The Second District Court of Appeal recently reversed a jury verdict that awarded a contractor nearly $300,000 after determining that the amount had already been paid by another entity. The dispute in Tern Bay Community Development District v. Ryangolf Corporation arose from the planned development of a golf community known as Tern Bay. Tern Bay, LLC (“LLC”), a private company, was responsible for creating the golf course, pools, tennis courts, clubhouses, private roadways, fountains, hardscape, and security. Tern Bay Community Development District (“CDD”), a community development district created pursuant to Chapter 190, Florida Statutes, was in charge of developing the Tern Bay project’s infrastructure, i.e., public roadways, water management, wetlands, utilities, landscape, and professional services. In 2004, both CDD and LLC contracted with Ryangolf Corporation (“Ryangolf”) to construct the improvements to the property.
The project was not completed, and Ryangolf Corporation sued both CDD and LLC for breach of contract, alleging that they had failed to pay in excess of $2,000,000.00 for work performed. The LLC was insolvent, and at some point during the litigation, Ryangolf dropped LLC from the litigation. Ryangolf proceeded with its action against CDD. At trial, Ryangolf requested damages of $389,881.27 (comprising $109,061.50 for additional work performed on CDD’s behalf and $280,819.77 for money allegedly owed by CDD for invoices that Ryangolf had mistakenly charged to LLC). The jurors awarded the full amount requested.
On appeal, the Second District reversed a portion of the award because there was evidence at trial that LLC had paid Ryangolf for the work that should have been billed to CDD, in the amount of $280,819.77. Thus, the Second District held that because Ryangolf had previously been paid for these items of work, albeit by the wrong entity, Ryangolf was not entitled to recover for them again in its lawsuit against CDD. The court opined that if LLC paid Ryangolf for services rendered on behalf of CDD, then LLC, not Ryangolf, had a claim against CDD. LLC’s payment of CDD’s debt to Ryangolf essentially resulted in an equitable subrogation in which “the party discharging the debt stands in the shoes of the person whose claims have been discharged and thus succeeds to the right and priorities of the original creditor.”
During the appeal, Ryangolf asserted that LLC failed to pay far more than this amount on its contract. Rejecting this argument, the Second District explained that the fact that Ryangolf was unable to collect from LLC due to its insolvency did not justify an award of damages for money it had already been paid. This case is a good reminder for all parties seeking damages in litigation that it is not only crucial to have an itemized list of damages and evidence to support such damages, but to be sure that no portion of the damages sought represent amounts previously paid.