source: Caselaw Access Project

author: SMITH, Justice.

license: Public Domain

text:
    Ex parte Renaldo Chante ADAMS. (In re Renaldo Chante Adams v. State of Alabama).
    1030633.
    Supreme Court of Alabama.
    Dec. 23, 2005.

      Bryan A. Stevenson, Cathleen I. Price, and Gerald W. King of Equal Justice Initiative of Alabama, Montgomery, for petitioner.
    Troy King, atty. gen., and Tracy M. Daniel, asst. atty. gen., for respondent.
   SMITH, Justice.

We hereby suspend the provisions of Rule 39(g) and (h), Ala. R.App. P., allowing the petitioner and the respondent to file briefs and request oral argument, and we summarily grant the writ solely to address the propriety of Renaldo Chante Adams’s sentence. Adams was convicted and sentenced to death for murdering Melissa Mills during the course of a robbery, rape, and burglary. On appeal, the Court of Criminal Appeals affirmed Adams’s conviction and his sentence of death. Adams v. State, 955 So.2d 1037 (Ala.Crim.App.2003).

In Roper v. Simmons, 543 U.S. 551, 125 S.Ct. 1183, 161 L.Ed.2d 1 (2005), decided after the Court of Criminal Appeals issued its decision in this case, the United States Supreme Court held that it was unconstitutional to execute an offender who was under the age of 18 when he or she committed the offense. The opinion of the Court of Criminal Appeals states that Adams was 17 years old at the time of the offense. 955 So.2d at 1049. Nothing filed in this Court disputes that fact. Thus, it would appear that the United States Supreme Court’s decision in Roper applies to Adams’s sentence; therefore, we reverse the judgment of the Court of Criminal Appeals as to Adams’s sentence and remand the cause for a determination of the impact of Roper on Adams’s sentence. As to all other issues raised in Adams’s petition, certiorari review is denied.

WRIT GRANTED IN PART AND DENIED IN PART; REVERSED AND REMANDED.

NABERS, C.J., and SEE, LYONS, HARWOOD, WOODALL, STUART, and BOLIN, JJ., concur.

PARKER, J., recuses himself.

      . This case was originally assigned to another Justice; it was later reassigned to Justice Smith.


author: McMILLAN, Presiding Judge.

text:
    Renaldo Chante ADAMS v. STATE of Alabama.
    CR-98-0496.
    Court of Criminal Appeals of Alabama.
    April 28, 2006.

      J. Drew Colfax and Bryan A. Stevenson, Montgomery, for appellant.
    William H. Pryor, Jr., and Troy King, attys. gen., and Thomas Parker IV and Henry M. Johnson, asst, attys. gen., for appellee.
   McMILLAN, Presiding Judge.

The appellant, Renaldo Chante Adams, was convicted of four counts of capital murder and one count of first-degree robbery. He was sentenced to death on the capital-murder convictions and to life imprisonment on the robbery conviction. This Court affirmed Adams’s capital-murder convictions and death sentence, but remanded the case for the trial court to set aside Adams’s robbery conviction and sentence of life imprisonment as violative of double-jeopardy principles. Adams v. State, 955 So.2d 1037 (Ala.Crim.App.2003). After the trial court complied with our directions, this Court affirmed its judgment. Adams v. State, 955 So.2d 1037, 1106 (Ala.Crim.App.2003) (opinion on return to remand). Adams appealed to the Alabama Supreme Court, and that Court remanded the case to this Court, stating:

“In Roper v. Simmons, 543 U.S. 551, 125 S.Ct. 1183, 161 L.Ed.2d 1 (2005), decided after the Court of Criminal Appeals issued its decision in this case, the United States Supreme Court held that it was unconstitutional to execute an offender who was under the age of 18 when he or she committed the offense. The opinion of the Court of Criminal Appeals states that Adams was 17 years old at the time of the offense. 955 So.2d at 1049. Nothing filed in this Court disputes that fact. Thus, it would appear that the United States Supreme Court’s decision in Roper applies to Adams’s sentence; therefore, we reverse the judgment of the Court of Criminal Appeals as to Adams’s sentence and remand the cause for a determination of the impact of Roper on Adams’s sentence. As to all other issues raised in Adams’s petition, certiorari review is denied.”

Ex parte Adams, 955 So.2d 1106, 1107 (Ala.2005).

Adams was born on July 1, 1980; the murder occurred on the evening of August 20, 1997. The record clearly indicates that Adams was 17 years of age at the time of the murder. Thus, because Ada,ms was under the age of 18 when he committed the murder, his sentence of death is due to be set aside pursuant to Roper v. Simmons, 543 U.S. 551, 125 S.Ct. 1183, 161 L.Ed.2d 1 (2005). Therefore, this case must be remanded for the Montgomery Circuit Court to set aside Adams’s death sentence and to sentence him to the only other sentence available — life in the penitentiary without the possibility of parole. See Wimberly v. State, 931 So.2d 60 (Ala.Crim.App.2005); and Duke v. State, 922 So.2d 179 (Ala.Crim.App.2005) (opinion on remand from the United States Supreme Court). Due return should be filed with this Court no later than 42 days from the date of this opinion.

REMANDED WITH INSTRUCTIONS.

COBB, BASCHAB, SHAW, and WISE, JJ., concur.

       Note from the reporter of decisions: On October 20, 2006, on return to remand, the Court of Criminal Appeals affirmed, without opinion.


author: KAHN, J. DAVIS, J.,

text:
    Danny K. WHITE and wife, Laura Michelle White, Appellants, v. Troy SYFRETT, Appellee.
    No. 1D06-446.
    District Court of Appeal of Florida, First District.
    Nov. 28, 2006.

      Jeffrey P. Whitton, Panama City, for Appellants.
    Larry A. Bodiford of Hutto and Bodi-ford, Panama City, for Appellee.
   KAHN, J.

In this breach of contract case, the trial court dismissed appellants’ amended complaint with prejudice. Because the trial court erred by dismissal at such an early stage, we reverse and remand for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

Appellants, Danny K. White and Laura Michelle White, filed a complaint for damages, alleging breach of contract, against appellee, Troy Syfrett, concerning the purchase and sale of certain real estate. Sy-frett moved to dismiss the complaint, asserting that because it lacked allegations that the Whites complied with all conditions precedent, it failed to state a cause of action. The circuit court dismissed the complaint without prejudice on September 2, 2005.

On September 20, 2005, the Whites filed an amended complaint, again alleging breach of contract. The Whites alleged that, on August 23, 2002, they had entered into a contract with Syfrett for the purchase and sale of certain real estate in Bay County and they attached a copy of the contract as Exhibit A. The Whites further alleged:

3. Pursuant to the terms of the contract, the Plaintiffs and the Defendant agreed to the property to be conveyed based upon an aerial diagram which was drawn to scale. The Plaintiffs reserved the right to approve the actual survey once it was completed to ensure that it conformed to the aerial diagram approved by both parties.

The Whites alleged that, on September 23, 2004, they received a letter returning their $80,000 deposit and advising that Syfrett had decided not to develop the property. The Whites advised Syfrett that they were not accepting return of the deposit and were looking for Syfrett to perform under the terms of the contract. The Whites alleged that Syfrett subsequently “caused the subject property together with surrounding parcels to be sold to a third party thereby depriving the Plaintiffs of the right to acquire the property from the Defendant.”

Syfrett filed a Motion to Dismiss, again asserting that the Whites had failed to state a cause of action. Syfrett stated the following particulars:

■1. The plaintiff, Laura Michelle White, never executed the contract attached to the Complaint. Therefore, pursuant to paragraph III, the contract never had an effective date. In addition, the defendant would have had no cause of action against Laura Michelle White to enforce the contract or for any other remedy.
2. ■ The contract fails to allege that all conditions precedent have occurred and in fact said precedents have not occurred, to-wit: Paragraphs 2, 3, 6 and 7 of the Addendum.
3. Paragraph 6 contains an agreement to agree to some condition in the future and when that is an essential element of the contract, the parties have not reached a present meeting of the minds at the time the contract was signed. Further, in paragraph 6, that agreement causes the deposit money to be “nonrefundable.” Since the survey work was not done and approved, the deposit never became non-refundable.
4. Paragraph XII [sic] of the Addendum caused the contract to be contingent when the paving permits and development orders were obtained by Seller. This paragraph put no requirement on the Seller to obtain the permits and the obtaining of same remained optional to the defendant.
5. Paragraph XI and XII [sic] of the Addendum caused the contract to be illusory in that it affords the defendant the option of performing or not performing.
6. The legal description of the real property is insufficient to form the basis of a contract.

A hearing evidently took place; however, it was not transcribed. On January 11, 2006, the circuit court rendered an Order Dismissing Amended Complaint with Prejudice. The Order essentially adopted paragraph 6 of the motion to dismiss:

The real estate contract which is the subject matter of this litigation fails to adequately describe the real property to be conveyed. The description is so flawed that it constitutes a patent ambiguity which cannot be explained by the admission of parol evidence. See: Carson v. Palmer, 139 Fla. [570], 579, 190 So. 720 (1939). Accordingly, the plaintiffs’ amended complaint is dismissed with prejudice.

ANALYSIS

The Whites have appealed and argue that the trial court erred in granting the motion to dismiss.

A motion to dismiss tests whether the plaintiff has stated a cause of action. Because a ruling on a motion to dismiss for failure to state a cause of action is an issue of law, it is reviewable on appeal by the de novo standard of review. When determining the merits of a motion to dismiss, the trial court’s consideration is limited to the four corners of the complaint, the allegations of which must be accepted as true and considered in the light most favorable to the nonmov-ing party.

Bell v. Indian River Mem. Hosp., 778 So.2d 1030, 1032 (Fla. 4th DCA 2001) (citations omitted); see Magnum Capital, LLC v. Carter & Assocs., LLC, 905 So.2d 220, 221 (Fla. 1st DCA 2005); Snow v. Byron, 580 So.2d 238, 240 (Fla. 1st DCA 1991). Further, “[cjonsideration of potential affirmative defenses or speculation about the sufficiency of the evidence which plaintiff will likely produce on the merits is wholly irrelevant and immaterial to deciding such a motion.” Susan Fixel, Inc. v. Rosenthal & Rosenthal, Inc., 842 So.2d 204, 206 (Fla. 3d DCA 2003). Applying the standard to this case, we reverse and remand.

