KIS Group, LLC v. Moquin

KIS Group, LLC v. Moquin

Opinion

 [*64]  Damoorgian, J.

Petitioners KIS Group, LLC, Alerion Management Group, LLC and Ricardo DeAvila seek certiorari review of the trial court's order granting Respondent Yves Moquin's motion to amend his complaint to assert a claim for punitive damages. Because the court failed to follow the procedural requirements of section 768.72, Florida Statutes, we grant the petition.

Petitioner KIS is a company that was formed for the sole purpose of investing in KIOSK Information Systems, Inc., a company that designs and manufactures kiosk systems. Petitioner Alerion manages KIS and Petitioner DeAvila serves as a manager for Alerion. In 2010, Respondent purchased two membership units in KIS for $353,333.33. Five years later, Respondent contacted DeAvila and requested to redeem [**2]  his investment in KIOSK. Before granting the request, DeAvila advised Respondent that KIOSK might be sold within the year. Respondent acknowledged the possibility of a sale but decided to nonetheless redeem his investment.

Several months after Respondent redeemed his investment, KIOSK sold for a substantial profit. Respondent thereafter  [*65]  sued Petitioners for, amongst other things, fraud in the inducement. The fraud claims were predicated on Respondent's belief that at the time he requested to redeem his investment, Petitioners knew that the sale of KIOSK was imminent and not merely a remote future possibility as represented by DeAvila. Respondent maintained that Petitioners intentionally withheld this information in order to fraudulently induce him to sell his units early. Petitioners moved for summary judgment and, following a hearing, the court granted partial summary judgment. The three separate fraud claims against Petitioners, however, survived.

Shortly thereafter, Respondent moved to amend his complaint to add a claim for punitive damages. At the ensuing hearing, Respondent argued that the court's previous denial of Petitioners' motion for summary judgment on the fraud claims was [**3]  the functional equivalent of a determination by the court that there was a reasonable evidentiary basis for punitive damages. In support thereof, Respondent cited First Interstate Development Corp. v. Ablanedo, 511 So. 2d 536, 539 (Fla. 1987) for the proposition that "proof of fraud sufficient to support compensatory damages necessarily is sufficient to create a jury question regarding punitive damages." Petitioners countered that regardless of the previous ruling on the motion for summary judgment, the court was required to conduct a section 768.72 evidentiary inquiry to determine whether there was evidence in the record which would provide a reasonable basis for recovery of punitive damages.

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