expected when this all started in early 2015." After explaining that he believed that the litigation uncovered Manor's "infringement" of CCP's rights in the parking garage and that Manor had "significant exposure" in the City Action as a result, Govindaraju made a settlement counteroffer, requesting that the following items be added to Crocker's settlement offer: (1) "The easement being made perpetual without [the Jackson's Lease Contingency] . . ."; (2) "Make the 103 spaces free of charge to CCP . . . and perpetual." In exchange, Govindaraju offered to "work with [Manor] and the City of Tampa to get the [City Action] dismissed," "agree to the strictest confidentiality of the settlement," and "agree[] not to interfere at all whatsoever with any of [Manor's] efforts ...."
On March 22, 2017, Crocker responded to Govindaraju's settlement counteroffer. Crocker agreed to provide 103 reserved parking spaces to CCP. However, Crocker stated that it was "not in a position to provide [CCP] with perpetual, free spaces." Govindaraju replied that CCP only requested the following three changes to Crocker's settlement proposal: (1) removal of Jackson's Lease as a contingency to the easement, (2) seven years of abatement on the parking payments, and (3) addition of Manor as a party to the easement and release. On March 24, 2017, Crocker responded by offering the following revised terms: (1) "Reserved Spaces - [Crocker] will provide you with 103 reserved parking spaces." (2) "Term - the length of the Jackson's Lease as may be extended by you and Jackson[']s." Govindaraju replied, again seeking removal of the Jackson's Lease Contingency.
On April 18, 2017, Govindaraju again emailed Crocker indicating that CCP would not accept a settlement that did not include a provision "that [the] Jackson's [Lease] [C]ontingency be removed in its entirety." On April 25, 2017, Govindaraju emailed Crocker with "an alternative solution." Govindaraju proposed "terminat[ing] the easement in exchange for the purchase of 103 reserved spaces at the [Parking G]arage similar to . . . Manor's purchase of reserved spaces," effectively removing the Jackson's Lease Contingency.
On June 19, 2017, a representative from Crocker emailed Govindaraju indicating that Crocker had offered several major concessions which were rejected by CCP. On June 20, 2017, Govindaraju replied in a lengthy email in which he stated
I'm not a bully, but I am the guy who is the lifelong nerd who has always given the bully a bloody nose (literally and proverbially) ....To litigate these issues is a high risk for Crocker. You have conceded on the easy items which were highly contested at the beginning and which led to the perception that Crocker is an actor in bad faith. . . There is a simple solution here. We both have foresight, and know that there is nothing lost to your joint venture conceding on the above issues [removing the Jackson's Lease Contingency and making the arrangement perpetual]. There is zero lost, but here is unnecessary significant risk and expense with litigation.
Govindaraju explained that it was CCP's position that "Manor and Crocker made a statement under oath to the city that Crocker had 560 spaces available to give away" but the Parking Garage "DOES NOT have enough spaces." Considering the alleged fraud in the permitting process, Govindaraju explained that CCP has sought demolition of the Manor building pursuant to case law in which courts "require[d] destruction" of a building "if the application was false." Govindaraju promised that the Crocker Action and the City Action "c[ould] be simply closed and all of this swept under the rug by complying with [CCP's] simple requests." Govindaraju warned that "[t]here is gravity for [Crocker] and for Manor because the consequences at trial have 8[-]figure risk to each of [the] firms."
Govindaraju continued to engage in settlement negotiations with Manor. On September 1, 2017, Govindaraju emailed a representative from Manor, seeking to persuade Manor to join forces with CCP. In relevant part, Govindaraju told Manor that CCP did not "see [Manor] as [its] enemy;" rather, CCP considered both its and Manor's enemy to be Crocker. Govindaraju continued, saying "[i]f you can have someone really smart look at the chessboard, you will see that the only end game is that Crocker gets wrecked . . . [t]here is also a probability that [Manor] gets wrecked because the false statements are what led to your permit." Govindaraju attempted to persuade Manor that Crocker was responsible for the risk that Manor faced in the City Action and suggested that Manor "attack [Crocker] rapidly" so that Crocker "collapse[s]." Govindaraju attached a copy of the email he sent to Crocker on June 20, 2017, to persuade Manor to join CCP in attacking Crocker.
