CIVIL THEFT: GETTING BACK WHAT’S YOURS – THREE TIMES OVER

Posted almost 2 years ago. Applies to Florida, 3 helpful votes

Email

I. Introduction Many attorneys have reached the point where a claim for civil theft is automatically brought when allegations are raised regarding wrongfully and fraudulently obtained money or other property. Florida’s statutory action provides a seemingly simple vehicle for this path. Moreover, civil theft is often used simply as an additive amongst a host of other common conversion claims. A civil theft claim, properly plead and proven, can provide rewards of treble damages and reasonable attorney’s fees. This bonus may make civil theft more attractive than a basic conversion claim. However, the greater gains are only achieved by closely following the unique requirements of the statute and bearing in mind the increased risk of paying the defendant’s fees should the claim fail. Separate from classic tortious conversion, the Florida statute has stringent threshold requirements that must be satisfied. Counsel must carefully evaluate a potential case with a cost benefit analysis performed before any formal steps are taken. Below are basic suggested considerations counsel should ponder before drafting a civil theft complaint. This document is done with a mind for the unfamiliar attorney to assist in achieving favorable outcome. II. The Statute Florida Statutes §771.11 entitled “Civil Remedy for Theft" provides: Any person who proves by clear and convincing evidence that he or she has been injured in any fashion by reason of any violation of the provisions of ss. 812.012-812.037 has a cause of action for threefold the actual damages sustained and, in any such action, is entitled to minimum damages in the amount of $200, and reasonable attorney’s fees and court costs in the trial and appellate courts. Before filing an action for damages under this section, the person claiming injury must make a written demand for $200 or the treble damage amount of the person liable for damages under this section. If the person to whom a written demand is made complies with such demand within 30 days after receipt of the demand, that person shall be given a written release from further civil liability for the specific act of theft by the person making the written demand. Any person who has a cause of action under this section may recover the damages allowed under this section from the parents or legal guardian of any unemancipated minor who lives with his or her parents or legal guardians and who is liable for damages under this section. In no event shall punitive damages be awarded under this section. The defendant shall be entitled to recover reasonable attorney’s fees and court costs in the trial and appellate courts upon a finding that the claimant raised a claim which was without substantial fact or legal support. In awarding attorney’s fees and costs under this section, the court shall not consider the ability of the opposing party to pay such fees and costs. Nothing under this section shall be interpreted as limiting any right to recover attorney’s fees or costs provided under other provisions of law. Additional civil remedies are set forth in Florida Statutes §812.035. These remedies include injunctions, divestiture, restrictions on future activities or investments, dissolution or reorganization of any enterprise, suspension or revocation of any licenses, permits or approvals issued by state agencies or departments, and revocation of corporate charters. No showing of irreparable harm is required for injunctive relief. Where civil theft is alleged, there is no limitation on any other remedies provided for by law. A treble damages award and attorney’s fees are mandatory upon a jury’s verdict finding that the defendant committed the alleged civil theft. Aagaard-Juergensen, Inc. v. Lettellier, 579 So.2d 404 (Fla. 5th DCA 1991). Note however, that a treble damages award precludes any other punitive damages award. III. Pre-Suit Notice and the Statute of Limitations Compliance is mandatory with the pre-suit notice requirement, including a written demand for $200 or the treble damage amount that a defendant might be liable. Courts have permitted belated pre-suit notices that are otherwise satisfactory. Florida Statutes §812.035(10). The Statute of limitations is five years after the cause of action accrues, or within five years of the date the conduct ceased. Additionally, state intervention in a criminal or civil action against the same defendant for the same conduct suspends the private plaintiff’s action until the state’s action concludes; after which, the plaintiff has two years to file suit. IV. Recognized Property Interests A Plaintiff must establish legally recognizable interests in items stolen. Balcor