Mazzoni Farms, Inc. v. EI DuPont De Nemours and Co.

Citation761 So.2d 306
Decision Date08 June 2000
Docket Number No. SC95411., No. SC94846
PartiesMAZZONI FARMS, INC., etc., et al., Appellants, v. E.I. DuPONT DE NEMOURS AND COMPANY, etc., et al., Appellees. Foliage Forest, Inc., etc., et al., Appellants, v. E.I. DuPont de Nemours and Company, etc., et al., Appellees.
CourtUnited States State Supreme Court of Florida

Elizabeth K. Russo of Russo Appellate Firm, P.A., Miami, Florida, and Ferraro & Associates, P.A., Miami, Florida, for Appellants.

A. Stephens Clay, William H. Boice, and James F. Bogan, III of Kilpatrick Stockton LLP, Atlanta, Georgia; and Paul L. Nettleton of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Miami, Florida, for Appellees.

QUINCE, J.

We have for review the following two questions of Florida law certified by the United States Court of Appeals for the Eleventh Circuit to be determinative of a cause pending in that court and for which there appears to be no controlling precedent.

(1) DOES A CHOICE-OF-LAW PROVISION IN A SETTLEMENT AGREEMENT CONTROL THE DISPOSITION OF A CLAIM THAT THE AGREEMENT WAS FRAUDULENTLY PROCURED EVEN IF THERE IS NO ALLEGATION THAT THE CHOICE-OF-LAW PROVISION ITSELF WAS FRAUDULENTLY PROCURED?
(2) IF FLORIDA LAW APPLIES, DOES THE RELEASE IN THESE SETTLEMENT AGREEMENTS BAR
PLAINTIFFS' FRAUDULENT INDUCEMENT CLAIMS?

We have jurisdiction. See art. V, § 3(b)(6), Fla. Const. For the reasons discussed below, we answer the first certified question in the affirmative and the second certified question in the negative with respect to the plaintiffs whose causes of action are controlled by Florida law.

This case involves the consolidated cases of Mazzoni Farms, Inc. v. E.I. Dupont De Nemours & Co., 166 F.3d 1162 (11th Cir. 1999) and Foliage Forest, Inc. v. E.I. Dupont De Nemours & Co., 172 F.3d 1284 (11th Cir.1999). The Mazzoni plaintiffs, Jack Martin Greenhouses (JMG) and Mazzoni Farms, Inc. (Mazzoni), and the Foliage plaintiffs, Foliage Forest, Inc. (Foliage), Castleton Gardens, Inc. (Castleton), Country Joe's Nursery, Inc. (Country Joe), Palm Beach Greenery, Inc. (PBG), and Morningstar Nursery, Inc. (Morningstar), are commercial plant nurseries who sued defendants, E.I. DuPont De Nemours and Company and Crawford & Company (DuPont), alleging that defendants fraudulently induced them into settling products liability claims for mass destruction of trees and plants in their nurseries. DuPont manufactures and sells to plant nurseries fungicides, including Benlate—the fungicide alleged to have caused property damage to plants in these nurseries.

In the early 1990s, JMG and Mazzoni sued DuPont1 asserting products liability claims based on property damage and actual fraud claims based on DuPont's alleged concealment of Benlate's defects. JMG and Mazzoni, however, settled these claims with DuPont. The settlement agreements released DuPont from all claims, whether known or unknown, and contained a choice-of-law provision stating that Delaware law governed the release.2 The agreement further provided that the nurseries would not commence any action "based upon or in any way related to" the released claims. Mazzoni Agreement at 2, para. 3; JMG Agreement at 2, para. 3. In addition, the nurseries warranted that they "freely and voluntarily executed [the] release." Id. at 5, para. 10. Foliage and Castleton executed releases that were identical to the Mazzoni and JMG agreements.