Govindaraju continued to send Crocker emails in which he questioned the wisdom of Crocker's attorneys and emphasized the significant risk Crocker and Manor faced in the litigation if they did not cooperate with CCP's settlement efforts. In one email from August 18, 2018, Govindaraju explained to Crocker that he continued to participate in settlement negotiations to "nobly share with [Crocker] an easy way out [of the litigation] to save [its] dignity." Govindaraju also informed Crocker that CCP had reconciled with Jackson's and, thus, Crocker should settle to keep the "trespass issue" "buried under the rug for many reasons which I will not put into writing." Govindaraju then proposed that in addition to the previously discussed settlement terms, "the free parking period shall be perpetual." Govindaraju suggested that accepting his settlement offer presented a "tremendous value" to Crocker and Manor, allowing them to "preserve undeserved dignity" and "wipe [them]selves clean from this embarrassing situation."
The Manor Action
On October 25, 2018, Manor sued CCP for abuse of process (the Manor Action), alleging that CCP willfully and intentionally used the process of the circuit court in the Crocker Action and the City Action for a purpose for which process was not designed-"to coerce Manor into pressuring Crocker to provide access to parking spaces in the [Parking Garage] for a term that is not coextensive with the Jackson's [L]ease," a right of access which CCP has not claimed in either the Crocker Action or the City Action. Manor later filed an amended complaint, raising claims of abuse of process and malicious prosecution against CCP and the other Appellants.
On April 16, 2021, Manor filed a motion for leave to amend its complaint again to assert claims for punitive damages against each of the Appellants. In the motion, Manor argued that each of the Appellants "personally engaged in intentional or grossly negligent misconduct warranting imposition of punitive damages" pursuant to section 768.72, Florida Statutes (2020). Manor indicated that it would file and serve "a separate proffer of evidence supporting a 'reasonable showing' that a 'reasonable basis exists' for recovery of punitive damages." On May 24, 2022, Manor served and filed its proffer, which consisted of 189 exhibits. Manor also filed a PowerPoint presentation containing highlights and excerpts from its proffer that Manor used to support its claims for punitive damages.
On May 25, 2022, the trial court held a hearing on Manor's motion to amend. At the conclusion of the hearing, the trial court directed the parties to file posthearing submissions in support of their respective positions on Manor's motion to amend and proposed orders disposing of the motion. After considering the evidence presented at the hearing and the parties' posthearing submissions, the trial court granted Manor's motion to amend the complaint to assert claims for punitive damages against all the Appellants. The Appellants timely appealed.
Analysis
Appellate courts review a trial court's decision to grant a motion to amend a complaint to add claims for punitive damages de novo. Progressive Select Ins. Co. v. Ober, 353 So.3d 1190, 1192 (Fla. 4th DCA 2023) (citing Bistline v. Rogers, 215 So.3d 607, 610 (Fla. 4th DCA 2017)). "In evaluating the sufficiency of the evidence proffered in support of a punitive damages claim, the evidence is viewed in a light favorable to the moving party." Case v. Newman, 154 So.3d 1151, 1157 (Fla. 1st DCA 2014) (quoting Wayne Frier Home Ctr. of Pensacola, Inc. v. Cadlerock Joint Venture, L.P., 16 So.3d 1006, 1009 (Fla. 1st DCA 2009)).
In relevant part, section 768.72(1) provides "[i]n any civil action, no claim for punitive damages shall be permitted unless there is a reasonable showing by evidence in the record or proffered by the claimant which would provide a reasonable basis for recovery of such damages." If the trial court determines that the plaintiff has demonstrated a reasonable showing of entitlement to punitive damages, "[a] defendant may be held liable for punitive damages only if the trier of fact, based on clear and convincing evidence, finds that the defendant was personally guilty of intentional misconduct or gross negligence." See § 768.72(2). Pursuant to the punitive damages statute, "'Intentional misconduct' means that the defendant had actual knowledge of the wrongfulness of the conduct and the high probability that injury or damage to the claimant would result and, despite that knowledge, intentionally pursued that course of conduct, resulting in injury or damage." § 768.72(2)(a). "'Gross negligence' means that the defendant's conduct was so reckless or wanting in care that it constituted a conscious disregard or indifference to the life, safety, or rights of persons exposed to such conduct." § 768.72(2)(b).