A review of the First Amended Complaint indicates that the Whites sufficiently stated a cause of action for breach of contract. They alleged the parties had entered into a contract for the purchase and sale of certain real estate, they had deposited $30,000.00 with the escrow agent selected by Syfrett, they later received a letter from the escrow agent attempting to return the deposit and advising that Sy-frett had decided not to develop the property, they did not accept the return of the deposit and sought to have Syfrett perform under the terms of the contract, and Syfrett subsequently sold the subject property to a third party. Although the description of the property included in the contract (attached to the complaint) does appear problematic, we are not prepared to say it conclusively negates the claim. See Magnum Capital, 905 So.2d at 220 (“[I]f documents are attached to a complaint and conclusively negate a claim, the pleadings can be dismissed.”). Any insuf-ficiencies in the contract or evidence should be raised as defenses by the defendant, Syfrett. See Susan Fixel, Inc., 842 So.2d at 206.

The case relied on by the circuit court does not control. See Carson, 190 So. at 722. In particular, the Carson case did not involve a ruling on a motion to dismiss; rather, it involved an appeal from a final judgment, rendered after the court granted defense motions striking documents critical to the plaintiffs’ action. See id. at 721. Indeed, none of the cases cited by Syfrett concern a ruling on a motion to dismiss. In addition, in Carson, the court found a classic patent ambiguity in a deed:

[T]he deed contained two conflicting descriptions, each being fairly clear and intelligible and each, as applied to the plat, describing entirely different pieces of land. There is nothing in the instrument, in the form of other language, indicating which parcel was intended to be conveyed. Therefore the deed is void for uncertainty.

Id. at 722. This is not the situation here— at least not at this point in the litigation. Again, while the description of the property included in the contract appears problematic, the contract does indicate the parties were contemplating a particular piece of property and nothing in the complaint or contract indicates the parties did not understand what property the contract concerned. See Bajrangi v. Magnethel Enters., Inc., 589 So.2d 416, 418-19 (Fla. 5th DCA 1991) (reversing summary judgment and explaining, “The liberal rule of construction as it relates to descriptions, as announced by the various Florida Supreme Court decisions, is that parol evidence is admissible to determine the description so long as the instrument itself shows that the parties were contemplating a particular piece of property — rather than an unspecified piece of property or alternative descriptions or property to be obtained later.” (footnote and citations omitted)). See also Carson, 190 So. at 721-22 (“There are cases holding that where the description of land in a deed or mortgage is in some respect vague, uncertain or indefinite, parol evidence is admissible, to explain and remove, by proof of pertinent facts existing at the time, the uncertainty, and to identify the property intended to be conveyed, thus giving effect to the intention of the parties to the instrument. ... There are, however, exceptions to this rule. One of the recognized exceptions is that of a patent ambiguity. A patent ambiguity in the description of land is such an uncertainty appearing on the face of the instrument that the Court, reading the language of the instrument in the light of all facts and circumstances referred to therein, is unable to derive therefrom the intention of the parties as to what land was to be conveyed. This type of ambiguity may not be removed by parol evidence, since that would necessitate the insertion of new language into the instrument, which under the parol evidence rule is not permissible.” (citations omitted)). Here, the parties attached to the contract a sketch of a subdivision plot, with lines drawn thereon and the buyer’s initials next to the drawing. The parties agreed, in the Addendum, to later agree on the exact boundary points of the property, once the survey work was completed. Nothing, other than a statement in Syfrett’s motion to dismiss, indicates that this did not occur.

Moreover, with reference to the so-called “agreement to agree” issue, we do not know whether Syfrett performed or breached this provision. We note, in this regard, that “every contract includes an implied covenant that the parties will perform in good faith.” Champagne-Webber, Inc. v. City of Fort Lauderdale, 519 So.2d 696, 697 (Fla. 4th DCA 1988); see also, e.g., Cox v. CSX Intermodal, Inc., 732 So.2d 1092, 1097-98 (Fla. 1st DCA 1999) (“One of the implied contract terms recognized ... in Florida law ... is the implied covenant of good faith, fair dealing, and commercial reasonableness. This implied covenant arises because ‘[a] contract is an agreement whereby each party promises to perform their part of the bargain in good faith, and expects the other party to do the same.’ Thus, the implied covenant of good faith and fair dealing is designed to protect the contracting parties’ reasonable expectations.... Thus, where the terms of the contract afford a party substantial discretion to promote that party’s self-interest, the duty to act in good faith nevertheless limits that party’s ability to act capriciously to contravene the reasonable contractual expectations of the other party.” (citations omitted)); Fernandez v. Vazquez, 397 So.2d 1171, 1174 (Fla. 3d DCA 1981) (“One established contract principle is that a party’s good faith cooperation is an implied condition precedent to performance of a contract. Where that cooperation is unreasonably withheld, the recalcitrant party is estopped from availing herself of her own wrongdoing.”).

Further, under the case law presented by the parties, if Syfrett drafted the contract here, then Syfrett may be estopped to assert that the contract is unenforceable. See Bajrangi, 589 So.2d at 420 (finding lessor “estopped to assert that the lease is unenforceable because of the description contained therein” because lessor “chose the description for its own purpose and its attorneys prepared the lease” and lessor “accepted payments for almost two years (until after the purchase price for the sale of the store was completely paid) before raising the description as a defense to the exercise of the option”). This serves as yet another reason why the trial court should not have granted the motion to dismiss.

Finally, none of the other arguments raised by Syfrett in the motion to dismiss have conclusive merit at this stage. Syfrett’s argument concerning the failure of appellant Laura White to sign the contract lacks merit because Syfrett himself, “the party to be charged,” signed the contract. § 725.01, Fla. Stat. (2002) (“No action shall be brought whereby ... to charge any person ... upon any contract for the sale of lands ... unless the agreement or promise upon which such action shall be brought, or some note or memorandum thereof shall be in writing and signed by the party to be charged therewith or by some other person by her or him thereunto lawfully authorized.”); see, e.g., Cavallaro v. Stratford Homes, Inc., 784 So.2d 619, 621 (Fla. 5th DCA 2001) (“Pursuant to the statute, no action can be brought to enforce a contract for the sale of land unless the contract is in writing and signed by the party to be charged.”). In addition, Syfrett argued that the following “conditions precedent,” set forth in the seven-paragraph Addendum to the con7 tract, had not occurred:

2. Closing within 30 days of County accepting paved road to property.
3. Property to have the same density as the rest of Wells Landing.
6. Buyer and seller to agree on boundary points from aerial, than [sic] final approval after survey work has been done. Deposit money becomes non-refundable once survey work has been done and approved by buyer.
7. Contract contingent upon all paving, permits and D.O. being obtained by seller.

The Whites made allegations concerning these points:

3. Pursuant to the terms of the contract, the Plaintiffs and the Defendant agreed to the property to be conveyed based upon an aerial diagram which was drawn to scale. The Plaintiffs reserved the right to approve the actual survey once it was completed to ensure that it conformed to the aerial diagram approved by both parties.
5. In accordance with the terms of the contract the Plaintiffs were to close on the contract within thirty (30) days of the County accepting a paved road to the property. The Plaintiffs were periodically advised by the Defendant that he was pursuing the development order for the development of the property with the county and that steps were being undertaken to enable the Defendant to install the paved road as set out in the contract.
6. The Plaintiffs waited patiently for the Defendant to comply with the terms of the contract....

Thus, according to the Whites’ allegations, Syfrett had informed them that he was pursuing approval of the development order and the paving of the road. To the extent Syfrett argues the Whites’ allegations lack merit, he can test that as the case proceeds.

CONCLUSION

Because the Whites sufficiently stated a cause of action for breach of contract, the trial court erred in going beyond the four corners of the complaint and resolving the case at the motion to dismiss stage. See, e.g., Magnum Capital, 905 So.2d at 221; Bell, 778 So.2d at 1032. Accordingly, we REVERSE the order on appeal and REMAND this case for further proceedings.

BROWNING, C.J., concurs; DAVIS, J., dissents with opinion.

DAVIS, J.,

dissenting.

Because I agree with the trial court that the property description is patently ambiguous, I respectfully dissent and would affirm.


author: CASE, JAMES R., Associate Judge.

text:
    Harry BARTH, Appellant, v. STATE of Florida, Appellee.
    No. 2D05-3643.
    District Court of Appeal of Florida, Second District.
    Dec. 6, 2006.

      Kendra D. Presswood of Presswood Law Firm, P.A., Holmes Beach, for Appellant.
    Charles J. Crist, Jr., Attorney General, Tallahassee, and Timothy A. Freeland, Assistant Attorney General, Tampa, for Ap-pellee.
   CASE, JAMES R., Associate Judge.

Harry Barth appeals his judgments and sentences in two consolidated cases for possession of a listed chemical with intent to manufacture methamphetamine, possession of methamphetamine with intent to sell, and possession of drug paraphernalia. Barth alleges that the trial court erred in denying his dispositive motions to suppress in each case and challenges the trial court’s denial of his motion for reconsideration of his sentence. Barth reserved his right to appeal the denial of his motions to suppress. We affirm the trial court’s denial of Barth’s motion to suppress in case number 04-019616 and the trial court’s denial of his motion for reconsideration of sentence without comment. We also affirm the denial of Barth’s motion to suppress in case number 04-014137 because the trial court properly determined that the evidence was seized pursuant to a properly executed search warrant. We write solely to address the legality of the arresting officers’ initial warrantless entry into Barth’s residence.

