                                                                     [DO NOT PUBLISH]


                 IN THE UNITED STATES COURT OF APPEALS

                           FOR THE ELEVENTH CIRCUIT            FILED
                             ________________________ U.S. COURT OF APPEALS
                                                                     ELEVENTH CIRCUIT
                                    No. 08-13663                     FEBRUARY 11, 2009
                              ________________________                THOMAS K. KAHN
                                                                          CLERK
                        D. C. Docket No. 07-01379-CV-ODE-1

LUIGINO'S INTERNATIONAL, INC.,
a Florida corporation,

                                                                       Plaintiff-Appellant,

                                           versus


JAMIR MILLER,


                                                                     Defendant-Appellee.


                              ________________________

                     Appeal from the United States District Court
                        for the Northern District of Georgia
                          _________________________

                                   (February 11, 2009)

Before BIRCH and BARKETT, Circuit Judges, and KORMAN,* District Judge.
PER CURIAM:

       *
        Honorable Edward Korman, United States District Judge for the Eastern District of New
York, sitting by designation.
      Appellant Luigino’s International, Inc. (“Luigino’s”), a Florida frozen food

corporation, appeals the district court’s order dismissing with prejudice its fraud

claim against Jamir Miller (“Miller”), the Chairman and Chief Executive Officer of

Miller International Foods, Inc. (“Miller International”), a Georgia frozen food

company. The district court held that Luigino’s fraud claim was barred under

Florida’s economic loss rule, which prohibits claims in tort for damages which are

the same as those for breach of contract. On appeal, Luigino’s argues that: (1) the

district court should have applied Georgia law instead of Florida law, (2) the

economic loss rule does not apply, and (3) Luigino’s should be permitted to amend

its complaint. We agree with the district court that Florida law governs but

disagree with its ruling that the economic loss rule bars Luigino’s fraud claim.

Because Luigino’s was not in a contractual relationship with Miller and because

the fraud alleged was in the inducement and not in the performance, the economic

loss rule does not apply under Florida law. Accordingly, we AFFIRM in part and

VACATE and REMAND in part for further proceedings.

                                I. BACKGROUND

      On 26 March 2007, Luigino’s signed a written lease agreement with Miller

International whereby Luigino’s would lease space in a large food production

facility (“the plant”) located in Lithonia, Georgia that was purportedly owned by



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Miller International. See R1-1, Exh. F at 1, 11. Miller was not a named party to

the contract but signed the agreement on behalf of the corporation, Miller

International, as its Chairman and CEO. Id. at 10.

       In June 2007, Luigino’s sued Miller International and Miller in the Northern

District of Georgia.1 See R1-1. Counts one and two of the complaint were claims

for specific performance and breach of contract against Miller International only.

Id. at 11-15. Count three was a claim for fraud against both Miller International

and Miller. Id. at 15-18. Specifically, count three alleged that Miller International

and Miller knowingly made numerous false statements of material fact regarding

their intention to honor the lease agreement and Miller International’s ownership of

the plant. Although both Miller and the lease agreement stated that Miller

International owned the plant, the plant was in fact owned by another company

controlled by Miller called JM Real Estate Holdings, LLC. Id. at 17. Luigino’s

alleged that Miller International and Miller made these false representations in

order to “extort a partnership with Luigino’s” and “with the express intent and

purpose that Luigino’s would rely upon such misrepresentations.” Id. Luigino’s

claimed that its damages included in part the multiple contracts and commitments


       1
          Luigino’s previously filed suit against Miller International and Miller in the Middle
District of Florida but the action was dismissed for lack of personal jurisdiction. See Luigino’s’s
Int’l, Inc. v. Miller Int’l Foods, Inc., No. 6:07-cv-769-Orl-31KRS, 2007 WL 1576363, at *3
(M.D. Fla. May 30, 2007).

                                                 3
that it had made with customers, suppliers, manufacturers, and distributors relating

to the lease agreement. Id. at 18.

