BASHAR ATOUT, AS TRUSTEE OF THE HMH LAND TRUST DATED OCTOBER 29, 2013 VS BRENDA ROZANC, ONE SOURCE MANAGEMENT SOLUTIONS, INC., DOUGLAS W. OSWALD AND

SIXTH DISTRICT COURT OF APPEAL

STATE OF FLORIDA

Case No. 6D2023-2302 Lower Tribunal No. 2021-CA-008148-O

BASHAR ATOUT, as Trustee of the HHM LAND TRUST DATED OCTOBER 29, 2013, Appellant,

v.

BRENDA ROZANC and ONE SOURCE MANAGEMENT SOLUTIONS, INC., et al., Appellees.

Appeal from the Circuit Court for Orange County.

A. James Craner, Judge.

July 31, 2026

NARDELLA, J.

Appellant, Bashar Atout, as Trustee of HHM Land Trust ("the Trust"), appeals the trial court's order dismissing with prejudice the Trust's Third Amended Complaint against Appellees, Brenda Rozanc and One Source Management Solutions, Inc. For the reasons below, we reverse.

Atout is an investor living in Kuwait. About a decade ago, he began acquiring rental homes in Apopka, Florida, placing legal title of the homes into a revocable trust which he controlled as Trustee. To manage these rental homes while he was abroad, Atout hired Brenda Rozanc (“Rozanc") from Premier Management Group, and when Rozanc left Premier to start her own management company, he went with her and executed an agreement with Rozanc's new company, One Source Management Solutions, Inc. (“One Source”). In that Management Agreement, One Source promised the Trust that it would “manage, operate and lease" the properties during the term of the contract.

For whatever reason, as to four of the eighteen rental homes, One Source did not lease the homes on behalf of the Trust. Instead, it sold them without the Trust's knowledge or consent. One such sale Rozanc made to herself.

When Atout discovered this, the Trust filed a quiet title action and included One Source and Rozanc as defendants. Ultimately, the Trust managed to reclaim its legal ownership of the rental homes, allowing the Trust to pursue the attorney fees and costs incurred in restoring its ownership and the income it lost in the interim. It did this by adding three counts to its complaint: one for breach of contract and two for negligence.¹

In its newly amended complaint, the Trust brought a breach of contract claim against the only party with which it was in privity, One Source. It alleged One Source breached the Management Agreement in several ways, including failing to manage

the rental homes, failing to account for rental income, transferring rental income without authorization, and wrongly retaining security deposits.

The Trust also brought a negligence count against One Source, in which the Trust simply retooled its breach of contract claim. It did so by alleging that One Source undertook a duty to manage its rental homes, without ever mentioning the obligation was contractual, and then reiterating the same factual allegations it previously alleged constituted breaches of contract. But this time, the Trust alleged those actions and omissions amounted to negligence.

After setting forth functionally identical causes of action in contract and tort against One Source, the Trust turned to Rozanc, with whom it was not in privity, and pleaded an action in negligence. As to that claim, the Trust alleged Rozanc owed the Trust a duty both in her role as property manager of the rental homes and as the licensed Florida realtor who effectuated the sales. As to her culpable conduct, the Trust attributed to Rozanc the same actions and omissions it previously charged against One Source, as well as two additional acts of negligence: taking a real estate commission on each sale without a written listing agreement and acting on forged documents when she facilitated the unauthorized sales.²

In response, both One Source and Rozanc moved to dismiss the Complaint. Beginning with the single breach of contract claim, One Source argued that an

unauthorized sale of four rental homes did not breach the Management Agreement because the Management Agreement concerned only One Source's leasing of the rental homes. As the sale of the rental homes was never contemplated in the only contract between the two parties, a cause of action based in contract could not exist. To complement this argument, One Source and Rozanc then claimed that the mere existence of a contract between One Source and the Trust prohibited any action in negligence against both One Source, with which the Trust was in privity, and Rozanc, with whom it was not. Ultimately, the trial court accepted these arguments and further determined that “there does not appear to be a circumstance where the issues get better, so it appears to be appropriate to grant the motion to dismiss the third amended complaint with prejudice."

With its claims dismissed, and thus no path to recuperate the full extent of its losses, the Trust filed this appeal. Our review is de novo. Morin v. Fla. Power & Light Co., 963 So. 2d 258, 260 (Fla. 3d DCA 2007) (“In reviewing an order granting a motion to dismiss for failure to state a cause of action, the standard of review is de novo.").

