Florida Fourth DCA Clarifies Limits of Attorney Liability in Third‑Party Opinion Letters

The Florida Fourth District Court of Appeal recently affirmed that an attorney who prepares an opinion letter on behalf of the borrowers for the benefit of the lender in an arms-length transaction does not owe a duty to the lender. In this case, a $7.5 million loan was issued to the operators of ultra-luxury auto dealerships, and its cars, such as a 2019 McLaren Senna, were used as collateral for the loan.

The defendant issued an opinion letter on behalf of the borrowers, which was required by the claimant as a condition for funding the loan. The opinion letter contained representations based on the loan documents, such as that the borrowers had no known pending or threatened claims, no other encumbrances, and that claimant would have a valid security interest in the autos used as collateral. After the borrowers defaulted on the loan, claims for negligence and breach of fiduciary duty were brought against the defendant for alleged misrepresentations in the opinion letter. The claimant demanded $9,000,000 in damages, contending that it wouldn’t have made the loan if not for the defendant’s misrepresentations.

The claimant filed competing summary judgment motions. Ultimately, the judge agreed with the defense argument that despite stating in the opinion letter that the claimant could rely on his representations, there is no duty imposed on a party or its counsel to act for the benefit or protection of the opposing party in an arms-length commercial transaction. If the claimant chose to rely on such representations, that is a calculated risk with no recourse against the defendant for its own failure to investigate further. A final judgment in favor of the defendant with an award of costs was entered. The claimant appealed to the 4th DCA, who affirmed the judgment. This case expands past precedent and is highly instructive for attorneys issuing third party opinion letters and those that choose to rely upon them.