Full Opinion

DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT NEXLUBE OPERATING, LLC, Appellant/Cross-Appellee, v. EDA INVESTMENTS, LLC, Appellee/Cross-Appellant, and ENZIO D’ANGELO, Appellee. No. 2D19-1784 August 20, 2021 Appeal from the Circuit Court for Hillsborough County, Steven Scott Stephens, Judge. Natalie P. Thomas, Shankman Leone, P.A., Tampa, and Kelli A. Edson, Quarles & Brady, LLP , Tampa, for Appellant. Mark R. Osherow, Osherow, PLLC, Boca Raton, for Appellee/Cross- Appellant. No appearance for Appellee Enzio D'Angelo. STARGEL, Judge. This action involves a dispute between several parties who had entered certain contracts for the planning, funding, and development of an innovative project to re-refine used oil into other industrial lubrication products using a particular method. NexLube Operating, LLC, was the defendant and counterplaintiff in the action first initiated by EDA Investments, LLC. The nature of the complaint and countercomplaint centered around claims for breaches of contracts and certain other related claims.1 Summary judgment was entered on some but not all of EDA's claims in favor of NexLube with a directed verdict entered in favor of EDA on its remaining claim during trial with a limitation on damages. Following a trial on NexLube's issues, the final judgment ultimately resulted in the entry of a $50,000 judgment, plus interest, in favor of EDA against NexLube. After the denial of NexLube's 1 Enzio D'Angelo, the sole owner and officer of EDA, also filed a complaint against NexLube. Summary judgment was granted in favor of NexLube on D'Angelo's individual complaint prior to trial because the contracts at issue were only between NexLube and EDA. Accordingly, D'Angelo is a named appellee under Florida Rule of Appellate Procedure 9.020(g)(2), but he has not otherwise participated in the appeal. 2 postjudgment motions seeking new trial, judgment notwithstanding the verdict (JNOV), and additur, NexLube appealed and EDA cross- appealed. Although we affirm most portions of the final judgment without comment, we reverse the final judgment, in part, to the extent that it found in favor of NexLube on its claim for negligent misrepresentation against EDA but awarded a damage amount of zero. There were a number of parties and players involved in the multiyear project related to the feasibility and funding of an oil re- refining plant at the Port of Tampa, but we need only focus on the contractual relationship between EDA and NexLube and those few individuals and companies directly involved in the related facts. Beginning in 2010, NexLube and EDA entered into a series of consulting agreements with specific responsibilities covering certain periods during the feasibility portion of the refinery project. During the feasibility portion of the project, which included engineering studies, an analysis of equipment and process needs, and the project's long-term costs estimates, ChemNec Engineering was hired. Enzio D'Angelo communicated regularly with ChemNec during this time. Ultimately, the costs of this project grew beyond 3 those first anticipated, and by February 2012 the anticipated project costs for NexLube had grown from approximately $40 million to more than $80 million. During this time, NexLube was putting together a document in preparation for seeking third-party investors, the Private Placement Memorandum (PPM). NexLube claims it relied significantly on the projected costs provided to it by D'Angelo and, indirectly, ChemNec in preparing this document. On February 9, 2012, D'Angelo provided a cost estimate for the project of $82,309,883. Over the next week, however, D'Angelo and ChemNec emailed about the piping and other costs that had not yet been included in estimates and would increase the overall project costs by approximately $14,000,000. D’Angelo was aware these increased costs could jeopardize the project. NexLube claims that these additional costs were not provided in D'Angelo's next report on February 21. Moreover, NexLube's Board of Directors met on February 28, 2012, to review the feasibility results and make investment decisions based on the projected costs. Based on the incorrect projected costs before the Board of Directors, which had been provided by EDA through D’Angelo, NexLube elected to proceed with the project and to solicit third-party investors. 4 On April 10, 2012, NexLube and EDA entered into a final consulting agreement for this portion of the project. NexLube also entered into a Settlement and Participation Agreement (SPA) with EDA and D'Angelo, which outlined additional project terms and clarified the ownership, rights, and responsibilities of the parties. NexLube signed a twenty-year lease with the Tampa Port Authority for the site in June 2012 and broke ground on construction in July 2012. It also finalized the PPM for the purpose of obtaining third- party investors. In late 2012 and early 2013 the details of the actual cost estimates began to be revealed, and by May 2013, the project cost was projected to be $129,678,670. NexLube employees also then brought misconduct claims against D'Angelo in August 2013, and following an investigation, NexLube terminated the consulting agreement for cause on September 16, 2013. It then learned that D'Angelo had not provided all the cost estimates from ChemNec. By this time, relationships had soured, and costs for use of the method originally 5 planned became untenable. Construction of the refinery project was suspended in November 2013.2 EDA and D'Angelo sued NexLube in a six-count complaint that included a claim for breach of the Agreement for Consulting Services dated April 10, 2012, in count one (Agreement for Consulting) and that sought damages in the amount of $475,000,3 and NexLube brought a countersuit raising three counts, including a claim for negligent misrepresentation against EDA. There were numerous amended complaints, countercomplaints, and third- party complaints raising various counts filed over the course of litigation, but partial grants of motions to dismiss and summary judgment, as well as the voluntary dismissal of the third-party complaint, resulted in only certain counts being set for trial. In 2 Ultimately the project was reinitiated using a different refining method than the one associated with the contracts at issue in this case. Part of the allegations in these counts include that costs and equipment for the method under these contracts were lost when the new method did not require the same equipment or process. 