Because Manor seeks to recover punitive damages for intentional torts, it must show intentional misconduct; gross negligence would not suffice. Cf. Bistline, 215 So.3d at 609 ("Because the claims at issue do not sound in negligence, the asserted basis for punitive damages under the statute was 'intentional misconduct' "); cf also ER Truck &Equip Corp v Gomont, 300 So.3d 1230, 1231 (Fla 3d DCA 2020) (Scales, J, concurring) ("Because Gomont's retaliatory discharge claim asserts an intentional tort, the basis for seeking punitive damages under the statute is 'intentional misconduct.' "(citation omitted)). This makes sense: one cannot negligently-or even grossly negligently-intend to do something. Cf. Booth v. Mary Carter Paint Co., 182 So.2d 292, 299 (Fla. 2d DCA 1966)) ("[N]egligence and intention have no necessary connection. Negligence is not dependent upon bad intention, nor is it necessarily negat[ed] by good intention. When the legal rights of others are involved, the question of negligence vel non must stand on the facts themselves, uninfluenced by intention."). Thus, the following discussion addresses Manor's claims for punitive damages with a focus on the intentional misconduct requirement to the exclusion of gross negligence.
I. Claims for Punitive Damages for Abuse of Process
The trial court found that "Manor's proffer provide[d] a reasonable basis from which a jury could conclude Govindaraju attempted to use litigation risk in an attempt to extort millions of dollars of parking rights." On appeal, the Appellants argue that the trial court erred by permitting Manor to amend its complaint with respect to its abuse of process claim to add a claim for punitive damages against CCP, Convergent, and Govindaraju.
While this court cannot entertain the Appellant's invitation to review the sufficiency of Manor's abuse of process claim because we can only review specified nonfinal orders as enumerated in Florida Rule of Appellate Procedure 9.130, cf. Suggs v. Sw. Fla. Water Mgmt. Dist., 953 So.2d 699, 700 (Fla. 5th DCA 2007), consideration of the elements of the abuse of process cause of action is relevant to reviewing the trial court's order. The elements of abuse of process are "(1) an illegal, improper, or perverted use of process by the defendant; (2) an ulterior motive or purpose in exercising the illegal, improper, or perverted process; and (3) damage to the plaintiff as a result of the defendant's action." Valdes v. GAB Robins N. Am., Inc., 924 So.2d 862, 867 n.2 (Fla. 3d DCA 2006) (citing Hardick v. Homol, 795 So.2d 1107, 1111 n.2 (Fla. 5th DCA 2001)). "[T]he usual case of abuse of process involves some form of extortion." S &I Invs. v. Payless Flea Mkt., 36 So.3d 909, 917 (Fla. 4th DCA 2010) (alteration in original) (quoting Bothmann v. Harrington, 458 So.2d 1163, 1169 (Fla. 3rd DCA 1984)). However, "[t]here is no abuse of process . . . when the process is used to accomplish the result for which it was created, regardless of an incidental or concurrent motive of spite or ulterior purpose." Id. (emphasis omitted) (quoting Bothmann, 458 So.2d at 1169).
