Specialty Marine & Indus. Supplies Inc v. Venus
| Decision Date | 11 February 2011 |
| Docket Number | CASE NO. 1D09-6092 |
| Court | Court of Appeal of Florida (US) |
| Parties | SPECIALTY MARINE & INDUSTRIAL SUPPLIES, INC., a Florida corporation, Appellant/Cross-Appellee, v. BAHRAM VENUS, individually; SHEILA VENUS, individually; BAHMAN VENUS LIVING TRUST, Bahman Venus and Nahid Venus as Trustees; NAHID VENUS LIVING TRUST, Bahman Venus and Nahid Venus as Trustees, Appellees/Cross-Appellants. |
FILE MOTION FOR REHEARING AND
An appeal and cross-appeal from the Circuit Court for Duval County.
Michael R. Freed, Matthew T. Jackson, and Joshua R. La Bouef of Brennan, Manna & Diamond, P.L., Jacksonville, for Appellant/Cross-Appellee.
Lester Makofka, Jacksonville, for Appellees/Cross-Appellants.
Specialty Marine & Industrial Supplies, Inc., appeals a judgment notwithstanding the verdict entered in favor of Bahram Venus and other defendants, appellees and cross-appellants. This judgment overturned a jury verdict that had awarded Specialty Marine damages in its negligent misrepresentation action against appellees based upon the trial court's finding that Specialty Marine "failed to justify [its] reliance" on Venus' representation. On appeal, Specialty Marine argues that the trial court erred in usurping the jury's determination that it had justifiably relied on Venus' negligent misrepresentation. In response, appellees assert that Specialty Marine failed to establish the elements of reliance and causation necessary to establish a negligent misrepresentation claim. After our review of the record, because competent and substantial evidence supports the jury's verdict, we reverse the judgment under review and reinstate the verdict. We also reverse the denial of prejudgment interest.
Bahram Venus and related Venus family trusts (jointly "Venus") owned real property in Mayport, Florida. While Venus owned the property, a boundary-line dispute arose between Venus and a neighbor. The disputed area was a strip of land which measures approximately 176 x 18 feet at the northern portion of the property. Venus eventually sought to sell the property. Specialty Marine contacted Bahram Venus and expressed an interest in purchasing the property. Attrial, the owner of Specialty Marine, James Michael Whalen, testified that, when he expressed an interest in the property, he was told by Bahram Venus that the property was 18 feet deeper than it actually was. Subsequently, Whalen was informed by an acquaintance of the boundary dispute between Venus and a neighbor. When Whalen questioned Venus as to the nature of the boundary dispute, Venus informed Whalen that the neighbor was "crazy," that the problem was "not a big deal," and that there was a survey supporting his position. At trial, Specialty Marine introduced evidence that, when it made a subsequent inquiry into this boundary dispute, Venus failed to correctly identify the 176 by 18 foot area of concern, and instead represented to Specialty Marine that the dispute involved a 6 to 8 foot strip of land. Further, according to Whalen, Venus never disclosed that a prior survey indicated that the property line at issue was not where Venus represented it to be.
After entering into a contract to purchase the subject property, Specialty Marine employed Tri-State Land Surveyors, Inc., a land surveyor recommended and utilized by Specialty Marine's lending institution, to conduct a survey and verify the boundary of the parcel. Whalen testified that he would not have entered into the contract to purchase the property, which led to Specialty Marine obtaining the Tri-State survey as a part of the closing, had Venus not first misrepresented the boundary of the property. Tri-State's survey erroneously showed that theboundary lines were located as represented by Venus. Specialty Marine closed the purchase of the property for a purchase price of $450,000. It later learned, however, that the actual boundary line was only six inches from the northerly side of the structure on the subject property, making the property unsuitable for its intended use. Specialty Marine filed a four-count complaint which included two claims against Tri-State for negligence and breach of contract regarding the preparation of the survey, a negligent misrepresentation claim against Bahram Venus individually, and a negligent misrepresentation claim against Bahram Venus, Sheila Venus, the Bahman Venus living trust, and the Nahid Venus living trust. Prior to trial, Specialty Marine settled with Tri-State.
At trial, the jury found that the Venus defendants engaged in negligent misrepresentation and returned a verdict in favor of Specialty Marine. The jury determined that the Venus defendants were the legal cause of 90% of Specialty Marine's damages and found that Specialty Marine incurred $400,000 in total damages. Venus filed a motion for judgment notwithstanding the verdict, 1 arguing that Specialty Marine failed to prove both reliance and causation of damages. The trial court granted Venus' motion, ruling that the cause of Specialty Marine'sdamages was not negligent misrepresentation but rather breach of warranty, a cause of action not raised by Specialty Marine. Nevertheless, the trial court awarded Specialty Marine $35,000 in damages under this alternate theory of liability. The trial court denied Specialty Marine's motion for prejudgment interest on the $35,000 breach of warranty award. This appeal follows.