      On 4 October 2007, the district court granted Miller International and

Miller’s partial motion to dismiss the counts of specific performance and fraud for

failure to state a claim for relief under Federal Rule of Civil Procedure 12(b)(6).

See R1-21. With respect to the fraud claim, the court held that Florida’s economic

loss rule barred the claim and that the exception of fraudulent inducement did not

apply. Id. at 11-13. This was because the court found that Luigino’s primary

claim – that Miller International and Miller lied about ownership of the plant – was

directly related to Miller International’s ability to lease the plant. Id. at 12-13. The

district court concluded that Luigino’s fraud allegations were so “inextricably tied

to Defendant’s performance under the Lease Agreement, that a claim in tort would

essentially duplicate [Luigino’s] claim for breach of contract.” Id. at 13.

Accordingly, the court dismissed Luigino’s fraud claim against both Miller

International and Miller. Id.

      The only remaining claim was for breach of contract against Miller

International – the only putative contracting party among the defendants. On 27

May 2008, the district court entered final judgment for Luigino’s against Miller

International for a total of $6,526,821, including attorneys’ fees. See R1-41 at 1-2.



                                            4
Based on the court’s October 2007 order, the court dismissed Luigino’s claims

against Jamir Miller with prejudice and ordered that Luigino’s shall take nothing

against Miller individually. Id. at 2.

      Luigino’s then filed this appeal from the district court’s final judgment

dismissing with prejudice the fraud claim against Miller. Miller International is

not a party to this appeal.

                                  II. DISCUSSION

      We review de novo a claim dismissed pursuant to Rule 12(b)(6) for failure

to state a claim for relief. See Glover v. Liggett Group, Inc., 459 F.3d 1304, 1308

(11th Cir. 2006) (per curiam). In deciding whether a complaint survives a motion

to dismiss, the court must assume that “all the allegations in the complaint are true

(even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544, ___, 127 S.

Ct. 1955, 1965 (2007). Although the complaint does not need detailed factual

allegations, there “must be enough to raise a right to relief above the speculative

level.” Id. at ___, 127 S. Ct. at 1965.

A. Choice of Law

      Under Georgia’s choice of law doctrine of lex loci delictis, the law of the

state where the injury occurred governs the fraud action. See Int’l Bus. Machines

Corp. v. Kemp, 536 S.E.2d 303, 306 (Ga. App. 2000). An exception to this rule is



                                           5
where the foreign state’s law contravenes Georgia’s established public policy. See

Alexander v. Gen. Motors Corp., 466 S.E.2d 607, 609 (Ga. App. 1995), rev’d on

other grounds, Alexander v. Gen. Motors Corp., 475 S.E.2d 123, 123-24 (Ga.

1996) (holding that the Court of Appeals correctly stated the public policy

exception but erroneously concluded that the exception did not apply). “The

burden is on the party seeking to establish the public policy exception.”

Alexander, 466 S.E.2d at 609.

      Luigino’s does not dispute that the injuries occurred in Florida but it argues

that Florida law should still not apply because Florida’s economic loss rule violates

Georgia’s public policy. We disagree. Both Florida and Georgia have an

economic loss rule which generally prohibits a contracting party from suing in tort

for only economic damages. See Gen. Elec. Co. v. Lowe’s Home Ctrs. Inc., 608

S.E.2d 636, 637 (Ga. 2005) (“The ‘economic loss rule’ generally provides that a

contracting party who suffers purely economic losses must seek his remedy in

contract and not in tort.”); Indem. Ins. Co. of N. America v. American Aviation,

Inc., 891 So. 2d 532, 536 (Fla. 2004) (tort action to recover solely economic

damages is barred where parties are in contractual privity). The policy

considerations underlying both rules are the same – to prevent a plaintiff from

recovering duplicative damages for the same wrongdoing. See Gen. Elec. Co., 608



                                          6
S.E.2d at 639 (economic loss rule “avoids the unfairness to defendants that would

come with duplicative liability for the same damage”); American Aviation, 891 So.