Morningstar, PBG, and Country Joe, however, executed releases that were different in two material respects. First, their agreements (hereinafter Morningstar Agreement, PBG Agreement, and Country Joe Agreement respectfully) did not contain a Delaware choice-of-law provision. Second, their agreements contained narrower release language. These nurseries discharged DuPont "from any and all claims, actions, causes of action, including consequential damages, demands, rights, damages, costs, losses, and any other liability or expense of whatsoever kind, which the undersigned ... now has or may or shall have by reason of the use of or application of DuPont Benomyl products." Morningstar Agreement at 1; PBG Agreement at 1; Country Joe Agreement at 1.

After executing the releases, the nurseries discovered information which led them to believe that DuPont intentionally concealed the value of the nurseries' claims to induce settlement. Specifically, the nurseries alleged that DuPont had discovered the perilous effects of Benlate in its field tests, destroyed the test plants and fields, and required all of the participants in the testing process to sign confidentiality papers. Based on these allegations of affirmative misrepresentation, the nurseries sued, claiming DuPont fraudulently induced them to execute the releases.

Although the nurseries originally filed their suits in state court, DuPont removed the cases to federal district court based on diversity jurisdiction and moved for dismissal.3 The district court in both Mazzoni and Foliage granted the motions to dismiss, finding the releases in the settlement agreements barred the fraudulent inducement claims. The district court held Florida law requires parties asserting fraudulent inducement claims to choose between an equitable or legal remedy. The district court further held the nurseries were unable to maintain the present actions because they ratified the settlement agreements by electing the legal remedy of damages instead of the equitable remedy of recision, a remedy which would have required them to return the settlement proceeds.

The Foliage nurseries moved for reconsideration of the orders of dismissal and requested leave to file amended complaints. The proposed amended complaints included, among other things, alternative claims for rescission. The district court, however, denied both motions, reiterating that the settlement agreements precluded the fraudulent inducement claims. The court further noted the alternative rescission claims were defective because the nurseries failed to state they would return the settlement proceeds.

The nurseries subsequently appealed the cases to the Eleventh Circuit. In Mazzoni, the Eleventh Circuit recognized that although the choice-of-law provision would be enforceable under section 201 of the Restatement (Second) of Conflict of Laws ("Restatement"),4 no Florida court had considered section 201. See Mazzoni, 166 F.3d at 1164

. Further, the court recognized that while Florida courts applied reasoning analogous to the Restatement's approach in construing arbitration clauses, those cases were distinguishable because of their reliance on federal policy favoring arbitration. See id. As a result, the Eleventh Circuit concluded that Mazzoni involved questions of state law for which there was no definitive controlling precedent. Accordingly, the Eleventh Circuit certified the relevant questions to this Court. See id. at 1165. Another panel of the Eleventh Circuit, acknowledging the prior Mazzoni certification, consolidated Foliage with Mazzoni, and certified the same questions. See Foliage, 172 F.3d at 1285. The questions as certified by the Eleventh Circuit are:

(1) DOES A CHOICE-OF-LAW PROVISION IN A SETTLEMENT AGREEMENT CONTROL THE DISPOSITION OF A CLAIM THAT THE AGREEMENT WAS FRAUDULENTLY PROCURED, EVEN IF THERE IS NO ALLEGATION THAT THE CHOICE-OF-LAW PROVISION ITSELF WAS FRAUDULENTLY PROCURED?
(2) IF FLORIDA LAW APPLIES, DOES THE RELEASE IN THESE SETTLEMENT AGREEMENTS BAR PLAINTIFFS' FRAUDULENT INDUCEMENT CLAIMS?

Mazzoni, 166 F.3d at 1165; Foliage, 172 F.3d at 1287. If the answer to the first question is in the affirmative, upholding the choice-of-law provision, that answer becomes dispositive for Mazzoni, JMG, Foliage, and Castleton because these nurseries signed settlement agreements with a Delaware choice-of-law provision. In that event, the second question, concerning fraudulent inducement under Florida law, need not be resolved for the Mazzoni plaintiffs. If, however, the answer to the first question is in the negative, then we must also answer the second question with regard to these plaintiffs. The second question must be addressed in either event for Country Joe, PBG, and Morningstar because their agreements do not contain a choice-of-law provision in favor of Delaware law. Accordingly, Florida law automatically applies to these three plaintiffs.

