This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0313.CIV
DATE: 1/11/2022
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 313 Unlawful Activities Under the Uniform Commercial Code-Sales
SPONSOR(S): Persons-Mulicka
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Civil Justice & Property Rights Subcommittee Mawn Jones
2) Regulatory Reform Subcommittee
3) Judiciary Committee
SUMMARY ANALYSIS
A "tort" is a wrong for which the law provides a remedy. Florida common law recognizes a tort for the wrongful
interference with a contract or business relationship (“tortious interference”), which is established by proving
the:
Existence of a contract or a business relationship;
Defendant’s knowledge of the contract or business relationship;
Defendant’s intentional and unjustified procurement of the contract’s breach or interference with the
business relationship, which was the proximate cause of the breach or interference; and
Resulting damage to the plaintiff.
HB 313 provides a statutory cause of action for the tort of tortious interference. Specifically, the bill provides
that it is unlawful for any person, by inducement, persuasion, misrepresentation, intimidation, or other means,
to:
Cause the breach of a lawful contract by any party thereto; or
Intentionally and unjustly interfere with a business relationship.
Under the bill:
Any person injured due to the unlawful breach of a contract or interference with a business relationship
has a civil cause of action for treble damages, temporary or permanent injunctive relief, or any other
appropriate relief authorized by law.
The court may award a prevailing plaintiff in such an action reasonable attorney fees and costs.
The statutory cause of action does not include the right to enforce a non-competition agreement.
The bill may have an indeterminate negative fiscal impact on state and local governments.
The bill provides an effective date of July 1, 2022. STORAGE NAME: h0313.CIV PAGE: 2
DATE: 1/11/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Uniform Commercial Code
The Uniform Commercial Code (“UCC”) is a set of laws governing commercial transactions in the
United States.
1
The UCC includes both general provisions and specific provisions governing sales,
leases, negotiable instruments, bank deposits and collections, letters of credit, documents of title,
investment securities, secured transactions, and leases.
2
Florida’s UCC provisions are codified in
chapters 670-680 of the Florida Statutes.
Chapter 672, F.S., relates to sales under the UCC and, unless the context otherwise requires, applies
to transactions in goods.
3
For the purposes of that chapter, “goods” means “all things…which are
movable at the time of identification to the contract for sale other than the money in which the price is to
be paid, investment securities… and things in action” and includes “the unborn young of animals and
growing crops and other identified things attached to realty….”
4
Tort Law
A "tort" is a wrong for which the law provides a remedy. The purpose of tort law is to fairly compensate
a person harmed by another person’s wrongful acts, whether intentional, reckless, or negligent, through
a civil action or other comparable process. A properly-functioning tort system:
Provides a fair and equitable forum to resolve disputes;
Appropriately compensates legitimately harmed persons;
Shifts the loss to responsible parties;
Provides an incentive to prevent future harm; and
Deters undesirable behavior.
5
A tort may be statutorily created or recognized at common law.
6
The legislature may codify the common
law in statute, but whether a statutory remedy is exclusive or instead cumulative depends upon the
legislature’s intent as shown in the statute’s language.
7
A presumption exists that the legislature’s
adoption of a statutory remedy does not change the common law remedy unless the statute explicitly
and clearly states otherwise.
8
Tortious Interference
Florida common law recognizes the tort of wrongful interference with a contract or business relationship
(“tortious interference”), established by the plaintiff proving:
The existence of a contract or a business relationship;
9
The defendant’s knowledge of the contract or business relationship;
1
A joint project of the Uniform Law Commission and the American Law Institute, the UCC has been adopted by every state. Chs. 670-
680, F.S.; Uniform Law Commission, Uniform Commercial Code, https://www.uniformlaws.org/acts/ucc (last visited Dec. 9, 2021).
2
Id.
3
Ss. 672.101 and 672.102, F.S.
4
Examples of goods to be severed from realty include minerals, timber, and removable structures. Ss. 672.105(1) and 672.107, F.S.
5
Am. Jur. 2d Torts s. 2.
