[CLC-Discussion] Fw: Seller Liability under Johnson

Mon Jul 1 12:04:19 PDT 2013

Billian v. Mobil at 710 So. 2d 984 is very instructive on the relationship and history of fraudulent misrepresentation, negligent misrepresentation and non-disclosure.  In the instant example, the seller knew of a fact that (presumably) materially affected the price of the home.   The seller failed to disclose at least the known extent of the damage.  Consequently, this is a Johnson v. Davis type of fraud for failing to disclose.   With J v. D, the seller must “know” of a fact.  Should have known is not the standard. 

If the seller made a representation, for example in a disclosure form or in the contract itself saying that they know of nothing that would materially affect the value of the home, and the representation is inaccurate, and the seller knows it or  even if the seller doesn’t know whether or not the statement is true or false, then if the buyer can prove they relied on the representation to their detriment they may also have a claim for fraudulent misrepresentation.  

“Should have known” only arises in the context of a negligent misrepresentation.   First, a representation is required.  The representation has to be inaccurate.  The seller is negligent in making the representation (should have known it was inaccurate), the buyer relies, and the reliance is detrimental.  

Robert P. Butts, Esq.

Board Certified as a Specialist in Construction Law

FISHER, BUTTS, SECHREST & WARNER, P.A.

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From: clc-discussion-bounces at lists.flabarrpptl.org [mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Nuechterlein, Michael F.
Sent: Monday, July 01, 2013 2:14 PM
To: 'fred.dudley at hklaw.com'; debianchi236 at bellsouth.net; ian at mkpalaw.com; thomas.cooney at browardschools.com
Cc: clc-discussion at lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Fw: Seller Liability under Johnson

Fred, do you have the Name of, and/or cite on,  that case?  Thanks for your help.

Mike.

From: clc-discussion-bounces at lists.flabarrpptl.org [mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of fred.dudley at hklaw.com
Sent: Monday, July 01, 2013 1:09 PM
To: debianchi236 at bellsouth.net; ian at mkpalaw.com; thomas.cooney at browardschools.com
Cc: clc-discussion at lists.flabarrpptl.org
Subject: Re: [CLC-Discussion] Fw: Seller Liability under Johnson

A recent case decision has clarified that "negligent" misrepresentation is NOT sufficient for cause of action under Johnson v. Davis.

Frederick Dudley | Holland & Knight
Board Certified Construction Lawyer
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Phone 850.425.5668 | Fax 850.224.8832 | Cell 850.294.3471
 <mailto:fred.dudley at hklaw.com> fred.dudley at hklaw.com |  <http://www.hklaw.com/> www.hklaw.com 

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From: clc-discussion-bounces at lists.flabarrpptl.org [mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Paul V. DeBianchi
Sent: Monday, July 01, 2013 12:52 PM
To: Ian Kravitz; Thomas C. Cooney
Cc: Construction Law Discussion
Subject: [CLC-Discussion] Fw: Seller Liability under Johnson

The reference I have is an old one but take a look at Atlantic Nat'l Bank of Florida v. Vest, 480 So. 2d 1328, rev. denied 491 So. 2d 281, and 508 So. 2d 16 (Fla. 1987) for the elements.

"The tort is often mentioned and rarely explained.  All that must be alleged in a suit for negligent misrep is not that that the representor intended to make a false statement, but rather that the representation was made under circumstances in which its falsity should have been known." Wallerstein, 573 So. 2d 9.

Elements:
      1. misrep; 2. representor must either know of the misrep, must make the misrep w/o knowledge of its truth or falsity, or must make the rep under circumstances in which he ought to have known of its falsity; 3. representor must intend that the rep induce another to act; 4. injury to party acting in justifiable reliance on misrep

Finally, Check out the Florida Standard Jury Instructions Civil
MI 8 for the elements

Here are some others.

