Case Summary and Outcome

The District Court of Appeal of the State of Florida Fourth District (USA) affirmed the lower court’s ruling in favor of Lake Point, awarding $4.4 million in damages against Maggy Hurchalla for tortious interference. Lake Point sued Hurchalla, an environmentalist and former Marty County commissioner, alleging that her “false and misleading” statements influenced the current commissioners and delayed their Lake Point Phase I and II Project. The jury decided in favour of the Lake Point, to which Hurchalla appealed. The Court rejected Hurchalla’s appeal, stating there was sufficient evidence of her interference through false statements. The Court concluded that Hurchalla “intentionally or at the least, with reckless disregard, made purportedly factual statements to induce the BOCC not to go forward with its contract with Lake Point”. The Court determined that sufficient evidence was presented to the jury to prove that Hurchalla demonstrated “actual malice” and “express malice” toward Lake Point and, therefore, could not claim First Amendment privilege and Florida Common Law privilege.

---

Facts

Lake Point Phase I, LLC and Lake Point Phase II, LLC (collectively, “Lake Point”) filed a lawsuit of tortious interference against the appellant, Maggy Hurchalla, a Florida environmentalist and former Martin County Commissioner (1974-1994). [p. 2] She has received numerous awards for her long commitment to environmental issues and has served on state and regional environmental boards and committees. [p. 4] The South Florida Water Management District and Martin County were initially co-defendants with Hurchalla but settled before the trial.

Lake Point purchased a 2,266-acre tract of land in Martin County because it “realized that there was a very economical limestone on the [P]roperty” that the company could use for its heavy highway construction business. [p. 4] They proposed a public-private partnership with the District to construct a stormwater treatment project. The Agreement with the District permitted Lake Point to mine limestone if permission was obtained from both the Florida Department of Environmental Protection and the Army Corps of Engineers. [p. 3] The Project envisioned that the excavation of limestone would create stormwater management lakes that the District could use for water storage and conveyance purposes. [p. 4]

In September 2012, the media reported that Lake Point planned to redirect the project to supply water to West Palm Beach for consumptive use, alarming Hurchalla. During the same time, there was a change in the Board of the Martin County Commission (BOCC), which led to the election of her close friends Anne Scott and Sarah Heard.

In 2013, Lake Point sued the District and the County, asserting claims for declaratory relief, breach of contract, and tortious interference. [p. 4] In an amended complaint, Lake Point asserted two counts against Hurchalla, individually: one for tortious interference seeking injunctive relief, the other for tortious interference seeking damages. [p. 4]

Lake Point alleged that Hurchalla made “numerous false and misleading statements verbally and in writing to the BOCC, highlighting seven statements she made in a January 4, 2013 email sent to all five county commissioners. [p. 5] Lake Point alleged that “[a]s a result of and in direct response to Hurchalla’s efforts and false statements”, the County and the District breached various obligations. [p. 5] The District and the County settled with Lake Point, and the County paid Lake Point $12 million. Lake Point abandoned its count against Hurchalla for an injunction. The only remaining count at the time of trial was against Hurchalla for damages, focusing on her alleged tortious interference. [p. 5]

The trial court denied Hurchalla’s motion for judgment notwithstanding the verdict. [p. 5] Hurchalla gave notice of appeal. Hurchalla appealed, arguing errors related to First Amendment and common law privileges, insufficiency of evidence, denial of a motion for judgment notwithstanding the verdict, adverse inference jury instruction, and attorney’s fees sanction. [p. 2]

---

Decision Overview

Judge Conner of the District Court of Appeal of the State of Florida delivered the judgment, and Judge Damoorgian and Judge Forst concurred with the judgment. The central issue for consideration was whether the jury had erred in awarding Lake Point $4.4 million in damages and disregarding Hurchalla’s First Amendment and Common Law Privileges.