6
Common law is law derived from judicial decisions instead of from statutes. Legal Information Institute, Common Law,
https://www.law.cornell.edu/wex/common_law (last visited Dec. 9, 2021).
7
Thornber v. City of Fort Walton Beach, 586 So. 2d 914 (Fla. 1990).
8
Id. at 918.
9
A business relationship need not be evidence by a formal or enforceable contract, but the relationship must be one under which the
plaintiff has existing or prospective legal or contractual rights and evidenced by an actual and identifiable understanding or agreement
which in all probability would have been completed if the defendant had not interfered. Ethan Allen, Inc. v. Georgetown Manner, Inc.,
647 So. 2d 812 (Fla. 1994); Fla. Jur. 2d Interference s. 2. STORAGE NAME: h0313.CIV PAGE: 3
DATE: 1/11/2022
The defendant’s intentional and unjustified procurement of the contract’s breach or interference
with the business relationship; and
Resulting damage to the plaintiff caused by the defendant’s actions.
10
A claim for tortious interference with a contract may only be brought against a person who is not a party
to the contract, while a claim for tortious interference with a business relationship may only be brought
against a disinterested third party.
11
A person is not considered a disinterested third party to a business
relationship if he or she has any beneficial or economic interest in, or control over, that relationship,
unless malice is the sole basis for the alleged interference.
12
Attorney Fees
Parties to a civil action must generally pay their own attorney fees and costs regardless of who prevails,
unless the fees claim is based on a contract or statute.
13
Statutes authorizing the assessment of
attorney fees must do so expressly and be strictly construed.
14
Because tortious interference is a
common law tort, no statute presently authorizes a party to such a claim to recover his or her attorney
fees, but s. 768.79, F.S., the “offer of judgment statute,” may allow litigants to seek and obtain attorney
fees in a tortious interference claim under specified conditions.
15
Damages
Damages awardable to a plaintiff prevailing in a tortious interference claim are generally actual
damages,
16
or those damages reasonably flowing from the unlawful procurement of the contract breach
or interference with the business relationship.
17
Uncertainty as to the amount of damages or difficulty in
proving the exact amount does not prevent recovery if it is clear that the plaintiff suffered substantial
damages and there is a reasonable basis to support the amount awarded.
18
However, a speculative
hope of future business is insufficient to sustain a claim for damages for tortious interference with a
business relationship.
19
Florida law also authorizes the award of punitive damages
20
in any civil action where there is “a
reasonable showing by evidence in the record or proffered by the claimant which would provide a
reasonable basis for recovery of such damages.”
21
To award punitive damages, the trier of fact must
find, based on clear and convincing evidence,
22
that the defendant was personally guilty of intentional
misconduct or gross negligence.
23
10
Ethan Allen, Inc., 647 So. 2d at 814; Tietig v. S.E. Reg’l Const. Corp., 557 So. 2d 98 (Fla. 2d DCA 1990); Fla. Jur. 2d Interference ss.
4 and 11.
11
Bortell v. White Mountains Ins. Group, Ltd., 2 So. 3d 1041 (Fla. 4th DCA 2009); Sloan v. Sax, 505 So. 2d 526 (Fla. 3d DCA 1987);
Fla. Jur. 2d Interference ss. 3 and 10.
12
Astro Tel, Inc. v. Verizon Florida, LLC, 979 F. Supp. 2d 1284 (M.D. Fla. 2013); Palm Beach Cnty. Health Care Dist. v. Prof’l Med.
Educ., Inc., 13 So. 3d 1090 (Fla. 4th DCA 2009); Mattlocks v. Black Entm’t Television, LLC, 43 F. Supp. 2d 1311 (S.D. Fla. 2014); Fla.
Jur. 2d Interference ss. 3 and 10.
13
Campbell v. Goldman, 959 So. 2d 223 (Fla. 2007); Price v. Tyler, 890 So. 2d 246 (Fla. 2004).
14
Sarkis v. Allstate Ins. Co., 863 So. 2d 210 (Fla. 2003); Knealing v. Puleo, 675 So. 2d 593 (Fla. 1996).