On September 2, 2004, two detectives from the Sarasota Sheriffs Office Special Investigations Bureau were engaged in surveillance at a residence in Nokomis, Florida, as part of an ongoing investigation of methamphetamine production and sales in the area. During their surveillance, the detectives observed Barth and an accomplice depart the residence in a pickup truck. The detectives and other members of the Sheriffs Office followed their movements and observed the two men travel to several stores where they purchased items commonly used in the production of methamphetamine, after which they returned to the residence.

Based on the information developed during the ongoing investigation, the immediate surveillance, and the detectives’ knowledge and experience (the lead detective had extensive experience in the investigation of the illegal production and sale of methamphetamine and had over one hundred thirty hours of training in the subject), the detectives had reason to believe that materials necessary for the production of methamphetamine were present in the residence and that a methamphetamine laboratory was likely to be in operation there. Because the process involved in the production of methamphetamine is highly dangerous and presented an unacceptable level of risk to the occupants and neighbors, the detectives made the decision to enter the residence prior to obtaining a search warrant solely for the purpose of evacuating the persons inside. After first consulting with the assistant state attorney, the detectives entered Barth’s residence, evacuated its residents, and contacted the fire department. Once the occupants were removed from the residence and fire department investigators had determined the residence was safe, the detectives refrained from reentering to conduct a search until the warrant had been obtained. The subsequent search resulted in the seizure of methamphetamine, chemicals used in the production of methamphetamine, and drug paraphernalia.

Barth argues that the initial, warrantless entry into his home was without probable cause or exigent circumstances; therefore, the subsequent search of his home was illegal and the evidence seized in the search should be suppressed. As Barth correctly points out, a warrant-less search of a home is presumptively unreasonable and a violation of the Fourth Amendment, unless the search falls within certain recognized constitutional exceptions. Seibert v. State, 923 So.2d 460, 468 (Fla.2006); Mercier v. State, 579 So.2d 308, 309 (Fla. 2d DCA 1991). One of the recognized exceptions is exigent circumstances. Seibert, 923 So.2d at 468; Lee v. State, 856 So.2d 1133, 1137 (Fla. 1st DCA 2003); United States v. Burgos, 720 F.2d 1520, 1525 (11th Cir.1983).

Whether exigent circumstances are present that would justify entry without a warrant is evaluated based on the totality of the circumstances. Seibert, 923 So.2d at 468. “The kinds of exigencies or emergencies that may support a warrant-less entry include those related to the safety of persons or property.” Rolling v. State, 695 So.2d 278, 293 (Fla.1997). “It is immaterial whether an actual emergency existed in the residence; only the reasonableness of the officer’s belief at the time of entry is considered on review.” Seibert, 923 So.2d at 468 (citing State v. Boyd, 615 So.2d 786, 789 (Fla. 2d DCA 1993)).

Many courts have considered whether the dangers inherent in the operation of a methamphetamine lab, which include handling of hazardous and volatile chemicals, poisonous fumes, fire, and explosion, present sufficient exigent circumstances to justify entry without a warrant and have found in the affirmative. See, e.g., United States v. Williams, 431 F.3d 1115 (8th Cir.2005); United States v. Rhiger, 315 F.3d 1283 (10th Cir.2003); Fulmer v. State, 2003 WL 22245944 (Ark.Ct.App.2003) (not reported); People v. Messina, 165 Cal.App.3d 937, 212 Cal.Rptr. 75 (1985); People v. Haycraft, 349 Ill.App.3d 416, 285 Ill.Dec. 260, 811 N.E.2d 747 (2004); State v. Pape, 2005 WL 2135139 (Ohio Ct.App.2005) (Slip Op.); Coffey v. State, 99 P.3d 249 (Okla.Crim.App.2004); State v. Gabbard, 129 Or.App. 122, 877 P.2d 1217 (1994); Buchanan v. State, 129 S.W.3d 767 (2004); State v. Franks, 130 Wash.App. 1015 (Wash.Ct.App.2005). We expressly agree with the conclusions of these courts and hold that the operation of a methamphetamine lab is inherently dangerous, presents an immediate threat to public safety, and is well within the scope of the exigent circumstance exception.

In the instant case, the detectives had reasonable cause to believe that Barth had a methamphetamine lab in operation within the dwelling based on their experience, facts developed during investigation, and observance of Barth’s activities that day. Thus, their initial entry into the residence was based on clear exigent circumstances and was therefore lawful.

Because the detectives took the precaution of waiting until the search warrant arrived before reentering the residence and conducting their search, we need not examine whether the exigent circumstances justifying the initial entry also justified the subsequent search and seizure of the evidence Barth sought to have suppressed. Instead, the search was conducted pursuant to a properly executed warrant, and the evidence discovered during that search was therefore admissible. See Segura v. United States, 468 U.S. 796, 810, 104 S.Ct. 3380, 82 L.Ed.2d 599 (1984); State v. Riley, 462 So.2d 800, 802 (Fla.1984); Mercier, 579 So.2d at 309.

We have considered the other issues raised by Barth in this appeal and have determined they are without merit.

Affirmed.

SALCINES and LaROSE, JJ., Concur.

      . Since the initial entry in this case was lawful, any evidence the detectives might have observed in plain sight during the entry would have been subject to seizure without a warrant. See State v. Riggs, 890 So.2d 465, 468 (Fla. 2d DCA 2004).

      . Barth has not challenged the existence of probable cause for the issuance of the warrant.


author: PER CURIAM.

text:
    VANTRAN INDUSTRIES, INC., Robert Salinas and his wife, Lenore Salinas, Appellants, v. RYDER TRUCK RENTAL, INC., a Florida corporation, Williams Scotsman, Inc., a foreign corporation, Hank Eldon Rowell, and the Estate of James McCraken, Jr., Appellees.
    No. 1D05-4467.
    District Court of Appeal of Florida, First District.
    Dec. 18, 2006.

      Robert Fraser and Daniel F. Pilka of Pilka & Associates, P.A., Brandon, for Appellants.
    Christopher H. McElroy and Michael J. Poché of Allen, Kopet & Associates PLLC, Tallahassee, for Appellees.
   PER CURIAM.

In this negligence action, Appellants appeal the trial court’s order granting final summary judgment in favor of Appellees and the trial court’s order denying their motion for disqualification of the trial judge. We reverse the order granting final summary judgment. We affirm the trial court’s order denying Appellants’ motion to disqualify the trial judge.

The trial court’s decision to grant summary judgment is reviewed de novo. Menendez v. The Palms West Condominium Ass’n, Inc., 736 So.2d 58, 60-61 (Fla. 1st DCA 1999). Summary judgment is properly granted where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Id. at 60. Summary judgment should be cautiously granted in a negligence case. Fenster v. Publix Supermarkets, Inc., 785 So.2d 737, 739 (Fla. 4th DCA 2001).

Here, the trial court determined that the sudden emergency doctrine applied as a matter of law because Appellee, Hank Eldon Rowell, had no legal duty once he was confronted with a sudden emergency based on McCain v. Florida Power Corporation, 593 So.2d 500 (Fla.1992). This was error.

The sudden emergency doctrine requires

(1) that the claimed emergency actually or apparently existed; (2) that the perilous situation was not created or contributed to by the person confronted; (3) that alternative courses of action in meeting the emergency were open to such person; and (4) that the action or course taken was such as would or might have been taken by a person of reasonable prudence in the same or similar situation.

Wallace v. Nat’l Fisheries, Inc., 768 So.2d 17, 18 (Fla. 3d DCA 2000). “The presence or absence of a sudden emergency situation is a question of fact ordinarily to be decided by the jury.” Id. at 18. (citing Scott v. City of Opa Locka, 311 So.2d 825, 826-27 (Fla. 3d DCA 1975)). “So, too, is the issue of whether, under the circumstances, the defendant reacted to the situation in a prudent manner.” Id. at 18-19 (citing Cleveland v. City of Miami, 263 So.2d 573 (Fla.1972)).

When a driver is confronted with a sudden emergency, he is not held to the same standard of care that would otherwise be expected, but neither is he excused from not acting in a reasonable and prudent manner. Dupree v. Pitts, 159 So.2d 904, 906-07 (Fla. 3d DCA 1964). Once the emergency arises, a driver “is not negligent, provided he has used due care to avoid meeting such an emergency and, after it arises, he exercises such care as a reasonably prudent and capable driver would use under the unusual circumstances, which is usually [a question] for the jury.” Id. at 906 (quoting Blashfield, Cyc. of Automobile Law & Practice, Sec. 668, pp. 538-45).

While the trial court was correct that the existence of a legal duty is a question of law, the court erroneously equated the existence of a legal duty with the breach of a legal duty. See McCain, 593 So.2d at 502. Thus, the trial court erred in finding that Mr. Rowell had no legal duty because he was confronted with a sudden emergency. Under the sudden emergency doctrine, Mr. Rowell had both a duty to act as a reasonably careful and prudent driver in attempting to avoid the unusual situation and a duty in how he reacted to it.

Appellants have introduced evidence that precludes summary judgment. Genuine issues of material fact regarding whether Mr. Rowell acted with reasonable diligence after he was confronted with the sudden emergency exist. Mr. Rowell testified that he braked while traveling through the median, in violation of his training as a truck driver. In addition, an eyewitness testifying as both an expert and a lay witness stated that Mr. Rowell could have stayed in the median if he had slowed down before the time he was confronted with the sudden emergency and if he had not simultaneously braked and steered hard while traveling through the median.

The trial court rejected the eyewitness’ testimony, finding that he could not see what he claimed. On summary judgment, however, all facts and inferences must be considered in the light most favorable to the non-moving party. Fenster, 785 So.2d at 739; Bowers v. Cain, 609 So.2d 61, 62 (Fla. 4th DCA 1992). The jury, not the trial court, could reject the eyewitness’ testimony if it believed that he could not see what he claimed. See Deakter v. Menendez, 830 So.2d 124, 127 (Fla. 3d DCA 2002) (stating that “[t]he court may not encroach on the province of the trier of fact by electing to weigh the evidence or adjudging the credibility of the witnesses” when ruling on a motion for summary judgment) (citing Sierra v. Shevin, 767 So.2d 524, 525 (Fla. 3d DCA 2000); Bitz v. Ed Knox CLU & Assoc., P.A., 721 So.2d 823 (Fla. 3d DCA 1998)). Accordingly, we reverse the final summary judgment entered in favor of Appellees and remand for a new trial.

