Third District Court of Appeal State of Florida
Opinion filed December 29, 2021. Not final until disposition of timely filed motion for rehearing.
________________
No. 3D21-125 Lower Tribunal No. 19-13301 ________________
GE Real Estate Services, Inc., d/b/a Keller Williams Realty Premier Properties, Appellant,
vs.
Mandich Real Estate Advisors, Inc., Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Peter R. Lopez, Judge.
Douglas H. Stein, P.A., and Douglas H. Stein, for appellant.
Haber Law, P.A., and David B. Haber and Ariella Gutman, for appellee.
Before LOGUE, HENDON, and LOBREE, JJ.
HENDON, J. GE Real Estate Services, Inc., d/b/a Keller Williams Realty Premier
Properties (“KW”) appeals from the trial court’s dismissal with prejudice of
its second amended complaint against Mandich Real Estate Advisors, Inc.
(“Mandich”). We affirm.
Facts
Fred Afif (“Afif”) and Louis Erice (“Erice”) are licensed real estate
agents who were employed by KW. George Smith (“Smith”) is a Florida
licensed real estate broker, formerly affiliated with Miami New Realty
(“MNR”) and Multifamily Real Estate Group, Inc. (“MREG”). In January
2017, Afif, Erice, and Smith entered into a Commission and Non-
Circumvent Agreement (“Commission Agreement”) whereby Afif and Erice
would procure purchasers of hotel properties, Smith would procure sellers
of hotel properties, and they would split the real estate commissions. The
Commission Agreement contained a “non-circumvent” provision that
provided that neither KW nor Smith on their own could enter into sales
agreements and cut the other out of the commission.1 The Commission
1 The provision states: 4. Non-Circumvent. The parties acknowledge that the sale or purchase of property by a Protected Party is a business opportunity to all parties. Therefore, the parties agree not to circumvent, avoid, or bypass, directly or indirectly, each other for the purpose of avoiding payment of the Commission by entering into any agreement for the sale and purchase of property with,
2 Agreement specifically referred to the River Park Hotel and Suites, Miami,
Florida, as the only asset under consideration for sale or lease by Afif, who
was the only broker involved in full negotiation with the buyer and seller.
After the Commission Agreement was executed, Afif introduced Smith to
his client, who did business through their wholly owned corporation,
Sanctuary Resort and Marina, LLC (“Buyers”). The sale of the River Park
Hotel property did not close.
Over a year later, around March of 2018, Smith, acting as broker,
identified another hotel opportunity for the Buyers to purchase, the Sands
Harbor Resort and Marina property (“Sands Harbor”). On March 23, 2018,
Smith formed a new corporation, Mandich. On May 10, 2018, Smith
became the qualifying broker for that company when it became licensed as
a brokerage company by the Florida Department of Professional
Regulation. On May 11, 2018, Smith and the Buyers entered into a
or to a Protected Party that does not include the payment of the Commission. In the event a party circumvents the other in breach of this paragraph, the non-breaching party shall be entitled to a Commission in the amount of 50% percent of the total AMOUNT OF COMMISSION for the Protected Party's property, with said 50% percent Commission being agreed upon as liquidated damages for the failure of the breaching party to perform the duties, liabilities and obligations imposed upon it by this Agreement. The parties acknowledge that this liquidated damages provision is acceptable because of the difficulty, inconvenience and uncertainty of ascertaining actual damages.
3 Broker’s Fee Agreement, whereby the Buyers agreed to pay Smith a flat
fee of $75,000 identified as a “finder’s fee,” not a “commission,” for his
services related to identifying the property and its sellers, subject to the
transaction closing. No commission was otherwise agreed upon under the
terms of the Broker’s Fee Agreement. It is important to note that when
Smith and the Buyers entered into the Broker’s Fee Agreement, Smith was
still affiliated with MREG.
In October 2018, the Sands Harbor property transaction closed, and
the Buyers disbursed the $75,000 finder’s fee to Mandich, Smith’s current
brokerage company.
Afif and Erice, individually, and KW sued Smith, individually, and
Mandich for breach of the Commission Agreement, and for civil conspiracy,
seeking damages as a result of the Sands Harbor sale. Count 1 alleged
that upon accepting Smith as its Director and Broker, Mandich assumed
the obligations of the Commission Agreement. The complaint further
alleged that Mandich breached the non-circumvent provision of the
Commission Agreement by excluding KW, Afif, and Erice from the Sands
Harbor negotiations and the Broker’s Fee Agreement. The civil conspiracy
count alleged that Smith and Mandich conspired to defraud KW, Afif, and
4 Erice by excluding them from the negotiations and the Sands Harbor
finder’s fee.