I. Certified Question I

At the outset, we acknowledge the Eleventh Circuit's statement that its "sterile phrasing of the issues need not preclude [us] from inquiring into the specifics of these cases." See Mazzoni, 166 F.3d at 1165

. That being said, we recognize that the nurseries elected to affirm rather than rescind the settlement agreements. Consequently, we restrict the inquiry of the first certified question to situations where the parties have elected to affirm the contract and sue for damages. Thus, we have rephrased the first certified question to read:

(1) DOES A CHOICE-OF-LAW PROVISION IN A SETTLEMENT AGREEMENT CONTROL THE DISPOSITION OF A CLAIM THAT THE AGREEMENT WAS FRAUDULENTLY PROCURED IF THE DEFRAUDED PARTY HAS ELECTED TO AFFIRM THE CONTRACT AND SUE FOR DAMAGES?

As a threshold matter, the nurseries contend that the Court need not answer the first certified question. They offer the following syllogism: because DuPont did not specify the basis in Delaware law or the differences between Delaware law and Florida law,5 there is a legal presumption that Delaware law is the same as Florida law, and therefore Florida law applies. The nurseries further assert that both Matsuura v. Alston & Bird, 166 F.3d 1006 (9th Cir.1999), and Fuku-Bonsai, Inc. v. E.I. DuPont de Nemours & Co., 187 F.3d 1031 (9th Cir.1999), interpreted Delaware law to provide for an election of remedies between rescission and suing for damages. Because Florida law similarly provides for an election of remedies, they argue that Florida law, not Delaware law, should apply.

Apparently, the nurseries have misinterpreted the law by incorrectly relying on cases where choice-of-law provisions did not...

To continue reading

Request your trial
182 cases
  • Malicki v. Doe
    • United States
    • Florida Supreme Court
    • March 14, 2002
    ... ... Primera Asemblea de Dios, Inc., No. 05-96-01458, 1998 WL 242412, at *3 (Tex.Ct.App. May ... See Mazzoni Farms, Inc. v. E.I. DuPont De Nemours & Co., 761 So.2d ... ...
  • Florida Evergreen Foliage v. Ei Du Pont De Nemours
    • United States
    • U.S. District Court — Southern District of Florida
    • March 8, 2001
    ... ... Steven J. Gutter, et al., Plaintiffs, ... E.I. Dupont de Nemours, et al., Defendants ... No. 98-2256-Civ ... No ... In September 1992, Green Leaf Nursery, Inc. ("Green Leaf"), a Florida plant nursery, and its owner, Gus Pena ... Mazzoni Farms, Inc. v. E.I. DuPont De Nemours & Co., 761 So.2d 306, 313 & 316 ... ...
  • Northland Cas. Co. v. Hbe Corp.
    • United States
    • U.S. District Court — Middle District of Florida
    • September 13, 2001
    ...may not apply the laws of another state if to do so would be repugnant to Florida's public policy. Mazzoni Farms, Inc. v. E.I. DuPont De Nemours & Co., 761 So.2d 306, 311 (Fla.2000). The Supreme Court of Florida has enunciated a strong public policy against allowing insurance coverage for i......
  • Panthera Rail Car LLC v. Kasgro Rail Corp.
    • United States
    • U.S. District Court — Western District of Pennsylvania
    • December 4, 2013
    ... ... Id. ; Inv. Syndicate of Am., Inc. v. City of Indian Rocks Beach, 434 F.2d 871, 876 (5th ... See also Mazzoni Farms, Inc. v. E.I. DuPont De Nemours & Co., 761 So.2d ... ...
  • Request a trial to view additional results
1 books & journal articles
  • Contract cases
    • United States
    • James Publishing Practical Law Books Florida Causes of Action
    • April 1, 2022
    ...repudiates the transaction, or damages, whereby the party ratifies the contract. Mazzoni Farms, Inc. v. E.I. DuPont De Nemours and Co ., 761 So.2d 306, 313 (Fla. 2000). 3. Equitable Lien: As part of the relief granted in rescission, a court may impose an equitable lien. Billian v. Mobile Co......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT