Mazzoni Farms Inc v. E.I. Dupont, 97-5931

• Decision Date: 22 August 2000
• Docket Number: N,No. 97-5931,97-5931
• Citation: 223 F.3d 1275
• Parties: (11th Cir. 2000) MAZZONI FARMS, INC., a Florida corporation, Plaintiff-Appellant, v. E.I. DUPONT DE NEMOURS AND COMPANY, a Delaware corporation, d.b.a. Dupont, CRAWFORD & COMPANY, a Georgia Corporation, Defendants-Appellees. JACK MARTIN GREENHOUSES, INC., f.k.a. M & M ORNAMENTALS, INC., and JACK MARTIN, Plaintiffs-Appellants, v. E.I. DUPONT DE NEMOURS AND COMPANY, d.b.a. Dupont, Defendant-Appellee. o. 97-5932.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1275

223 F.3d 1275 (11th Cir. 2000) MAZZONI FARMS, INC., a Florida corporation, Plaintiff-Appellant,
v.
E.I. DUPONT DE NEMOURS AND COMPANY, a Delaware corporation, d.b.a. Dupont, CRAWFORD & COMPANY, a Georgia Corporation, Defendants-Appellees. JACK MARTIN GREENHOUSES, INC., f.k.a. M & M ORNAMENTALS, INC., and JACK MARTIN, Plaintiffs-Appellants,
v.
E.I. DUPONT DE NEMOURS AND COMPANY, d.b.a. Dupont, Defendant-Appellee. No. 97-5931, No. 97-5932. IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT. Aug. 22, 2000.

Page 1276

Appeals from the United States District Court for the Southern District of Florida

Before ANDERSON, Chief Judge, DUBINA and FAY, Circuit Judges.

PER CURIAM:

Plaintiffs Mazzoni Farms and Jack Martin, commercial nurseries whose plants were allegedly damaged by a DuPont product called Benlate, appealed the district court's order dismissing their fraudulent inducement claims under Fed.R.Civ.P. 12(b)(6). Because the issues presented involved a choice-of-law provision for which there was no definitive Florida precedent, we certified the following two questions to the Supreme Court of Florida:

(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?

The Supreme Court of Florida has answered 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.¹ See Mazzoni Farms, Inc., v. E.I. DuPont De Nemours & Co., 761 So.2d 306, (Fla.2000). Moreover, the Delaware Supreme Court recently held that a release in a settlement agreement does not bar a nursery's claim for fraud in the inducement of the release. See E.I. DuPont De Nemours & Co. v. Florida Evergreen Foliage, 744 A.2d 457 (Del. 1999). Since the Supreme Court of Florida held that the Delaware choice-of-law provision in the settlement agreement controlled the disposition of the fraudulent inducement claim, the Delaware Supreme Court's opinion is binding on the parties.

In light of the Supreme Court of Florida's opinion, attached hereto as an appendix, as well as the Delaware Supreme Court's opinion, we reverse the district court's order dismissing the plaintiffs' claims and remand this case for further proceedings consistent with the Supreme Court of Florida's opinion.²

REVERSED and REMANDED.

---------------

NOTES:

1. In an earlier order, this court consolidated the present appeals with appeals numbered 97-5696, 97-5697, 97-5698, 97-5699, and 97-5700. The present appeals (Nos. 97-5931 and 97- 5932) contain Delaware choice of law provisions, while some of the consolidated appeals do not. Accordingly, on July 20, 2000, this court entered an order unconsolidating the appeals, which means that this opinion affects appeals Nos. 97-5931 and 97-5932 only.

2. In a letter to this court, DuPont argues alternatively that this court can affirm the district court's order of dismissal because the plaintiffs, having settled claims of actual fraud against DuPont, could not have "justifiably relied" on any alleged misrepresentations or omissions by DuPont in connection with the settlement of their underlying claims. We note that the district court did not address this issue in its order, so neither do we. See Singleton v. Wulff, 428 U.S. 106, 120 (1976) ("It is the general rule, of course, that a federal appellate court does not consider an issue not passed upon below."); see also Baumann v. Savers Federal Sav. & Loan Ass'n, 934 F.2d 1506, 1512 (11th Cir. 1991) (courts generally will not address an issue that has not been decided by the trial court). On remand, the district court should consider DuPont's argument.

---------------

Page 1277

ATTACHMENT APPENDIX

 MAZZONI 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.
                

 Nos. SC94846, SC95411
                 Supreme Court of Florida
                 June 8, 2000
                

Certified Question of Law from the United States Court of Appeals for the Eleventh Circuit - Case Nos. 97-5931 & 97-5696

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.

Page 1278

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...