I

In its first issue raised on appeal, the Trust argues the trial court erred in dismissing with prejudice its breach of contract claim against One Source. We agree. The trial court erroneously accepted the premise that, because the Management Agreement did not specifically address the sale of the rental homes, One Source could not breach the agreement by improperly selling another's home. What that premise ignores is that by selling the rental homes, One Source transferred control of them and thus broke its contractual obligation to “manage, operate and lease" the homes. Indeed, a contract need not anticipate and explicitly detail the precise mechanism or manner of the breach for a cause of action to lie when the promising party fails to fulfill an obligation in the contract. The contract need only identify the obligation. See generally WSG W. Palm Beach Dev., LLC v. Blank, 990 So. 2d 708, 713 (Fla. 4th DCA 2008) (“The parties need not have contemplated the precise injuries which occurred, as long as they could have reasonably been expected to flow from the breach."); see also 5 Arthur Linton Corbin, Corbin on Contracts §1010, at 79 (1964)) (“All that is necessary, in order to charge the defendant with a particular loss, is that it is one that ordinarily follows the breach of such a contract in the usual course of events, or that reasonable men in the position of the parties would have foreseen as a probable result of breach. It is not necessary that the parties should have given the matter a moment's thought or should have expressed themselves on the subject."). Here, the Management Agreement obligated One Source to “manage, operate and lease” the rental homes, and as alleged in the Complaint, One Source failed to perform that obligation.

But even if we were to accept this faulty premise, we would still be compelled to reverse because the Complaint identified additional provisions of the Management Agreement that One Source breached. For example, the Complaint alleged One

Source failed to properly account for rental income, transferred rental income without authorization, and improperly retained security deposits. All three of these specific breaches matched specific obligations listed in the Management Agreement. Yet the trial court dismissed the Trust's breach of contract claim with prejudice. This was error and reversal is warranted.

II

In its second issue raised on appeal, the Trust argues the trial court erred in dismissing with prejudice its negligence claim against One Source. As to this contention, we disagree.

We begin our analysis of the Trust's negligence claims against One Source by making a simple observation: Although they share a common origin,³ tort law and contract law address distinct obligations in modern society. As explained by English legal scholar Patrick Atiyah:

For at least 100 years—and in many respects for more like twice that time-common lawyers have operated within a particular conceptual framework governing the law of obligations. Within this framework, the fundamental distinction has been that between obligations which are voluntarily assumed, and obligations which are imposed by law. The former constitutes the law of contract, the latter fall within the purview of the law of tort.

Patrick Atiyah, Contracts, Promises and the Law of Obligation, 94 L.Q. Rev. 193 (1978).

When a party fails to fulfill obligations it voluntarily assumed, the remedy lies in the law of contract, and that remedy traditionally tends toward restoring the aggrieved party's expectations through compelled performance or contemplated damages. In contrast, when a party fails to fulfill obligations imposed by law, the remedy lies in the law of tort, which attempts to return the victim to his pre-injury position and compensates him for actual harm sustained.

As a result, tort remedies—free of the obstacles and limitations a contract may impose are sometimes more desirable in the eyes of the aggrieved party. And as outcomes tend to follow incentives, aggrieved parties have long sought to bring

actions in tort, even where the relationship with the wrongdoer is born of a contract and the resulting injury, a pure economic loss, is sustained from a failure to properly perform a contractual obligation. The result is that without any limitation, the law of contract and the societal good it serves is at risk of being swallowed by a sea of tort. See G. Gilmore, The Death of Contract, 87–94 (1974). In response to this risk, judicially created boundary doctrines emerged, including the economic loss rule and the independent tort doctrine. Palmeri, John M. and Barnett, Monty L. (1996) The Continuing Vitality of the Economic Loss Rule, Land & Water L. Rev.: Vol. 31: Iss.², pp. 757-73 (explaining that the economic loss rule finds its roots in the English common law which generally defined legal duties in terms of contractual relationships. With the gradual expansion of tort law, the rule was developed in an effort to define the outer limits of tort liability); Danielle Sawaya, Not Just for Products Liability: Applying the Economic Loss Rule Beyond Its Origins, 83 Fordham L. Rev. 1073, 1097–1102 (2014) (explaining the importance of the economic loss rule in contractual privity cases to protect the boundary between tort and contract). In modern times, it appears that every jurisdiction in the United States has some form of the economic loss rule or independent tort doctrine. Margaret

Wykowski, Comment, Clarifying Washington's Approach to the Independent Duty Doctrine, 95 Wash. L. Rev. 1091, 1096 (2020). In other states, the economic loss rule is considered by some to be the strongest judicially created boundary. Mark A. Geistfeld, The Contractually Based Economic Loss Rule in Tort Law: Endangered Consumers and the Error of East River Steamship, 65 DePaul L. Rev. (2016).

