Gonzalez v. Barrenechea, Nos. 3D12-3430 & 3D13-987

(Fla. 3d DCA 2015)

By a 2-to-1 panel decision (Judge Logue writing for the majority joined by Judge Salter with Judge Suarez dissenting), the Third District Court of Appeal just opened the doors for plaintiffs to get a second bite at the apple if they fail to prove damages at trial.

Judge Jerald Bagley bench tried this rather mundane case concerning a defendant being sued for designing a faulty air-conditioning system for a residence. The plaintiff-homeowner sought actual damages for costs in redesigning and replacing the air-conditioning system and also sought damages for loss of use of the home while awaiting the system’s replacement. The homeowner claimed that it took 20 months to replace the system, rendering the home unsuitable for living. To establish the damages resulting from the loss of use, the homeowner presented testimony from an expert. The expert testified that comparable rentals for the full use of the home were $15,500 per month.

However, on cross-examination, it turned out that over the 20-month period, part of the house was intermittently occupied by the son of the homeowner. Further, the homeowner used the vacant house’s garage to store his cars, stored furniture in the house, and used the dock for the homeowner’s sea vessel.

Cross-examination further revealed that the homeowner’s expert witness did not consider and was unaware of the homeowner’s various uses and was unable to give an opinion about the damages for loss of use. The expert testified: “[t]here would be a rental market for it, but it would be somewhat diminished for that needed garage storage and needed use of the dock.”

Thus, the homeowner’s expert did not evaluate comparable rentals where docks, garages, and rooms were not available to a renter. As a result, the expert did not determine damages for the loss of use of the home, taking into consideration those factors.

At the conclusion of the trial, Judge Bagley awarded direct damages for the redesign and repair of the air conditioning system. However, because the homeowner’s expert was unable to ascertain the loss of use damages, Judge Bagley’s order stated that the homeowner’s expert “did not offer an opinion about the estimated rental value based on the actual, restricted use of the property that would have been available to prospective renters during the presumed rental period.”

Therefore, Judge Bagley denied loss of use damages and denied a motion for rehearing. The appeal followed.

How The Majority Analyzed Damages

The majority opinion framed the appellate question: whether the trial court erred in finding the loss of use damages too speculative.

The majority found that although the homeowner’s expert could not determine the damages taking into account the limited use of the rental value: “We note that none are so large as to negate the rental value arrived at” by the expert.

The majority observed that the homeowner “would likely” have had to pay to store the items elsewhere. The majority stated that these storage fees “would likely” be subject to a counter-adjustment. The opinion then discusses shifting the burden of proof on the defendants to establish any set-off.

Can’t We All Just Get Along

I believe that the most interesting part of the majority opinion is where the majority interposes an obligation on behalf of a litigant to agree to reopen a case where the litigant, “neither presented evidence of the value of these adjustments nor cooperated with the homeowner in his attempt to reopen his case to present such evidence.” Therefore, the burden shifts to the defense to either present evidence of some diminution of damages or the defense should “cooperate” and allow reopening of a case.

The majority continued that an award of the full amount of loss of use damages would arguably result in a small windfall to the homeowner and that “[g]iven a choice between a small windfall for the injured plaintiff and a large windfall to the [] defendants as tortfeasors, the law favors a windfall for the injured plaintiff.” So, declared the majority, Judge Bagley erred in denying loss of use damages because the expert established a prima facie case for loss of use damages.

A Rare Dissenter Dissents

Judge Alan Schwartz, hands-down the Third District’s most famous judge has often stated that: “A dissent and two dollars and 14 cents will get you a cup of coffee at Starbucks.” True, indeed. That said, Judge Richard Suarez is perhaps the least dissenting judge that the Third District has ever had in its 57 years of existence. So, when Judge Suarez dissents, readers should pay attention.

In his dissent, Judge Suarez agreed with Judge Bagley’s decision because the evidence did not support the loss of use damages claim: “The Homeowner did not ask for a continuance when the new information came to light at trial. The trial court found that the Homeowner entirely failed to prove his damages for loss of use because the values testified to were inaccurate.”

Judge Suarez also did not agree with the majority because there was no factual basis in the record for the majority to base reversal on a factual “assumption” that none of the damage calculation adjustments for loss of use was “so large as to negate the rental value arrived at” by the expert. Judge Suarez also tells the reader that the defendant could not have pleaded set-off in the answer because prior to trial, the facts “were not fully set forth in the Complaint.” Thus, reasons Judge Suarez, the ultimate facts came out at trial during the expert’s cross-examination. Accordingly, comparable rental values that the expert testified to at trial were inaccurate by the expert’s own admission.

The dissent also takes exception to the plaintiff’s attempt to have the case reheard, quoting St. Petersburg Hous. Auth. v. J.R. Dev., 706 So. 2d 1377 (Fla. 2d DCA 1998): “Rehearing is not intended as a device to present additional evidence that was available, although not presented at the original trial…Once the parties rested here, in the absence of legal or factual error or newly-discovered evidence, the case was concluded….”

Last, the dissent states that the appellate court cannot be the fact-finder on appeal. Thus, reasoned Judge Suarez: “The truth or falsity of the testimony of the expert witness, and the weight given the testimony are matters for the trier of fact to determine, not an appellate court.” Judge Suarez further wrote: “The appellate court cannot speculate that the rental valuation reduction is ‘limited’ or that the windfall to the plaintiff owner would be ‘small’ – that is a factual determination and where there are no data and no facts in the record to support that conclusion, the appellate court must allow the trial court’s ruling to stand.”

Advice For Judges And Practitioners

This case presents problems for defense lawyers and for judges, while at the same time breathing new life into plaintiffs’ damages claims.

First, for defense lawyers, it appears that in the initial pleading stages, asserting a set-off defense may be prudent. But, the problem is that there may not be a basis for asserting the defense. In turn, that may set the stage for costly motion practice, discovery issues, and possible sanctions for frivolous pleadings.

Also, assuming that defense counsel engaged in stupendous and decimating cross-examination of an expert witness, the opinion suggests that you should cooperate with plaintiff counsel and agree to rehear/re-open the damages part of the case if there is some evidence of damages to allow the plaintiff to properly establish damages.

From a professionalism perspective, that would be nice. But, from a zealous advocacy perspective, along with a malpractice perspective, agreeing to rehear/re-open a case could be problematic.

Turning to trial judges, the problems have multiple permutations. Here are just a few examples: 

  1. Do you automatically grant rehearing and re-open cases even though the plaintiff failed to prove damages if there is some record evidence of some damages?; 
  2. Do you take a more active role in making sure that you continue cases to allow plaintiffs to shore up the damages claim, even after they rest?; 
  3. Do you just take your best guess as to the damages and hope that you are right?; 
  4. Do you actively question experts to ascertain the proper damages? 

Last, turning to plaintiff lawyers, life is good. If you can establish that indeed a prima facie case for damages exists, but not the exact amount, you can use this case to obtain either a continuance or rehearing. Then, you can have your witness perform the proper analysis and present the trier of fact with the correct analysis and establish bullet-proof damages. The only problem that I see is if you are in a jury trial, a lengthy continuance would be difficult. Thus, I suggest requesting a brief continuance so as not to inconvenience the jury.

This article was first published on the Law.com Network on February 10, 2015.