AFFIRMED in part, REVERSED in part, and REMANDED.

WOLF, PADOVANO and THOMAS, JJ., concur.


author:
KLEIN, J.
      MAY J.,

text:
    Philip A. DISQUE, as Personal Representative of the Estate of Rose Benjamin, and Alvin Benjamin, an individual, Appellants, v. Larry UNGER, as Personal Representative of the estate of Karen Benjamin, and Skylar Unger, a minor, Appellees.
    Nos. 4D05-2976, 4D05-2977.
    District Court of Appeal of Florida, Fourth District.
    Jan. 17, 2007.
    Rehearing Denied June 11, 2007.

      Jeffrey Allan Hirsch and Linda M. Reck of Greenberg Traurig, P.A., Fort Lauder-dale, for appellant Philip A. Disque.
    Frederick C. Heidgerd of Heidgerd & Hunn, P.A., Deerfield Beach, for appellant Alvin Benjamin.
    Stanley P. Kaplan, Miami, for appellee Larry Unger.
    Dirán V. Seropian of Edna L. Caruso, P.A., West Palm Beach, for appellee Sky-lar Unger.
   KLEIN, J.

When Alvin and Rose Benjamin dissolved their marriage in 1989, they entered into a property settlement agreement which required Alvin to leave one-third of his estate to their two children, Karen and Susan, “and/or any of their issue.” After Rose died, a question arose as to the interpretation of this language, and Rose’s estate filed a complaint in the probate court for declaratory relief. When the probate court realized that Rose’s estate had no financial interest in the dispute, it dismissed the action. We affirm.

Karen, one of the children, died before her mother and had a daughter named Skylar. The question raised in the declaratory action was whether Alvin had to equally divide the one-third he was required to leave to his children, or whether he could leave the entire one-third to Susan.

When the personal representative of Rose’s estate, Philip Disque, became aware of the dispute, he filed the declaratory action asking the court to determine whether, as personal representative, he was obligated to enforce the agreement. He relied on a provision of the agreement which made it binding upon the parties’ “heirs, executors, administrators, legal representatives and assigns and shall inure to the benefit of [her] respective heirs, executors, administrators, legal representatives or assigns.” In the declaratory action, Alvin took the position that he was not required to leave one-half of the one-third to Skylar, and Skylar took the opposite position.

After motions to dismiss were denied, the parties filed cross-motions for summary judgment. At the hearing on the motions, the probate court, on its own, concluded that there was no reason for it to declare what Alvin was required to do with his will, because the result would have “absolutely no impact” on Rose’s estate. Alvin and the estate have appealed.

Section 733.602(1), Florida Statutes (2003), which describes the general duties of a personal representative, provides:

A personal representative is a fiduciary who shall observe the standards of care applicable to trustees as described by s. 737.302. A personal representative is under a duty to settle and distribute the estate of the decedent in accordance with the terms of the decedent’s will and this code as expeditiously and efficiently as is consistent with the best interests of the estate. A personal representative shall use the authority conferred by this code, the authority in the will, if any, and the authority of any order of the court, for the best interest of interested persons, including creditors, (emphasis added)

The parties do not contest the trial court’s conclusion that, no matter which way the dispute was resolved, it would be of no financial benefit to the estate. The appellants contend, however, that the probate court should have resolved the issue because the property settlement agreement authorized Rose’s estate to enforce it. The fact that the estate was authorized by the property settlement agreement to enforce it, however, does not satisfy the requirement of section 733.602(1), that the personal representative act in the best interest of interested persons.

In this case the persons interested in the estate, beneficiaries or creditors, have no interest in the dispute involving Alvin’s will. We accordingly agree with the trial court that, under these specific facts, where the estate could not benefit financially, and the dispute could be resolved in a lawsuit between all of the interested parties without the estate being a party, the estate should not be involved.

One of the arguments raised by the appellants is that they were denied due process when the trial court, on its own, dismissed the declaratory judgment action at the hearing on the motions for summary judgment, because none of the parties had requested dismissal at that point. If we were to remand for further proceedings, however, it would only delay the inevitable and the litigation expenses would reduce the amount of money in the estate.

When the personal representative found himself in a quandary as to whether to file this lawsuit, he should have sought court approval before filing the lawsuit, as is authorized by section 733.603, Florida Statutes (2003). When the trial court concluded, on its own, that pursuing this litigation was not in the best interest of the estate, it was simply doing what was contemplated by section 733.603. Because it is undisputed that the estate cannot benefit financially, and that further litigation will deplete the assets which would otherwise go to interested persons, there is no reason to prolong this proceeding.

Affirmed.

POLEN, J., concurs.

MAY, J., dissents with opinion.

MAY J.,

dissenting.

I respectfully dissent based upon the need to afford the parties due process. I do not argue with the practical decision the majority makes today. Nevertheless, I choose to dot the i’s and cross the t’s, a technical ruling to be sure.

This case came before this court for review after the trial court sua sponte dismissed the complaint for declaratory relief during a hearing on cross-motions for summary judgment. The defendant did not move to dismiss the complaint and no one was on notice that the court would undertake to do so. When it did so, the plaintiff was unprepared to respond to the unnoticed issue. In my view, this offends the notion of fairness, which the court system should emulate.

While any effort to reverse and remand the case may very well result in the same ultimate disposition, I believe the rules of procedure and the right to due process must be respected. Therefore I would reverse and remand the case for further proceedings.


author: TAYLOR, J. FARMER, J.,

text:
    MORGAN STANLEY & CO. INCORPORATED, Appellant, v. COLEMAN (PARENT) HOLDINGS INC., Appellee.
    No. 4D05-2606.
    District Court of Appeal of Florida, Fourth District.
    March 21, 2007.
    Rehearing Denied June 4, 2007.

      Bruce S. Rogow of Bruce S. Rogow, P.A., Fort Lauderdale, and Sylvia H. Wal-bolt of Carlton Fields, P.A., West Palm Beach, for appellant.
    Joel D. Eaton of Podhurst Orseck, PA., Miami, Jerold S. Solovy, Ronald L. Mariner and Paul M. Smith of Jenner & Block LLP, Chicago, IL, and Jack Scarola of Searcy Denney Scarola Barnhart & Ship-ley, P.A., West Palm Beach, for appellee.
   TAYLOR, J.

This appeal arises from a merger between The Coleman Company, Inc., a manufacturer of camping gear, and Sunbeam, Inc., a manufacturer of household products. Coleman (Parent) Holdings Inc. (CPH), which owned most of the Coleman stock before the merger, exchanged its stock for shares of Sunbeam stock. Later, as reports emerged that Sunbeam’s sales were falling and that the company had artificially inflated the value of its stock, Sunbeam’s stock price plunged. Sunbeam ultimately declared bankruptcy. CPH sued Morgan Stanley & Co., Inc. (Morgan Stanley), Sunbeam’s investment banker in the transaction, alleging that Morgan Stanley helped Sunbeam in carrying out its fraudulent scheme to inflate the price of its stock until after the merger. A jury returned a verdict against Morgan Stanley for conspiracy and aiding and abetting fraud. It awarded CPH compensatory damages of $604,334,000 and punitive damages of $850 million. Morgan Stanley appeals the $1.58 billion judgment entered on the jury verdict. We reverse.

Morgan Stanley raises several issues on appeal, including: (1) whether the trial court improperly entered a partial default against Morgan Stanley as a sanction for discovery misconduct; (2) whether the trial court properly applied Florida law rather than New York law on the issues of justifiable reliance and damages; (3) whether CPH failed to prove compensatory damages by not establishing the fraud-free value of the Sunbeam stock on the date of the merger transaction; (4) whether the trial court erred in denying Morgan Stanley a fair opportunity to contest and mitigate evidence of litigation misconduct presented during the punitive damages phase of trial; and, (5) whether the punitive damages awarded were excessive. Because our decision on the third issue regarding proof of damages is dispositive, we do not reach the other issues and confine our discussion to compensatory and punitive damages.

A. Compensatory Damages

Pursuant to the merger agreement, Sunbeam bought the Coleman stock and paid CPH approximately half of the purchase price with its own stock. CPH received 14.1 million shares of Sunbeam stock, with an estimated value over $600 million. The transaction closed on March 30,1998.

The merger agreement contained a “lockup” restriction, which limited CPH’s ability to sell its Sunbeam stock for a specified period. CPH could not sell more than 25% of the Sunbeam stock for 90 days, then could sell another 25% in another 90 days and the remaining 50% in 270 days. A “lockup” provision is customary in situations where, as here, a company is selling a substantial number of shares and wants them sold in an orderly fashion. The shares were unregistered, but Sunbeam had agreed to register them promptly.

On April 3, 1998, Sunbeam issued a press release announcing that first quarter sales would be 5% below 1997 sales and that the company would show a loss for the quarter. Sunbeam stock dropped 10%, to $34 a share, after this report.

In mid-June 1998, Sunbeam’s CEO, AI Dunlap, was fired after an internal investigation revealed fraudulent bookkeeping. Jerry Levin, formerly Coleman’s CEO, then took the reins as Sunbeam’s CEO and brought several senior Coleman executives with him. By then, the stock price had dropped to $18. Shortly after Dunlap’s firing, Arthur Andersen “pulled” its 1996 and 1997 audit certificates.

By the end of 1998, Levin and his team had been at Sunbeam for almost six months. The company had restated its financials for 1996 and 1997, reducing the loss in 1996 and moving it to 1997. Sunbeam still showed a profit for 1997, even after the restatement, and still had assets of $3.5 billion.