Florida courts once routinely applied this rule, which rule was premised on the definition of economic loss, and defined by the Florida Supreme Court as "damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits without any claim of personal injury or damage to other property." Tiara Condo. Ass'n v. Marsh & McLennan Cos., Inc., 110 So. 3d 399, 401 (Fla. 2013) (quoting Casa Clara Condo. Ass'n, Inc. v. Charley Toppino & Sons, Inc., 620 So. 2d 1244, 1246 (Fla. 1993)).

With a focus on the nature of the loss, the rule in Florida evolved beyond the product liability realm to protect the contract by forbidding parties in privity from suing in tort to recover pure economic losses. Id. Under this widely accepted evolution of the rule, parties were effectively prevented "from circumventing the allocation of losses set forth in the contract by bringing an action for economic loss in tort." Id. at 402 (quoting Indem. Ins. Co. of N. Am. v. Am. Aviation, Inc., 891 So.

2d 532, 536 (Fla. 2004)). But this was not to last in Florida. In 2013, the Florida Supreme Court abolished the previously embraced contractual privity branch of the economic loss rule in Tiara. Id. at 399.9 Id. at 409, 414 (Pariente, J. concurring) (Canady, J. dissenting). Justice Pariente defended Tiara against the charge that it expanded viable tort claims, by stating that other basic common law principles already protected the boundary between tort and contract. Id. at 408 (Pariente, J. concurring). And it is this concurrence that many have seen as a reference to another boundary doctrine, the independent tort doctrine, which prohibits a plaintiff from recovering in tort for a contract dispute unless the tort is independent of any breach of contract.

Id. at 408 (Pariente, J. concurring); see also Peebles v. Puig, 223 So. 3d 1065, 1068 n.4 (Fla. 3d DCA 2017) (Our sister court, in a footnote, makes clear it did not evaluate the case under the economic loss rule, and in stating as much, affirmed the existence of the independent tort doctrine.); Certain Underwriters at Lloyd's of London, UK Subscribing to Pol'y No. B1230AP56189A14 v. Ocean Walk Resort Condo. Ass'n, Inc., No. 616CV258ORL37GJK, 2017 WL 3034069, at *10 (M.D. Fla. July 18, 2017) (comparing two decisions from U.S. Court of Appeals for the Eleventh Circuit discussing the application of Justice Pariente's concurrence in Tiara: Lamm v. State St. Bank & Tr., 749 F. 3d 938, 947 (11th Cir. 2014), which stated that, despite the limitation of the economic loss rule in Tiara, the decision may "have left intact a separate hurdle, namely that 'a party still must demonstrate that the tort is independent of any breach of contract claim" and Lookout Mountain Wild Animal Park, Inc. v. Stearns Zoological Rescue & Rehab Ctr., Inc., 553 Fed. App'x. 864, 866 (11th Cir. 2014), in which the court cited Justice Pariente's concurrence in support of its conclusion that the plaintiff had not identified any tortious acts sufficiently independent of the alleged breach of contract to render the tort claims viable).

Following Tiara, Florida courts have required that tort claims brought between parties in contractual privity be "independent" of any breach of contract, and we join them now in that requirement. See Kenny v. Everlong, LLC, 398 So. 3d 418 (Fla. 4th DCA 2024); see also Island Travel & Tours, Ltd., Co. v. MYR Indep.,