Paul V. DeBianchi 
Paul V. DeBianchi P.A.
111 S. E. 12th St.
Fort Lauderdale, Florida, 33316-1813
Phone: 954-764-6133
Fax: 954-764-6131
E-mail: DeBianchi236 at BellSouth.net
Florida Bar Number: 155341

----- Original Message ----- 

From: Paul V. DeBianchi <mailto:debianchi236 at bellsouth.net>  

To: Ian at mkpalaw.com ; Thomas C. Cooney <mailto:thomas.cooney at browardschools.com>  

Cc: clc-discussion at lists.flabarrpptl.org 

Sent: Monday, July 01, 2013 12:48 PM

Subject: Re: [CLC-Discussion] Seller Liability under Johnson

Remember, also that Freud may involve a negligent misrepresentation.See Golden v. Complete Holdings, 818 F. Supp. 1495 (M.D. Fla. 1993)

Same for innocent misrepresentation: 

Innocent Misrepresentation of Fact. According to the weight of authority, misrepresentation of material facts, although innocently made, if acted on by the other party to his detriment, will constitute a sufficient ground for rescission and cancellation in equity. The real inquiry is not whether the party making the representation know it to be false, but whether the other party believed it to be true and was misled by it in making the contract; and, whether the misrepresentation is made innocently or knowingly, the effect is the same. It is as conclusive a ground of relief in equity as a willful and false assertion, for it operates as a surprise and imposition on the other party; and in such case the party must be held to his representations.'  Sutton v. Cast-Crete Corp. of Fla., 197 So.2d 556 (Fla.App. 2 Dist., 1967)     See also Jones v. Walter C. Hardesty, Inc., 1930, 100 Fla. 155 <https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=bq%2bS2nNuuWjdMF%2fRS7%2fbblEeMXEmm%2fHA475%2btJIby9C2PC1LIseq1YkOL4NepfYiva6EkwKhSM%2bC2%2fUTly2pANNx9vj2%2fjg%2bq5sVCdFHQ7X9sLshAs0U42%2fOsXOTfIpoiukyOqsvmjT%2f%2f2ECqYus%2fH8o23GqX9nnAOuwj5wF331FB1LFJLQ4n8eLgV39kUOG&ECF=Jones+v.+Walter+C.+Hardesty%2c+Inc.%2c+1930%2c+100+Fla.+155> , 129 So. 497 <https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=bq%2bS2nNuuWjdMF%2fRS7%2fbblEeMXEmm%2fHA475%2btJIby9C2PC1LIseq1YkOL4NepfYiva6EkwKhSM%2bC2%2fUTly2pANNx9vj2%2fjg%2bq5sVCdFHQ7X9sLshAs0U42%2fOsXOTfIpoiukyOqsvmjT%2f%2f2ECqYus%2fH8o23GqX9nnAOuwj5wF331FB1LFJLQ4n8eLgV39kUOG&ECF=129+So.+497> ; Peace River Phosphate Min. Co. v. Thomas A. Green, Inc., 1931, 102 Fla. 370 <https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=bq%2bS2nNuuWjdMF%2fRS7%2fbblEeMXEmm%2fHA475%2btJIby9C2PC1LIseq1YkOL4NepfYiva6EkwKhSM%2bC2%2fUTly2pANNx9vj2%2fjg%2bq5sVCdFHQ7X9sLshAs0U42%2fOsXOTfIpoiukyOqsvmjT%2f%2f2ECqYus%2fH8o23GqX9nnAOuwj5wF331FB1LFJLQ4n8eLgV39kUOG&ECF=Peace+River+Phosphate+Min.+Co.+v.+Thomas+A.+Green%2c+Inc.%2c+1931%2c+102+Fla.+370> , 135 So. 828 <https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=bq%2bS2nNuuWjdMF%2fRS7%2fbblEeMXEmm%2fHA475%2btJIby9C2PC1LIseq1YkOL4NepfYiva6EkwKhSM%2bC2%2fUTly2pANNx9vj2%2fjg%2bq5sVCdFHQ7X9sLshAs0U42%2fOsXOTfIpoiukyOqsvmjT%2f%2f2ECqYus%2fH8o23GqX9nnAOuwj5wF331FB1LFJLQ4n8eLgV39kUOG&ECF=135+So.+828> , and Robson Link  <https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=bq%2bS2nNuuWjdMF%2fRS7%2fbblEeMXEmm%2fHA475%2btJIby9C2PC1LIseq1YkOL4NepfYiva6EkwKhSM%2bC2%2fUTly2pANNx9vj2%2fjg%2bq5sVCdFHQ7X9sLshAs0U42%2fOsXOTfIpoiukyOqsvmjT%2f%2f2ECqYus%2fH8o23GqX9nnAOuwj5wF331FB1LFJLQ4n8eLgV39kUOG&ECF=Robson+Link+%26+Co.+v.+Leedy+Wheeler+%26+Co.%2c+1944%2c+154+Fla.+596> & Co. v. Leedy Wheeler & Co., 1944, 154 Fla. 596, 18 So.2d 523 <https://apps.fastcase.com/Research/Pages/Document.aspx?LTID=bq%2bS2nNuuWjdMF%2fRS7%2fbblEeMXEmm%2fHA475%2btJIby9C2PC1LIseq1YkOL4NepfYiva6EkwKhSM%2bC2%2fUTly2pANNx9vj2%2fjg%2bq5sVCdFHQ7X9sLshAs0U42%2fOsXOTfIpoiukyOqsvmjT%2f%2f2ECqYus%2fH8o23GqX9nnAOuwj5wF331FB1LFJLQ4n8eLgV39kUOG&ECF=18+So.2d+523> .