3 As a result of NexLube's early termination of the Agreement for Consulting, EDA sought damages of $25,000 per each of the seventeen months remaining under the Agreement for Consulting. 6 that regard, several factors are important regarding the scope of this appeal. First, the trial court determined in the order partially granting summary judgment that only count one of EDA's action—the claim for breach of contract related to the termination of the Agreement for Consulting—would go to trial, granting summary judgment in favor of NexLube on the anticipatory breach claim related to the SPA and the various related counts that made up the remainder of the complaint. The summary judgment order did not include the counterclaims brought by NexLube. Second, as the remaining matters proceeded to trial, the court entered a directed verdict on EDA's sole remaining claim against NexLube but limited the damages awarded on it to $50,000.4 Third, the parties disputed the jury instructions given as a result of the directed verdict in terms of how the jury was to consider NexLube's counterclaims related to breach of the same contract. Of those counterclaims, the jury found in favor of NexLube only on its negligent misrepresentation claim. However, it awarded a damage amount of zero on that claim, 4 The directed verdict limited the damages to a two-month period, thereby limiting the damages amount to $50,000. 7 which thereby resulted in a finding in favor of EDA on one claim and NexLube on one claim in terms of liability but only resulted in a damages award of $50,000 to EDA. NexLube filed a motion for new trial, motion for JNOV, and motion for additur, which were all denied, and ultimately the final judgment in favor of EDA for $50,000 was entered. The parties have raised numerous issues on appeal, but we need only discuss those issues concerning the jury's verdict of zero damages on NexLube's count for negligent misrepresentation— specifically NexLube's claims that the trial court erred in failing to grant either the motion for JNOV or additur to award its proven damages amount (an amount that must be greater than zero) on that claim. Within this count, NexLube claimed that EDA, through D'Angelo, negligently made false statements to it regarding the costs of the project, that EDA should have known the statements were false, and that NexLube relied on those statements to its detriment.5 The jury found in favor of NexLube, as reflected on the 5 A party claiming negligent misrepresentation must prove (1) that a misrepresentation of material fact occurred that the defendant believed to be true but which was in fact false, (2) that the defendant should have known the representation was false, (3) that 8 verdict form, but it found that the damages on this claim were zero. However, NexLube claims that it presented evidence of up to $32,529,731 in damages on this count, including consultant fees, unusable equipment, storage costs, insurance, engineering contracts, consulting contracts, technology licenses, and lost interest, through its various witnesses and documentary evidence. After the verdict was rendered, NexLube filed its motions for new trial, JNOV6, and additur. Specifically, in the motions for JNOV and additur NexLube argued that while the evidence may have been in dispute as to the amount of damages proven on the claim, there was no dispute that the amount was more than zero. The trial court denied both motions. the defendant intended to induce reliance on the false representation by the plaintiff, and (4) that the plaintiff justifiably relied on the misrepresentation, resulting in damages. Arlington Pebble Creek, LLC v. Campus Edge Condo. Ass'n, 232 So. 3d 502, 505 (Fla. 1st DCA 2017). There is no dispute that the jury verdict reflected findings consistent with the elements of this claim, with the exception of the zero damages amount. 6 "The parties use the term motion for judgment notwithstanding the verdict rather than directed verdict. Although disfavored, see Hall v. Ricardo, 331 So. 2d 375, 376 (Fla. 3d DCA 1976) (citing Fla. R. Civ. P. 1.480), and 55 Fla. Jur. 2d Trial § 160 (2013), the term is still widely used." Merritt v. OLMHP, LLC, 112 So. 3d 559, 560 n.1 (Fla. 2d DCA 2013). 