Originally, GpH had planned to sell the Sunbeam shares after the “lockup” period. However, several circumstances prevented it from 'doing so. ' First, because of the fraud and Arthur Andersen’s restatement of Sunbeam’s financials, registration of the Sunbeam shares could not be completed until late 1999. Registration of a security is required before it can be sold in the public markets. Second, according to CPH, if, at any time after June 1998, the market had learned that CPH was attempting to sell its Sunbeam stock, “the market would clearly have viewed that as CPH abandoning a sinking ship and would have destroyed any value for the CPH stock.” Third, because senior executives previously affiliated with CPH had assumed positions on Sunbeam’s board and gained access to information concerning Sunbeam’s performance, CPH was concerned that selling any of its Sunbeam shares could subject it to liability for insider trading.

On February 6, 2001, nearly three years after the transaction closed, Sunbeam went bankrupt. Howard Gittis, the vice-chairman of CPH, testified that, in his opinion, Sunbeam went bankrupt because it was overleveraged, i.e., had too much debt. As a result of the bankruptcy, CPH’s Sunbeam shares became worthless.

At trial, CPH sought benefit-of-the-bargain damages. To establish these, CPH presented the testimony of its expert, Dr. Blaine Nye, a financial economist. Dr. Nye testified that CPH suffered damages between $634 and $680 million. He used an expected value for the 14.1 million Sunbeam shares of $48.26 per share (based on the average share price from the time the deal was publicly disclosed until the day it closed), for a total expected value of more than $680 million. Dr. Nye stated his opinion that, because CPH never was able to realize any value from the shares, CPH effectively received “zero” value. As an alternative, he assumed that three-quarters of the shares were saleable in the first quarter of 2000, which would have yielded a share price of $4.35 per share (averaged over the quarter). By that method, CPH’s loss amounted to $634 million.

Morgan Stanley objected to the admission of Dr. Nye’s opinion on damages. It argued that Dr. Nye’s testimony was incompetent, because he did not factor a valuation date into his analysis. Contrary to the requirements set by settled law on fraud damages, his opinion was not based upon the value of the stock on the March 30, 1998 date of the transaction. The court overruled the objection. During cross-examination of Dr. Nye, Morgan Stanley established that Dr. Nye did not calculate the actual value of Sunbeam shares at any point in time. Departing from his practice in other securities cases, he did not determine the “fraud-free” price of Sunbeam stock on the date of closing. He simply assumed CPH could not have recovered any value, as he was instructed to do by CPH. He did not consider whether other factors affected the stock price, such as business decisions by the new management team or the stock market crash of 2000. He did not analyze whether Sunbeam’s acquisition of other small companies during this time created problems. He did not look at Sunbeam’s expenses while it was being operated by the new management.

After Dr. Nye’s examination, Morgan Stanley moved to strike Dr. Nye’s testimony and renewed its earlier motions in li-mine and motion to exclude. Morgan Stanley argued that Dr. Nye’s testimony was legally deficient, pointing out that the expert admitted at trial, as well as in deposition, that he “did not use the date of the deal at all” in his analysis and made no attempt to estimate the value of the loss as of March 30, 1998. The court denied the motions. It also denied Morgan Stanley’s motion to direct a verdict in its favor due to CPH’s failure to prove damages.

On May 16, 2005, the jury returned a verdict finding, by clear and convincing evidence, that CPH relied on the false statements made by Morgan Stanley or Sunbeam, and that it suffered damages as a result. The jury awarded CPH compensatory damages in the amount of $604,334,000. Two days later, after brief testimony regarding punitive damages, the jury returned a verdict for punitive damages in the amount of $850 million. Morgan Stanley appealed the entire judgment on these verdicts.

CPH sought benefit-of-the-bargain damages from Morgan Stanley. Under the “flexibility theory” of damages followed in Florida, a defrauded party is entitled to the measure of damages that will fully compensate him. Nordyne, Inc. v. Fla. Mobile Home Supply, Inc., 625 So.2d 1283, 1286 (Fla. 1st DCA 1993) (“The ‘flexibility theory’ permits the court to use either the ‘out-of-pocket’ or the ‘benefit-of-the-bargain’ rule, depending upon which is more likely fully to compensate the injured party.”). At CPH’s request, the trial court concluded that CPH was entitled to benefit-of-the-bargain damages. Damages under the benefit-of-the-bargain rule are measured by the difference between the value of the property as represented and the actual value of the property on the date of the transaction. Kind v. Gittman, 889 So.2d 87, 90 (Fla. 4th DCA 2004); Totale, Inc. v. Smith, 877 So.2d 813, 815 (Fla. 4th DCA 2004); Teca, Inc. v. WM-TAB, Inc., 726 So.2d 828, 829 (Fla. 4th DCA 1999); Perlman v. Ferman Corp., 611 So.2d 1340, 1341 (Fla. 4th DCA 1993). Actual value of the property at the time of purchase is a “crucial element in the damage equation.” Teca, 726 So.2d at 829. This is so whether a plaintiff seeks benefit-of-the-bargain damages or an out-of-pocket measure of damages. Kind, 889 So.2d at 90; Totale, 877 So.2d at 815. The same standard is applied in federal securities cases. See Miller v. Asensio & Co., 364 F.3d 223, 227 (4th Cir.2004) (citing Affiliated Ute Citizens v. U.S., 406 U.S. 128, 155, 92 S.Ct. 1456, 31 L.Ed.2d 741 (1972)) (stating that the measure of damages in 10(b) case was the difference between the fair value of what plaintiff received and the fair value of what they would have received had there been no fraudulent conduct at the time of sale); In re Imperial Credit Indus., Inc. Sec. Litig., 252 F.Supp.2d 1005, 1014 (C.D.Cal.2003).

As a general rule, plaintiffs alleging securities fraud rely on expert proof to establish both the fact of damage and the appropriate method of calculation. Sowell v. Butcher & Singer, Inc., 926 F.2d 289, 301 (3d Cir.1991). CPH’s expert testified as to the bargained-for value of the Sunbeam stock, but he did not testify as to the actual value of the Sunbeam stock at the time of purchase — a necessary element of proof. He testified that although he had done such calculations in other cases, in this case he did not isolate the fraud-free price and perform the standard securities analysis to determine what would have been the stock’s value on the date of transaction. Instead, he treated the stock as though it had no value when the transaction occurred in 1998.

CPH defends the evidence it presented at trial on damages. It argues that Morgan Stanley is liable for the full amount of its loss, because Morgan Stanley defrauded CPH into accepting shares that it could not resell. It contends that “in cases where misconduct induces a plaintiff to purchase stock and then hinders the plaintiff from reselling that stock, courts repeatedly have held that the wrongdoer is liable for losses until resale can occur.” CPH maintains that, because it could not sell its stock, it was not bound by the date-of-transaction rule, but could recover for stock price declines until such time as it could resell the stock. Consistent with CPH’s theory of damages, the trial court instructed the jury to value the stock on the date CPH could first resell it after December 1999, when the shares could be registered.

Morgan Stanley counters that CPH should not be allowed to recover for declines in Sunbeam’s stock price during the period that CPH had agreed to a contractual “lockup”. By agreeing to the “lockup”, CPH bargained for at least part of the stock’s illiquidity and accepted the risk of declines in stock price due to market conditions or other non-fraud related factors during the “lockup period”. Thus, to allow CPH to recover for non-fraud related losses during the “lockup” period, when CPH had effectively agreed to absorb non-fraud related losses for that period, would amount to giving CPH more than what it bargained for. The record shows that Sunbeam lost approximately 90% of its value during the contractual “lockup” time-frame.

CPH maintains that it is entitled to recover for even non-fraud related stock price declines during this period, because it would not have entered the agreement, with its “lockup” clause, but for the fraud. However, CPH’s “but for” causation argument disregards the proximate causation required for fraud damages and is at odds with the benefit-of-the-bargain recovery it elected. Benefit-of-the-bargain damages do not turn on what would have happened if CPH had known the representations were false. They measure what CPH would have received had the representations been true. By opting for benefit-of-the-bargain damages, CPH does not seek to rescind the transaction; it seeks to affirm the transaction and claim the benefit of the bargain. The bargain, in this case, included sale restrictions.

A plaintiff who seeks a benefit-of-the-bargain measure of damages is not entitled to a better bargain than the one it made. This is true even under Florida’s “flexibility theory” of damages. The “flexibility theory” of damages, which allows a plaintiff to chose either benefit-of-the-bargain or out — of-pocket damages in fraud cases, is not so flexible as to allow a plaintiff to pick and choose which parts of the contract it wants to affirm and which parts it wants to disaffirm. Furthermore, applying CPH’s “but for” rationale to proving damages would result in recovery of all non-fraud related losses in virtually every fraud case, because the defrauded party would need only assert that it would not have agreed to the contract had it known of the fraud.

To support its argument that it was entitled to all “pre-sale” losses, CPH relies primarily on Shearson Loeb Rhoades, Inc. v. Medlin, 468 So.2d 272, 273 (Fla. 4th DCA 1985). However, Shearson hinders rather than helps CPH’s claim. In that case, we held that the measure of damages for delay in delivery of stock certificates is the difference between the value when the certificates should have been delivered and the value when they were actually delivered. We barred damages for subsequent depreciation absent proof that the plaintiff “would have sold” earlier had the stock been properly delivered. Here, CPH introduced no such proof. To the contrary, it had actually agreed not to sell during the most critical period when Sunbeam lost 90% of its value.

As to the date-of-transaction rule, CPH argues that the transaction date is not necessarily the operative valuation date in a case involving stock or other property that, due to fraud, could not be resold when the fraud was exposed. It contends that once it placed in evidence a stock price table showing the daily market price of Sunbeam shares from March 1998 until Sunbeam declared bankruptcy in February 2001, the jury could simply select a date when the effects of the fraud no longer existed and perform its own calculation in making an award. However, even if the jury had chosen a date, such as the date Arthur Andersen restated the Sunbeam financials, other factors existed that could have affected the stock price. As the Supreme Court explained in Dura Pharmaceuticals., Inc. v. Broudo, 544 U.S. 336, 342-43, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005):

When a purchaser subsequently resells such shares, even at a lower price, that lower price may reflect, not the earlier misrepresentation, but changed economic circumstances, changed investor expectations, new industry-specific or firm-specific facts, conditions, or other events, which taken separately or together account for some or all of that lower price.