Property Management, Inc. v. Ahronovitz, 634 So.2d 277, 279 (Fla. 4th DCA 1994). Where interests may not be quantified or are unidentifiable then civil theft claims fail. Conversely, the more specific and identifiable, the more likely the claim will survive. As an example, a plaintiff properly plead and succeeded in claiming an interest in a specific sum of money from an identifiable source. Escudero v. Hasburn, 689 So.2d 1144 (Fla. 3d DCA 1997). The extent to which specificity is required is determined by a facts and circumstances test. A fairly recent Fifth District decision demonstrates how murky this test can become. Florida Desk, Inc. v. Mitchell International, Inc., 817 So.2d 1059 (Fla. 5th DCA 2002). A hospital arranged for an intermediary to purchase office equipment and resell the equipment to the hospital. Mitchell sent an approved purchase to Florida desk and received a “deposit" for 50% of the equipment’s purchase price that Mitchell put into a general operating account. After the equipment was delivered, Mitchell never paid, causing Florida Desk to file suit against Mitchell. The Fifth District reversed the trial court’s favorable ruling for Mitchell on the grounds that merely because an amount is specific does not create an identifiable fund that is in an unsegregated account. Florida Desk would need to prove a given set of money was held specifically for its benefices. Finally the risk of non-payment to Mitchell by the hospital made the hospital the proper party for suit. This case should make attorneys leery of an easy civil theft claim because of a demand for a specific amount of money. V. The Felonious Intent to Steal The defendant must be shown in the pleading to have acted with a “felonious intent to steal" or the civil theft complaint will be ruled deficient. Lewis v. Heartsong, 559 So.2d 453 (Fla. 1st DCA 1990). Civil courts often borrow the definition of felonious intent from criminal cases. See Gersh v. Cofman, 769 So.2d 407 (Fla. 4th DCA 2000). An absence of pleading and proof that this intent existed will not support an action for civil theft despite a finding for conversion. Pathway Financial v. Miami Int’l Realty Co., 588 So.2d 1000 (Fla. 3d DCA 1991). VI. Presentation of Clear and Convincing Evidence Felonious intent is demonstrated by showing clear and convincing evidence of a standard heightened well beyond the usual requirements of conversion. [T]he facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established. Although this standard of proof may be met where the evidence is in conflict. Westinghouse Elect. Corp., Inc. v. Bay County Energy Systems, Inc., 590 So.2d 986, 988 (Fla. 1st DCA 1991). With this idea in mind, counsel desiring to plead civil theft must carefully weigh with exacting attention to see all elements are satisfied. VI. Applicability of the Economic Loss Rule Civil theft claims are not barred by the Economic Loss Rule. There are circumstances where civil theft qualifies as an independent tort. See Pershing Indus., Inc. v. The Estate of Victoria Sanz, 740 So.2d 1246 (Fla. 3d DCA 1999). A plaintiff would need to plead this tort along with a breach of contract claim. In Burke v. Napieracz, 674 So.2d 756 (Fla.1st DCA 1996), the court found that a defendant who willfully converted plaintiff’s funds when allowed access to an account by contract was guilty of both breach and civil theft. The use of this tort can give the canny lawyer a “second bite at the apple" when pleading a case. However, the same lawyer must be careful to remember that the conduct was verifiably separate from the conduct of the breach. VII. Damages and Attorney’s Fees Treble damages are recoverable with a properly entered civil judgment or when a defendant pleads guilty to grand theft. The second clause is of great importance to civil matters, as final judgment in favor of the state will collaterally estop a defendant in a civil theft suit. Additionally, a successful plaintiff is automatically awarded fees and costs. However, a near reverse also applies in regards to fees and costs should the plaintiff lose. If the court finds the pleading to lack legal or factual substance, using a very loose standard, the court is mandated to award fees to the defending party irrespective of the plaintiff’s financial status. Moreover, the defense still has access to fee award procedures such as Florida Statutes §57.105. The possibility of treble damages is useful weapon to threaten with during settlement negotiations. The easy awarding of fees to either party, though, is a sword that cuts both ways. Note that effective April 29, 2002, Fla. Stat §772.11 was amended to include remedies under §825.103(1) for the exploitation of an elderly person or disabled adult, in addition to other principally nonsubstantive changes.