15
The offer of judgment statute provides that, in a civil action for damages, if a: 1) Defendant makes an offer of judgment and the
plaintiff does not accept such offer within 30 days, the plaintiff must pay the defendant’s reasonable costs and attorney fees incurred
from the date the defendant made the offer if the judgment is one of no liability or the judgment obtained by the plaintiff is at least 25
percent less than the offer; or 2) Plaintiff files a demand for judgment and the defendant does not accept such demand within 30 days,
the defendant must pay the plaintiff’s reasonable costs and attorney fees incurred from the date the plaintiff made the demand if the
plaintiff recovers a judgment in an amount at least 25 percent greater than the demand.
16
“Actual damages” are damages awarded to compensate the plaintiff for his or her actual losses. Legal Information Institute, Actual
Damages, https://www.law.cornell.edu/wex/actual_damages (last visited Dec. 9, 2021).
17
Ethan Allen, Inc., 647 So. 2d at 815.
18
Ins. Field Servs., Inc. v. White & White Inspection and Audit Serv., Inc. 647 So. 2d 812 (Fla. 1994).
19
Douglass Fertilizers & Chem., Inc. v. McClung Landscaping, Inc., 459 So. 2d 335 (Fla. 5th DCA 1984).
20
“Punitive damages” are damages awarded in additional to actual damages in order to punish the defendant. Legal Information
Institute, Punitive Damages, https://www.law.cornell.edu/wex/punitive_damages (last visited Dec. 9, 2021).
21
S. 768.72(1), F.S.
22
“Clear and convincing evidence” is evidence that is highly and substantially more likely to be true than untrue. It is a more rigorous
standard than the “preponderance of the evidence” standard but a less rigorous standard than the “beyond a reasonable doubt”
standard required to prove a defendant’s guilt in a criminal prosecution. Legal Information Institute, Clear and Convincing Evidence, STORAGE NAME: h0313.CIV PAGE: 4
DATE: 1/11/2022
Because a tortious interference claim does not sound in negligence, a punitive damages award in such
a claim must be based on the defendant’s intentional misconduct.
24
Florida courts have found that
evidence may support a finding of intentional misconduct in the tortious interference claim context but
not necessarily a punitive damages award.
25
This is because, in order to sustain a punitive damages
claim, the conduct at issue must have been committed in “an outrageous manner or with fraud, malice,
wantonness, or oppression.”
26
Even where punitive damages are awardable, Florida law generally caps
such awards at three times the amount of compensatory damages or $500,000, whichever is greater.
27
Sovereign Immunity
Sovereign immunity is the principle that a government cannot be sued without its consent.
28
Article X, s.
13 of the Florida Constitution authorizes the legislature to waive sovereign immunity, which it has done
to a limited extent for the state and its agencies and political subdivisions in s. 768.28, F.S. The waiver
applies only to “injury or loss of property, personal injury, or death caused by the negligent or wrongful
act or omission of any employee of the agency or subdivision while acting within the scope of the
employee’s office or employment” where a private person would be liable for the same conduct.
Damages recoverable in tort suits authorized against the state and its political subdivisions are capped
at $200,000 per person and $300,000 per incident, although the legislature may pass a claim bill
authorizing the payment of judgments exceeding these amounts.
29
Any statute purporting to waive sovereign immunity must be strictly construed and narrowly interpreted,
and a waiver may not be found unless it has been “unequivocally expressed.”
30
Courts interpreting the
limited sovereign immunity waiver in s. 768.28, F.S., have found that it does not apply to tort claims
based solely on economic loss because such claims are not based on “injury or loss of property,
personal injury, or [wrongful] death.”
31
Thus, sovereign immunity presently bars suits against the state
for tortious interference.
32
Enforcement of Non-Competition Agreements
A non-competition (“non-compete”) agreement is a contractual agreement in which one party promises
another party not to compete with the other party’s business in a specified manner for a specified time
period.
