Osceola Groves v. Wiley
| Decision Date | 28 January 1955 |
| Parties | OSCEOLA GROVES, Inc., a Florida corporation, and C. J. Gonterman, Petitioners, v. Verna B. WILEY, a widow, and Bessis E. Duncan, a widow, on behalf of themselvesand all others similarly situated, Respondents. |
| Court | Florida Supreme Court |
Paty, Downey & Paty, West Palm Beach, for petitioners.
Ira E. Billingham, Coral Gables, and Redfearn & Ferrell, Miami, for respondents.
Petitioners were defendants in the trial court. They moved to dismiss plaintiffs' complaint urging that no cause of action for equitable relief was stated and that the suit was not a class suit. The court entered an order on October 13, 1954 overruling the motion to dismiss, denying application for appointment of a receiver and postponing until trial the question of whether the suit should be treated as a class suit. Defendants seek certiorari to review that part of the order which denied the motion to dismiss and deferred ruling on the question of class suit.
Material allegations of the complaint are as follows: Defendant Osceola Groves, Inc. is the alter ego of the defendant C. J. Gonterman and was organized by him and used for the purpose of defrauding plaintiffs and others similarly situated. The corporation subdivided about 394 acres of land into one acre units and sold these units for $1,000 each to numerous persons each of whom signed similar contracts of sale and lease agreements. Each plaintiff is the owner of units purchased under this scheme by contract from the corporation. Plaintiffs bring the suit as a class suit on behalf of themselves and all others similarly situated, and 'Said persons constitute a class having a common or general interest in the subject matter of this suit, and they are so numerous as to make it impracticable to bring them all before the court, and for that reason, the plaintiffs sue on behalf of all, as allowed by the 1954 Florida Rules of Civil Procedure, rule 3.6.'
In the sale contracts of the units of land the corporation promised the plaintiffs to plant each tract with citrus trees, to replace any trees that may die in planting, to cultivate and maintain the trees, and to provide for marketing of the crops. In ninety-nine year leases executed simultaneously with the contract of purchase, the plaintiffs each agreed that the land units should be under control of the defendant corporation for ninety-nine years. In these leases the corporation agreed to maintain the units in keeping with good husbandry and to market the crops, to keep separate accounts for each unit and to make annual reports, to pay to the owner of each unit '80% of the earnings of said property' and to retain '20% of the earnings' for its services in connection with the land. Defendants abided by the agreements until about 1948. Thereafter defendants breached the so-called lease agreements in that they fraudulently operated under the agreements for their own benefits and 'saw to it that the expense of maintenance arose from approximately $35.00 per acre unit in 1947 to more than $175.00 per acre unit in 1953,' and they 'so manipulated the costs of maintenance and operation of each unit that each year the cost of operation and maintenance was nearly equal to or exceeded the return from each unit under a scheme to keep the expenses increasing in order to retain all of the income from the land,' and they wrongfully, with intent to defraud, took returns from the land which should have gone to plaintiffs. Defendants have wrongfully failed to account for and have withheld from plaintiffs and others similarly situated monies due them in an amount of about $800,000.
Plaintiffs prayed for an accounting, for an order enjoining disposition of corporate assets, for cancellation of the ninety-nine year lease contracts, for a receiver to take over operation of the groves, and for an order enjoining defendants from doing any more work on the properties involved in the litigation.
Attached to and made a part of the complaint are copies of the contract of sale and the lease agreement entered into between the corporation and plaintiff Verna B. Wiley. Both of these instruments bear the date December 7, 1943. The complaint does not contain copies of the contract and lease agreement alleged to have been entered into by the plaintiff Bessie E. Duncan.
With reference to class suits, Rule 3.6, Florida Rules of Civil Procedure provides:
'When the question is one of common or general interest to many persons constituting a class so numerous as to make it impracticable to bring them all before the court, one or more may sue or defend for the whole.'
The language of this rule is identical to that appearing in the old Chancery Act, Section 63.14, F.S.1941, F.S.A., under which we have held that one endeavoring to bring a class suit must plead facts showing the right and necessity for that and 'more is required than the mere pleading the language of the statute.' City of Lakeland v. Chase Nat. Co., 159 Fla. 783, 32 So.2d 833, 838. With reference to the subject of similar frauds practiced on various persons as the basis of representative suit, in Note, 1938, 114 A.L.R. 1015, 1019, it is stated:
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Frankel v. City of Miami Beach
...Co. v. State; Pasco, and Bader, supra, enunciated a rule of law which conflicted with the rule this Court formulated in Osceola Groves v. Wiley, 78 So.2d 700 (Fla.1955) and Nielsen v. City of Sarasota, 117 So.2d 731 (Fla.1960). Moreover, the Third District in deciding Frankel and the above ......
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Avila South Condominium Ass'n, Inc. v. Kappa Corp.
...Sparkman, 335 So.2d 802, 806 (Fla.1976). Counts three and four allege fraud, and for that reason fall under the rule of Osceola Groves v. Wiley, 78 So.2d 700 (Fla.1955), that recovery for fraud on separate contracts cannot be had in a class The Association as well was named as plaintiff, bu......
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Estate of Bobinger v. Deltona Corp.
...and, further, that a class action on extrinsic fraud is not allowed in Florida according to the rule announced in Osceola Groves, Inc. v. Wiley, 78 So.2d 700 (Fla.1955), and Lance v. Wade, 457 So.2d 1008 (Fla.1984). The dismissal was without prejudice to the refiling of individual suits to ......
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Davis v. Powertel, Inc.
...rule 1.220(a)(2), because the issue of reliance is unique to each person who is alleged to have been defrauded. See Osceola Groves, Inc. v. Wiley, 78 So.2d 700 (Fla.1955); Lance v. Wade, 457 So.2d 1008 (Fla.1984). However, we conclude that there is a critical difference between a deceptive ......
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Class actions: fundamentals of certification analysis.
...234 So. 2d at 130 ("a cause of action based upon fraud and deceit, is inappropriate for a class action") (citing Osceola Groves v. Wiley, 78 So. 2d 700 (Fla. 1955)); see also Butterworth, 171 F.R.D. at 322 (Florida law does not recognize fraud on the market, thus the individual reliance req......