Upledger v. Vilanor Inc.

• Decision Date: 04 April 1979
• Docket Number: No. 78-156,78-156
• Citation: 369 So.2d 427
• Parties: John UPLEDGER and Diane Upledger, his wife, Appellants, v. VILANOR INCORPORATED, a Florida Corporation, Victor Kingdon and Larry Williams, Appellees.
• Court: Florida District Court of Appeals

Page 427

369 So.2d 427

John UPLEDGER and Diane Upledger, his wife, Appellants, v. VILANOR INCORPORATED, a Florida Corporation, Victor Kingdon and Larry Williams, Appellees.

No. 78-156.

District Court of Appeal of Florida, Second District.

April 4, 1979.

Wayne J. Boyer, of Wayne J. Boyer, P. A., Clearwater, for appellants.

N. S. Gould, of Phillips, McFarland, Gould, Wilhelm & Wagstaff, P. A., Clearwater, for appellees.

GRIMES, Chief Judge.

This case involves the extent to which a person may rely upon a misrepresentation of fact without verifying its accuracy.

The appellants (purchasers) bought an apartment building from appellees (sellers). Later, the purchasers sued the sellers for damages, contending that the sellers had knowingly made certain false representations to them with respect to the building. The purchasers alleged that they relied upon these misrepresentations and that had the truth been known to them they would not have gone through with the purchase. The sellers obtained a summary judgment.

The purchasers' evidence indicated that the sellers had told them that certain of the apartments rented for specific amounts when, in fact, the rentals being collected from these apartments were substantially less. The purchasers further stated that the sellers advised them that the durations of the apartment leases were longer than they turned out to be. The sellers denied these assertions, but, because this appeal stems from a summary judgment, we must assume them to be true. The purchasers admitted that they had failed to check the accuracy of the alleged misrepresentations. The court ruled against the purchasers on the authority of Potakar v. Hurtak, 82 So.2d 502 (Fla.1955), and Folz v. Beard, 332 So.2d 129 (Fla. 2d DCA 1976).

In Potakar, the amended complaint alleged that in the course of entering into a lease of a restaurant facility the defendant/lessor falsely stated that the previous lessee had made a profit. In fact, the restaurant had lost money for several years. The plaintiff/lessee alleged that he relied upon the statement in deciding to lease the premises and that he suffered damages by virtue of the fact that the business was not profitable and had never been profitable. In affirming the dismissal of the amended complaint, the supreme court discussed and seemed to cite with approval the following statement from 23 Am.Jur. Fraud and Deceit § 155 (19 ):

"A rule which has been approved, and which combines those elements of both the objective and subjective tests which have been stated by the courts enunciating them to be desirable, is that in measuring the right to rely upon representations, every person must use reasonable diligence for his own protection. Under any standard of conduct, and in the absence of accompanying actual deception, artifice, or misconduct, it is well agreed that where the means of knowledge are at hand and are equally available to both parties, and the subject matter is equally open to their inspection, if one of them does not avail himself of those means and opportunities, he will not be heard to say that he was deceived by the other's misrepresentations. * * * "

Potakar v. Hurtak, supra at 504. The court held that the amended complaint did not allege facts which met the foregoing test.

Folz v. Beard, supra, involved a suit to rescind the sale of an employment agency on the basis of fraudulent misrepresentations. In reversing the judgment of rescission because of an erroneous jury instruction, this court said:

We think the charge is ambiguous, misleading, obviously incomplete and improperly states the applicable law. It is the rule in Florida that in the absence of a fiduciary relationship, or of actionable fraud inducing the representee to forbear investigation, or of circumstances making an investigation impossible, difficult, or expensive (none of which circumstances is established here), the representee is under a duty to exercise reasonable diligence for his own protection. Thus in the absence of accompanying undiscoverable deception, artifice, or misconduct, where the means of knowledge are at hand and are equally available to both parties and the subject matter is equally open to their inspection, if one of them does not avail himself of those means and opportunities he will not be heard to say that he was deceived by the other's misrepresentations.

Folz, 332 So.2d at 130.

While acknowledging that these decisions lend support to the sellers' position, the purchasers refer to several other cases which appear to be equally persuasive toward the purchasers' view. Of particular significance is Board of Public Instruction v. Everett W. Martin & Son, Inc., 97 So.2d 21 (Fla.1957). In that case a contractor misrepresented to the school board the amount of money it had paid for substituted jalousies incorporated into a construction job in order to obtain a higher payment. The school board admitted that it had made no independent investigation of the amount which the contractor had actually paid for the jalousies. While the issue on appeal involved the giving of a challenged jury instruction and the refusal to give another, the court observed that the basic question of law in the case was whether a party may defend itself from a claim founded upon a fraudulent misrepresentation of fact by showing that the deceived party should have made an independent investigation to ascertain the truth or falsity of the representor's statements. In reversing a judgment for the contractor the court held:

We are of the opinion that in this case, it was not the duty of the Board's architects to investigate the cost of the substituted material purchased by the contractor. . . .

We believe that the Board and its agents, the architects, were justified in accepting the representation of the contractor that he paid a certain sum for the substituted jalousies without having to go to the company which sold the jalousies to the contractor to determine the price actually paid by the contractor.

Board of Public Instruction v....