Smith and Mandich moved to dismiss the complaint. At the hearing,
the trial court recognized that Afif and Erice were voluntarily dropped as
parties, leaving KW as the sole plaintiff. The trial court then concluded that
the breach of contract count against Mandich must be dismissed with
prejudice because Mandich was not a party to the Commission Agreement.
The court further dismissed the civil conspiracy count without prejudice and
with leave to amend. The trial court specifically stated that it was possible
for KW to state a cause of action for civil conspiracy only if it could show
that Mandich had knowledge of the Commission Agreement and agreed to
circumvent it.
KW filed its Second Amended Complaint. The only counts relevant to
this appeal are the counts against Mandich for tortious interference with a
contractual or business relationship, and against Mandich (and the Buyers)
for civil conspiracy. After a hearing, the trial court dismissed all of KW’s
claims against Mandich with prejudice and denied KW’s motion for re-
hearing.
Examining de novo the allegations of KW’s amended complaint, we
conclude that KW’s claim of tortious interference against Mandich, based
5 on a theory of imputed knowledge of the Commission Agreement, fails as a
matter of law. People’s Trust Ins. Co. v. Alonzo-Pombo, 307 So. 3d 840,
842 (Fla. 3d DCA 2020) (holding a dismissal for failure to state a cause of
action is reviewed de novo); United Auto. Ins. Co. v. Law Offices of Michal
I. Libman, 46 So. 3d 1101, 1103 (Fla. 3d DCA 2010) (holding a motion to
dismiss for failure to state a cause of action admits all well pleaded facts as
true, as well as reasonable inferences that may arise from those facts). In
this instance, the trial court correctly concluded that further opportunities to
amend the complaint would be futile. See Broz v. R.E. Reece, 272 So. 3d
512 (Fla. 3d DCA 2019).
A claim for tortious interference with the Commission Agreement
required KW to set forth four elements in its complaint against Mandich: 1)
the existence of a business relationship between KW and a third person, in
this case, Smith, under which KW has legal rights, 2) Mandich’s knowledge
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Third District Court of Appeal State of Florida
Opinion filed December 29, 2021. Not final until disposition of timely filed motion for rehearing.
________________
No. 3D21-125 Lower Tribunal No. 19-13301 ________________
GE Real Estate Services, Inc., d/b/a Keller Williams Realty Premier Properties, Appellant,
vs.
Mandich Real Estate Advisors, Inc., Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Peter R. Lopez, Judge.
Douglas H. Stein, P.A., and Douglas H. Stein, for appellant.
Haber Law, P.A., and David B. Haber and Ariella Gutman, for appellee.
Before LOGUE, HENDON, and LOBREE, JJ.
HENDON, J. GE Real Estate Services, Inc., d/b/a Keller Williams Realty Premier
Properties (“KW”) appeals from the trial court’s dismissal with prejudice of
its second amended complaint against Mandich Real Estate Advisors, Inc.
(“Mandich”). We affirm.
Facts
Fred Afif (“Afif”) and Louis Erice (“Erice”) are licensed real estate
agents who were employed by KW. George Smith (“Smith”) is a Florida
licensed real estate broker, formerly affiliated with Miami New Realty
(“MNR”) and Multifamily Real Estate Group, Inc. (“MREG”). In January
2017, Afif, Erice, and Smith entered into a Commission and Non-
Circumvent Agreement (“Commission Agreement”) whereby Afif and Erice
would procure purchasers of hotel properties, Smith would procure sellers
of hotel properties, and they would split the real estate commissions. The
Commission Agreement contained a “non-circumvent” provision that
provided that neither KW nor Smith on their own could enter into sales
agreements and cut the other out of the commission.1 The Commission
1 The provision states: 4. Non-Circumvent. The parties acknowledge that the sale or purchase of property by a Protected Party is a business opportunity to all parties. Therefore, the parties agree not to circumvent, avoid, or bypass, directly or indirectly, each other for the purpose of avoiding payment of the Commission by entering into any agreement for the sale and purchase of property with,
2 Agreement specifically referred to the River Park Hotel and Suites, Miami,
Florida, as the only asset under consideration for sale or lease by Afif, who
was the only broker involved in full negotiation with the buyer and seller.
After the Commission Agreement was executed, Afif introduced Smith to
his client, who did business through their wholly owned corporation,
Sanctuary Resort and Marina, LLC (“Buyers”). The sale of the River Park
Hotel property did not close.