----- Original Message ----- 

From: Thomas C. Cooney <mailto:thomas.cooney at browardschools.com>  

To: Ian at mkpalaw.com 

Cc: clc-discussion at lists.flabarrpptl.org 

Sent: Monday, July 01, 2013 11:41 AM

Subject: Re: [CLC-Discussion] Seller Liability under Johnson

Ian:

The answer relates back to the Seller's knowledge of the full extent of termite damage.  Assuming that a standard residential disclosure form was used for your client's transaction, what were the specific disclosures provided by the Seller regarding both inspection and treatment for "termites, dry rot, pest or wood destroying organisms?" 

In this instance you indicate that Seller disclosed prior treatment.  Did Seller also provide the date, type of treatment and company name?  Any proposal/estimate/contract and/or invoice from the treating company should have indicated the extent of infestation to be treated.  If the full extent of infestation/damage is indicated on any proposal/estimate/contract and/or invoice, then an argument could be made that the Seller was on notice and would have a duty to disclose the full extent of such termite damage. 

Thomas C. Cooney, Esq.

Assistant General Counsel

Office of The General Counsel

School Board of Broward County, Florida

754-321-2050

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Ian Kravitz <Ian at mkpalaw.com> on Monday, July 01, 2013 at 10:44 AM -0400 wrote:

Interesting fact pattern.  Seller discloses prior treatment of termite damage.  Some minor termite damage visible from buyer inspection.  In reality, extensive termite damage had been covered up by seller using much effort, including actually plastering rotten wood, texturing to look like actually wood, and then painting over.  After moving in, covered up damage begins to expand and fall from home.  Further inspection discovers extent of damage.

Obviously some termite damage was open and obvious.  However, extent of the damage was not open and obvious.  While a further detailed inspection may have discovered the greater extent of damage, Johnson does not generally require inspection when seller has intentionally covered up extent of damage.

Any thoughts on how this one plays out if buyer sues seller for intentionally covering up “extent” of the damage?

Ian T. Kravitz, Esquire    <http://www.mkpalaw.com/Attorneys/Ian-T-Kravitz.shtml> view my bio

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