               NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
                      MOTION AND, IF FILED, DETERMINED


                                               IN THE DISTRICT COURT OF APPEAL
                                               OF FLORIDA
                                               SECOND DISTRICT

ICMFG & ASSOCIATES, INC., TOM                  )
COGHLAN, BONNIE Del GROSSO,                    )
MICHAEL DOYLE,                                 )
                                               )
              Appellants,                      )
                                               )
v.                                             )       Case No. 2D15-3557
                                               )                2D15-4588
THE BARE BOARD GROUP, INC.,                    )
                                               )       CONSOLIDATED
              Appellee.                        )
                                               )

Opinion filed March 17, 2017.

Appeal from the Circuit Court for Pinellas
County; Pamela A.M. Campbell, Judge.

Ceci Culpepper Berman and Thomas J.
Seider of Brannock & Humphries,
Tampa; Robert W. Hitchens of Hitchens
& Hitchens, P.A., St. Petersburg, for
Appellants.

Kelly J. Ruoff and Marie Tomassi of
Trenam, Kemker, Scharf, Barkin, Frye,
O'Neill, & Mullis, P.A., St. Petersburg, for
Appellee.


WALLACE, Judge.

              The Appellants, ICMfg and Associates, Inc. (ICM); Tom Coghlan; Bonnie

del Grosso; and Michael Doyle, appeal an Order on Trial and a final judgment entered

in favor of The Bare Board Group, Inc. (BBG), following a bench trial limited to the issue
of damages. We hold that the trial court did not abuse its discretion in striking the

Appellants' pleadings and in entering a default against them as a sanction. However,

we conclude that the trial court erred in ruling that the default previously entered against

the Appellants made it unnecessary for BBG to prove a connection between the

Appellants' tortious conduct and BBG's claimed lost profits. Accordingly, we reverse the

awards for lost profits, including the prejudgment interest thereon, and remand for a

new trial limited to the issue of BBG's claim for lost profits. We affirm the other

damages awards and the awards of attorney's fees and costs.

                  I. THE FACTS AND PROCEDURAL BACKGROUND

A. Introduction

              BBG is a Florida corporation that was formed in 2002. It is a supplier of

printed computer circuit boards. At the time of the events pertinent to the underlying

litigation, Mr. Coghlan and Ms. del Grosso were both officers, directors, and highly

compensated employees of BBG. Each of them also owned shares of BBG.

              Both Mr. Coghlan and Ms. del Grosso were previously acquainted with Mr.

Doyle because all three of them were involved in the printed computer circuit board

industry. Mr. Doyle planned to establish a printed computer circuit board business.

Lacking the funds to do so, he approached Mr. Coghlan and Ms. del Grosso for

financing. They both advanced money to Mr. Doyle with knowledge of his plans. Mr.

Doyle incorporated ICM as a Florida corporation in March 2010.

B. The Parties' Claims

              The litigation in the underlying case began in March 2012 with the filing of

a complaint for declaratory judgment by ICM, Mr. Coghlan, and Ms. del Grosso against




                                            -2-
BBG. Mr. Coghlan and Ms. del Grosso had resigned as officers, directors, and

employees of BBG on January 13, 2012. At the time of their resignations, Mr. Coghlan

and Ms. del Grosso each held 11.087% of the outstanding shares of BBG. A

shareholder agreement granted BBG the first right of redemption of those shares upon

the termination of the employment of Mr. Coghlan and Ms. del Grosso with BBG. In

their complaint, ICM, Mr. Coghlan, and Ms. del Grosso alleged that the parties had a

dispute regarding the proper value of the shares of stock and that they were in doubt

about their rights under the shareholder agreement. They asked the trial court for

declaratory relief to resolve the dispute.

              BBG answered the complaint and raised various affirmative defenses. In

an amended counterclaim, BBG added Mr. Doyle as a counter-defendant1 and made

the following pertinent allegations:

                      1. BBG is a Florida corporation, in good standing,
              with its principal place of business in Pinellas County,
              Florida.

                     2. ICM is a Florida corporation first established on
              March 22, 2010[,] with its principal place of business in
              Pinellas County, Florida.

                    3. Coghlan and B. del Grosso are each long-time
              employees and minority shareholders, and officers of BBG,
              and held positions as directors of BBG for several years.

                    4. On January 13, 2012, Coghlan and B. del Grosso
              each unexpectedly announced to BBG his and her
              resignation as employees of BBG.



