Legal Malpractice: Standing, Privity; Pleading: Separation of Distinct Claims Into Separate Counts, Short and Plain Statement of Ultimate Facts, Stream of Consciousness Pleading, Lack of Minimal Organization and Coherence, Conclusory Allegations, Inconsistency Between Complaint and Exhibit; Amendment: Plaintiff Should be Given At Least One Chance To Amend To State A Cause of Action

K.R. Exchange Services, Inc. v. Fuerst, Humphrey, Ittleman, PL, ___ So. 3d ___, 35 Fla. L. Weekly D2317 (Fla. 3d DCA 10/20/10)

A Florida limited liability company served as a consultant for an Israeli corporation.  The Israeli corporation would pay commissions to the Florida company in return for the right to deposit the Israeli corporation’s checks into the Florida company’s bank account.  When the Florida company’s bank refused to accept the checks, the Florida company retained a law firm to resolve the problem.  The law firm was unsuccessful in this undertaking, and the Florida company and the Israeli corporation sued the law firm and one of its lawyers for legal malpractice.  The trial court dismissed with prejudice the Israeli corporation’s claim for lack of standing because of the absence of privity of contract between the law firm and the corporation.  The appellate court held that dismissal was appropriate, but the dismissal should have been without prejudice. (1) The complaint was pled inadequately.  (a) The Israeli corporation failed to separate each of its distinct claims into separate counts.  Instead, it lumped together all of its claims against all of the defendants.  (b) Rather than setting forth “a short and plain statement of the ultimate facts showing that the pleader is entitled to relief,” the Israeli corporation engaged in stream of consciousness pleading against two individuals and two entities without even “minimal organization and coherence,” making allegations against the “defendants” without specifying the particular defendants to which it was referring.  (2) Although the Israeli corporation alleged that it was an intended third party beneficiary of the contract for legal services between the Florida company and the law firm, the retainer agreement attached to the complaint contradicted this assertion.  “The agreement refer[ed] only to [the Florida company], [did] not show an intent . . . directly and primarily [to] benefit [the Israeli corporation], and [was] inconsistent with the complaint’s allegation regarding [the Israeli corporation] as an intended third-party beneficiary.”  (3) The allegations of malpractice were conclusory. (4) Nevertheless, the dismissal should have been without prejudice because this was the Israeli corporation’s first attempt to state a cause of action, and it should have been given at least one more opportunity to do so because the court had not “yet concluded that amendment would be futile or would prejudice [the defendants].”