Besett v. Basnett
| Decision Date | 23 October 1980 |
| Docket Number | No. 57201,57201 |
| Citation | 389 So.2d 995 |
| Parties | Merle E. BESETT, Irene D. Besett, and C. Joe Czerwinski, Petitioners, v. Robert K. BASNETT and Barbara L. Basnett, Respondents. |
| Court | Florida Supreme Court |
C. Guy Batsel and Leo Wotitzky of Wotitzky, Wotitzky, Johnson, Mandell & Batsel, Punta Gorda, and Charles J. Cheves, of Cheves & Rapkin, Venice, for petitioners.
Michael R. Karp of Wood, Whitesell & Karp, Sarasota, for respondents.
The petitioners, Mr. and Mrs. Besett and Mr. Czerwinski, the appellees in the district court and the defendants in the trial court, seek review of the district court's decision in Basnett v. Besett, 371 So.2d 705 (Fla.2d DCA 1979). In this case, the district court found that a fraudulent misrepresentation complaint stated a cause of action even though the plaintiffs failed to allege that they had investigated the truth of the defendants' misrepresentations. We accept jurisdiction on the basis of conflict with Potakar v. Hurtak, 82 So.2d 502 (Fla.1955), approve the decision of the district court, and hold that the plaintiffs' fraudulent misrepresentation complaint does state a cause of action.
The respondents, Mr. and Mrs. Basnett, the appellants in the district court and the plaintiffs in the trial court, were Connecticut residents interested in resettling in Florida. They obtained information about Redfish Lodge from its owners, the Besetts, and the Besetts' real estate broker, Czerwinski. As prospective buyers, they made several trips to Florida to inspect the lodge. They allege that the sellers misrepresented the size of the land offered for sale to be approximately 5.5 acres, when, in fact, the sellers knew it to be only 1.44 acres. They allege that the sellers knowingly misrepresented the amount of the lodge's business for 1976 to be $88,000 and that the roof on a building was brand new, when, in fact, the business income was substantially lower and the roof was not new and leaked. They also allege the defendants misrepresented to them the availability of additional land for expansion. Relying on these misrepresentations, which they allege were made to induce them to buy, they bought the lodge and the land.
Upon the motion of the defendants, the trial court, relying on Potakar v. Hurtak, dismissed the complaint for failing to state a cause of action. The district court reversed on the authority of its decision in Upledger v. Vilanor, Inc., 369 So.2d 427 (Fla.2d DCA 1979), cert. denied, 378 So.2d 350 (Fla.1979). These cases represent the two divergent lines of authority on this issue which have developed in Florida.
Potakar v. Hurtak was also a fraudulent misrepresentation action. Potakar alleged that he had asked Hurtak if the previous lessees of a restaurant had made a profit, and Hurtak replied they had, even though he knew the previous lessees had lost money for several years. Potakar alleged the misrepresentations were made to defraud, deceive, and influence him to lease the business. In affirming the trial court's dismissal of the complaint for failure to state a cause of action, the court observed that there were "no allegations as to the past profits, no showing as to the right of the plaintiff to rely on past statement, no fact stated as to the diligence on the plaintiff's part in investigating, or failing to investigate such facts, or how he was prevented from investigating the past profits of the said business." 82 So.2d at 503. The Court looked to 23 Am.Jur., Fraud and Deceit § 155, at 960-61 (1940), for a statement of the general rule that "a person to whom false representations have been made is not entitled to relief because of them if he might readily have ascertained the truth by ordinary care and attention, and his failure to do so was the result of his own negligence." 82 So.2d at 503. The Court concluded that Potakar's complaint did not state a cause of action.