Over a year later, around March of 2018, Smith, acting as broker,
identified another hotel opportunity for the Buyers to purchase, the Sands
Harbor Resort and Marina property (“Sands Harbor”). On March 23, 2018,
Smith formed a new corporation, Mandich. On May 10, 2018, Smith
became the qualifying broker for that company when it became licensed as
a brokerage company by the Florida Department of Professional
Regulation. On May 11, 2018, Smith and the Buyers entered into a
or to a Protected Party that does not include the payment of the Commission. In the event a party circumvents the other in breach of this paragraph, the non-breaching party shall be entitled to a Commission in the amount of 50% percent of the total AMOUNT OF COMMISSION for the Protected Party's property, with said 50% percent Commission being agreed upon as liquidated damages for the failure of the breaching party to perform the duties, liabilities and obligations imposed upon it by this Agreement. The parties acknowledge that this liquidated damages provision is acceptable because of the difficulty, inconvenience and uncertainty of ascertaining actual damages.
3 Broker’s Fee Agreement, whereby the Buyers agreed to pay Smith a flat
fee of $75,000 identified as a “finder’s fee,” not a “commission,” for his
services related to identifying the property and its sellers, subject to the
transaction closing. No commission was otherwise agreed upon under the
terms of the Broker’s Fee Agreement. It is important to note that when
Smith and the Buyers entered into the Broker’s Fee Agreement, Smith was
still affiliated with MREG.
In October 2018, the Sands Harbor property transaction closed, and
the Buyers disbursed the $75,000 finder’s fee to Mandich, Smith’s current
brokerage company.
Afif and Erice, individually, and KW sued Smith, individually, and
Mandich for breach of the Commission Agreement, and for civil conspiracy,
seeking damages as a result of the Sands Harbor sale. Count 1 alleged
that upon accepting Smith as its Director and Broker, Mandich assumed
the obligations of the Commission Agreement. The complaint further
alleged that Mandich breached the non-circumvent provision of the
Commission Agreement by excluding KW, Afif, and Erice from the Sands
Harbor negotiations and the Broker’s Fee Agreement. The civil conspiracy
count alleged that Smith and Mandich conspired to defraud KW, Afif, and
4 Erice by excluding them from the negotiations and the Sands Harbor
finder’s fee.
Smith and Mandich moved to dismiss the complaint. At the hearing,
the trial court recognized that Afif and Erice were voluntarily dropped as
parties, leaving KW as the sole plaintiff. The trial court then concluded that
the breach of contract count against Mandich must be dismissed with
prejudice because Mandich was not a party to the Commission Agreement.
The court further dismissed the civil conspiracy count without prejudice and
with leave to amend. The trial court specifically stated that it was possible
for KW to state a cause of action for civil conspiracy only if it could show
that Mandich had knowledge of the Commission Agreement and agreed to
circumvent it.
KW filed its Second Amended Complaint. The only counts relevant to
this appeal are the counts against Mandich for tortious interference with a
contractual or business relationship, and against Mandich (and the Buyers)
for civil conspiracy. After a hearing, the trial court dismissed all of KW’s
claims against Mandich with prejudice and denied KW’s motion for re-
hearing.
Examining de novo the allegations of KW’s amended complaint, we
conclude that KW’s claim of tortious interference against Mandich, based
5 on a theory of imputed knowledge of the Commission Agreement, fails as a
matter of law. People’s Trust Ins. Co. v. Alonzo-Pombo, 307 So. 3d 840,
842 (Fla. 3d DCA 2020) (holding a dismissal for failure to state a cause of
action is reviewed de novo); United Auto. Ins. Co. v. Law Offices of Michal
I. Libman, 46 So. 3d 1101, 1103 (Fla. 3d DCA 2010) (holding a motion to
dismiss for failure to state a cause of action admits all well pleaded facts as
true, as well as reasonable inferences that may arise from those facts). In
this instance, the trial court correctly concluded that further opportunities to
amend the complaint would be futile. See Broz v. R.E. Reece, 272 So. 3d
512 (Fla. 3d DCA 2019).
A claim for tortious interference with the Commission Agreement
required KW to set forth four elements in its complaint against Mandich: 1)
the existence of a business relationship between KW and a third person, in
this case, Smith, under which KW has legal rights, 2) Mandich’s knowledge
of the relationship, 3) Mandich’s intentional and unjustified interference with
the relationship that induced or otherwise caused Smith not to perform his
obligation under the Commission Agreement with KW, and 4) damage to
KW resulting from Smith’s failure to perform. See DNA Sports Performance
Lab, Inc. v. Club Atlantis Condo. Ass'n, 219 So. 3d 107, 110 (Fla. 3d DCA
2017). KW was unable, despite a number of opportunities to amend its
6 complaint, to plead facts that would show Mandich intentionally and
unjustifiably interfered with the Commission Agreement resulting in
damage to KW, i.e., KW’s exclusion from the Broker’s Fee Agreement
executed by Smith and the Buyers, to which agreement Mandich was not a
party.