33
Non-compete agreements are often used in the employment context, where an employee
promises not to compete with his or her employer’s business during his or her employment and for a
period of time after the employment ends. In Florida, s. 542.335, F.S., governs non-compete
agreements entered into on or after July 1, 1996.
https://www.law.cornell.edu/wex/clear_and_convincing_evidence#:~:text=Definition,the%20contention%20is%20highly%20probable.
(last visited Dec. 9, 2021).
23
“Intentional misconduct” means that the defendant had actual knowledge of the wrongfulness of the conduct and the high probability
that injury or damage to the claimant would result and, despite that knowledge, intentionally pursued that course of conduct, resulting in
injury or damage. “Gross negligence” means that the defendant’s conduct was so reckless or wanting in care that it constituted a
conscious disregard or indifference to the life, safety, or rights of persons exposed to such conduct. S. 768.72(2), F.S.
24
Bistline v. Rogers, 215 So. 3d 607 (Fla. 4th DCA 2017).
25
Winn & Lovett Grocery Co. v. Archer, 171 So. 214 (Fla. 1936); Hosp. Corp. of Lake Worth v. Romaguera, 511 So. 2d 559 (Fla. 4th
DCA 1986).
26
Imperial Majesty Cruise Line, LLC v. Weitnauer Duty Free, Inc., 987 So. 2d 706 (Fla. 4th DCA 2008).
27
Where the factfinder determines that the wrongful conduct was motivated solely by unreasonable financial gain and makes other
specific findings about the conduct’s nature and likelihood of injury, punitive damages are capped at four times the amount of
compensatory damages or $2 million, whichever is greater. If the factfinder determines that the defendant had a specific intent to harm
the claimant at the time of injury and did actually harm the claimant, there is no punitive damages cap. S. 768.73(1), F.S.
28
Legal Information Institute, Sovereign Immunity, https://www.law.cornell.edu/wex/sovereign_immunity (last visited Dec. 9, 2021).
29
S. 768.28(5), F.S.
30
Florida Dept. of Transp. v. Schwefringhaus, 188 So. 3d 840 (Fla. 2016).
31
Cnty. of Brevard v. Miorelli Eng’g Inc., 677 So. 2d 32 (Fla. 5th DCA 1996), quashed on other grounds by Cnty. of Brevard v. Miorelli
Eng’g Inc., 703 So. 2d 1049 (Fla. 1997); City of Pembroke Pines v. Corrs. Corp. of Am., Inc., 274 So. 3d 1105 (Fla. 4th DCA 2019);
Prestige Homes of Tamarac, Inc. v. City of Tamarac, 284 So. 3d 603 (Fla. 4th DCA 2019), affirming Prestige Homes of Tamarac, Inc. v.
City of Tamarac, 2017 WL 5201072 (Fla. 17th Jud. Cir. 2017).
32
Prestige Homes, 284 So. 3d at 603.
33
Hank Jackson, Florida’s Noncompete Statute: “Reasonable” or “Truly Obnoxious,” Fla. Bar Journal Vol. 92, No. 3 (Mar. 2018) p. 10,
https://www.floridabar.org/the-florida-bar-journal/floridas-noncompete-statute-reasonable-or-truly-obnoxious/ (last visited Dec. 9, 2021). STORAGE NAME: h0313.CIV PAGE: 5
DATE: 1/11/2022
A non-compete agreement is enforceable through a breach of contract claim brought against the
violating party, and, while monetary damages are awardable in such claims where proven, the usual
remedy awarded is an injunction.
34
However, courts have also allowed the enforcement of a non-
compete agreement through a tortious interference claim where the elements of tortious interference
are proven and the defendant is not a party to the non-compete agreement.
35
Effect of Proposed Changes
HB 313 codifies within chapter 672, F.S., the tort of tortious interference with a contract or business
relationship. Specifically, the bill provides that it is unlawful for any person, by inducement, persuasion,
misrepresentation, intimidation, or other means, to:
Cause the breach or violation of, or the refusal or failure to perform, a lawful contract by any
party thereto; or
Intentionally and unjustly interfere with a business relationship.