Hurchalla argued that the trial court erred in instructing the jury on her defense under the First Amendment privilege to petition the government and the Florida common law privilege to make statements to a political authority regarding matters of public concern. She contended that there were important distinctions between the two privileges and that the trial court failed to provide separate and distinct instructions for each. [p. 5-6]

Before adjudging the validity of Hurchalla’s claims, the court referred to the Supreme Court’s decision in Nodar v. Galbreath (462 So. 2d 803, Fla. 1984) to explain the similarities and differences between the federal constitutional First Amendment privilege and the Florida common law privilege. [p. 6] The Court highlighted that both privileges are qualified, meaning they are not absolute and can be overcome by showing malice on the part of the defendant. However, the type of standard necessary to overcome the privileges differs. While referring to New York Times Co. v. Sullivan, 376 U.S. 254, 84 S. Ct. 710, 11 L. Ed. 2d 686 (1964), the court noted that actual malice must be shown to overcome the First Amendment privilege, while express malice is required to overcome the Florida common law privilege. [p. 6] While actual malice consists of  “knowledge of falsity or reckless disregard of truth to falsity”, express malice is present when “the primary motive for the statement is shown to have been an intention to injure the plaintiff”. [p. 6]

The Court observed that during the charge conference, Hurchalla predominantly focused on legal principles related to the common law privilege. However, at times, arguments about the First Amendment privilege were interjected, leading to a blurred distinction between the two privileges. Crucially, the Court noted the absence of separate proposed jury instructions for each privilege submitted by Hurchalla. [p. 6]

Due to Hurchalla’s failure to make important distinctions during the charge conference, the Court ruled that the trial court’s instructions regarding privileged communication and the privilege defense were not reversible error. Citing Universal Ins. Co. of N. Am. v. Warfel (82 So. 3d 47, Fla. 2012) and Goodwin v. State (751 So. 2d 537, Fla. 1999), the court emphasized that fundamental error is waived when defense counsel requests an erroneous instruction.

While citing Bose Corp. v. Consumers Union of U.S., Inc., Hurchalla argued that “an appellate court has an obligation ‘to make an independent examination of the whole record’ to ensure that ‘the judgment does not constitute a forbidden intrusion on the field of free expression.’” [p. 7]

The court adjudged whether there was “clear and convincing” evidence that Hurchalla demonstrated actual malice by interfering with Lake Point’s contract. [p. 7]

Citing section 767 of the Florida Standard Jury Instruction 408.5, the Court observed that “physical violence, fraudulent misrepresentation and threats of illegal conduct are ordinarily wrongful means”. [p. 10] Here the Court focused on fraudulent misrepresentation and cited Butler v. Yusem, 44 So. 3d 102, 105 (Fla. 2010) to lay down its four elements “(1) a false statement concerning a material fact; (2) the representor’s knowledge that the representation is false; (3) an intention that the representation induce another to act on it; and (4) consequent injury by the party acting in reliance on the representation.”

Using the elements of misrepresentation described in Butler, the Court ruled that: (1) Hurchalla made two false statements concerning a material fact to the BOCC (effectively, the County); (2) Hurchalla knew that the representations were false; (3) Hurchalla intended that the representations induce the BOCC (the County) to act on them; and (4) the County was injured when the BOCC acted upon the representation and was subsequently sued for its actions based on the reliance. [p. 11]

The Court concluded that Hurchalla “intentionally or at the least, with reckless disregard, made purportedly factual statements to induce the BOCC not to go forward with its contract with Lake Point”. [p. 11] The Court ruled that the jury had sufficient evidence to decide the issue of express malice based on Hurchalla using wrongful means to interfere in Lake Point’s contract with the County by the use of misrepresentations to the BOCC in her January 4, 2013 email to the commissioners. [p. 12]

The court also concluded that there was sufficient evidence presented to the jury to prove that Hurchalla demonstrated express malice toward Lake Point through malevolent intent to harm. [p. 12]

---