Batlemento v. Dove Fountain, Inc.

593 So. 2d 234, 1991 Fla. App. LEXIS 12752, 1991 WL 273700
District Court of Appeal of Florida·Decided December 27, 1991·No. 89-2460·Published·Cited by 28 cases

Opinion

593 So.2d 234 (1991)

Sam BATLEMENTO, et al., Appellants,
v.
DOVE FOUNTAIN, INC., et al., Appellees.

No. 89-2460.

District Court of Appeal of Florida, Fifth District.

December 27, 1991.
Rehearing Denied February 21, 1992.

*236 Charles Evans Davis and Stephen P. Kanar, Orlando, for appellants.

Douglas C. Spears of Pleus, Adams & Spears, P.A., Orlando, for appellees.

GRIFFIN, Judge.

This is an appeal from a final judgment upon a jury verdict rendered in favor of plaintiffs/appellees Vito and Ida Maniaci (the "Maniacis") and Dove Fountain, Inc. (plaintiffs) for fraud, breach of contract, and violation of the Business Opportunities Act.[1]

This case arises from the Maniacis' purchase of a Casa Mia restaurant on Conway Road in Orlando, Florida in 1983. Casa Mia was a chain of primarily family-owned Italian restaurants which were located solely within the Orlando area. The chain was started by three brothers, Sam Batlemento, Luigi Badalamente and their brother Joe (now deceased). Many of the restaurants were operated by family members, but a small minority of the restaurants were operated by outsiders who frequently owned an equity interest. The remaining interests were owned by Casa Mia Pizzeria & Ristorante, Inc., a Florida corporation ("Casa Mia"), which in turn was owned by Florentes, Inc., a corporation owned in equal shares by the Badalamente brothers.

Appellee Vito Maniaci, a postal worker, who resided in Michigan, was a lifelong friend of the Badalamentes. Over the years he had invested in a number of different business ventures with the Badalamentes on which he had always made money. Among these ventures was a Big Boy restaurant and a duplex in the Orlando area. Since 1976, he had frequently visited Sam Batlemento and Luigi Badalamente in Orlando and the parties had discussed the possibility of Vito's participation in the Casa Mia business.

In the late 1970's, Casa Mia underwent expansion and the brothers allegedly decided to franchise the restaurants.[2] Either in anticipation of the franchise or Maniaci's retirement in 1986, talks concerning the Maniacis' purchase of a restaurant began to accelerate in 1983. In August, 1983, the Maniacis decided to send their twenty-one year old son, Dan Maniaci, to Orlando to learn the business by working in the existing Casa Mia restaurants.

By November 1, 1983, Vito had completed his investigation of various locations and had decided to purchase Casa Mia's existing Conway Road location. The restaurant was owned by Buona Fortuna, a corporation owned in equal shares by Casa Mia and University, Inc. University in turn was owned in equal shares by Casa Mia and Franco Ferrari (a son-in-law of one of the Badalamentes). The purchase price was $99,000. At the closing, on November 29, 1983, the Maniacis paid $33,000 down in cash and assigned the company two promissory notes totalling $8,000. The remaining balance of $58,000 was to be paid at the rate of 12% under the terms of the purchase money note given Buona Fortuna.

At the time of the sale, the Maniacis entered into a Management Agreement with Casa Mia. Under the terms of the agreement, the Maniacis agreed to pay Casa Mia five percent of gross sales in exchange for Casa Mia's management expertise, although no specific management responsibilities were set forth in the agreement.[3]

*237 The Maniacis took over the restaurant as of December 1, 1983 and operated it under the aegis of Dove Fountain, Inc., a corporate entity which controlled the restaurant until it closed in September of 1986. Although sales increased during the first year, the restaurant experienced financial problems from the first. The Maniacis made no provision for working capital, allegedly because this issue had never been raised by the Badalamentes. Also, the Maniacis had been told by appellants that operating expenses would approximate $13,000 per month but, in fact, they were $17,000 a month. Evidently, the Maniacis had not taken into account payment of the obligations under the purchase money note; also, it appears that Dan Maniaci was not an efficient manager. By April of 1984, the restaurant was in arrears over $12,000. Throughout 1984 and 1985, conditions in the restaurant continued to deteriorate. Appellees made sporadic payments under the note and for advertising, but eventually defaulted under their lease. The restaurant closed in September of 1986 and the equipment was sold in early 1987 for only $18,000.

In their Amended Complaint filed against appellants Sam Batlemento, Luigi Badalamente and Casa Mia, appellees sought damages for fraud, breach of the management contract, violation of Florida's Business Opportunities Act[4] and for civil redress of criminal practices.[5] Casa Mia counterclaimed for monies owed under the management agreement and Sam Batlemento counterclaimed for monies owed on various insurance policies he had carried for the Maniacis through Batlemento Insurance Co. Buona Fortuna also filed a third-party complaint to recover sums due under the purchase note and mortgage. The total amount allegedly due on the counterclaims and third-party complaint was in excess of $65,000.

The case was tried to a jury, which found in favor of plaintiffs on their claims for fraud, breach of contract and violation of the Business Opportunities Act. The jury awarded appellees $147,000 in compensatory damages and an equal amount for punitive damages. Following denial of their post-trial motions, appellants have appealed the final judgment asserting multiple claims of error.

I. FRAUD

Appellants argue that fraud was not properly pleaded, there was no evidence adduced at trial to support a judgment for fraud and that indeed, as a matter of law, the circumstances leading up to appellees' purchase of this business could not constitute fraud. We agree that the allegations contained in the amended complaint are completely inadequate to state a cause of action for fraud. The fraud allegations in the amended complaint were as follows:

8. Defendants, Sam Batlemento, Luigi Badalamente and Casa Mia made representations to Maniaci concerning the prior business history of the restaurant being offered, its prior income, its potential income, prospects, and the services that would be provided in support of the business by said Defendants.
9. Maniaci in reliance upon the representations of said Defendants entered into an agreement to purchase the Casa Mia Pizzeria and Ristorante... .
10. The representations made by Sam Batlemento, Luigi Badalamente and Casa Mia were false and known by said Defendants to be false at the time they were made. Specifically, the representations *238 as to the prior business history, potential income and services to be provided were false, contrived and without basis in fact.
11. Defendants, Sam Batlemento, Luigi Badalamente and Casa Mia made the aforesaid representations with specific intent that Maniaci rely on them to their detriment.
* * * * * *
23. The representations made by Defendants to induce Plaintiffs to enter into the agreement to acquire the business opportunity were false and fraudulent and known to be false and fraudulent at the time they were made.
24. Defendants intended that Plaintiffs rely upon said representations to their detriment.
25. With respect to representations as to services and support t

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Batlemento v. Dove Fountain, Inc., 593 So. 2d 234, 1991 Fla. App. LEXIS 12752, 1991 WL 273700 (Fla. Ct. App. 1991).

593 So. 2d 234 (Batlemento v. Dove Fountain, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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