              1
                BBG added two additional counter-defendants to the litigation who were
subsequently dropped as parties. For the purposes of this opinion, we need not
address the allegations of the amended counterclaim or the course of the litigation
pertaining to these parties who were eventually dropped.



                                             -3-
                    5. While holding the position of officer and director of
             BBG, Coghlan and B. del Grosso each owed fiduciary duties
             to BBG, to include performing its duties in and for the best
             interest of the corporation [and] to present all business
             opportunities which came to their attention to BBG if it
             involved the present corporate activity of BBG.

                     6. Coghlan and B. del Grosso, while serving as
             officers of BBG and as members of its four-person board of
             directors, knowingly and deliberately undertook a course of
             conduct, undisclosed to BBG, to divert BBG customers and
             other BBG customer opportunities to ICM, which is a
             competitor of BBG and [for] which Coghlan and B. del
             Grosso were initially named as ICM's officers and directors.

                    7. Only upon an investigation by BBG after the
             sudden resignations of Coghlan and B. del Grosso on
             January 13, 2012[,] were these surreptitious activities of
             diverted corporate business and opportunities and the
             existence of ICM discovered by BBG.

                     8. Doyle is a resident of Pinellas County, Florida, was
             the initial Vice President of ICM, and has been involved in
             the same industry as BBG for several years with other
             entities in Pinellas County, Florida.

                    ....

                     11. BBG has retained the law firm of Trenam,
             Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A.[,] to bring
             suit on their behalf and have agreed to pay a reasonable fee
             for their services.

                     12. All conditions precedent to the maintenance and
             institution of this lawsuit have been performed, have been
             waived, or have otherwise been satisfied.

In addition, BBG alleged that Mr. Coghlan and Ms. del Grosso had violated their

fiduciary duties to BBG by diverting its customers and business opportunities to ICM

and by generally interfering with BBG's business. BBG alleged further that Mr. Doyle

and Ms. del Grosso and others had aided and abetted the breach of fiduciary duties by

Mr. Coghlan and Ms. del Grosso for the purpose of benefitting ICM's business. BBG



                                          -4-
alleged that these activities had caused damages to it, including the loss of its rightful

business and profits.

              BBG alleged six causes of action in its amended counterclaim as follows:

Count I, breach of fiduciary duty (Coghlan and B. del Grosso); Count II, aiding and

abetting breach of fiduciary duty (ICM and Doyle); Count III, civil conspiracy to defraud

(ICM, Coghlan, B. del Grosso, and Doyle); Count IV, fraud (Coghlan and B. del Grosso);

Count V, violation of the Florida Deceptive and Unfair Trade Practices Act, sections

501.201-.213, Florida Statutes (2011) (FDUTPA) (ICM, Coghlan, B. del Grosso, and

Doyle); and Count VI, tortious interference with business relationships (ICM, Coghlan,

B. del Grosso, and Doyle). The Appellants answered the amended counterclaim and

raised various affirmative defenses.

C. Discovery Abuse, Fraud, and Sanctions

              With regard to the claims asserted by BBG in its amended counterclaim,

the timing, nature, and extent of the involvement of Mr. Coghlan and Ms. del Grosso

with ICM were critical issues. The record supports the conclusion that the Appellants

engaged in a concerted effort to interfere with BBG's attempts to discover evidence

favorable to BBG on these issues. This effort included the repeated disregard of

discovery obligations, noncompliance with court orders to make discovery, false

deposition testimony, and the failure to disclose that two of ICM's tax returns had been

amended after BBG had requested copies of the returns. The amendments to the two

tax returns deleted the names of Mr. Coghlan and Ms. del Grosso from the original

returns as two of the shareholders of ICM and listed Mr. Doyle instead as the sole

shareholder. Nevertheless, BBG was persistent, and it ultimately obtained copies of the




                                            -5-
tell-tale original tax returns through a subpoena duces tecum for deposition directed to

ICM's accountant.

              After BBG finally obtained copies of the original tax returns, it moved for

sanctions against the Appellants. The trial court conducted a hearing on the motion.

After the hearing, the trial court entered a lengthy order that outlined the Appellants'

derelictions in detail. The trial court then set forth its conclusions of law as follows:

                    18. The Court, having heard argument from counsel
              and considering its findings of fact under the totality of the
              circumstances, hereby GRANTS BBG's Motion for Sanctions
              for Counter-Defendants' Destruction of Evidence and
              Commission of Fraud on the Court.