2d at 536 (“‘Where damages sought in tort are the same as those for breach of

contract a plaintiff may not circumvent the contractual relationship by bringing an

action in tort.’”) (citation omitted).

       Further, as the district court pointed out, both Georgia and Florida law

recognize an exception to the economic loss rule for injuries that occur

independently of the contract. See O.C.G.A. § 51-1-11(a) (2000) (“[I]f the tort

results from the violation of a duty which is itself the consequence of a contract,

the right of action is confined to the parties and those in privity to that contract,

except in cases where the party would have a right of action for the injury done

independently of the contract . . . ."); American Aviation, 891 So. 2d at 537

(“Although parties in privity of contract are generally prohibited from recovering

in tort for economic damages, we have permitted an action for . . . torts committed

independently of the contract breach, such as fraud in the inducement.”). Contrary

to Luigino’s contention, Georgia law does not unequivocally “hold persons making

fraudulent statements in business settings liable, despite contractual relationships.”

Appellant’s Brief at 20; see, e.g., ServiceMaster Co., L.P. v. Martin, 556 S.E.2d

517, 523 (Ga. App. 2001) (fraud claim properly dismissed because the alleged



                                            7
fraudulent statements did not induce plaintiff to provide any services and therefore

could not “convert a claim in contract into a discrete claim in tort”).

      Given the similarities between Georgia and Florida law, the district court

correctly concluded that Florida’s economic loss rule does not contravene

Georgia’s public policy and that Florida law should apply under the doctrine of lex

loci delictis. Accordingly, we affirm that aspect of its judgment.

B. Application of Florida’s Economic Loss Rule

      Although the district court correctly determined that Luigino’s fraud claim is

governed by Florida law, it erred in applying the economic loss rule with respect to

Miller. The Supreme Court of Florida has expressly limited the economic loss rule

to situations “where the parties are either in contractual privity or the defendant is a

manufacturer or distributor of a product, and no established exception to the

application of the rule applies.” American Aviation, 891 So. 2d at 534. In

American Aviation, the parties were not in contractual privity and the defendant

was neither a manufacturer nor distributor of a product. Id. Accordingly, the

plaintiff’s negligence action was not barred by the economic loss rule. Id.

      Here, there is no contractual privity between Luigino’s and Miller because

the only named parties to the lease agreement are Luigino’s and Miller

International. Luigino’s complaint does not aver that it had a contractual



                                            8
relationship with Miller and it did not file its claims for specific performance and

breach of contract against Miller personally. In the absence of contractual privity

between Luigino’s and Miller, Florida’s economic loss rule does not apply. See

id.; accord Advisor’s Capital Investments Inc., v. Cumberland Cas. & Sur. Co., No.

8:05-CV-404-T-23MAP, 2007 WL 220189, at *2 n.5 (M.D. Fla. Jan. 26, 2007)

(economic loss rule does not bar claims of fraudulent inducement and negligent

misrepresentation because plaintiffs and defendants were not in contractual

privity); McLeod v. Barber, 764 So. 2d 790, 792 (Fla. App. 2000) (“[T]he law is

clear that the economic loss doctrine does not apply to tort claims where there is no

contractual relationship between the parties.”); Williams v. Bear Stearns & Co.,

725 So. 2d 397, 399 (Fla. App. 1998) (economic loss rule does not apply to tort

claims of negligent misrepresentation and breach of fiduciary duty against three

defendants who had no contractual relationship with the complaining party). The

district court therefore erroneously dismissed Luigino’s fraud claim against Miller

on this basis.

       We recognize that contractual privity may not be required when a tort action

is barred against a corporation under the economic loss rule and its corporate

employee is being sued for the same tortious conduct. See Vesta Constr. &

Design, L.L.C. v. Lotspeich & Assoc., Inc., 974 So. 2d 1176, 1181 (Fla. Dist. Ct.