Abuse of process is an intentional tort. Cf. Indem. Ins. Co. of N. Am. v. Am. Aviation, Inc., 891 So.2d 532, 543 n.3 (Fla. 2004) (identifying abuse of process as an "[i]ntentional tort"). Evidence in support of the commission of an intentional tort alone is not sufficient to establish a reasonable basis for a claim of punitive damages. See Bistline, 215 So.3d at 611 ("Merely pleading a facially sufficient claim for an intentional business tort is not sufficient to claim punitive damages. '[P]unitive damages are reserved for particular types of behavior which go beyond mere intentional acts.' "(alteration in original) (quoting Weinstein Design Grp., Inc. v. Fielder, 884 So.2d 990, 1001 (Fla. 4th DCA 2004))); Air Ambulance Pros., Inc. v. Thin Air, 809 So.2d 28, 30 (Fla. 4th DCA 2002) ("Record evidence may support an intentional tort, but not necessarily an award of punitive damages."). Instead, the plaintiff must make "a reasonable showing" that there is "a reasonable basis" for the finder of fact to believe that "the defendant had actual knowledge of the wrongfulness of the conduct and the high probability that injury or damage to the claimant would result and, despite that knowledge, intentionally pursued that course of conduct, resulting in injury or damage." See § 768.72(1)-(2)(a).
At the hearing on its motion to amend and on appeal, Manor argued that it made a reasonable showing that CCP, Convergent, Govindaraju, Sachdev, and Beraquit, through Govindaraju, used the process of the trial court in the Crocker Action and the City Action to coerce Manor to exert pressure on Crocker to agree to CCP's settlement offer which would require Crocker to remove the Jackson's Lease Contingency from the Parking Easement Agreement-collateral relief not sought in either the Crocker Action or the City Action. While this would tend to support the conclusion that the defendants advanced their cause of action for "an ulterior motive or purpose," see Valdes, 924 So.2d at 867 n.2, the other elements of the tort of abuse of process are not as readily supportable, especially to the extent required to support entitlement to punitive damages based upon such tort. In other words, the defendants would also be required to have used the process of filing the lawsuit in a manner that was "illegal, improper, or perverted," see id., and to have done so with "actual knowledge of the wrongfulness of the[ir] conduct and the high probability that injury or damage to [Manor] would result," § 768.72(2)(a). While Govindaraju's and CCP's attorneys' strategic tactics and their communications with Crocker and Manor during settlement negotiations could certainly be considered aggressive, Manor has not shown them to have been "illegal." As such, to prove punitive damages are warranted for its abuse of process cause of action, Manor would be required to establish that such tactics constitute "improper" or "perverted" use of the litigation process by refusing to settle the Crocker Action and the City Action unless Manor successfully convinced Crocker to remove the Jackson's Lease Contingency from the Parking Easement Agreement. Whether blustering about one's prowess while denigrating one's opponent, expressing unqualified self-assurance about the merits of one's legal position, and asserting hyperbolic confidence in one's chances of litigation success and an unwillingness to capitulate during settlement negotiations constitutes an "improper" or "perverted" use of the civil litigation process to achieve ulterior ends might depend on the particular perspective and experience of the finder of fact. However, this court need not opine on that question if it finds that the evidence on which Manor relied does not provide a reasonable showing that the defendants "had actual knowledge of the wrongfulness" of the use of such tactics in pursuit of the ulterior motive of eliminating the Jackson's Lease Contingency. See § 768.72(2)(a). In other words, Manor would need to prove that the defendants knew it was wrong to seek an objective not included in the relief sought in their lawsuit-a perpetual right to the spaces effectuated by elimination of the Jackson's Lease Contingency-by means of the aforementioned bellicose communications and hardball tactics.