                      19. A deliberate and contumacious disregard of the
              court's authority will justify the striking of pleadings as will
              bad faith, willful disregard or gross indifference to an order of
              the court, or conduct that evinces deliberate callousness.
              Mercer v. Raine, 443 So. 2d 944, 946 (Fla. 1983); Bailey v.
              Woodlands Co., Inc., 696 So. 2d 459 (Fla. 1st DCA 1997)
              (affirming dismissal of party's pleading based on finding a
              pattern of willful noncompliance or disregard of the rules of
              civil procedure.)

                    20. [Recitation of pertinent factors under Kozel v.
              Ostendorf, 629 So. 2d 817, 818 (Fla. 1993) omitted.]

                      21. Here, Counter-Defendants ICM and Doyle, based
              on the above findings of fact, have personally engaged in
              and are responsible for a pattern of willful noncompliance
              and contumacious disregard of the rules of civil procedure
              that has prejudiced BBG through undue expense and delay
              in this litigation. The Court has reviewed the deposition
              testimony of Doyle and finds him not to be credible in his
              responses, not complete in his responses, and to have made
              numerous attempts to mislead the parties in responding to
              discovery.

                     22. A court has a duty and an obligation to strike a
              party's pleadings if the party commits a fraud during
              discovery. Long v. Swofford, 805 So. 2d 882, 884 (Fla. 3d
              DCA 2001).



                                             -6-
                       23. Counter-Defendants have committed fraud in the
                discovery process by intentionally concealing and then
                ultimately altering evidence, namely the 2010 and 2011 tax
                returns, central to the issues in this litigation—Coghlan's and
                del Grosso's involvement with ICM while officers and
                directors of BBG. In addition, the Court finds Coghlan's and
                del Grosso's [deposition] testimony that they were not
                shareholders in ICM to be untruthful and belied by both the
                Ownership Email and the original 2010 and 2011 tax returns
                of ICM that were subsequently altered in order to mislead
                BBG and this Court as to Coghlan's and del Grosso's
                ownership interest in ICM. This fraud warrants striking
                Coghlan's and del Grosso's pleadings.

Based on its findings of fact and conclusions of law, the trial court struck the Appellants'

pleadings and entered a default against them on liability with regard to BBG's amended

counterclaim.

D. The Trial Court's Ruling on Causation and Damages

                The entry of the order striking the Appellants' pleadings and the entry of a

default on liability against them on BBG's amended counterclaim made it unnecessary

for BBG to prove liability. But BBG's claims were unliquidated in amount; accordingly,

the parties still faced a trial on damages. As the trial on damages approached, the

parties had a dispute about whether and to what extent BBG was required to prove a

connection between the Appellants' conduct and BBG's claimed lost profits.

                At a pretrial hearing, the trial court heard the parties' arguments about the

nature of the proof required on BBG's claim for lost profits. BBG argued that causation

was an element of liability that had been established by the default. Therefore, BBG

reasoned, it need only prove the amount of its damages at trial. In response, the

Appellants contended that—despite the entry of the default—BBG was still required to




                                             -7-
prove a connection between the Appellant's conduct and the claimed lost profits. The

trial court agreed with BBG's arguments and ruled as follows:

                     THE COURT: So at this point the Court is finding that
              the element of causation has already been established. So
              we're here for the trial on damages.

                      [COUNSEL FOR THE APPELLANTS]: Is counter-
              plaintiff [the Appellee] required to show a connection
              between the alleged damages and the bad act?

                    THE COURT: I would say that is causation, that
              nexus is causation. I think that's been established.

                      ....

                    But I believe at this point in time, the nexus and the
              causation are already established. I think that's my ruling.

This ruling guided the presentation of the evidence at the trial on damages that

followed.

E. The Evidence at Trial on Damages

              At trial, some of BBG's claims for damages were essentially undisputed.

These claims included the salary and bonuses paid to Mr. Coghlan and Ms. del Grosso

and miscellaneous expenses incurred in connection with BBG's investigation into the

Appellants' conduct. Here, we are concerned not with these damages but with the

awards for lost profits.

