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Fla.App. 3 Dist.,2009.
Hallock v. Holiday Isle Resort & Marina, Inc.
4 So.3d 17, 34 Fla. L. Weekly D232 District Court of Appeal of Florida,
Third District.
Background: Purchaser of half of operator's half-interest in restaurant brought action against operator and other
partner for tortious interference, fraud, breach of contract, breach of fiduciary duty, libel, and slander after operator
and partner opened another restaurant next door and partner later terminated joint venture agreement. Operator
brought counterclaim for breach of contract. After various motions for summary judgment, the Circuit Court, Mon-
Holdings: The District Court of Appeal, Ramirez, J., held that:
(1) breach of contract allegations in amended complaint related back to original complaint, and
(2) operator and partner could not breach fiduciary duty to purchaser by engaging in conduct permitted by agree-
ment.
241II Computation of Period of Limitation
241II(H) Commencement of Proceeding; Relation Back
241k127 Amendment of Pleadings
241k127(2) Amendment Restating Original Cause of Action
241k127(4) k. Actions on Contract. Most Cited Cases
[2] Joint Adventures 224 4(1)
224 Joint Adventures
and full authority as to the conduct of the business.
[3] Joint Adventures 224 4(1)
224 Joint Adventures
Rogers, Morris & Ziegler and Mark F. Booth, Fort Lauderdale, for appellees.
Before GERSTEN, C.J., and RAMIREZ, J., and SCHWARTZ, Senior Judge.
to Dismiss Plaintiff's Third Amended Complaint on June 8, 2007; the Order Denying Motion for Rehearing
or Reconsideration on June 14, 2007; the Order Granting Defendant, Holiday Isle Resort & Marina, Inc.'s
Motion for Summary Final Judgment Joined by Rip Tosun, on January 2, 2008; and the Order Denying
Motion for Reconsideration on January 24, 2008.
I. Facts
cated at Holiday Isle Resort & Marina, Windley Key, Islamorada, Florida. Under the 1984 joint venture agree-
ment, Tosun was to operate the restaurant as a partnership, each party owning fifty percent interest. The agree-
ment would expire in five years. The joint venture agreement provided that “Tosun may not assign or alienate his
interest in the Venture, and in the event of death of Tosun, the Venture shall terminate.”
© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.
The joint venture was later extended and modified by an undated “Extension of Modification of Joint Venture
Agreement,” which limited the extension periods to one-year, effective March 1, 1996. During the time period
that Rip's was in business, it was managed and operated by Tosun. During this time, Holiday Isle owned and oper-
ated at least four other restaurants and five other bars and various food kiosks, all located on the Holiday Isle Re-
sort property.
In 1997, Tosun entered into a Contract for Sale and Purchase whereby Tosun sold fifty percent of his half interest
in Rip's to Thomas Hallock, the plaintiff in the trial court. That sale provided that in return for payments totaling
$125,000, Hallock would receive fifty-percent of Tosun's interest in Rip's, as well as continue to receive his pre-
sent salary. This purchase agreement granted Hallock the option to purchase Tosun's remaining interest in Rip's,
subject to Holiday Isle's consent. Hallock admits that while he asked for Holiday Isle's consent to purchase To-
sun's remaining interest in Rip's, Holiday Isle never responded to his request for Holiday Isle's consent.
equipment were also shifted to the Steakhouse.
Hallock objected to the partners about the cessation of the breakfast shift and Holiday Isle's lack of response to his
request for consent to his purchase. Hallock alleged that personnel and equipment were diverted from Rip's to the
Steakhouse to increase profits of the Steakhouse, to the detriment of Rip's. Holiday Isle responded by threatening
to terminate the agreement. On March 1, 2000, Holiday Isle terminated the joint venture agreement.
as premature as to Tosun, and affirmed as to all other matters appealed.
I. Breach of Contract
[1] The initial complaint contained a count for breach of contract against Holiday Isle, but Hallock dropped this
claim when he filed his first amended complaint based on the fact that Holiday Isle persistently had maintained, un-
The trial court committed legal error in dismissing this count because the allegations in the complaint related back to
the original complaint. In Palafrugell Holdings, Inc. v. Cassel, 825 So.2d 937, 940 (Fla. 3d DCA 2001), we reversed
the dismissal of a complaint based on the statute of limitations under similar circumstances, citing Florida Rule of
Civil Procedure 1.190(c), which states, “[w]hen the claim or defense asserted in the amended pleading arose out of
[2] After remand, Holiday Isle re-filed its motion for summary judgment with the trial court based on the economic
loss rule. The trial court granted the motion stating that the “breach of fiduciary duty is not separate and distinct
from the essence of the parties' Joint Venture Agreement,” citing Clayton v. State Farm Mutual Automobile Insur-
ance Company, 729 So.2d 1012, 1014 (Fla. 3d DCA 1999), which states that “where the alleged fraudulent misrep-
resentation is inseparable from the essence of the parties' agreement, the economic loss rule still applies,” and Pear-
duty is one of those well-established torts.” Invo Florida, 751 So.2d at 1267. We concluded “that Moransais makes
it clear that the economic loss rule has not abolished the cause of action for breach of fiduciary duty, even if there is
an underlying oral or written contract.” Id.
[3] As we stated in Hallock I, “[a] joint adventurer such as Holiday Isle owes a fiduciary duty to the other partners
We further stated in Hallock I “that there is a genuine issue of material fact as to whether Holiday Isle breached its
fiduciary duty to Hallock in opening a competing restaurant next door to Rip's, the Steakhouse, and in diverting as-
sets and employees from the partnership to the Steakhouse.” Id. at 463. The joint venture agreement expressly grants
Tosun authority over the employees, where it states that “[a]ll personnel employed by the Venture shall be employ-
We conclude that the trial court correctly granted summary judgment on the breach of fiduciary duty count. We
therefore affirm the order granting summary judgment with respect to the breach of fiduciary duty count, but reverse
the dismissal of the breach of contract count.