The district court, in Upledger, reached a different result. In that case, Upledger, who was purchasing an apartment building from Vilanor, relied upon misrepresentations made by Vilanor concerning the amounts for which the apartments rented and the duration of the leases. Upledger admitted that he did not undertake an independent investigation, and he claimed that he would not have completed the purchase if he had known the true facts. In reversing the trial court's dismissal of Upledger's complaint, the district court, recognizing that there are conflicting lines of authority, concluded:
(W)hen a specific false statement is knowingly made and reasonably relied upon, we choose to align ourselves with the growing body of authorities which holds that the representee is not precluded from recovery simply because he failed to make an independent investigation of the veracity of the statement....
The district court, we believe, made the correct choice. A person guilty of fraudulent misrepresentation should not be permitted to hide behind the doctrine of caveat emptor. The principle of law which we adopt is expressed in Sections 540 and 541 of Restatement (Second) of Torts (1976) as follows:
§ 540. Duty to Investigate.
The recipient of a fraudulent misrepresentation of fact is justified in relying upon its truth, although he might have ascertained the falsity of the representation had he made an investigation.
Comment:
a. The rule stated in this Section applies not only when an investigation would involve an expenditure of...
To continue reading
Request your trial
-
Bavelis v. Doukas (In re Bavelis)
...made an investigation, unless he knows the representation to be false or its falsity is obvious to him." Id. (quoting Besett v. Basnett , 389 So.2d 995, 998 (Fla. 1980) ); see also, e.g. , M/I Schottenstein Homes v. Azam , 813 So.2d 91, 94–95 (Fla. 2002) ("[I]f the recipient 'knows that [th......
-
In re Std. Jury Instructions in Civil Cases -- Report No. 09-01
...revealed its falsity, unless he or she knows the representation to be false or its falsity is obvious to him or her. Besett v. Basnett, 389 So.2d 995 (Fla.1980). 4. There must be actual damage for recovery in a fraud action. Fraud that does not result in damage is not actionable. Casey v. W......
-
In re Standard Jury Instructions in Civil Case—-Report Number
...revealed its falsity, unless he or she knows the representation to be false or its falsity is obvious to him or her. Besett v. Basnett, 389 So.2d 995 (Fla.1980). 4. There must be actual damage for recovery in a fraud action. Fraud that does not result in damage is not actionable. Casey v. W......
-
Rogers v. Cisco Systems, Inc., 3:03 CV 32/LAC/MCR.
...as to claims for information negligently supplied to others in the course of a business, profession, or employment); Besett v. Basnett, 389 So.2d 995, 997 (Fla.1980)(adopting the view of §§ 54CM1 of the Restatement as to the duty to investigate falsity of fraudulent representation); Stev-Ma......
-
Justifiable Reliance Required For Fraudulent Inducement Claim
...fraud claim, the appellate court reviewed the judgment applying a de novo standard of review. The Court quoted from Besett v. Basnett, 389 So.2d 995, 997 (Fla. 1980), for the proposition The recipient of a fraudulent misrepresentation is not justified in relying upon its truth if he knows t......
-
Fraudulent inducement claims should always be immune from economic loss rule attack.
...Nonetheless, the ELR has no place defeating the claim.(62) Take, for instance, that old (but still good) nugget, Besset v. Basnett, 389 So. 2d 995 (Fla. 1980), which sets the pace in this arena. There, the plaintiff purchased a fishing lodge based on seller's false representations that the ......
-
Must information in the public record be disclosed to buyers of residential real property and may it be mispresented?
...fact that is "readily observable" in a Johnson nondisclosure case is analogous to a misrepresentation of a fact as in Besett v. Basnett, 389 So. 2d 995 (Fla. 1980). In both cases, he noted, if the actual facts or the falsity of the misrepresentation may be disclosed by a cursory glance, nei......
-
The return of the Pink Panther or Johnson v. Davis, redux.
...reliance on the truth of the Johnsons' representation was justified and is supported by this Court's decision in Besett v. Basnett, 389 So. 2d 995, where we held "that a recipient may rely on the truth of a representation, even though its falsity could have been ascertained had he made an i......