              BBG presented its primary evidence on lost profits through the testimony

of its damages expert, a certified public accountant with a specialty in forensic

accounting. BBG's expert divided the customers for which BBG claimed to have

sustained lost profits into two groups. The first group included former BBG customers

who had been "diverted" to ICM and to whom ICM had made sales. This first group




                                           -8-
was referred to as the "diverted" group. The second group consisted of BBG customers

who were claimed to have had "contact" with Mr. Coghlan, Ms. del Grosso, and a

certain salesperson. BBG's expert referred to this group as the "tainted" or "tampered"

group. The expert assigned BBG customers to the tampered group even though ICM

had not made any sales to them. BBG's expert claimed that sales to customers in the

tampered group had declined relative to BBG's remaining customers assigned to a so-

called "control" group. The supposed deleterious effect of contact by Mr. Coghlan, Ms.

del Grosso, and the designated salesperson on customers assigned to the tampered

group was never adequately explained. BBG's expert calculated the lost profits for

customers assigned to the diverted group and the tampered group by applying BBG's

average profit percentage to sales allegedly lost to BBG. In addition, for each of these

two groups, the expert calculated an estimate for BBG's future lost profit on sales for

five years into the future.

              Notably, BBG's expert freely admitted on cross-examination that he had

done nothing to investigate the question of a causal link between the Appellants'

conduct and the claimed lost profits. For customers assigned to the tampered group,

the question of a connective link was particularly problematic. In this regard, Appellants'

counsel asked BBG's expert if he had any information about specific communications

purportedly made by Mr. Coghlan, Ms. del Grosso, or the salesperson to these

customers. The expert's response is telling: "No. I assumed the causation because

that's what I was told to assume. I had heard that there were issues. I was told that

there were issues, but it was my understanding that the Court had already made a

ruling on the causation."




                                           -9-
In other words, BBG's expert testified to the damages claimed for lost profits based on

an assumption about causation that he had been asked to make by BBG's counsel.

The expert did no more than analyze BBG's financial information in light of the

assumptions about a connection between the Appellants' conduct and the claimed lost

profits that he had been instructed to make.

              At trial, the Appellants offered the testimony of their own expert who

questioned the methodology employed by BBG's expert. The Appellants also

contended that many of the BBG customers did not belong on either the diverted list or

the tampered list for a variety of reasons. Generally speaking, the trial court refused to

consider the Appellants' evidence and arguments along these lines based on its prior

ruling that causation had been established by the entry of the default on liability.

F. The Trial Court's Ruling

              After the trial on damages, the trial court entered an Order on Trial

containing a detailed statement of its findings.2 Although the trial court had previously

entered a default on liability against the Appellants, it specifically found that BBG had

proven the elements of each cause of action alleged in its counterclaim. The trial court

also accepted the calculation of past and future lost profits offered by BBG's expert on

damages.

              On Counts I-III and VI of the amended counterclaim, the trial court ruled

that BBG was entitled to recover lost profits for customers diverted from BBG to ICM of



              2
               We commend the trial court for the care that it put into the preparation of
the Order on Trial. The detail contained in this order has rendered this court's task of
appellate review much easier than it might otherwise have been.



                                           - 10 -
$1,594,927, plus prejudgment interest of $80,440.34. In addition, the trial court ruled

that BBG was entitled to future lost profits for customers in the diverted group of

$2,311,133.

              On Counts I-III and VI of the amended counterclaim, the trial court ruled

that BBG was entitled to recover lost profits for customers in the tampered group

against the Appellants of $1,734,038, plus prejudgment interest of $200,821.13. In

addition, the trial court ruled that BBG was entitled to future lost profits for customers in

the tampered group of $3,269,611.

              On Counts I, III, IV, and V, the trial court found that BBG was entitled to

disgorgement of Mr. Coghlan's salary and bonuses of $721,124, plus prejudgment

interest of $122,048.92. Recovery of these amounts was against Mr. Coghlan only.

              On Counts I, III, IV, and V, the trial court found that BBG was entitled to

disgorgement of Ms. del Grosso's salary and bonuses of $729,550, plus prejudgment

interest of $122,864.60.3 Recovery of these amounts was against Ms. del Grosso only.

              On Count V, the trial court found that BBG was entitled to recover

additional actual damages from the Appellants of $6374.45, plus prejudgment interest of

$605.57. These damages were for miscellaneous expenditures made by BBG to

investigate the Appellants' conduct.

              Finally, the trial court ruled that BBG was entitled to recover punitive

damages against each of the Appellants in an amount to be determined. The trial court

also ruled that BBG was entitled to recover its attorney's fees from the Appellants on



              3
             The amount of prejudgment interest for this award is stated in the final
judgment as $122,864.61 instead of $122,864.60.



                                            - 11 -
Count V, its FDUTPA claim, in accordance with section 501.2105. The trial court

reserved jurisdiction to determine the amount of the punitive damages and BBG's

reasonable attorney's fees.