                                           9
App. 5 2008); see also Ben-Yishay v. Mastercraft Dev., LLC, 553 F. Supp. 2d

1360, 1370-71 (S.D. Fla. 2008). In Vesta, the Fifth District correctly noted the

distinction in Florida law between misrepresentations which occur during the

performance of the contract and those which are independent of the contract, such

as those made to induce a party to enter the contract on behalf of the company. See

Vesta, 974 So. 2d at 1181-82. In the latter case (misrepresentations made

independent of the contract), the economic loss rule does not apply to bar a tort

claim. See id. at 1182. Because the employee’s alleged misrepresentations in

Vesta occurred during the performance of the contract, however, the economic loss

rule applied to bar a negligence suit against that employee. See id. In Ben-Yishay,

the court concluded that the plaintiffs’ fraudulent inducement claims were not

independent of their breach of contract claims because the alleged

misrepresentations consisted of promises made in the agreement and a merger

clause restricted reliance on prior representations. See Ben-Yishay, 553 F. Supp.

2d at 1370. Accordingly, the court ruled that because the economic loss rule

barred claims of fraudulent misrepresentation against the corporations involved in

the contract, it likewise barred those same claims against an employee of those

companies. See id. at 1371.

      Unlike the contract here, however, Vesta and Ben-Yishay involved contracts



                                          10
capable of performance. The contract between Luigino’s and Miller International

could not be performed under any circumstances because Miller International did

not own the property purportedly leased. Under Georgia law, which governs

whether Luigino’s was entitled to specific performance of the contract, a court

cannot order “the specific performance of a contract wherein the purported vendor

agrees to sell land which belongs to another.” Viola E. Buford Family Ltd. P’ship

v. Britt, 642 S.E.2d 383, 384 (Ga. Ct. App. 2007) (quotation marks omitted). The

contract was thus totally incapable of performance, which is why the district court

dismissed Luigino’s claim for specific performance. See R1-21 at 3-7. The

district court nevertheless concluded that the economic loss rule applied to Miller

International based on its erroneous finding that Luigino’s fraud claim “relates to

Defendants’ performance of the contract.” See id. at 12-13. Contrary to the

court’s finding, the fraud was manifestly in the inducement into a non-performable

contract – not in its performance. However, that ruling by the district court as to

Miller International is not before us.

      Since the fraud in this case was in the inducement, the liability for such

tortious conduct was chargeable jointly and severally to Miller and Miller

International. Application of the economic loss rule to bar Luigino’s fraud in the

inducement claim against Miller individually was error. As noted above, there was



                                          11
no privity between Miller and Luigino’s which is a prerequisite to application of

the contractual privity economic loss rule. The district court’s uncontested

erroneous finding of fraud in the performance with respect to Miller International –

which triggers application of the economic loss rule – cannot be used to justify

application of that rule against Luigino’s in its claim of fraud in the inducement (an

exception to the economic loss rule) against Miller individually. Any concern

about a double recovery vis-a-vis Miller individually is satisfied by the hornbook

text rule that “[w]hen payment of the judgment in full is made by the judgment

debtor, there is no doubt that the plaintiff is barred from a further action against

another who is liable for the same damages, or from enforcement of another

judgment against the other.” See Keeton et al., Prosser & Keeton on the Law of

Torts § 48 (5th ed. 1984). Thus, to the extent the damages overlap, Luigino’s

cannot recover twice. In light of our decision, we decline to address at this

juncture Luigino’s argument that it should be permitted to amend its complaint.

                                 III. CONCLUSION

      Luigino’s appeals the dismissal of its fraud claim against Miller. We

AFFIRM the district court’s judgment as to the application of Florida law.

However, we conclude that the district court erroneously dismissed this claim

under Florida’s economic loss rule. Given that Luigino’s had no contractual



                                           12
relationship with Miller and the fraudulent misrepresentations occurred in the

inducement of the contract, the economic loss rule does not apply to bar Luigino’s

fraud claim against Miller. Accordingly, we VACATE and REMAND for further

proceedings consistent with this opinion on that issue.

      AFFIRMED in part; VACATED and REMANDED in part.




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