To answer that question, an examination of what the term "wrongfulness" means in the context of the punitive damages statute is required. In the context of punitive damages-meant to punish a tortfeasor rather than compensate a plaintiff, see Bistline, 215 So.3d at 609 (noting that conduct must "rise to the level of truly culpable behavior deserving of punishment")-the term wrongfulness would refer to conduct that is "[c]ontrary to conscience, morality, or law." See wrongfulness, American Heritage Dictionary 2001 (5th ed. 2011); see also Owens-Corning Fiberglas Corp. v. Ballard, 749 So.2d 483, 486 (Fla. 1999) ("Under Florida law, the purpose of punitive damages is not to further compensate the plaintiff, but to punish the defendant for its wrongful conduct and to deter similar misconduct by it and other actors in the future."). Such an interpretation is borne out by case law on the issue of punitive damages, which have been described as those "reserved for truly culpable behavior [that] are intended to 'express society's collective outrage.' "Marder v. Mueller, 358 So.3d 1242, 1245 (Fla. 4th DCA 2023) (quoting KIS Grp., LLC v. Moquin, 263 So.3d 63, 65-66 (Fla. 4th DCA 2019)). "Punitive damages are a form of extraordinary relief for acts and omissions so egregious as to jeopardize not only the particular plaintiff in the lawsuit, but the public as a whole, such that a punishment-not merely compensation-must be imposed to prevent similar conduct in the future." Grove Isle Ass'n, Inc. v. Lindzon, 350 So.3d 826, 830 (Fla. 3d DCA 2022) (quoting BDO Seidman, LLP v. Banco Espirito Santo Int'l, 38 So.3d 874, 876 (Fla. 3d DCA 2010)). Presuming for the sake of analysis that the evidence relied upon by Manor amounts to a preliminary showing that Govindaraju, CCP, and Convergent may have committed the tort of abuse of process, the evidence does not rise to the level of the wrongfulness-and knowledge of such wrongfulness- required to expose a defendant to a claim for punitive damages for Manor's abuse of process claims.
The employment of ruthless negotiation tactics based on ongoing litigation, even if during such negotiation a litigant seeks concessions from the opposing party that are ancillary to the litigation, does not in and of itself present an affront to "conscience, morality, or the law," see wrongfulness, American Heritage Dictionary, 2001 (5th ed. 2011), so as to constitute the type of "wrongfulness," see § 768.72(2)(a), that the punitive damages statute is design to impose on a defendant as punishment. Dissembling communications meant to obscure one's true intentions (or to delay commitment to a strategic direction until more knowledge is obtained); duplicitous representations to various actors in multiparty negotiations for the purpose of sussing out weaknesses or realigning shifting alliances in one's favor: these tactics, while arguably unseemly, are hardly uncommon in the context of negotiations over the resolution of contentious litigation. The punitive damages statute and case law construing it require more than the natural products of human nature exhibited by those that find themselves in the inherently antagonistic milieu of the litigation process-more than the typical cunning and aggressiveness commonly shown by litigants and their advocates embroiled in negotiations over a fraught or high-stakes dispute that has found its way to the courts. Rather, punitive damages are reserved for anomalously transgressive conduct that is "outrageous in character" and "extreme in degree." See Cleveland Clinic Fla. Health Sys. Nonprofit Corp. v. Oriolo, 357 So.3d 703, 706 (Fla. 4th DCA 2023) (alteration in original) (quoting Payton Health Care Facilities, Inc. v. Est. of Campbell, 497 So.2d 1233, 1240 (Fla. 2d DCA 1986)). Courts have described such intentional conduct for which punitive damages are appropriate as that which "is fraudulent, malicious, deliberately violent or oppressive." See Marder, 358 So.3d at 1245 (quoting Owens-Corning Fiberglas Corp., 749 So.2d at 486). While undoubtedly distasteful to some, the evidence upon which Manor relies for its entitlement to punitive damages for abuse of process does not include conduct of that severity. As such, the trial court erred by granting Manor leave to amend its complaint to seek punitive damages against Govindaraju, CCP, and Convergent as to the abuse of process claim.
II. Claims for Punitive Damages for Malicious Prosecution
The trial court found that Manor made a reasonable showing that there was a reasonable basis for an award of punitive damages against CCP with respect to Manor's malicious prosecution claim. The trial court found that Manor's proffer included emails to Sachdev which provided Sachdev-and by extension CCP-with knowledge of the quasi-judicial proceedings through which the city approved and affirmed Manor's site plan and the building permit for the Manor building on July 31, 2014, and October 28, 2014. This purported knowledge is the basis for Manor's claim that CCP's due process claim against the city in the City Action was not supported by probable cause. Manor alleged that CCP lied when it claimed not to have received due process in order to maliciously seek demolition of the Manor building. On appeal, the Appellants argue that the trial court erred by permitting Manor to amend its complaint with respect to its malicious prosecution claim to add a claim for punitive damages against CCP.