G. The Final Judgment

              After the entry of the Order on Trial, the parties stipulated to an award of

$275,000 to BBG for its attorney's fees and costs. In addition, the parties stipulated that

BBG would recover punitive damages of $100,000 against each of the Appellants. On

September 28, 2015, the trial court entered a final judgment in accordance with the

Order on Trial and the parties' stipulation concerning attorney's fees and costs and

punitive damages. The total of the judgment against all of the Appellants for damages,

prejudgment interest, and attorney's fees and costs is $9,472,950.49. The trial court

entered separate judgments against Mr. Coghlan and Ms. del Grosso for the

disgorgement of their salary and bonuses4 and the $100,000 punitive damages awards.

The trial court also entered judgments against ICM and Mr. Doyle for the $100,000

punitive damages awards against them. The Appellants filed notices of appeal with

regard to the Order on Trial and the final judgment. This court subsequently

consolidated the two cases.

                         II. THE APPELLANTS' ARGUMENTS

              On appeal, the Appellants argue that the trial court abused its discretion in

striking their pleadings and in entering a default judgment on liability against them on



              4
              The amount of the judgment against Mr. Coghlan for disgorgement of
salary and bonuses is $721,124, plus prejudgment interest of $122,048.92. The
amount of the judgment against Ms. del Grosso for disgorgement of salary and bonuses
is $729,550, plus prejudgment interest of $122,864.61.



                                           - 12 -
BBG's amended counterclaim. Alternatively, the Appellants argue that multiple errors in

the trial court's rulings regarding damages require a new trial on that issue. Finally, the

Appellants argue that a reversal of the final judgment requires a reversal of the award

for attorney's fees and costs. We will consider these arguments separately below.

                                     III. DISCUSSION

A. The Entry of the Default as a Sanction

               The conduct for which the trial court sanctioned the Appellants involved

repeated and willful violations of discovery obligations and the trial court's orders

compelling discovery. However, a reading of the trial court's sanctions order discloses

that the trial court determined to impose the ultimate sanction on the Appellants

because they had attempted to perpetrate a fraud on BBG and the trial court. The

subject of the fraud was pertinent to a critical issue for trial—the involvement of Mr.

Coghlan and Ms. del Grosso in the business affairs of ICM. The trial court found that

this attempted fraud included but was not limited to discovery abuses. In addition, the

trial court found that the Appellants had intentionally concealed and ultimately altered

evidence that was central to the issues in the litigation, i.e., ICM's 2010 and 2011

federal income tax returns. The trial court also found that the deposition testimony of

Mr. Coghlan and Ms. del Grosso about these issues was contradicted by the

contemporaneous documentary evidence of their involvement in the business affairs of

ICM. Competent, substantial evidence in the record supports the trial court's findings in

this regard.

               Our review of a trial court's imposition of sanctions is for abuse of

discretion. Distefano v. State Farm Mut. Auto. Ins. Co., 846 So. 2d 572, 574 (Fla. 1st




                                            - 13 -
DCA 2003). When, as here, the trial court has imposed the ultimate sanction based on

fraud, we employ a narrowed abuse of discretion standard of review. See Jacob v.

Henderson, 840 So. 2d 1167, 1168-69 (Fla. 2d DCA 2003). "A trial court has a duty and

an obligation to dismiss a cause of action based upon fraud." Long v. Swofford, 805 So.

2d 882, 884 (Fla. 3d DCA 2001). Fraud arises when

              it can be demonstrated, clearly and convincingly, that a party
              has sentiently set in motion some unconscionable scheme
              calculated to interfere with the judicial system's ability
              impartially to adjudicate a matter by improperly influencing
              the trier of fact or unfairly hampering the presentation of the
              opposing party's claim or defense.

Cox v. Burke, 706 So. 2d 43, 46 (Fla. 5th DCA 1998) (quoting Aoude v. Mobil Oil Corp.,

892 F.2d 1115, 1118 (1st Cir. 1989)). We hold that the trial court properly concluded

that the Appellants' conduct in this case amounted to such a scheme.

              In an attempt to minimize their conduct, the Appellants argue that they

must have been poor schemers indeed—they provided BBG with the name of their

accountant from whom BBG's attorney obtained the tell-tale documents. Granted,

BBG's attorneys refused to be stymied by the Appellants' evasions and pursued the

investigation of the pertinent facts to a successful conclusion. But the persistence and

resourcefulness of BBG's attorneys does not excuse the Appellants' conduct or diminish

its seriousness. We are not persuaded by the Appellants' argument based on the

unsuccessful nature of their attempted fraud on the trial court.