Additional Resources

Key Cases - Civil Theft 1. Balcor Property Management, Inc. v. Ahronovitz, 634 So.2d 277 (Fla. 4th DCA 1994). The court reversed and remanded with instructions that judgment be entered in favor of defendant. The court found that plaintiff failed to show either a legally recognizable interest in the property or a quantifiable injury to himself and failed to present any persuasive authority to support his position. The court further found that because plaintiff could not sustain his claim for civil theft, he could not prove that he was injured by any involvement by defendant in a conspiracy to commit civil theft. 2. Escudero v. Hasburn, 689 So.2d 1144 (Fla. 3d DCA 1997). The trial court entered a temporary injunction enjoining appellant from withdrawing, transferring or otherwise disposing of the bank funds pursuant to Florida's Civil Theft Statute. The trial court denied appellant's motion to dissolve the temporary injunction. The court affirmed, holding that appellee stated a cause of action for civil theft because appellee's allegations regarding the parties' agreement, if proven, rebutted the presumption of joint ownership in the funds. The civil theft claim was not barred simply because a contractual relationship was involved. 3. Florida Desk, Inc. v. Mitchell International, Inc., 817 So.2d 1059 (Fla. 5th DCA 2002). The appellate court held the procurer could not be held liable for the tort of civil theft of the deposits the end user had paid, because the procurer was not required to hold those deposits for the benefit of the supplier. The procurer's demand of 50 percent payment from the end user before buying equipment that was shipped directly to the end user did not create any ownership rights in the supplier as to that advance payment upon which an action for civil theft could be based. 4. Lewis v. Heartsong, 559 So.2d 453 (Fla. 1st DCA 1990). The court affirmed in part as to all counts except the one for conversion because appellant failed to state a claim sufficient to satisfy the requirements of civil theft, there was no mention of the civil theft statute, and no allegations of felonious intent to steal. 5. Gersh v. Cofman, 769 So.2d 407 (Fla. 4th DCA 2000). Viewing this evidence in the light most favorable to appellant, a reasonable juror could have concluded appellee cousin forged appellant's signature, and that he did so as part of an elaborate scheme to steal from appellant. Thus, the trial court erred in directing a verdict on the civil theft count. 6. Pathway Financial v. Miami Int=l Realty Co., 588 So.2d 1000 (Fla. 3d DCA 1991). In a special verdict a jury awarded plaintiffs damages for breach of contract, damages for conversion, and treble damages for civil theft. The jury found defendant had not committed fraud or misrepresentation, but awarded punitive damages on a claim for tortious conversion. The verdicts on the civil theft and conversions claims were inconsistent with the finding that defendant had not committed fraud or misrepresentation, and were reversed. The verdict awarded contract damages on inconsistent theories, and the judgment was reversed for a new trial on the damage issue. 7. Westinghouse Elect. Corp., Inc. v. Bay County Energy Systems, Inc., 590 So.2d 986 (Fla. 1st DCA 1991). In reversing the decision that denied appellant's motion for judgment notwithstanding the verdict, the court held that appellee wood broker did not establish felonious intent by clear and convincing evidence so as to prevail on its claim for civil theft. The jury was not presented with two conflicting accounts of what took place between appellant and appellee wood broker. The record demonstrated that the evidence was ambiguous. 8. Pershing Indus., Inc. v. The Estate of Victoria Sanz, 740 So.2d 1246 (Fla. 3d DCA 1999).The trial court granted summary judgment to appellant on appellee's claims for fraud in the inducement, conversion, and civil theft, holding that the claims were barred by the economic loss rule. Without discussing the claims specifically, the appellate court affirmed final judgment against appellant on some of appellee's claims. The appellate court reversed and remanded summary judgment against appellee on the claims for fraud in the inducement, conversion, and civil theft, holding that because the claims were independent tort claims they were not barred by the economic loss rule. 9. Burke v. Napieracz, 674 So.2d 756, (Fla. 1st DCA 1996). Appellant filed suit against appellee for breach of contract, conversion, and civil theft. Appellant filed a motion for summary judgment that was denied, while appellee's motion for summary judgment was granted. Appellant challenged, and the court reversed in part and affirmed in part. The court affirmed the denial of appellant's summary judgment motion without comment. The court held that the trial court erroneously granted appellee's motion for summary judgment on the statute of frauds and the economic loss rule. The statute of frauds did not apply because appellant fully performed her obligations under the agreement. Further, the economic loss rule did not apply to claims of conversion and civil theft because a separate and independent tort could be found in such actions. The court remanded the matter for further proceedings. 10. United States v. Bailey, 419 F.3d 1208 (11th Cir. 2005). The attorney's clients were found guilty of laundering the proceeds of a fraudulent telemarketing scheme, and a jury returned a special verdict forfeiting their interests in various assets to the Government, including $ 2 million they had placed in trust in the Cayman Islands for the payment of the attorney's fees. In returning its forfeiture verdict, the jury found that the attorney was a transferee of the laundered proceeds. The attorney defied an order to deposit the fund into court, apparently because the funds had all been distributed. The government brought a conversion action against the attorney, asserting that under the relation-back doctrine codified in 21 U.S.C.S. ' 853(c), the funds vested in the Government. The court vacated its earlier orders, and entered judgment as a matter of law in favor of the attorney. Under Florida law, the Government did not have an immediate right to possession of the legal trust fund at the time of the alleged conversion and, therefore, could not maintain an action for either conversion or civil theft against the attorney, without some subsequent legal. 11. Altadis USA, Inc. v. NPR, Inc., 308 F. Supp. 2d 1304 (S.D. Fla. 2004).Since the court assumed that Ohio law applied, plaintiffs could not state a claim for conversion of money and the Florida civil theft statute did not provide a sufficient basis for a theft count against an Ohio-based bank.

Rate this guide

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 

Ask now

25,245 answers this week

2,805 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

25,245 answers this week

2,805 attorneys answering

Legal Dictionary

Don't speak legalese? We define thousands of terms in plain English.

Browse our legal dictionary