Opinion
Case No. 96-3458
Opinion filed April 3, 1998 Rehearing Denied April 28, 1998
Appeal from the Circuit Court for Volusia County, Robert K. Rouse, Jr., Judge.
Arthur J. Ranson, III, Orlando, for Appellants.
Stephen A. Weinstein of Unger, Swartwood, Latham Indest, P.A., Orlando, for Appellees, Hudson Realty, Inc. and Dennis M. Buckley.
No Appearance for Appellees, Transact Realty Investment Corporation, Inc., Sheriff Guindi, Edward Heaphy, Jerry B. Wells, Esquire, David F. Vedder, Esquire, Robert W. Elton, Esquire, and John C. Revis, Esquire.
We affirm the dismissal of the appellant's complaint against Hudson Realty, Inc. and Dennis M. Buckley with prejudice. The allegations against these defendants are all contained in a single count entitled, "Breach of Duty, Fraud and Misrepresentation." Hudson Realty was the listing broker for a motel on the market for sale. The listing sheet contained the income and expenses for the motel's operation in 1989 and 1990 as supplied by the seller. Appellants purchased the property. An addendum to the purchase contract made the sale contingent upon the sellers furnishing an income and expense statement for 1991. This was transmitted by Hudson Realty to the Thibault's realtor upon receipt from the seller. The complaint is that these figures were not a true picture of the operation of the motel. The lower court dismissed the complaint with prejudice relying on principles of caveat emptor.
Although caveat emptor would not bar a claim of fraud based on affirmative misrepresentation, appellants have not met the stringent pleading requirements necessary to state a cause of action for fraud. Fla. R. Civ. P. 1.120. Most of the facts contained in the complaint are not relevant to a fraud claim. All that is pleaded in support of the fraud theory is that the broker "either knew or should have known" that the financial information supplied by the seller was false because he was the "owner of like hotel/motel properties in Daytona Beach." These allegations fall far short of the elements of the cause of action for fraud. Similarly, even under the Florida supreme court's recent decision recognizing the tort of negligent misrepresentation as set forth in Restatement (Second) of Torts § 552 (1977), the elements of this tort are not pleaded. The third tort included in this count, "breach of duty," does not exist in this context.
Gilchrist Timber Co. v. ITT Rayonier, Inc., 696 So.2d 334, 337 (Fla. 1997).
AFFIRMED.
GOSHORN, J., concurs.
THOMPSON, J., dissents, with opinion.
I respectfully dissent because I believe the appellants have sufficiently stated a cause of action. Further, when the trial court was presented with two alternative bases for dismissal — failure to state a cause of action and caveat emptor — it ruled that the doctrine of caveat emptor was the sole basis.
The Thibaults are Canadian citizens legally residing and conducting business in Volusia County. In February 1992, they contacted a realty company for assistance in locating a beach front motel to purchase in Daytona Beach. The company notified the Thibaults that the Cardinal Motel was for sale. Hudson Realty was the listing broker for the motel. The listing sheet provided by Hudson Realty reported the income and expenses of the motel for the years 1989 and 1990. Based on that information, the Thibaults signed a contract on 19 February 1992 to purchase the motel for $575,000 and submitted the contract to the sellers for their acceptance. An addendum to the contract made the sale contingent upon the sellers furnishing, within three days of acceptance, a statement of the motel's income and expenses for 1991.
By facsimile, Hudson Realty sent a document entitled "Cardinal Motel Win-and-Loss Statement 01.01.91 to 12.31.91" to the Thibaults' agent. Upon receipt of the statement, the Thibaults signed a document stating: "We have reviewed the figures for 1991 for the Cardinal Motel. These figures are satisfactory to us. With this letter we are removing the contingency regarding 1991 income and expenses." The sellers executed the contract on 26 February 1992.
On 16 October 1995, the Thibaults filed suit against Hudson Realty and its agent Buckley for breach of duty, fraud and misrepresentation. The Thibaults alleged that the listing sheet provided by Hudson Realty and Buckley overstated the motel's 1990 income by over 100 percent and substantially understated operating expenses. They also alleged that the win-and-loss statement materially misrepresented the actual income and expenses of the motel for 1991. Claiming fraud and/or negligent misrepresentation, the Thibaults alleged that Hudson Realty and Buckley "intentionally and with reckless and negligent disregard for the truth" provided information they knew or should have known was false; the Thibaults relied on the assertions made in the listing sheet and win-and-loss statement; due to inexperience and a "severe language disadvantage;" the Thibaults relied on those assertions; and, as a result, they purchased an unprofitable business and suffered $200,000 in damages. These allegations constituted a single count. Based upon these facts, the Thibaults' complaint sufficiently, though inartfully, pleaded claims for fraud and negligent misrepresentation.
In a separate count, the Thibaults made similar allegations against the realty company they first contacted and its agents. Those claims were settled after summary judgment in the defendants' favor.
Hudson Realty and Buckley filed a motion to dismiss for failure to state a cause of action. At the motion hearing, they asserted, in the alternative, that the action was barred by the doctrine of caveat emptor. The trial court granted the motion based on that doctrine. I find this ruling incorrect.
Although no longer applicable to residential real estate transactions, Johnson v. Davis, 480 So.2d 625 (Fla. 1985), the doctrine of caveat emptor still applies to sales of commercial property, Kaplan v. Peterson, 674 So.2d 201, 203 (Fla. 5th DCA 1996). In the latter arena, however, caveat emptor bars only claims for intentional nondisclosure of material facts; the doctrine does not bar claims alleging fraudulent misrepresentations or active concealment. Besett v. Basnett, 389 So.2d 995 (Fla. 1980); Wasser v. Sasoni, 652 So.2d 411 (Fla. 3d DCA 1995); Green Acres, Inc. v. First Union Nat. Bank of Florida, 637 So.2d 363 (Fla. 4th DCA 1994). In addition, caveat emptor is not relevant to negligent misrepresentation claims. See Gilchrist Timber, Co. v. ITT Rayonier, Inc., 696 So.2d 334 (Fla. 1997)(holding that comparative negligence principles apply to negligent misrepresentations). In conclusion, based upon the facts, I would find that the trial court erred in dismissing the Thibaults' fraud and negligent misrepresentation claims on the basis of caveat emptor.