              Granted, some trial judges might have imposed the lesser sanction of an

award of attorney's fees and costs against the Appellants for their conduct.

Nevertheless, even under our narrowed standard of review that is applicable here, we

cannot say that no reasonable trial judge would have imposed the ultimate sanction on



                                           - 14 -
the Appellants for their egregious conduct. Accordingly, we find no abuse of discretion

here and uphold the trial court's order imposing the ultimate sanction on the Appellants.

See Ramey v. Haverty Furniture Cos., Inc., 993 So. 2d 1014, 1020-21 (Fla. 2d DCA

2008) (affirming an order dismissing an action for fraud on the court where the evidence

supported the trial court's determination that the plaintiff had provided intentionally false

deposition testimony and interrogatory answers concerning his prior medical treatment

that were directly related to central issues in the case); Perrine v. Henderson, 85 So. 3d

1210, 1211 (Fla. 5th DCA 2012) (affirming an order dismissing an action for fraud on the

court where the plaintiff made numerous material misrepresentations regarding his

medical history and current injuries, which were central issues in the case); Babe Elias

Builders, Inc. v. Pernick, 765 So. 2d 119, 120-21 (Fla. 3d DCA 2000) (affirming an order

striking the defendant's pleadings where the defendant created false invoices to justify

amounts charged to the plaintiffs and arranged for the presentation of false deposition

testimony that the invoices were accurate).

B. The Impact of the Default on the Proof of Lost Profits

              The trial court's ruling on the impact of the entry of the default against the

Appellants on the necessity for BBG to establish a connecting link between the

Appellants' conduct and the damages for lost profits claimed by BBG is a pure question

of law. Accordingly, our review of this issue is de novo. See Kaaa v. Kaaa, 58 So. 3d

867, 869 (Fla. 2010). The question of the methodology employed in calculating

damages also involves a question of law that we review de novo. Katz Deli of Aventura,

Inc. v. Waterways Plaza, LLC, 183 So. 3d 374, 380 (Fla. 3d DCA 2013); Del Monte

Fresh Produce Co. v. Net Results, Inc., 77 So. 3d 667, 673 (Fla. 3d DCA 2011).




                                            - 15 -
              Based on the sanctions order entered against the Appellants for the

claims asserted by BBG, liability was not an issue at trial. Thus, for example, the

Appellants could not dispute the allegations of paragraphs 5 and 6 of BBG's amended

counterclaim regarding the breach of their fiduciary duties to BBG and their conduct

directed at BBG's customers. They could not raise multiple other defenses that might

otherwise have been available to them before the sanctions order was entered.

Nevertheless, because BBG's claims for damages were unliquidated in amount, the

Appellants had the right to a hearing on damages to contest the amount of damages

claimed by BBG. "Florida Rule of Civil Procedure 1.440(c) requires a hearing on claims

for unliquidated damages, even if a party has been defaulted." Medcom USA, Inc. v.

Ryder Homes & Groves Co., 847 So. 2d 594, 596 (Fla. 2d DCA 2003). "[A] defaulted

defendant has the right to contest the amount of unliquidated damages and may offer

evidence in mitigation thereof." Talucci v. Matthews, 960 So. 2d 9, 10 (Fla. 4th DCA

2007). Therefore, the entry of the default on liability did not make the Appellants liable

as a matter of law for all of the damages claimed by BBG. See id.

              Even where, as in this case, the trial is on the issue of damages only and

liability is not in question, the claimant remains "obligated to prove some connexity

between the damages claimed and [the defendant's tortious conduct]." Rucker v.

Garlock, Inc., 672 So. 2d 100, 102 (Fla. 3d DCA 1996); see also Talucci, 960 So. 2d at

10 ("The right to contest unliquidated damages in any negligence action encompasses

the right to challenge the causal relationship between the damages claimed and the

liability established by the default."); Leal v. Waterproofing Sys. of Miami, Inc., 812 So.

2d 473, 473 (Fla. 3d DCA 2002) (holding that a defendant against whom a directed




                                           - 16 -
verdict on liability had been entered had the right to contest the issue of recovery for

diagnostic bills). The requirement to show some "connexity" between the defendant's

conduct and the claimant's damages is consistent with the law of damages. In this

regard, the Florida Supreme Court has said:

                     The fundamental principle of the law of damages is
              that the person injured by breach of contract or by wrongful
              or negligent act or omission shall have fair and just
              compensation commensurate with the loss sustained in
              consequence of the defendant's act which [gave] rise to the
              action. In other words, the damages awarded should be
              equal to and precisely commensurate with the injury
              sustained.

