Maryland Cas. Co. v. Krasnek, 33312

• Decision Date: 03 March 1965
• Docket Number: No. 33312,33312
• Citation: 174 So.2d 541
• Parties: MARYLAND CASUALTY COMPANY, a Maryland Corporation, Petitioner, v. Charies KRASNEK, Respondent.
• Court: Florida Supreme Court

Page 541

174 So.2d 541

MARYLAND CASUALTY COMPANY, a Maryland Corporation, Petitioner, v. Charies KRASNEK, Respondent.

No. 33312.

Supreme Court of Florida.

March 3, 1965.

Rehearing Denied March 3, 1965.

Knight, Smith, Underwood & Peters and Wm. M. Hoeveler, Miami, for petitioner.

Malcolm Lewis Kneale, Miami, for respondent.

O'CONNELL, Justice.

By petition for certiorari the petitioner seeks review of a decision of the District Court of Appeal, Third District, reversing a summary judgment of the Civil Court of Record for Dade County in an action at law on a negotiable instrument.

Plaintiff, respondent here, on April 29, 1961 was injured in an accident involving a vehicle owned by the House and Garden Furniture Company. Upon a claim being made against that company, representatives of the petitioner insurance company, believing that their company carried liability insurance on the vehicle involved, approached respondent and negotiated a settlement with him. In return for a general release executed by respondent, petitioner delivered a settlement check dated May 23, 1961 in the amount of $759.86, which respondent duly delivered to his bank for deposit. Prior to payment of the check, however, petitioner discovered that earlier information received from its home office was in error and that the policy covering the vehicle in question had been permitted to lapse. Immediately upon discovering its error, petitioner stopped payment on the check. After making an unsuccessful demand for payment, respondent instituted suit on the check.

Petitioner defended in the trial court on the grounds, (1) that the settlement contract was not supported by adequate consideration, and (2) pursuant to Section 52.20 F.S.A., on the equitable ground that the settlement contract was subject to rescission by reason of a unilateral mistake as to a material fact. On motion by both parties for summary judgment, the trial court entered judgment for defendant.

On appeal, the District Court of Appeal, Third District, reversed, apparently on the alternate grounds, (1) that under Florida law, unilateral mistake provides no basis for equitable relief and therefore no defense herein for petitioner; but in any event, (2) that his relief is only available 'if payment has not placed the other party in a changed position so that it would be unjust to require refund'; or (3) that unilateral mistake will not justify such relief if it results 'solely from the want of such care and diligence as would be exercised by persons of reasonable prudence under the same circumstances.' Petitioner seeks review here under Article V, Section 4 of the Florida Constitution, F.S.A., and Rule 4.5, subd. c of the Appellate Rules, 31 F.S.A., alleging conflict with the decisions of this Court in Langley v. Irons Land & Development Co., 94 Fla. 1010, 114 So. 769 (1927); Hurst Motor Co. v. National Bond & Investment Co., 96 Fla. 148, 117 So. 792, 59 A.L.R. 807 (1928) and Boole v. Florida Power & Light Co., 147 Fla. 589, 3 So.2d 335 (1941).

Although there is little doubt that the statement in the District Court's opinion that unilateral mistake provides no basis for rescission of a contract or for other equitable relief therefrom, represents the majority view, Restatement, Contracts Section 12 (1932); Restatement, Restitution, Section 14(1); 5 Williston on Contracts, Section 1579 (1937), we are of opinion that it does not accurately reflect Florida case law. Thus, in the Langley case, supra, although it appears that the mistake was actually induced by the party against whom rescission was sought, the fact is that the court held in favor of rescission on the ground of unilateral mistake.

In the Hurst case, supra, the court again ordered rescission, saying at 117 So., page 792, 'In absence of fraud, relief will be granted in equity on the ground of a unilateral mistake, where the mistaken party offers to put the other party in status quo * * *.'

The facts of the Boole case, supra are rather more in point, although there is no indication that the mistake involved was brought about by negligence. There, the decedent of the party suing for rescission had executed a general release in favor of the other party to an accident, unaware at the time that he had suffered more serious injuries than yet appeared. Although in holding for rescission, the court wrote in terms of mutual mistake, it would seem that the mistake was really unilateral in the same sense as here.

In these and other cases, Voss v. Forgue, 84 So.2d 563 (Fla.1956); Wicker v. Board of Public Instruction of Dade County, 106 So.2d 550 (Fla.1958); Crosby v. Andrews, 61 Fla. 554, 55 So. 57 (1911), this court has granted equitable relief on the basis of unilateral mistake. Among these, the Crosby case, supra, is noteworthy. There, the board of trustees of a church sought to cancel a deed by which they had conveyed certain church property, on the ground that they had by mistake included land which had previously been conveyed to another grantee (one of their number, incidentally). In granting rescission, the court said, 55 So. at p. 63:

'A deed of conveyance may be rescinded or cancelled for a negligent mistake of fact that is unilateral where the negligence is not a breach of legal duty, and the mistake is material and made under circumstances that render it inequitable for the other party to have the benefit thereof, even though he did not by commission or omission contribute to the mistake, and the parties were dealing at arm's length and on equal footing.'

Jurisdictional conflict established, we now turn to the alternative grounds for the holding below. There is no doubt that the law was correctly stated...