Thus, recovering in a securities case “require[s] elimination of that portion of the price decline that is the result of forces unrelated to the wrong.” Miller, 364 F.3d at 232 (quoting In re Executive Telecard, Ltd. Sec. Litig., 979 F.Supp. 1021, 1025 (S.D.N.Y.1997)).

Usually, a securities plaintiff proves the actual, or “fraud-free,” value of the stock at the time of purchase by presenting an expert “event study” or “event analysis.” In fact, an “event analysis” is often required to support an expert’s damages calculation and “generally involves the computation of a statistical regression analysis or, at a minimum, the compilation of a detailed analysis of each particular event that might have influenced the stock price.” Miller, 364 F.3d at 234. This is the kind of calculation that CPH’s expert said he had done in other cases.

’ In Miller, the expert claimed to have done the “event analysis” in his head, never committing any portion of it to paper, other than his final conclusion. The court characterized this analysis as “markedly thin” and upheld a zero verdict, stating that the record was one from which the jury “cannot” have awarded damages. Id. at 235.

In In re Imperial Credit Industries, Inc. Securities Litigation, 252 F.Supp.2d 1005 (C.D.Cal.2003), at the summary judgment stage, the court excluded the defense expert’s damages report as junk science under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), then entered summary judgment for the defendant, because the report contained no “event study” or similar analysis. In so doing, it noted:

11. Because of the need “to distinguish between the fraud-related and non-fraud related influences of the stock’s price behavior,” In re Oracle Sec. Litig., 829 F.Supp. 1176, 1181 (N.D.Cal.1993), a number of courts have rejected or refused to admit into evidence damages reports or testimony by damages experts in securities cases which fail to include event studies or something similar. See, e.g., In re Northern Telecom Sec. Litig., 116 F.Supp.2d 446, 460 (S.D.N.Y.2000) (“Torkelson’s testimony is fatally deficient in that he did not perform an event study or similar analysis to remove the effects on stock price of market and industry information and he did not challenge the event study performed by defendants’ expert.”); Executive Telecard, 979 F.Supp. at 1024-26 (finding an expert’s methodology not reliable because he failed to conduct an event study or regression analysis to detect whether stock price declines were the result of forces other than the alleged fraud; applying Daubert v. Mer rell Dow Pharm., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) to exclude the expert damages report); Oracle, 829 F.Supp. at 1181 (“Use of an event study or similar analysis is necessary more accurately to isolate the influences of information specific to Oracle which defendant allegedly have distorted-— As a result of his failure to employ such a study, the results reached by [plaintiffs’ expert] cannot be evaluated by standard measures of statistical significance.”)
12. The importance and centrality of the event study methodology in determining damages in securities cases-and the propriety of rejecting expert damages reports which do not use such a methodology-has been conceded by plaintiffs in other securities fraud cases:
“[According to [plaintiffs], the methodology-‘event study methodology’used to calculate shareholder damages during the class period ‘has been used by financial economists since 1969 as a tool to measure the effect on market prices from all types of new information relevant to a company’s equity valuation.’ It is so accepted, plaintiffs add, that courts now reject expert damage estimates which do not use event study methodology to evaluate the impact on the market of a company’s disclosures.”
In re Cendant Corp. Sec. Litig., 109 F.Supp.2d 235, 253-54 (D.N.J.2000).

Imperial Credit, 252 F.Supp.2d at 1015.

CPH was not entitled to have the jury speculate as to the value of the stock on the date of sale. Rather, it was required to prove the stock’s value on that date. As we explained in Totale, “the crucial time for the measurement is the time of the fraudulent representation. Later appreciation or depreciation of the property that is subject of the false representation generally does not alter the fraud damage computation.” 877 So.2d at 815. The federal cases cited above merely expand on Florida law that requires the plaintiff to prove the actual, “fraud-free” value of the stock at the time of purchase. Although CPH insisted in oral argument that the stock market was doing well and that there were no non-fraud related factors affecting the stock price during the “lockup” period, it failed to present any competent proof at trial establishing the absence of non-fraud related factors.

In sum, CPH failed to meet its burden of proving the actual, “fraud-free” value of the Sunbeam stock on the date of the transaction. Instead, it measured damages based on the stock’s value years after the transaction. Because there was no proof presented at trial on the correct measure of damages, the trial court should have granted Morgan Stanley’s motion for directed verdict. We therefore reverse the final judgment for compensatory damages and remand for entry of a judgment for Morgan Stanley. See Kind, 889 So.2d at 90; Tec a, 726 So.2d at 830.

We reject CPH’s argument that it should, at the least, be given a new trial to prove damages because the trial court erred in its pretrial rulings and jury instructions concerning the proper measure of damages. CPH cannot complain about rulings that it urged the court to make in accordance with its damages theory. Furthermore, as we held in Teca, a plaintiff is not entitled to a second “bite at the apple” when there has been no proof at trial concerning the correct measure of damages. Id. at 830.

B. Punitive Damages

The trial was bifurcated, with the jury deciding liability and compensatory damages in Phase I. In Phase II, the jury tried the issue of punitive damages and awarded CPH $850 million in punitive damages. Because we conclude that Morgan Stanley was entitled to a directed verdict and reversal of the compensatory damages award, we reverse the punitive damages award as well. The punitive damages award cannot stand where, as here, no legally cognizable damage was shown as a result of the alleged fraud. Had the trial court properly directed a verdict for Morgan Stanley, the case would have ended at that point and the punitive damages phase never would have been reached.

CPH argues that we should nevertheless uphold the award of punitive damages. It suggests that even after entering a directed verdict on compensatory damages, the trial court could have submitted the liability issue to the jury as a possible predicate for punitive damages. Relying on Ault v. Lohr, 538 So.2d 454 (Fla.1989), and Engle v. Liggett Group, Inc., 945 So.2d 1246 (Fla.2006), CPH argues that, where an intentional tort is proved, punitive damages are recoverable even in the absence of compensatory damages. We conclude that Ault is distinguishable and that Engle is not controlling in this case.

Ault was an assault and battery case. The jury in that case awarded the plaintiff punitive damages, but no compensatory damages. The Florida Supreme Court approved the punitive damages award because of the jury’s express finding of liability. The court held that “a finding of liability alone will support an award of punitive damages ‘even in the absence of financial loss for which compensatory damages would be appropriate.’ ” 538 So.2d at 456. Assault and battery torts, however, are fundamentally different from fraud.

Unlike in the ease of fraud, actual injury or compensatory damages are not essential to stating a cause of action for assault and battery. See, e.g., Paul v. Holbrook, 696 So.2d 1311, 1312 (Fla. 5th DCA 1997); Lay v. Kremer, 411 So.2d 1347, 1349 (Fla. 1st DCA 1982).

It is fundamental that “[ajctual damages and the measure thereof are essential as a matter of law in establishing a claim of fraud.” Nat’l Equip. Rental, Ltd. v. Little Italy Rest. & Delicatessen, Inc., 362 So.2d 338, 339 (Fla. 4th DCA 1978). “Damage is of the very essence of an action for fraud or deceit.” Casey v. Welch, 50 So.2d 124, 125 (Fla.1951). Without proof of actual damage the fraud is not actionable. Id.; Stokes v. Victory Land Co., 99 Fla. 795, 128 So. 408 (1930); Pryor v. Oak Ridge Dev. Corp., 97 Fla. 1085, 119 So. 326 (1928); Wheeler v. Baars, 33 Fla. 696, 15 So. 584 (1894); Nat’l Aircraft Servs., Inc. v. Aeroserv Int'l, Inc., 544 So.2d 1063 (Fla. 3d DCA 1989); Nat’l Equip. Rental, 362 So.2d at 339. Thus, to prevail in an action for fraud, a plaintiff must prove its actual loss or injury from acting in reliance on the false representation.

Even if CPH established the fact of some unquantified damage (which theoretically could have supported a nominal damage award), this is not enough to justify a punitive damage award in a fraud case. Punitive damages for fraud cannot be based on nominal damages alone. Nat’l Aircraft Servs., 544 So.2d at 1065. Although the Florida Supreme Court’s recent Engle opinion does state that “an award of compensatory damages is not a prerequisite to a finding of entitlement to punitive damages,” we read the opinion as addressing the order of proof in determining entitlement to punitive damages. 945 So.2d at 1262 (“Therefore we conclude that the order of these determinations is not critical.”).

Accordingly, we reverse both the compensatory and punitive damage awards and remand this cause with directions to enter judgment for Morgan Stanley.

Reversed and Remanded.

SHAHOOD, J., concurs.

FARMER, J., dissents with opinion.

FARMER, J.,

dissenting.

I have a different perception. Mine sees differences in the case actually litigated in the trial court from the case on appeal. In sum, I see nothing wrong under Florida law with Coleman’s theory of compensatory damages or proof and would affirm that part of the judgment. As for punitive damages, however, I would reverse and remand for a new trial on the issue of entitlement and, if necessary, the amount. I elaborate in the following paragraphs.

Compensatory Damages

Sunbeam sought to buy Coleman’s stock to acquire control of the company. It agreed to pay part of the price with its own stock and part in cash. Coleman’s reasons for accepting some of the price in the buyer’s own securities were doubtlessly based on the tax laws, but there are other considerations as well. For example, one reason to hold the stock would be to receive future earnings from what was represented to be worth $640,000,000. And so the mere fact that part of the price was paid in securities hardly means that the seller intended to convert such securities into cash, or that buyer’s damages should be based only on some hypothetical price the stock might have fetched if resold at some point.

The claim is intentional fraud, not breach of contract. Coleman claimed that Sunbeam and Morgan Stanley deliberately falsified financial reports to induce Coleman to accept Sunbeam stock as part of Sunbeam’s acquisition of Coleman. That means that the worth of the stock is critical to measuring Coleman’s damages.