Like abuse of process, malicious prosecution is an intentional tort. See Alamo Rent-A-Car, Inc. v. Mancusi, 632 So.2d 1352, 1355 (Fla. 1994). The elements of malicious prosecution are
(1) an original judicial proceeding against the present plaintiff was commenced or continued; (2) the present defendant was the legal cause of the original proceeding; (3) the termination of the original proceeding constituted a bona fide termination of that proceeding in favor of the present plaintiff; (4) there was an absence of probable cause for the original proceeding; (5) there was malice on the part of the present defendant; and
(6) the plaintiff suffered damages as a result of the original proceeding.MacAlister v. Bevis Constr., Inc., 164 So.3d 773, 776-77 (Fla. 2d DCA 2015). Again, the plaintiff must do more than make a showing that an intentional tort may have been committed; the plaintiff must make a reasonable showing that there is a reasonable basis for the finder of fact to believe that "the defendant had actual knowledge of the wrongfulness of the conduct and the high probability that injury or damage to the claimant would result and, despite that knowledge, intentionally pursued that course of conduct, resulting in injury or damages." See § 768.72(2)(a), (b).
In the City Action, CCP claimed that Manor and Crocker had fraudulently misrepresented material information related to Manor's parking needs and calculations to the city when applying for a building permit. It later amended its complaint to allege that the city failed to provide CCP with meaningful notice and opportunity to be heard during the building permit proceedings. However, Manor's proffer makes a reasonable showing that CCP had received notice. It is this latter theory of prevarication upon which CCP continued its City Action litigation that gives rise to the reasonable showing of entitlement to punitive damages for Manor's malicious prosecution claim.
Sachdev received emails about and formal mailed notice of the city council hearing on Manor's shared parking arrangement. In particular, Sachdev received an email on July 22, 2014, which contained a survey regarding the development and construction of the Manor building. The survey informed recipients that "[t]here will be limited on-site parking. The parking for the building will primarily be in the parking garage located on the commercial space on the other side of Harbour Place Drive." The survey also advised recipients that "[Manor] is currently seeking approval for the project from the City of Tampa....As part of the approval process, there will be an opportunity for public comment on the proposed development including at the next city council meeting schedule for Thursday, July 31st at 9:00a.m." In response to this email, Sachdev emailed a member of the Plaza Harbour Island Condominium Association, asking him to call Sachdev. Manor's proffer also included testimony indicating that Sachdev's testimony that he did not recall seeing, reading, or opening the email containing the survey was not truthful, as it contradicts the documentary evidence, which suggests that Sachdev had opened, read, and responded to the survey email informing him of the date of the public hearing prior to approval of the site plan and issuance of the building permit. Manor also proffered evidence that Sachdev, president of CCP, received formal notice of the public hearing regarding the Manor building's parking arrangement.
Thus, the evidence proffered by Manor in support of its motion to amend the complaint to add claims for punitive damages as to its malicious prosecution claim established at least a reasonable basis for the finder of fact to believe that CCP had knowledge that its representations in the City Action and the appeal of the judgment in the City Action were false. Essentially, the evidence presents a reasonable showing to support Manor's theory that CCP lied to the court with the purpose of raising the specter of the destruction of the Manor building in order to intimidate the defendants into altering the parking easement to CCP's benefit. Not only could this satisfy the standard for malicious prosecution-requiring a defendant to have maliciously advanced a cause of action that lacked probable cause-but it is also a reasonable showing that the defendant's malicious prosecution was undertaken wrongfully, within the meaning of that term in the context of the punitive damages statute. Knowing subversion of the civil justice system by the presentation of fabrications of fact to a truth-seeking tribunal with the potential to make good on threats to destroy an opposing party's business venture and literally raze its property is the type of "fraudulent, malicious, [and] deliberately . . . oppressive" conduct for which punitive damages are designed not only to punish the perpetrator "for its wrongful conduct" but also "to deter similar misconduct by it and other actors in the future." See Owens-Corning Fiberglas Corp., 749 So.2d at 486; see also Grove Isle Ass'n, 350 So.3d at 830 (noting that "punitive damages are reserved for truly culpable behavior and are intended to express society's collective outrage" (quoting KIS Grp., 263 So.3d at 65-66)); cf Southstar Equity, LLC v. Lai Chau, 998 So.2d 625, 633 (Fla. 2d DCA 2008) ("The jury's determination that punitive damages were warranted is most readily sustained on the basis of the jury's finding that the defendants were guilty of intentional misrepresentation-a finding supported by the evidence that the defendants affirmatively misled the plaintiff ....").