9 We conclude that NexLube is entitled to a new trial on damages based on the trial court's abuse of discretion in denying its motion for additur, which properly placed the issue of inadequate damages before the court for consideration. See Ellender v. Bricker, 967 So. 2d 1088, 1091 (Fla. 2d DCA 2007) ("A party may raise the issue of an inadequate verdict for the first time in a posttrial motion for additur . . . .").7 In any action . . . wherein the trier of fact determines that liability exists on the part of the defendant and a verdict is rendered which awards money damages to the plaintiff, it shall be the responsibility of the court, upon proper motion, to review the amount of such award to determine if such amount is excessive or inadequate in light of the facts and circumstances which were presented to the trier of fact. 7 We recognize that NexLube filed its motion for additur in conjunction with a motion for new trial. That motion was based in significant part on its argument related to a jury instruction that stemmed from the directed verdict on EDA's breach of contract claim. To the extent NexLube argued in that motion and argues on appeal that this instruction was erroneous and confused the jury and required a new trial, we do not reach that issue within this opinion and note only that the instruction is beyond the scope of the issues to be tried upon remand during any retrial on damages resulting from this opinion. However, to the extent that the trial court's specific findings related to the motion for new trial also related to the jury's consideration of the evidence of damages on the negligent misrepresentation count, we address that evidence within the context of the ruling on the motion for additur. 10 § 768.74(1), Fla. Stat. (2018). The trial court's role in determining whether a jury's damage award is inadequate or excessive is governed by statutory factors. § 768.74(5). "If the court finds that the amount awarded is excessive or inadequate, it shall order a remittitur or additur, as the case may be." § 768.74(2). An appellate court then reviews rulings on motions for additur under an abuse of discretion standard. Ellender, 967 So. 2d at 1092; Garrett v. Miami Transfer Co., 964 So. 2d 286, 289 (Fla. 4th DCA 2007). In this case, NexLube filed a motion for additur arguing that the jury found liability on its negligent misrepresentation claim and, in light of the evidence presented, that the money damages award of zero was inadequate. On appeal, it argues that under the factors set forth in section 768.74(5), the trial court abused its discretion in failing to grant its motion and order additur. EDA argues that the trial court did not abuse its discretion in denying the motion, that NexLube failed to prove money damages were incurred as a result of the negligent misrepresentation, and that the zero damages amount is therefore adequate and supported by the evidence. In looking at an inadequate verdict claim, "the evidence must support a jury's 11 zero-dollar award for it to stand." Rozar v. R. J. Reynolds Tobacco Co., 292 So. 3d 1202, 1207 (Fla. 1st DCA 2020) (relying on this court's analysis in Ellender, 967 So. 2d at 1092-93, to conclude that where undisputed evidence supports damages, a zero-dollar verdict is inadequate). Ellender examined the evidence of future damages stemming from injuries sustained in an accident in the face of a zero-dollar verdict on those specific damages following the denial of a motion for additur. We concluded that three of the five factors in section 768.74 controlled the conclusion that the trial court erred in not granting additur, specifically that "the jury clearly ignored this evidence or misconceived the merits of the case relating to the amount," that "the award of zero damages . . . does not bear a reasonable relation to the amount of damages proven," and that "the zero damages award . . . [was] not supported by the evidence." 967 So. 2d at 1092. Likewise, those three factors should have controlled the trial court's determination of the inadequacy of the zero-dollar verdict in this case. See § 768.74(5)(b), (d), (e). Specifically, NexLube has established that it presented sufficient evidence of damages related to decisions that were made 12 in reliance on numbers that included the misrepresented cost estimates given to it by EDA through D'Angelo. While the trial court concluded that the jury could have rightfully rejected NexLube's expert testimony regarding the calculation of interest lost on cash flow projections, in order to reach a zero verdict the jury still would have had to ignore or misconceive the other types of damage evidence presented by NexLube, including damages related to costs of continuing the project after it relied on the misrepresentation and suspending the project for the cost analysis after it learned of the actual projection overruns, as well as insurance, site, and equipment costs. We need not further deduce what the exact amount of damages proven by NexLube was to recognize that an award of a zero damage amount was inadequate because it failed to bear a reasonable relationship to the damages proven by NexLube and thus was not supported by the evidence. Like Ellender, 967 So. 2d at 1092-93, the trial court here abused its discretion in denying NexLube's motion for additur where three of the five statutory factors in section 768.74(5) supported that the zero-dollar award was inadequate. See § 768.74(5)(b), (d), (e). 13 Instead the trial court should have concluded that the zero- dollar damage award was inadequate. Upon such a conclusion, the trial court then should have granted the motion pursuant to subsection (2), and because EDA objected to any determination of a damages amount above zero, under subsection (4), the trial court should have set the matter for a new trial only as to damages on the count for negligent misrepresentation. Instead, it entered a final judgment reflecting the zero-dollar verdict on this count. Accordingly, we reverse the final judgment insofar as it awards a zero-dollar judgment on NexLube's count for negligent misrepresentation against EDA. In all other respects, including the liability determination on that claim, we affirm the final judgment. We remand for a new trial on damages on the negligent misrepresentation count. Affirmed in part; reversed in part; remanded. KHOUZAM and SMITH, JJ., Concur. Opinion subject to revision prior to official publication. 14