Hanna v. Martin, 49 So. 2d 585, 587 (Fla. 1950) (emphasis added); see also Glades Oil

Co. v. R.A.I. Mgmt., Inc., 510 So. 2d 1193, 1195 (Fla. 4th DCA 1987) ("In a tort action,

the measure of damages is that which is necessary to restore the injured party to the

position he would have been in had the wrong not been committed."). Obviously, the

limitation of damages awards to those sustained in consequence of the defendant's act

precludes awards for losses attributable to other causes.

              BBG had the burden of proving its claim for lost profits. See Physicians

Reference Lab., Inc. v. Daniel Seckinger, M.D. & Assocs., P.A., 501 So. 2d 107, 109 n.1

(Fla. 3d DCA 1987). "[L]ost profits 'must be proven with a reasonable degree of

certainty before [the loss] is recoverable.' " Paul Gottlieb & Co. v. Alps S. Corp., 985

So. 2d 1, 9 (Fla. 2d DCA 2007) (second alteration in original) (quoting Shadow Lakes,

Inc. v. Cudlipp Constr. & Dev. Co., 658 So. 2d 116, 117 (Fla. 2d DCA 1995)). "The

mind of a prudent impartial person should be satisfied that the damages are not the

result of speculation or conjecture." Id. (quoting Shadow Lakes, 658 So. 2d at 117). "It

is fundamental that a lost profit award must be commensurate with what is fair and just



                                           - 17 -
and limited to the actual damages sustained." Pahokee Hous. Auth., Inc. v. S. Fla.

Sanitation Co., 478 So. 2d 1107, 1108 (Fla. 4th DCA 1985) (citing Hanna, 49 So. 2d at

587). Where an award of lost profits amounts to an unmerited windfall, it will be set

aside. See id.

              In light of these principles, we hold that the trial court's pretrial ruling that

the default on liability was sufficient to establish "the nexus and causation" between the

Appellants' tortious acts and BBG's claim for lost profits was in error. This error

prejudiced the Appellants throughout the trial on damages that followed. The trial court

accepted the testimony about BBG's claimed lost profits given by its expert. The trial

court based its award of damages for lost profits entirely on the expert's testimony. But

the expert disclaimed any effort to investigate or to consider a link between the

Appellants' conduct and its effect on BBG's business. The expert based his

methodology on his "understanding that the Court had already made a ruling on

causation." In addition, the trial court's pretrial ruling had a pervasive effect on the rest

of the trial because the Appellants were prevented from demonstrating that BBG's

claimed business losses were not as great as it claimed or were attributable—in whole

or in part—to other causes.

              Without conceding that the trial court erred in deciding the "connexity"

issue, BBG defends the methodology employed by its expert in determining its claim for

lost profits. According to BBG, the methodology employed by its expert ensured that

the lost profits calculated for both the diverted group and the tampered group were

connected to and the result of the Appellants' tortious conduct. In particular, BBG

asserts that its expert's "method of calculating lost profits from the Tampered Group




                                             - 18 -
inherently accounted for other possible lost profits." BBG argues for affirmance of the

damages awards for lost profits because—without regard to the trial court's ruling on

causation—the methodology employed by its expert was sound.

              We reject this argument for three reasons. First, BBG's expert conceded

that—in reliance on counsel's instructions—he made no investigation of the facts to

determine the existence of a link between the Appellants' conduct and the claimed lost

profits. At the very least, the expert's disregard of the issue of causation renders his

conclusions about BBG's claimed lost profits suspect.

              Second, the expert's methodology with regard to the tampered group is—

at the least—questionable.5 It is unexplained in our record how unspecified "contact"

between Mr. Coghlan, Ms. del Grosso, or a salesperson and BBG customers with whom

ICM did no business could possibly be linked to sales lost to BBG. Here, the

conclusions of BBG's expert about millions of dollars in lost profits appear to be based

on nothing more than conjecture and surmise. In this regard, we note that the lost

profits claimed for the tampered group are substantially greater than the lost profits

claimed for customers to whom ICM actually made sales.