To state a cause of action for negligent misrepresentation, a plaintiff must show:
(1) the defendant made a misrepresentation of material fact that he believed to be true but which was in fact false; (2) the defendant was negligent in making the statement because he should have known the representation was false; (3) the defendant intended to induce the plaintiff to rely and [sic] on the misrepresentation; and (4) injury resulted to the plaintiff acting in justifiable reliance upon the misrepresentation.
Simon v. Celebration Co., 883 So.2d 826, 832 (Fla. 5th DCA 2004); see Butler v. Yusem, 44 So. 3d 102, 105 (Fla. 2010). In its judgment, the trial court explained its ruling, as follows:
The Court finds that it is difficult to find that Venus was negligent. The Court finds that in a light most favorable to the plaintiff he could be found to be negligent for his failure to disclose the [conflict with the neighbor] to Whalen. The Court also finds that [Specialty Marine] failed to justify [its] reliance. [Specialty Marine] made no investigation regarding a disputed property line which had been brought to his attention by the seller[.]
On appeal, Specialty Marine contends that it introduced competent substantial evidence showing that it relied on Venus' negligent misrepresentationsmade prior to the closing of the purchase. Further, Specialty Marine argues that its reliance on Venus' misrepresentation caused Specialty Marine to incur a loss by purchasing property which was unsuitable for Specialty Marine's intended use. Venus argues in response that, because Specialty Marine relied on Tri-State's negligently conducted survey, as a matter of law, Specialty Marine could not have relied on the misrepresentations in question. Venus further asserts that, as a result, even if he may have misrepresented the boundary line in dispute, Specialty Marine is precluded from recovery.
The standard of review of a trial court's ruling on a motion for judgment notwithstanding the verdict is de novo. Hancock v. Schorr, 941 So. 2d 409, 412 (Fla. 4th DCA 2006); McQueen v. Jersani, 909 So. 2d 491, 492-93 (Fla. 5th DCA 2005). The standard of review applicable to the review of a directed verdict also governs review of a judgment in accordance with a prior motion for directed verdict. See Premier Lab Supply, Inc. v. Chemplex Industries, Inc., 10 So. 3d 202 (Fla. 4th DCA 2009). "[W]hen presented with a motion for directed verdict, a court must view all the evidence in a light most favorable to the non-movant, and in the face of evidence which is at odds or contradictory, all conflicts must be resolved in favor of the party against whom the motion has been made." Jackson County Hosp. Corp. v. Aldrich, 835 So. 2d 318, 325-26 (Fla. 1st DCA 2002) (citing Ticor Title Guarantee Co. v. Harbin, 674 So. 2d 781, 782 (Fla. 1st DCA 1996)). A jury verdict must be sustained if it is supported by competent substantial evidence. See Richey v. Modular Designs, Inc., 879 So. 2d 665, 667 (Fla. 1st DCA 2004).
When granting the judgment here, the trial court relied heavily on Besett v. Basnett 389 So. 2d 995, 997 (Fla. 1980), in ruling that Whalen's "failure to act because of his stated reliance on Venus is not sufficient to constitute justifiable reliance." Because Besett involved a claim for fraudulent misrepresentation, not negligent misrepresentation, the trial court's reliance on Besett was misplaced. Under Florida law, fraudulent misrepresentation and negligent misrepresentation involve different elements, especially with respect to justifiable reliance. There are four elements necessary to establish fraudulent misrepresentation: (1) a false statement concerning a material fact; (2) the representer's knowledge that the representation is false; (3) an intention that the representation induce another to act on it; and (4) consequent injury by the party acting in reliance on the representation. Butler, 44 So. 3d at 105; Johnson v. Davis, 480 So. 2d 625, 627 (Fla. 1985). Justifiable reliance is not a necessary element of fraudulent misrepresentation.Butler, 44 So. 3d at 105. Because justifiable reliance is not an element of fraudulent misrepresentation, "a recipient may rely on the truth of a representation, even though its falsity could have been ascertained had [the recipient] made an investigation, unless [the recipient] knows the representation tobe false or its falsity is obvious." Gilchrist Timber Co. v. ITT Rayonier, Inc., 696 So....
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