Florida Litigation Guide

Fraud - Negligent Misrepresentation

[1] Elements and Case Citations

(1) Defendant made a false statement regarding a material fact;

(2) Defendant knew or should have known the representation was false;

(3) Defendant intended that the representation induce plaintiff to act on it; and

(4) Plaintiff suffered damages in justifiable reliance on the representation.

The elements of claims for fraud in the inducement, fraud in the performance, fraudulent misrepresentation and negligent misrepresentation are identical and differ only by the underlying facts supporting each claim. Compare Pulte Home Corp. v. Osmose Wood Preserving, Inc., 60 F.3d 734, 742 (11th Cir. 1995) (fraud in the inducement), with Baggett v. Electricians Credit Union, 620 So. 2d 784, 786 (Fla. 2d DCA 1993) (negligent misrepresentation), and Johnson v. Davis, 480 So. 2d 625, 627 (Fla. 1985) (fraudulent misrepresentation). The economic loss doctrine bars claims for fraud in the performance, but not claims for fraud in the inducement. See Williams Elec. Co., Inc. v. Honeywell, Inc., 772 F. Supp. 1225, 1238 (N.D.Fla. 1991). Fraud is also known as the tort of deceit. See Crown Eurocars, Inc. v. Schropp, 636 So. 2d 30, 37 (Fla. 2d DCA 1993), aff’d, 654 So. 2d 1158 (Fla. 1995).

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Florida State Courts

Supreme Court: Johnson v. Davis, 480 So. 2d 625, 627 (Fla. 1985)

First District: Jenkins v. W.L. Roberts, Inc., 851 So. 2d 781, 783 (Fla. 1st DCA 2003)

Second District:Rocky Creek Ret. Prop., Inc. v. Estate of Fox ex rel., 19 So.3d 1105, 1110 (Fla. 2d DCA 2009).

Third District: Coral Gables Distrib., Inc. v. Milich, 992 So.2d 302, 303 (Fla. 3d DCA 2008).

Fourth District: Bankers Mut. Capital Corp. v. United States Fidelity and Guaranty Co., 784 So. 2d 485, 490 (Fla. 4^th DCA 2001)

Fifth District: Simon v. Celebration Co., 883 So. 2d 826, 832 (Fla. 5th DCA 2004); See also Townsend v. Morton, __ So.3d __, 2010 WL 2218327, *3 (Fla. 5th DCA June 4, 2010).

Florida Federal Courts

Eleventh Circuit: Tiara Condo. Ass'n, Inc. v. Marsh & McLennan Co., __ F.3d __, 2010 WL 2105923, *3 (11th Cir. May 27, 2010).

Southern District: City of St. Petersburg v. Total Containment, Inc., 265 F.R.D. 630, 638 (S.D. Fla. 2010).

Middle District: Linville v. Ginn Real Estate Co., LLC, __ F.Supp.2d __, 2010 WL 1063704, *3 (M.D. Fla. March 10, 2010).

Northern District: Rogers v. Cisco Sys., Inc., 268 F.Supp.2d 1305, 1312 (N.D. Fla. 2003) (stating that under Florida law the elements of a negligent misrepresentation claim are essentially same as those for fraudulent misrepresentation, except that, instead of knowledge of falsity of representation, plaintiff need only prove that representor reasonably should have known of statement's falsity); See Landmark American Ins. Co. v. Moulton Properties, Inc., 2009 WL 3087266, *7 (N.D. Fla. Sept. 22, 2009) (stating the elements of fraudulent misrepresentation).

References

Restatement (Second) of Torts § 525 (1977 Amendment)

[2] Defenses to Claims for Fraud

(1) Fla. R. Civ. P. 1.110(d) (pleading affirmative defenses), and other standard defenses. See § 60.

(2) Statute of Limitations: § 95.11(3)(j), Fla. Stat. (four years).

(3) The statute of repose provides that a claim for fraud must be commenced ``within 12 years after the date of the commission of the alleged fraud, regardless of the date the fraud was or should have been discovered’’. See § 95.031(2)(a), Fla. Stat.

(4) Mere opinions or misrepresentations of law are not actionable. See e.g., Bailey v. Trenman, Simmons, Kemker, Scharf, Barkin, Frye & O’Neil, 938 F. Supp. 825, 829 (S.D. Fla. 1996).

(5) False statements regarding promised future action are not actionable unless the promisor had no intentions of performance at the time of the representation. See Thor Bear, Inc v. Crocker Mizner Park, Inc., 648 So. 2d 168, 172 (Fla. 4th DCA 1994).

(6) Reliance on misrepresentations are unreasonable where the statements are contained in a subsequent written agreement between the parties. See Barnes v. Burger King Corp., 932 F. Supp. 1420, 1427 (S.D. Fla. 1996).

(7) Waiver is a defense to fraud when the allegedly defrauded party had actual or imputed knowledge of the facts supporting the fraud claim. See Coral Gables Imported Motorcars, Inc. v. Fiat Motors of North America, Inc., 673 F.2d 1234, 1240 (11th Cir. 1982), cert. denied, 459 U.S. 1104 (1983).

(8) Fraudulent misrepresentations do not result from a seller’s puffery in stating opinions or commendations about a product’s value. See Wasser v. Sasoni, 652 So. 2d 411, 412 (Fla. 3d DCA 1995).

(9) When concurrent with a claim for breach of contract, no claim for fraud will lie unless “there is damage due to fraud that is separate from damages resulting from any subsequent contractual breach.” Argonaut Dev. Group, Inc., SWH Funding Corp., 150 F. Supp. 2d 1357, 1363 (S.D. Fla. 2001).

(10) To assert the defense of fraud, the party must allege with specificity the relevant facts and circumstances supporting the defense, as well as all of the essential elements of fraudulent conduct. Cocoves v. Campbell, 819 So.2d 910, 912 (Fla. 4^th DCA 2002).