Further, the Commission Agreement was executed prior to Mandich’s
existence as a commercial entity and under Florida law, contracts entered
into by a real estate agent on behalf of a former do not automatically
transfer to, or impute knowledge of prior agreements to, a new brokerage
company simply because the agent joined the new brokerage company.2
See Marks v. M.S.F. Mgmt. Corp., 540 So. 2d 138, 140 (Fla. 5th DCA
1989) (holding the new broker never acquired any interest in the
commission agreement because it was not the employing broker when
plaintiff’s services were performed). The usual rule provides that a contract
cannot bind one who is not a party to it or has not in some way agreed to
accept its terms. To create a valid contract there must be reciprocal assent
to a certain and definite proposition. CH2M Hill Se., Inc. v. Pinellas Cnty,
598 So. 2d 85, 89 (Fla. 2d DCA 1992) (citing In re Estate of Donner, 364
2 Real estate salesmen are prohibited from operating without brokers; commission agreements made by salesmen are enforceable by the broker who is their employer at the time the services entitling the salesman to compensation are rendered. Marks, 540 So. 2d at 140 (citations omitted).
7 So. 2d 742 (Fla. 3d DCA 1978)). The trial court repeatedly charged KW
with amending its complaint to allege some direct knowledge and
purposeful interference by Mandich, and KW was unable to do so, thereby
failing to fulfill elements of the cause of action for intentional interference.
KW’s claim against Mandich for civil conspiracy similarly fails. KW
alleges that Mandich knew of the prior Commission Agreement between
Afif and Erice (working for KW) and Smith (working with MNR/MREG) and
intentionally conspired with Smith and the Buyers to circumvent the
Commission Agreement by agreeing with Smith to execute the Broker’s
Fee Agreement with the Buyer, and by passively accepting the
contractually agreed finder’s fee from the Buyer once the Sands Harbor
sale closed. KW alleges it is entitled to payment of its share of the finder’s
fee for the Sands Harbor purchase by virtue of its rights under the prior
Commission Agreement for the River Park Hotel, which sale never closed.
We disagree.
In Florida, “[a] civil conspiracy requires: (a) an agreement between
two or more parties, (b) to do an unlawful act or to do a lawful act by
unlawful means, (c) the doing of some overt act in pursuance of the
conspiracy, and (d) damage to plaintiff as a result of the acts done under
the conspiracy.” Raimi v. Furlong, 702 So. 2d 1273, 1284 (Fla. 3d DCA
8 1997). “General allegations of conspiracy are inadequate.” World Class
Yachts, Inc. v. Murphy, 731 So.2d 798, 799 (Fla. 4th DCA 1999). A
complaint must “set forth clear, positive, and specific allegations of civil
conspiracy.” See id. Smith’s allegedly tortious actions – procuring a ready
and willing buyer, executing the Broker’s Fee Agreement with the Buyer,
and failing to include Afif and Erice in the deal – occurred prior to his
employment with Mandich. Smith’s allegedly tortious acts cannot be
imputed to Mandich, which entity was not a party to either the Commission
Agreement or the Broker’s Fee Agreement. Mandich cannot be found liable
for civil conspiracy merely by passively accepting a finder’s fee. “To
assume or speculate . . . that the [appellees] participated in a conspiracy . .
. merely because they ultimately received some benefits from the
[investments] is insufficient for the imposition of liability against them.”
Raimi, 702 So. 2d at 1285; Eagletech Commc'ns, Inc. v. Bryn Mawr Inv.
Grp., Inc., 79 So. 3d 855, 863 (Fla. 4th DCA 2012). As Mandich was not a
party to the Commission Agreement, and that agreement is unrelated to
the sale of the Sands Harbor property, KW has not properly alleged
damages as against Mandich. We make no determination regarding the
issue of KW’s damages for any tort committed by Smith individually and
prior to his employment with Mandich.
9 We thus affirm the trial court’s dismissal with prejudice of the tortious
interference and conspiracy counts against Mandich, after KW’s repeated
failure to amend the complaint to state those causes of action as against
Mandich.
Affirmed.