ICMfg & Associates, Inc. v. The Bare Board Group, Inc.
238 So. 3d 326
Fla. Dist. Ct. App.2017Background
- BBG, a printed circuit board supplier, sued ICMfg & Associates, Inc. (ICM), and individual defendants Coghlan, del Grosso, and Doyle after Coghlan and del Grosso resigned from BBG and allegedly diverted BBG customers to ICM.
- BBG counterclaimed alleging breach of fiduciary duty, aiding and abetting, conspiracy, fraud, FDUTPA violations, and tortious interference; it sought lost profits and other damages.
- The defendants engaged in discovery abuse, concealed and altered ICM’s 2010–2011 tax returns, and gave inconsistent deposition testimony; the trial court found this amounted to fraud on the court.
- The trial court struck the defendants’ pleadings and entered a default on liability as a sanction, leaving only damages for trial; BBG tried damages with an expert who assumed causation per the court’s pretrial ruling.
- The trial court awarded substantial past and future lost profits, disgorgement of salaries, punitive damages, and attorney’s fees; defendants appealed.
Issues
| Issue | Plaintiff's Argument (BBG) | Defendant's Argument (Appellants) | Held |
|---|---|---|---|
| Was striking pleadings and entering default proper as a sanction for discovery abuse/fraud? | Sanctions were warranted due to deliberate concealment, alteration of documents, and false testimony. | Sanctions were excessive; lesser sanctions would suffice. | Affirmed: trial court did not abuse discretion; conduct amounted to fraud on the court. |
| Does an entry of default on liability eliminate claimant's burden to prove causation for lost profits? | Default established liability and causation nexus; BBG only needed to prove amount of damages. | Default does not relieve BBG of proving a connection between tortious conduct and claimed lost profits. | Reversed: default did not relieve BBG of proving some connexity between defendants’ conduct and lost profits. |
| Were BBG’s lost-profits damages proven with sufficient methodology and certainty? | Expert’s methodology (control group, profit percentage) tied losses to defendants’ conduct. | Expert failed to investigate causation; methodology (especially for "tampered" group) speculative. | Reversed: expert assumed causation and failed to establish a reliable nexus; remand for new trial on lost profits. |
| Does reversal of lost-profits awards require vacatur of stipulated attorney’s fees under FDUTPA? | Fees awarded under FDUTPA are separate and need not be allocated; stipulation fixes amount. | Fees should be vacated if underlying damages reversed. | Affirmed: fee award under FDUTPA stands; no allocation required and FDUTPA recovery remains. |
Key Cases Cited
- Mercer v. Raine, 443 So. 2d 944 (Fla. 1983) (striking pleadings justified for willful noncompliance)
- Kozel v. Ostendorf, 629 So. 2d 817 (Fla. 1993) (factors for evaluating discovery sanctions)
- Long v. Swofford, 805 So. 2d 882 (Fla. 3d DCA 2001) (court must dismiss for fraud on the court)
- Rucker v. Garlock, Inc., 672 So. 2d 100 (Fla. 3d DCA 1996) (defaulted plaintiff must still show connexity between conduct and damages)
- Hanna v. Martin, 49 So. 2d 585 (Fla. 1950) (damages must be commensurate with loss caused by defendant)
- Paul Gottlieb & Co. v. Alps S. Corp., 985 So. 2d 1 (Fla. 2007) (lost profits must be proven with reasonable certainty)
- Heindel v. Southside Chrysler-Plymouth, Inc., 476 So. 2d 266 (Fla. 1st DCA 1985) (no allocation of attorney’s fees required when claims arise from same transaction)
- Diamond Aircraft Indus., Inc. v. Horowitch, 107 So. 3d 362 (Fla. 2013) (quoting Heindel on fee allocation)