Manor also satisfied its obligation to show that the defendants knew of the wrongfulness of their conduct; the evidence reasonably shows that they were aware they were making misrepresentations to the court. In an action for the intentional tort of malicious prosecution, a plaintiff must prove that the defendant commenced or continued proceedings maliciously but not necessarily that the defendant had perfect knowledge that its claim against the plaintiff lacked probable cause. Cf. Alterra Healthcare Corp. v. Campbell, 78 So.3d 595, 602 (Fla. 2d DCA 2011) ("Because a malicious-prosecution defendant's good faith is 'an essential element to be considered on the question of probable cause,' if it appears that further investigation is justified before instituting a proceeding, 'liability may attach for failure to do so.' "(first quoting Glass v. Parrish, 51 So.2d 717, 720 (Fla. 1951), and then quoting Harris v. Lewis State Bank, 482 So.2d 1378, 1382 (Fla. 1st DCA 1986))). Here, the evidence relied upon by Manor reasonably supports that the defendants continued the City Action litigation under the nonotice theory that they had every reason to understand lacked probable cause. And of course, they also knew there was a probability that Manor could suffer injury or damage-demolition of the Manor building or cessation of the project-if CCP were successful in its claims in the City Action based on the alleged falsehoods on which CCP's lack-of-notice theory was based. See § 768.72(2)(a) (requiring that "the defendant had actual knowledge of . . . the high probability that injury or damage to the claimant would result and, despite that knowledge, intentionally pursued th[e] course of conduct"). Therefore, the trial court did not err by granting Manor leave to amend its claim for malicious prosecution to add claims for punitive damages.
III. Claims for Punitive Damages against Sachdev and Beraquit based on Govindaraju's Conduct
The trial court found that Manor's "proffer . . . provide[d] a reasonable basis from which a jury could award punitive damages against all other Defendants [including Sachdev and Beraquit] based on the conduct of Govindaraju laid out in the proffer." On appeal, the Appellants argue that the trial court erred in finding that Sachdev and Beraquit could be held personally liable for punitive damages resulting from Govindaraju's conduct.
Section 768.72(3) addresses the circumstances under which punitive damages may be imposed upon principals.
(3) In the case of an employer, principal, corporation, or other legal entity, punitive damages may be imposed for the conduct of an employee or agent only if the conduct of the employee or agent meets the criteria specified in subsection (2) and:
(a) The employer, principal, corporation, or other legal entity actively and knowingly participated in such conduct;
(b) The officers, directors, or managers of the employer, principal, corporation, or other legal entity knowingly condoned, ratified, or consented to such conduct; or
(c) The employer, principal, corporation, or other legal entity engaged in conduct that constituted gross negligence and that contributed to the loss, damages, or injury suffered by the claimant.§ 768.72(3).
As explained above, the conduct of Govindaraju-the "employee or agent" in this case-during settlement negotiations did not "meet[] the criteria specified in" section 768.72(2) for punitive damages as to the abuse of process claim; therefore, even if, presuming arguendo that Sachdev and Beraquit could properly be considered principals of Govindaraju for purposes of section 768.72(3), the trial court erred by permitting Manor to amend its complaint to assert claims for punitive damages for the abuse of process claim against Sachdev and Beraquit personally based on Govindaraju's conduct. However, the question remains whether Sachdev and Beraquit can be held personally liable as principals for Govindaraju's conduct in initiating and continuing the litigation for the purpose of establishing Manor's entitlement to amend to add punitive damages against them based on its malicious prosecution claim.