              Third, even if one accepts that the testimony of BBG's expert properly

linked the Appellants' conduct to the lost profits claimed, a reversal and remand for a

new trial on lost profits would still be required. A new trial is necessary because the

rulings at trial effectively prevented the Appellants from presenting their defenses that


              5
                The discussion of the methodology pertinent to the tampered group is by
way of example only. A detailed examination of the methodology employed by BBG's
expert is beyond the scope of this opinion. Because the issue of BBG's lost profits must
be tried again under a correct rule of proof, we will not discuss the testimony of BBG's
expert in its entirety.



                                           - 19 -
BBG's losses were not as great as they claimed and that most of the lost profits claimed

by BBG were attributable to causes other than their conduct. The trial court's rulings at

the trial stymied the Appellants from raising these issues through cross-examination of

BBG's witnesses and from the presentation of their own evidence. The trial court also

declined to consider the Appellants' arguments about other possible causes of the

claimed lost profits.

              The entry of the default against the Appellants on the amended

counterclaim should not have granted BBG a blank check on which it could insert the

numbers it chose untethered to any link to the effects of the Appellants' conduct. On the

contrary, BBG's lost profits claim was limited to those damages that it could establish

were incurred as a consequence of the Appellants' conduct with reasonable specificity

and certainty. The trial court's pretrial ruling and rulings at the trial on causation raised

the very real possibility that BBG received an undeserved windfall on its lost profits

claim. Because these rulings were in error, we must reverse the awards for lost profits

and remand for a new trial limited to that issue.

C. BBG's Entitlement to Attorney's Fees

              The parties stipulated to the reasonable amount of BBG's attorney's fees

and costs as $275,000. On appeal, the Appellants argue that a reversal of the

judgment for damages necessarily requires reversal of the portion of the judgment

representing attorney's fees and costs. See Maynard v. Fla. Bd. of Educ. ex rel. Univ.

of S. Fla., 19 So. 3d 347, 347 (Fla. 2d DCA 2009); Wagner v. Uthoff, 868 So. 2d 617,

618-19 (Fla. 2d DCA 2004). Under the law applicable to the award of attorney's fees in

this case, we disagree.




                                            - 20 -
              The trial court made its award of attorney's fees to BBG under Count V of

its amended counterclaim, the FDUTPA claim. BBG's recovery of its FDUTPA claim is

not affected by the reversal of the recovery of lost profits. On the contrary, BBG's

recovery on the FDUTPA claim included disgorgement of Mr. Coghlan's salary and

bonuses, disgorgement of Ms. del Grosso's salary and bonuses, and the recovery of

miscellaneous expenses incurred. There was no recovery for lost profits on the

FDUTPA claim. The award of attorney's fees on the FDUTPA claim need not be

allocated to services specific to that claim:

              [I]n actions containing a deceptive trade practices count and
              one or more alternative theories of recovery, all based on the
              same transaction, no allocation of attorney's services need
              be made except to the extent counsel admits that a portion
              of the services was totally unrelated to the 501 claim or it is
              shown that the services related to issues, such as punitive
              damages, which were clearly beyond the scope of a 501
              proceeding.

Heindel v. Southside Chrysler-Plymouth, Inc., 476 So. 2d 266, 272 (Fla. 1st DCA 1985);

see also Diamond Aircraft Indus., Inc. v. Horowitch, 107 So. 3d 362, 370-71 (Fla. 2013)

(quoting Heindel with approval); Mandel v. Decorator's Mart, Inc. of Deerfield Beach,

965 So. 2d 311, 314 (Fla. 4th DCA 2007) (same). Here, the Appellants have made no

claim that the services rendered by BBG's attorneys on the other counts of the

amended counterclaim were unrelated to the services rendered on the FDUTPA claim.

Because the award of attorney's fees on the FDUTPA claim remains unaffected by the

reversal of the damages award for lost profits and no allocation of the attorney's fee

award is required, we must affirm the award of attorney's fees and costs.

                                    IV. CONCLUSION




                                            - 21 -
             In summary, we affirm the sanctions order that struck the Appellants'

pleadings and entered a default against them on BBG's amended counterclaim. We

reverse the Order on Trial and the final judgment to the extent that they awarded lost

profits and prejudgment interest thereon to BBG. We remand this case to the trial court

for a new trial limited to the issue of BBG's lost profits. We affirm the other damages

awards, including those for disgorgement of salaries and bonuses against Mr. Coghlan

and Ms. del Grosso and the awards for additional expenses and punitive damages

against all of the Appellants. We also affirm the award of attorney's fees and costs.

             Affirmed in part, reversed in part, and remanded.



MORRIS and SLEET, JJ., Concur.




                                          - 22 -