The value of stock is affected by an objective factor, which in turn may be enhanced by subjective factors. Objectively, it reflects the intrinsic worth of the corporation: the value of its assets in excess of its liabilities. Its worth might also be enhanced by intangible factors:, for example, although heavily in debt, a pending transaction could inject considerable profits.

Theoretically, there are two ways in which the value of the Sunbeam stock could have been falsified by the misrepresentations of Sunbeam and Morgan Stanley. The first would be that the stock really had no objective value at all because the corporation was insolvent and lacked any prospects to rescue it. The alternative could be that the stock actually retained a value less than the corporate financial reports indicated. In other words, the distinction is the difference between zero and some positive whole number.

Florida law, therefore, understandably gave Coleman different ways to measure the injury it suffered from stock whose value had been deliberately misrepresented.

“Florida has adopted two standards for the measurement of damages in an action for fraudulent representation. Either may be used to do justice as the circumstances demand. The first standard is the ‘benefit-of-the-bargain’ rule.... The second standard is the ‘out-of-pocket’ rule .... ” [e.s.]

See Martin v. Brown, 566 So.2d 890, 891 (Fla. 4th DCA 1990); see also Strickland v. Muir, 198 So.2d 49, 51 (Fla. 4th DCA 1967), receded from on other grounds, Teca, Inc. v. WM-TAB, Inc., 726 So.2d 828 (Fla. 4th DCA 1999). Looking at the benefit-of-the-bargain rule, I see nothing wrong with the jurisprudence of allowing the deceived victim of fraud to hold a defendant to his lies for purposes of assessing damages. So if a defendant had represented the thing to be worth $10,000 when it was actually worth nothing, it is fit and appropriate to mulct him in money damages for the full $10,000. Let the defendant pay what he said the value was. Essentially that is what the benefit-of-the-bargain theory of damages does.

At trial Coleman measured its damages by the benefit of its bargain. It did not seek to prove that the stock had some reduced value above zero. To the contrary, it contended instead that the stock was worthless. As I understand its evidence at trial if believed by the jury, it could have been properly understood as showing that the stock it received from Sunbeam and Morgan Stanley never really had any real value because of the concealed insolvency of Sunbeam — as the later bankruptcy confirmed.

One important aspect of compensating someone for the intentional deceit of another is to make the damages fit the fraud and place the deceived person where he (it) would have been if the goods (stock) had been as represented. If Sunbeam and Morgan Stanley were guilty of deceiving Coleman into believing that the shares given in payment for the company were worth at least $640,000,000, even though the stock had no real value because of the corporation’s concealed insolvency, then it seems only right to hold Sunbeam indebted to Coleman for the same $640,000,000 in money damages. Such compensation is just and fair because it vindicates the value (mis )represented.

I see no legal reason why the deceiver should be benefited in the measurement of damages by the mere fact that Coleman held on to the stock and refrained from selling it in the market when it might have done so. For one thing, by requiring a resale of inflated stock to an unsuspecting public, the court’s reasoning would encourage aggrieved buyers unwittingly to make use of their seller’s fraudulent representations concealing its real lack of value. The law of damages can hardly countenance such a perpetuation of fraudulent financial statements. If the tainted stock has no value, there is no reason for one in the position of Coleman to produce evidence of the selling price of the stock for any particular day after the sale and before the lawsuit so long as it instead proved that from the day of the sale it had no real value on account of the hidden financial failure of the company. Moreover, Coleman’s failure to sell the stock at the first chance was obviously weighed by the jury. The verdict demonstrates that the jury apparently found that Coleman’s failure to attempt resale was of no consequence.

At trial Morgan Stanley’s damages defense was apparently meant to defeat Coleman’s benefit-of-the-bargain theory by focusing on the second method of proving fraud damages. To reduce damages it sought to establish that even if the stock fell short of the entire value represented by the financial statements, it was nevertheless still worth some lesser value. Morgan Stanley certainly elicited evidence of a lesser value and so argued to the jury. The problem for Morgan Stanley on appeal is that its theory was substantially rejected by the jury. While there may have been contrary evidence, Coleman produced contrary evidence to support its theory of zero value. The jury relied on Coleman’s theory instead of Morgan Stanley’s, a reliance that should impel this court on appeal to reject the alternative theory of measuring damages as well.

The principal policy underlying compensation in fraud cases has been explained thus:

“In tort actions, the goal is to restore the injured party to the position it would have been in had the wrong not been committed. In most cases, the measure of damages which will accomplish this goal is that provided by the ‘out-of-pocket rule.’ However, in some eases, the measure of damages afforded by that rule will prove inadequate to achieve the desired goal. To address those latter cases in which the claim is for fraud, what has been described as the ‘flexibility theory’ has been developed. The ‘flexibility theory’ permits the court to use either the ‘out-of-pocket’ or the ‘benefit-of-the-bargain’ rule, depending wpon which is more likely fully to compensate the injured party.” [c.o., e.s.]

Nordyne, Inc. v. Fla. Mobile Home Supply, Inc., 625 So.2d 1283, 1286 (Fla. 1st DCA 1993). Coleman had strong authority under Florida law to rely on the benefit-of-the-bargain rule and succeeded in producing evidence that the stock it received was essentially worthless. While Morgan Stanley was free to hitch its star to the alternative out-of-pocket rule, it was the function of the jury to decide which of the two theories would fully compensate the deceived victim of this particular fraud. From the amount awarded, it is obvious that the jury largely used the benefit-of-the-bargain rule, reducing the amount claimed by Coleman to fit the jury’s resolution of the evidence. I do not think the trial judge abused her discretion in allowing the evidence or by refusing to disturb the jury’s compensation verdict.

Punitive Damages

In Ault v. Lohr, 538 So.2d 454 (Fla.1989), the court held that a plaintiff can recover punitive damages when the fact finder has found a breach of duty but compensatory or actual damages have not been proven; nominal damages need not first be awarded before punitive damages are proper. Yet in spite of Ault, the majority peremptorily holds that no punitive damages are possible in this intentional fraud case because of its reversal of the jury’s award of compensatory damages. Their reasoning is:

“Although the Florida Supreme Court’s recent Engle opinion does state that ‘an award of compensatory damages is not a prerequisite to a finding of entitlement to punitive damages,’ we read the opinion as addressing the order of proof in determining entitlement to punitive damages, not as eliminating the need for proof of damages establishing the underlying case of fraud.”

(referring to Engle v. Liggett Group, Inc., 945 So.2d 1246, 1262 (Fla.2006)). To understand why Engle does not hold what the majority said it did, I set out the Engle court’s actual discussion on this subject in its entirety:

“A. Phase I Finding on Entitlement to Punitive Damages
“The last question on the Phase I verdict form asked the jury to determine whether ‘[ujnder the circumstances of this case, ... the conduct of any Defendant rose to a level that would permit a potential award or entitlement to punitive damages.’ The jury answered ‘yes’ with respect to each of the defendants. In Phase II-B, the jury awarded a total of $145 billion in punitive damages to the class.
“The Third District ruled that the trial erred in awarding classwide punitive damages ‘without the necessary findings of liability and compensatory damages.’ Engle II, 853 So.2d at 450.[] A majority of the Court (Anstead, Pariente, Lewis and Quince) concludes that an award of compensatory damages is not a prerequisite to a finding of entitlement to punitive damages. Compensatory and punitive damages serve distinct purposes. As the United States Supreme Court has explained:
‘The former are intended to redress the concrete loss that the plaintiff has suffered by reason of the defendant’s wrongful conduct. The latter, which have been described as ‘quasi-criminal,’ operate as ‘private fines’ intended to punish the defendant and to deter future wrongdoing. A jury’s assessment of the extent of a plaintiffs injury is essentially a factual determination, whereas its imposition of punitive damages is an expression of its moral condemnation. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 432, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001) (citations omitted).’
“Because a finding of entitlement to punitive damages is not dependent on a finding that a plaintiff suffered a specific injury, an award of compensatory damages need not precede a determination of entitlement to punitive damages. Therefore, we conclude that the order of these determinations is not critical. See Jenkins v. Raymark Indus., Inc., 782 F.2d 468, 474 (5th Cir.1986).
“A different majority of the Court (Wells, Anstead, Pariente and Bell) concludes that under our decision in Ault v. Lohr, 538 So.2d 454, 456 (Fla.1989), a finding of liability is required before entitlement to punitive damages can be determined, and that liability is more than a breach of duty. A finding of liability necessarily precedes a determination of damages, but does not compel a compensatory award. For example, in Ault, the jury found that the defendant had committed an assault and battery but awarded $0 in compensatory damages and $5000 in punitive damages. See id. at 455. Thus, unlike the Phase I jury in this case, the jury in Ault found that the plaintiff had proved the underlying cause of action but did not suffer any compensable damage.
“Although we appeared to use ‘breach of duty’ and ‘liability’ interchangeably in Ault, the Court expressly adopted the principles set forth in dicta in Lassiter v. International Union of Operating Engineers, 349 So.2d 622 (Fla.1976). Specifically, we stated that
‘[njominal damages are awarded to vindicate an invasion of one’s legal rights where, although no physical or financial injury has been inflicted, the underlying cause of action has been proved to the satisfaction of a jury. Accordingly, the establishment of liability for a breach of duty will support an otherwise valid punitive damage award even in the absence of financial loss for which compensatory damages would be appropriate. Ault, 538 So.2d at 455 (quoting Lassiter, 349 So.2d at 625-26).’
“In this case, the Phase I verdict did not constitute a ‘finding of liability’ under Ault. This is evidenced by the fact that had the jury found for Tobacco on the legal cause and reliance issues during Phase II, there would have been no opportunity for the jury to award the named plaintiffs damages of any type. In other words, Phase II findings for Tobacco on legal causation and reliance would have precluded the jury from awarding compensatory or punitive damages. It was error for the trial court to allow the jury to consider entitlement to punitive damages before the jury found that the plaintiffs had established causation and reliance.
“In Phase I, the jury decided issues related to Tobacco’s conduct but did not consider whether any class members relied on Tobacco’s misrepresentations or were injured by Tobacco’s conduct. As the Third District noted, the Phase I jury ‘did not determine whether the defendants were liable to anyone.’ Engle II, 858 So.2d at 450. It was therefore error for the Phase I jury to consider whether Tobacco was liable for punitive damages.” [e.s.]