Affirmed in part, reversed in part, and remanded for further proceedings.
© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.
Fla.App. 3 Dist.,2009.
Hallock v. Holiday Isle Resort & Marina, Inc.
4 So.3d 17, 34 Fla. L. Weekly D232
END OF DOCUMENT
224 Joint Adventures
and full authority as to the conduct of the business.
[3] Joint Adventures 224 4(1)
224 Joint Adventures
Rogers, Morris & Ziegler and Mark F. Booth, Fort Lauderdale, for appellees.
Before GERSTEN, C.J., and RAMIREZ, J., and SCHWARTZ, Senior Judge.
to Dismiss Plaintiff's Third Amended Complaint on June 8, 2007; the Order Denying Motion for Rehearing
or Reconsideration on June 14, 2007; the Order Granting Defendant, Holiday Isle Resort & Marina, Inc.'s
Motion for Summary Final Judgment Joined by Rip Tosun, on January 2, 2008; and the Order Denying
Motion for Reconsideration on January 24, 2008.
I. Facts
cated at Holiday Isle Resort & Marina, Windley Key, Islamorada, Florida. Under the 1984 joint venture agree-
ment, Tosun was to operate the restaurant as a partnership, each party owning fifty percent interest. The agree-
ment would expire in five years. The joint venture agreement provided that “Tosun may not assign or alienate his
interest in the Venture, and in the event of death of Tosun, the Venture shall terminate.”
© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.
The joint venture was later extended and modified by an undated “Extension of Modification of Joint Venture
Agreement,” which limited the extension periods to one-year, effective March 1, 1996. During the time period
that Rip's was in business, it was managed and operated by Tosun. During this time, Holiday Isle owned and oper-
ated at least four other restaurants and five other bars and various food kiosks, all located on the Holiday Isle Re-
sort property.
In 1997, Tosun entered into a Contract for Sale and Purchase whereby Tosun sold fifty percent of his half interest
in Rip's to Thomas Hallock, the plaintiff in the trial court. That sale provided that in return for payments totaling
$125,000, Hallock would receive fifty-percent of Tosun's interest in Rip's, as well as continue to receive his pre-
sent salary. This purchase agreement granted Hallock the option to purchase Tosun's remaining interest in Rip's,
subject to Holiday Isle's consent. Hallock admits that while he asked for Holiday Isle's consent to purchase To-
sun's remaining interest in Rip's, Holiday Isle never responded to his request for Holiday Isle's consent.
equipment were also shifted to the Steakhouse.
Hallock objected to the partners about the cessation of the breakfast shift and Holiday Isle's lack of response to his
request for consent to his purchase. Hallock alleged that personnel and equipment were diverted from Rip's to the
Steakhouse to increase profits of the Steakhouse, to the detriment of Rip's. Holiday Isle responded by threatening
to terminate the agreement. On March 1, 2000, Holiday Isle terminated the joint venture agreement.
as premature as to Tosun, and affirmed as to all other matters appealed.
I. Breach of Contract
[1] The initial complaint contained a count for breach of contract against Holiday Isle, but Hallock dropped this
claim when he filed his first amended complaint based on the fact that Holiday Isle persistently had maintained, un-
The trial court committed legal error in dismissing this count because the allegations in the complaint related back to
the original complaint. In Palafrugell Holdings, Inc. v. Cassel, 825 So.2d 937, 940 (Fla. 3d DCA 2001), we reversed
the dismissal of a complaint based on the statute of limitations under similar circumstances, citing Florida Rule of
Civil Procedure 1.190(c), which states, “[w]hen the claim or defense asserted in the amended pleading arose out of
[2] After remand, Holiday Isle re-filed its motion for summary judgment with the trial court based on the economic
loss rule. The trial court granted the motion stating that the “breach of fiduciary duty is not separate and distinct
from the essence of the parties' Joint Venture Agreement,” citing Clayton v. State Farm Mutual Automobile Insur-
ance Company, 729 So.2d 1012, 1014 (Fla. 3d DCA 1999), which states that “where the alleged fraudulent misrep-
resentation is inseparable from the essence of the parties' agreement, the economic loss rule still applies,” and Pear-
duty is one of those well-established torts.” Invo Florida, 751 So.2d at 1267. We concluded “that Moransais makes
it clear that the economic loss rule has not abolished the cause of action for breach of fiduciary duty, even if there is
an underlying oral or written contract.” Id.
[3] As we stated in Hallock I, “[a] joint adventurer such as Holiday Isle owes a fiduciary duty to the other partners
We further stated in Hallock I “that there is a genuine issue of material fact as to whether Holiday Isle breached its
fiduciary duty to Hallock in opening a competing restaurant next door to Rip's, the Steakhouse, and in diverting as-
sets and employees from the partnership to the Steakhouse.” Id. at 463. The joint venture agreement expressly grants
Tosun authority over the employees, where it states that “[a]ll personnel employed by the Venture shall be employ-
We conclude that the trial court correctly granted summary judgment on the breach of fiduciary duty count. We
therefore affirm the order granting summary judgment with respect to the breach of fiduciary duty count, but reverse
the dismissal of the breach of contract count.
Affirmed in part, reversed in part, and remanded for further proceedings.
© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.
Fla.App. 3 Dist.,2009.
Hallock v. Holiday Isle Resort & Marina, Inc.
4 So.3d 17, 34 Fla. L. Weekly D232
END OF DOCUMENT
