Facts
- James E. Radcliffe operated a Precision Tune Auto Care, Inc. (Precision) franchise store in South Florida (Store 1516) under a franchise-lease agreement.
- Radcliffe was also a guarantor for four other Precision franchise stores owned by other individuals.
- Radcliffe (and Performance Concepts, Inc.) sued Precision in Florida for breach of the franchise relationship; the complaint did not specifically state any items of special damages.
- Precision timely filed an answer and a counterclaim.
- Discovery disputes followed. Radcliffe served broad document requests and noticed a corporate representative deposition with extensive topics and production demands.
- Precision failed to timely and fully comply with discovery demands and court-ordered discovery deadlines, and at one point did not produce a corporate representative as noticed.
- When Precision later produced a corporate representative, the witness had limited knowledge and identified three other Precision individuals as having the needed knowledge.
- The trial court entered escalating sanctions orders and ultimately ordered Precision to produce three specifically identified representatives in Fort Lauderdale within a short deadline and to bring required documents, warning that noncompliance would result in Precision’s pleadings being struck.
- Precision produced two of the three witnesses; the third did not appear, and required documents were not produced as ordered.
- The trial court found Precision’s conduct amounted to a deliberate disregard of its discovery orders, struck Precision’s pleadings, and proceeded to a jury trial on damages only.
- At the damages trial, Radcliffe sought damages tied to future, contingent losses stemming from his guarantor obligations on the four other stores, arguing Precision’s breach regarding Store 1516 would prevent him from taking over those other stores’ leases if their operators defaulted, exposing him to substantial losses as guarantor.
- The trial court admitted this evidence and entered judgment on the jury’s damages award (approximately $840,093.86).
- Precision appealed, challenging (1) the order striking its pleadings as a discovery sanction and (2) the submission and award of special damages that were not specifically pled.
Issues
- Whether the trial court abused its discretion by striking Precision’s pleadings as a sanction for failing to comply with discovery orders.
- Whether the trial court erred by allowing the jury to consider and award special damages that were not specifically stated in the complaint.
Decision
- The court affirmed the order striking Precision’s pleadings, holding the trial court did not abuse its discretion in finding deliberate noncompliance with discovery orders and imposing the severe sanction.
- The court reversed the damages judgment and remanded for a new trial on damages because the trial court improperly allowed the jury to consider special damages that were not specifically pled.
Legal Principles
- A trial court has broad discretion to impose sanctions for discovery violations under Florida Rule of Civil Procedure 1.380; appellate review is for abuse of discretion.
- Striking pleadings or entering a default is the most severe discovery sanction and is proper only in extreme circumstances, such as willful or contumacious disregard of the court’s authority, bad faith, or gross indifference to court orders.
- Florida Rule of Civil Procedure 1.120(g) requires that items of special damages be specifically stated; if they are not specifically pled, evidence of those damages should not be admitted and they are not recoverable.
- When unpled special damages are submitted to the jury and included in the judgment, the proper remedy is reversal and a new trial on damages limited to recoverable, properly pled items.
Conclusion
The Fourth District affirmed the trial court’s decision to strike Precision’s pleadings after repeated discovery failures and violation of a clear order to produce designated witnesses and documents, but reversed the damages award because Radcliffe’s future, contingent guarantor-related losses were special damages that had not been specifically stated in the complaint, requiring a new trial on damages.