Manor's argument that Govindaraju is the agent of Sachdev and Beraquit by virtue of their delegation of authority to coordinate and facilitate litigation on behalf of CCP and Convergent lacks merit. As the CEO of CCP and a member of Convergent, Govindaraju is an agent of each LLC, not an agent of the individual members of each LLC. See § 605.04074(1)(a), Fla. Stat. (2021) ("[E]ach member is an agent of the [member-managed] limited liability company for the purpose of its activities and affairs, and an act of a member . . . binds the company . . . ."); (2)(b) ("[E]ach manager is an agent of the [manager-managed] limited liability company for the purpose of its activities and affairs, and an act of a manager. . . binds the company ...."). Further, members cannot be held liable for liabilities of an LLC solely by virtue of being a member of the LLC-even if, as here, the LLC fails to observe formalities relating to the exercise of powers and management. See § 605.0304(1)-(2) ("A debt, obligation, or other liability of a limited liability company is solely the debt, obligation, or other liability of the company. A member or manager is not personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or other liability of the company solely by reason of being or acting as a member or manager.... The failure of a limited liability company to observe formalities relating to the exercise of its powers or management of its activities and affairs is not a ground for imposing liability on a member or manager of the company for a debt, obligation, or other liability of the company."). In relevant part, section 605.04093(1) provides that
a member in a member-managed limited liability company is not personally liable for monetary damages to the limited liability company, its members, or any other person for any statement, vote, decision, or failure to act regarding management or policy decisions by . . . a member in a member-managed limited liability company unless:
(a) The . . . member breached or failed to perform the duties as . . . a member in a member-managed limited liability company; and
(b) The. . . member's breach of, or failure to perform, those duties constitutes any of the following:
...
5. In a proceeding by or in the right of someone other than the limited liability company or a member, recklessness or an act or omission that was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property.
Based on the foregoing statutes, Sachdev and Beraquit are not Govindaraju's principals-rather, Govindaraju is an agent of CCP (as its CEO) and an agent of Convergent (as a member of the LLC). See 605.04074(1)(a), (b). Thus, CCP and Convergent may be held liable for Govindaraju's conduct, see § 605.04074(1)(a), (b), but Sachdev and Beraquit may not individually be held directly or indirectly liable for Govindaraju's conduct unless Sachdev and Beraquit breached or failed to perform their duties as members of Convergent and their breach or failure to perform those duties constitutes recklessness, bad faith, or a malicious act exhibiting willful disregard for human rights, safety, or property, see § 605.04093(1). Sachdev and Beraquit's delegation of the responsibility for coordinating and facilitating litigation on behalf of CCP and Convergent to Govindaraju does not amount to a breach of or failure to perform their duties as members of Convergent. See § 605.04093(1)(a). Further, Manor did not present evidence sufficient to support that such a delegation was reckless, made in bad faith, or with a malicious purpose such that Sachdev and Beraquit willfully disregarded human rights, safety, or property. See § 605.04093(1)(b)5. Sachdev, Beraquit, and Govindaraju's failure to formally outline the division of their responsibilities in Convergent and with respect to CCP does not render Sachdev and Beraquit personally liable for Govindaraju's acts on behalf of either LLC. See § 605.0304(2). As such, Manor did not establish a reasonable basis for concluding that punitive damages could be imposed on Sachdev or Beraquit as the principal of Govindaraju or as personally liable as members of the corporate entity. See § 768.72(3) (governing under what circumstances "punitive damages may be imposed" on "an employer, principal, corporation, or other legal entity . . . for the conduct of an employee or agent").
Conclusion
Based on the foregoing, we affirm the part of the trial court's order granting leave to amend Manor's malicious prosecution claim to add claims for punitive damages, reverse the parts of the order granting leave to amend the amended complaint to add claims for punitive damages as to the abuse of process claim and as to Sachdev and Beraquit based on Govindaraju's conduct, and remand for further proceedings consistent with this opinion.
Affirmed in part, reversed in part, and remanded.
KELLY and LaROSE, JJ., Concur.
Opinion subject to revision prior to official publication.