Inc., 300 So. 3d 1236, 1239 (Fla. 3d DCA 2020) (courts continue to apply the independent tort doctrine to prevent plaintiffs from recovering in tort what is essentially a contract dispute); Marian Farms, Inc. v. Suntrust Banks, Inc., 135 So. 3d 363, 363 (Fla. 5th DCA 2014) (finding a basis for liability against the bank based on an independent duty owed to the plaintiff distinct from the depository agreement). And when applying Florida law, federal courts have followed suit. Cont'l Gen. Ins. Co. v. Gardina, 773 F. Supp. 3d 1294, 1299–300 (M.D. Fla. 2025) (explaining that while it was initially uncertain whether the independent tort rule had survived the Tiara decision, in the years since Tiara, the Eleventh Circuit and the district courts have continued to apply Florida's independent tort rule.). We note however that, as of yet, no precise, universal test exists for distinguishing an “independent" tort. See generally Lamm, 749 F. 3d at 947 (“exact contours of [the independent tort rule], as applied post-Tiara, are still unclear"). While some courts search for the source of duty, others compare conduct, and still others analyze the nature of damages sought. The variety of considerations has generated several formulations which to date elude a single canonical rule that the bench and bar can easily apply in every court across the state. Because each consideration has value as an indicator of independence, we review them now, as well as a carryover consideration from the old economic loss rule-public policy.

1.

Unlike claims that rely on contractual relationships, an "independent" tort is often characterized by a duty imposed by law rather than by agreement. As to this consideration, United States District Court Judge Steven Merryday has explained that the independent tort doctrine honors the same divide as the economic loss rule, but rather than looking at the nature of the loss, it focuses on the source of the duty allegedly breached. "If a contract imposes a duty, and the defendant breaches that duty, the plaintiff must sue for breach of contract. If society imposes the duty, the plaintiff must sue in tort.” Travelers Indem. Co. of Conn. v. Richard McKenzie & Sons, Inc., 326 F. Supp. 3d 1332, 1345 (M.D. Fla. 2018), aff'd,¹⁰ F. 4th 1255 (11th Cir. 2021). Following this reasoning, courts should consider whether the alleged breach of a duty in tort coincides or overlaps with a duty imposed by a contract. If the duty at issue is within the scope of a contract, and the relationship of the parties that led to the creation of that duty stems from a contract, then that duty's source is from contract and any alleged tort claims based on a breach of those duties may not be "independent."

But the analysis may not end there, as "independent" torts can be characterized by "other conduct" and distinct damages. The "other conduct" consideration requires that for a tort claim to exist alongside a breach of contract, the tort must arise from acts independent of the contract's breach. XP Glob., Inc. v. AVM, L.P., No. 16-cv-80905, 2016 WL 4987618, *4, *6 (S.D. Fla. Sept. 19, 2016).

It requires proof of facts separate and distinct from the contract breach. Invo Fla., Inc. v. Somerset Venturer, Inc., 751 So. 2d 1263, 1265 (Fla. 3d DCA 2000). In other words, under this consideration, the bad conduct serving as the predicate for the breach of contract claim must go beyond a failure to comply with the contract. Frutafino, S.A.S. v. Dole Chile, S.A., 405 So. 3d 497, 500 (Fla. 3d DCA 2025); see also Elec. Sec. Sys. Corp. v. S. Bell Tel. & Tel. Co., 482 So. 2d 518, 519 (Fla. 3d DCA 1986) ("[A] breach of contract, alone, cannot constitute a cause of action in tort.... It is only when the breach of contract is attended by some additional conduct which amounts to an independent tort that such breach can constitute negligence.").

Finally, in some circumstances, the nature of the loss may also be of guidance, as the nature of the loss often informs whether society has imposed an “independent" duty. Peebles, 223 So. 3d at 1068 (considering the nature of the loss in evaluating whether the alleged tort is independent). While Tiara abolished the perhaps overly simplistic contractual privity branch of the economic loss rule, the remaining independent tort doctrine should still consider the nature of the harm at issue as an indication of whether the claim asserted is truly independent of a contract or is simply a recasting of a contract action into a tort action.

With most broken contracts, injuries are measured in the harm to a party's economic interests, not in the harm to a party's person or property. When claims in tort are brought seeking identical damages to those available by contract and are clearly economic in nature, that is a strong indicator that the alleged tort claims are not "independent." Peebles, 223 So. 3d at 1069. Conversely, when claims are brought in tort seeking damages for personal injury or other non-economic damages, that is a strong indicator that some independent duty is at stake.¹⁰ While the nature of the damages is no longer a per se rubric after Tiara, their nature is still relevant in determining whether the tort claim brought is truly independent of a related contract. Island Travel & Tours, Co., 300 So. 3d at 1240 n.7.11 For example, professionals who negligently performed a contracted-for service were