945 So.2d at 1262-63. By no stretch of the imagination could this explanation be understood by me as merely fixing an “order of proof in determining entitlement to punitive damages.” Ault v. Lohr had already “eliminat[ed] the need for proof of damages establishing the underlying case of fraud,” and Engle explicitly proceeded to follow and apply Ault in the holding quoted above. Id. It is not reasonable to read the above quotation to mean anything other than that an award of some compensatory damages is unnecessary to find an entitlement to punitive damages.

Because the majority’s reading of Engle on the punitive damages issue is obviously at odds with the Supreme Court’s earlier holding in Ault, it is apparent that the majority thinks that Engle has impliedly overruled Ault. But the Supreme Court has repeatedly made clear that it does not impliedly overrule itself. See Puryear v. State, 810 So.2d 901, 905 (Fla.2002) (“We take this opportunity to expressly state that this Court does not intentionally overrule itself sub silentio. Where a court encounters an express holding from this Court on a specific issue and a subsequent contrary dicta statement on the same specific issue, the court is to apply our express holding in the former decision until such time as this Court recedes from the express holding.” [e.s.]); State v. Ruiz, 863 So.2d 1205, 1210 (Fla.2003) (“Further, as we have made clear, ‘this Court does not intentionally overrule itself sub silen-tio.’ ”); F.B. v. State, 852 So.2d 226, 228 (Fla.2003) (“Thus, while the Second District’s reliance ... is understandable, we again remind the courts that this Court does not intentionally overrule itself sub silentio.”); City of Miami v. McGrath, 824 So.2d 143, 152 (Fla.2002) (“there is no indication that the Court ... intended to recede from its prior approach to analyzing when a statute is an impermissible special law.”). There is absolutely nothing in Engle suggesting that Ault was being explicitly overruled; indeed the court actually proceeded to apply Ault. See Engle, 945 So.2d at 1262-63 (“A finding of liability ... does not compel a compensatory award. For example, in Ault, the jury found that the defendant had committed an assault and battery but awarded $0 in compensatory damages and $5000 in punitive damages. Thus, unlike the Phase I jury in this case, the jury in Ault found that the plaintiff had proved the underlying cause of action but did not suffer any compensable damage.”).

Ault’s actual holding is that zero compensatory damages do not preclude punitive damages. In fact the court granted review specifically to answer that question. Ault, 538 So.2d at 456 (“The narrow question for resolution by this Court is whether a plaintiff can recover punitive damages where the factfinder has found a breach of duty but no compensatory or actual damages have been proven.”). In holding that liability without at least some compensatory damages does not foreclose an award of punitive damages, Ault explained:

“We believe an express finding of a breach of duty should be the critical factor in an award of punitive damages. Accordingly, we hold that a finding of liability alone will support an award of punitive damages ‘even in the absence of financial loss for which compensatory damages would be appropriate. ’ We reject Ault’s contention that at least nominal damages must first be awarded before punitive damages are proper. We conclude that nominal damages are in effect zero damages and are defined as those damages flowing from the establishment of an invasion of a legal right where actual or compensatory damages have not been proven. In approving an award of punitive damages upon an express finding of liability by the factfin-der, we accept the view that nominal damages will be presumed from an encroachment upon an established right.” [e.s., f.o.]

Id. In a special concurring opinion, Justice Ehrlich contributed the following:

“The crucial element in determining whether punitive damages may be awarded absent an award of compensatory damages is proof of the underlying cause of action. Where actual damage is an essential element of the underlying cause of action, an award of compensatory damages must be a prerequisite to an award of punitive damages. This case involved the torts of assault and battery, which do not require proof of actual damage. Therefore, I agree that in this case, where the jury made an express finding of liability, punitive damages could properly be awarded even absent an award of compensatory damages.”

538 So.2d at 457.

The majority has not disturbed the jury’s finding of liability for fraud — for which plaintiff was required to present evidence of the fact (if not the amount) of some damage. Effectually the majority has resurrected this court’s holding in Buonopane v. Fritz, 477 So.2d 1030 (Fla. 4th DCA 1985) (“The law in Florida is clear that one cannot recover for punitive damages if no compensatory damages are awarded.”). But that holding that was expressly disapproved in Ault. 538 So.2d at 456 (“For the reasons expressed, we ... disapprove Buonopane v. Fritz, 477 So.2d 1030 (Fla. 4th DCA 1985)... .”)• There is a world of difference between the fact that one was damaged — i.e., harmed or injured — by a falsehood (fraud being merely one example of an actionable falsehood, defamation another) and the entirely separate issue of its quantification in money damages. Ault requires only the former and eschews the latter.

In setting aside the compensatory damages in this case, the majority’s premise is that the stock may well have had some lesser value than Morgan Stanley represented but the evidence fails to establish that any precise lesser value on some relevant date. Clearly, however, the evidence supported the inference that Coleman was damaged by the fraud, even if it fails to support the precise amount awarded. In First Interstate Development Corp. v. Ablanedo, 511 So.2d 536 (Fla.1987), the supreme court held that punitive damages are appropriate for any tortious conduct accomplished through fraud. See also Winn & Lovett Grocery Co. v. Archer, 126 Fla. 308, 171 So. 214, 221, 222 (1936) (exemplary damages are given solely as a punishment where torts are committed with fraud; to recover exemplary or punitive damages, the declaration must allege some general facts and circumstances of fraud). If proof of intentional fraud is per se enough for punitive damages, then the failure to establish the precise monetary amount of the actual loss caused by the fraud does not affect the entitlement to punitive damages. It may have an effect on the amount of punitive damages but not entitlement.

In order for the jury in this case to have assessed any compensatory damages, it first had to decide that Coleman had established the fact of damage from Morgan Stanley’s intentionally false financial statements. Accordingly, under Engle and Ault, if the majority could properly decide that Coleman failed to prove any amount of compensatory damages, it would be necessary to presume at least nominal damages for fraud. The result should then be to remand the case to the trial court for a new trial on punitive damages.

But apart from Engle, I think a new trial on punitive entitlement is required for an entirely different reason. My reasoning is this.

Liability on the fraud issue was partially established by the trial court’s imposition of sanctions on Morgan Stanley and its consequent jury instruction that it must take as established the essential facts Coleman relied on to prove liability for fraud. Later when this bifurcated trial entered the punitive damages phase, Morgan Stanley tried to present evidence contrary to those facts deemed established by the jury instruction for purposes of deciding the liability phase. The trial judge barred Morgan Stanley from doing so. In my opinion, this was error.

In deciding whether to inflict civil punishment by punitive damages, the critical issue turns on “the degree of reprehensibility11 of the defendant’s misconduct.” State Farm Mutual Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003); BMW of North America, Inc. v. Gore, 517 U.S. 559, 575, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). While there are other lesser factors, it is manifest that any “moral outrage” of the jury must arise from conduct suitably blameworthy. See e.g. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 432, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001) (“A jury’s ... imposition of punitive damages is an expression of its moral condemnation.”). The moral condemnation is the censure of a civil society expressed collectively by its representative members on a jury. It is not the individual reaction of a single judge — not even when the judge is imposing sanctions for discovery violations by directing the jury to take certain facts as proven. The facts creating an entitlement to punitive damages are not something that a trial judge can impose on a jury as a presumption. Unavoidably, it is the jury who must find and express that moral condemnation.

A jury cannot make this severe condemnation without admissible evidence confirming that the defendant’s conduct was adequately blameworthy. Due process thus requires that defendant must necessarily have the right to offer admissible evidence that members of the community might logically and reasonably consider as mitigating its blameworthiness for such punishment. In this case the trial judge essentially denied Morgan Stanley that right. For that reason I would have a new trial as to both entitlement and (if necessary) any amount.

      . CPH's argument on appeal that the jury actually awarded it $600 million in “consequential” damages is unpersuasive. The jury was not instructed on the concept of consequential damages. In any event, CPH’s new theory is not supported by the authorities it cites.

      . In his specially concurring opinion in Ault, Chief Justice Ehrlich observed that if actual damage is an essential element of a tort, then an award of compensatory damages is necessary for an award of punitive damages. Though we recognize that this concurring opinion is not binding precedent, we find it highly persuasive. The alternative view would, for example, permit virtually anyone who ever smoked a cigarette in the State of Florida to recover punitive damages in a fraud action against the tobacco companies, irrespective of a finding of any actual adverse health effects.

      .Even if we were to accept CPH's argument that some amount of punitive damages would still be awardable after a directed verdict on compensatory damages, due process principles would not have permitted an $850 million punitive damage award to stand in a case where no compensatory damages were awarded. See BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996) (holding that punitive damages must bear a reasonable relationship to compensatory damages). Under due process principles, only a small fraction of the $850 million award would conceivably have been recoverable in this situation.

      . I do agree with the majority’s necessarily implicit affirmance of the trial court’s application of Florida law instead of New York. Florida has a significant and undeniable interest in providing remedies for persons injured by false financial statements emanating from this state by companies who have decided to locate their headquarters here. I agree that the trial court did not abuse its discretion in the sanctions imposed on Morgan Stanley for substantial violations of court orders.

      . See § 768.725, Fla. Stat. (2005) (“In all civil actions, the plaintiff must establish at trial, by clear and convincing evidence, its entitlement to an award of punitive damages.”).

      . Again, even if the stock lacked objective value because of the insolvency of the corporation, the owners of its stock might still avoid a liquidation if they could point to some prospective advantage to conceivably rescue the situation. But without that, the stock would have no value.

      . Liggett Group, Inc. v. Engle, 853 So.2d 434, 450 (Fla. 3d DCA 2003).

      . Some synonyms are blameworthy, unpardonable, evil, wicked, iniquitous.