36
The bill defines “person” as an individual, corporation, business trust, estate, trust, partnership, limited
liability company, association, joint venture, or government; government subdivision, agency,
instrumentality, or public corporation; or any legal or commercial entity. “Contract” as used in chapter
672, F.S., is limited to contracts relating to the sale of goods unless the context otherwise requires.
37
Under the bill:
Any person injured by tortious interference as codified by the bill has a cause of action for
treble damages,
38
injunctive relief, or any other appropriate relief authorized by law.
The court must award a prevailing plaintiff in such an action reasonable attorney fees.
The statutory cause of action does not include the right to enforce a non-compete agreement.
The bill’s creation of a statutory cause of action for tortious interference differs from the common law
tort by:
Providing for the award of attorney fees to a prevailing plaintiff.
Providing for the automatic award of treble damages without a maximum dollar value cap or
any requirement for a showing of outrageous misconduct.
Not requiring that a defendant accused of interfering with a contract must have known of the
contract or must have acted to intentionally and unjustly cause the contract’s breach.
Authorizing suit against a person who was a party to the subject contract or had an interest in
the subject business relationship.
Barring the enforcement of a non-compete agreement under the tort created by the bill.
Likely applying only to a contract or business relationship relating to transactions in goods due
to its placement in chapter 672, F.S.
Further, though the bill does not include an explicit waiver of sovereign immunity, the bill includes
“government” and a “government subdivision, agency, instrumentality, or public corporation” in its
definition of “person” and subjects to suit any person that commits tortious interference with a contract
or business relationship as codified by the bill.
B. SECTION DIRECTORY:
Section 1. Creates s. 627.617, F.S., relating to unlawful activities; causes of action; damages.
34
An injunction is a court order requiring a person to do or stop doing a specific action. Injunctions may be permanent or temporary.
Legal Information Institute, Injunction, https://www.law.cornell.edu/wex/injunction (last visited Dec. 9, 2021); Env’t Servs., Inc. v. Carter,
9 So. 3d 1258 (Fla. 5th DCA 2009).
35
See, e.g, Massey Servs., Inc. v. Sanders, 312 So. 3d 209 (Fla. 5th DCA 2021); Gossard v. Adia Servs., Inc., 723 So. 2d 182 (Fla.
1998).
36
The bill defines “business relationship” as a relationship between two or more individuals or entities where there exists an oral or
written contract or agreement for goods or services.
37
S. 672.106(1), F.S.
38
“Treble damages” are damages awarded in an amount that is three times that of the plaintiff’s actual damages. Legal Information
Institute, Treble Damages, https://www.law.cornell.edu/wex/treble_damages (last visited Dec. 9, 2021). STORAGE NAME: h0313.CIV PAGE: 6
DATE: 1/11/2022
Section 2. Provides an effective date of July 1, 2022.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
If the bill waives sovereign immunity, the state may be sued for a tortious interference claim as
codified by the bill because state government falls under the definition of “person” used in the bill.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
If the bill waives sovereign immunity, a local government may be sued for a tortious interference
claim as codified by the bill because local governments fall under the definition of “person” used in
the bill.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill authorizes a person:
Prevailing under the codified tortious interference claim to recover his or her reasonable
attorney fees, which are not recoverable at common law.
To recover treble damages with no maximum dollar value cap or a requirement for a showing
of outrageous misconduct as required under the punitive damages statute.
To bring a cause of action against a person who was a party to the subject contract or had an
interest in the subject business relationship (that is, persons who are not subject to suit for
tortious interference at common law).
These provisions simultaneously increase a plaintiff’s potential financial recovery and a defendant’s
potential financial liability in a tortious interference claim. Further, the bill may subject to liability for
tortious interference, and thus the potential payment of damages and attorney fees, a person who
causes a breach of contract without knowing that a contract existed or acting intentionally and unjustly
to cause the breach.
D. FISCAL COMMENTS:
None.
STORAGE NAME: h0313.CIV PAGE: 7
DATE: 1/11/2022
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditures of funds; reduce the authority that counties and municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
3. Other:
None.
B. RULE-MAKING AUTHORITY:
Not applicable.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES