Johnson v. Davis
| Decision Date | 03 April 1984 |
| Docket Number | No. 83-1574,83-1574 |
| Citation | 449 So.2d 344 |
| Parties | Clarence H. JOHNSON and Dana Johnson, his wife, Appellants/Cross-Appellees, v. Morton DAVIS and Esther Davis, his wife, Appellees/Cross-Appellants. |
| Court | Florida District Court of Appeals |
Smith & Mandler and Mitchell W. Mandler, Miami, for appellants/cross-appellees.
Stanley M. Newmark, Miami, Joseph G. Abromovitz, Boston, Mass., for appellees/cross-appellants.
Before HENDRY, BASKIN and JORGENSON, JJ.
The Johnsons, the defendants in an action to rescind a real estate sales contract, appeal a final judgment that returned to the Davises $26,000 of the Davises' $31,000 deposit. The Davises cross-appeal the trial court's award of $5,000 of the deposit to the Johnsons and the trial court's failure to award the Davises costs and fees. For the reasons which follow we affirm the trial court's return of the majority of the deposit to the Davises but reverse those portions of the final judgment which awarded $5,000 of the deposit to the Johnsons and failed to award the Davises costs and fees. Accordingly, we remand with directions to return to the Davises the balance of their deposit, with interest, and to award them costs and fees. The remainder of the issues on appeal are without merit and the remainder of the trial court's final judgment is, therefore, affirmed.
In early May of 1982, "a season of calm weather," the Davises first saw and within two days entered into a contract to buy for $310,000 the Johnsons' home, which at the time was three years old. The form contract, which was provided by the Johnsons' broker, required a $5,000 deposit payment, an additional $26,000 deposit payment within five days and a closing by June 21, 1982. The contract provided for payment to the "prevailing party" of all costs and reasonable fees in any contract litigation and:
F. Roof Inspection: Prior to closing at Buyer's expense, Buyer shall have the right to obtain a written report from a licensed roofer stating that the roof is in a watertight condition. In the event repairs are required either to correct leaks or to replace damage to facia [sic] or soffit, Seller shall pay for said repairs which shall be performed by a licensed roofing contractor.
Before the Davises made the additional $26,000 deposit payment, Mrs. Davis noticed some buckling and peeling plaster around the corner of a window frame in the family room and stains on the ceilings in the family room and kitchen of the home. Upon inquiring, Mrs. Davis was told by Mr. Johnson that the window had had a minor problem that had long since been corrected and that the stains were wallpaper glue and the result of ceiling beams being moved. There is disagreement among the parties as to whether Mr. Johnson also told Mrs. Davis at this time that there had never been any problems with the roof or ceilings. The Davises thereafter paid the remainder of their deposit and the Johnsons vacated the home and moved to their new residence in Chicago. Several days later, following a heavy rain, Mrs. Davis entered the home and discovered water "gushing" in from around the window frame and from the ceiling of the family room and from the light fixtures, from around the glass doors and from above the stove in the kitchen. Domestics employed by the Johnsons' broker were scurrying about trying to contain the water with rags and buckets. Two roofers hired by the Johnsons' broker concluded that for under $1,000 they could "fix" certain leaks in the roof and by doing so make the roof "watertight." Three roofers hired by the Davises found that the roof was inherently defective, that any repairs would be temporary as the roof was "slipping," that only a new $15,000 roof could be "watertight" and that certain repairs to the walls, at an additional cost of $10,000, would be necessitated by damage attributable to the defective roof. Because the existing roof could not be made "watertight" the Davises demanded, on June 18, 1982, the return of their deposit. The Johnsons offered to "fix" the leaks in the existing roof.
The Davises filed a complaint alleging breach of contract and fraud and misrepresentation and seeking rescission of the contract and the return of their deposit. The Johnsons counterclaimed seeking the deposit as liquidated damages. The Davises argued, during the course of the proceedings, that paragraph F of the contract required the roof to be "watertight" but provided for only "minor" repairs and that, therefore, because the roof required other than "minor" repairs their only contractual remedy was rescission of the contract and the return of their deposit. During direct examination by the Davises' counsel, Mr. Johnson denied having told Mrs. Davis, on the day that she had inquired about the ceiling stains and peeling plaster, that there had never been any problems with the roof or ceilings. He claimed, rather, admitting that a leak had developed in the roof over the kitchen two years earlier, when the house was less than a year old, to have told Mrs. Davis of the roof problem, for the first time, on the day of her inquiry. Without findings of fact, the trial court entered its final judgment returning to the Davises $26,000 of their deposit plus interest, awarding the Johnsons $5,000 of the Davises' deposit plus interest, and awarding neither party costs or fees.
Because the trial court included no findings of fact in its order, we can but speculate as to the trial court's reasoning in returning only $26,000 of their deposit to the Davises. A trial court's reasoning, of course, is not the controlling factor in determining whether an appellate court will affirm the trial court's decision, the fundamental question in an appeal being whether the result reached by the trial court is correct, for whatever reason. E.g., In re Estate of Yohn, 238 So.2d 290 (Fla.1970). But in finding, under the only theory the trial court could logically have used in returning only part of their deposit to the Davises, that the trial court was correct in returning that portion of the deposit, we must conclude that the trial court erred in not returning to the Davises the remainder of their deposit.
It is apparent from the record that the trial court did not accept the Davises' characterization of paragraph F of the contract, for if the trial court had found there to be a breach of paragraph F, the trial court would have ordered the return of the Davises' entire deposit: there is no logical way to distinguish, under the breach of contract theory, the two deposit payments. Because of our holding we need not reach the issue of whether the trial court erred in this respect.
Under the fraud theory, however, the trial court could logically have made just such a distinction. The evidence before the trial court supports a finding that after receiving the $5,000 deposit payment the Johnsons affirmatively represented to the Davises that there were no problems with the roof, and thereafter received the additional $26,000 deposit payment. The trial court's ruling, insofar as it ordered the return of the $26,000 deposit payment, is therefore supported by the supreme court's decision in Besett v. Basnett, 389 So.2d 995 (Fla.1980), wherein it was held "that a recipient may rely on the truth of a representation, even though its falsity could have been ascertained had he made an investigation, unless he knows the representation to be false or its falsity is obvious to him," id. at 998. Accordingly, upon that authority, we affirm the trial court's return of their $26,000 deposit payment to the Davises. See Gold v. Wolkowitz, 430 So.2d 556 (Fla. 3d DCA), review denied mem., 437 So.2d 677 (Fla.1983).
In contradistinction to the circumstances of the $26,000 deposit payment, there was no evidence before the trial court that before receiving the $5,000 deposit payment the Johnsons affirmatively represented to the Davises that the roof was without defect. The trial court, therefore, logically could have found that this key factual distinction necessitated a conclusion that although the $26,000 deposit payment was induced by an affirmative misrepresentation, and should therefore be returned, the $5,000 deposit payment was not, and therefore need not be returned. On the record before us, we can find no other way logically to explain the nature of the trial court's final judgment.
Indeed, there is authority for such a distinction. In Banks v. Salina, 413 So.2d 851 (Fla. 4th DCA 1982), a case involving the sale of a used home with a leaky roof and defective swimming pool, the district court summarily reversed that part of the trial court's order that awarded the buyers damages for repairs not provided for in the contract of sale. The reversal was founded upon the district court's determination that, although the sellers had sold a defective home to the buyers without disclosing the presence of defects, of which the sellers evidently were aware, "[i]n Florida, there is no duty to disclose when parties are dealing at arms length," id. at 852. In support of this proposition the court in Banks cited Ramel v. Chasebrook Construction Co., 135 So.2d 876 (Fla. 2d DCA 1961), wherein there is dictum that "[i]n the absence of a fiduciary relationship, mere nondisclosure of all material facts in an arm's length transaction is ordinarily not actionable misrepresentation unless some artifice or trick has been employed to prevent the representee from making further independent inquiry," id. at 882.
However, having acknowledged this authority, by which we are not bound and which we feel represents an offensive view of societal duties and fails to embody the ideals which the law should always strive to reflect, we choose not to follow it.
In Florida, the elements necessary to establish the existence of a fraudulent misrepresentation are that (1) the defendant knew of the falsity of the representation, (2) the...
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