Precision Tune Auto Care, Inc. v. Radcliffe

James Radcliffe (defendant) owned and operated a Precision Tune Auto Care, Inc. (Precision) (plaintiff) franchise store, identified as Store 1516, in South Florida pursuant to a franchise-lease agreement. Radcliffe was also the guarantor for four other Precision franchise stores owned and operated by other individuals. Radcliffe brought a breach-of-franchise-agreement action against Precision seeking damages; the complaint did not plead any special damages. Precision timely filed an answer and counterclaim. Radcliffe then filed a list of discovery demands, with which Precision failed to comply. The trial court ultimately struck Precision’s counterclaim for failing to comply with discovery demands and discovery-related court orders. At trial, Radcliffe argued that he was entitled to special damages for future-contingent liability because (1) although Radcliffe’s guarantor agreement for the other four Precision stores allowed him to take over the franchise lease if the current owners defaulted, (2) Precision’s breach of Radcliffe’s franchise agreement for Store 1516 would prevent Radcliffe from taking over those leases; and (3) if Radcliffe were prevented from taking over the franchise-lease agreement on a store following default, he would incur substantial monetary damages under the guarantor agreement. The trial court admitted Radcliffe’s evidence and awarded Radcliffe special damages in its final judgement. Precision appealed, arguing that (1) the trial court should not have struck its counterclaim based on Precision’s failure to comply with discovery-related demands and court orders; and (2) because Radcliffe did not plead special damages in his complaint, the trial court erred by awarding Radcliffe special damages.