Summary
The Florida Third District Court of Appeal reviewed summary judgments arising from a residential property sale in which the seller alleged that the buyer and transaction professionals concealed the buyer’s identity and redevelopment plans. The court affirmed in part, reversed as to fraudulent misrepresentation and civil conspiracy, and remanded, holding that justifiable reliance is not required for fraudulent misrepresentation and that factual disputes supported the claims.
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Practice areas
Questions Presented
- Whether summary judgment was proper on Puleo's fraudulent misrepresentation claim based on a purported lack of justifiable reliance.
- Whether the record presented a genuine issue of material fact concerning reliance and damages on the fraudulent misrepresentation claim.
- Whether the viability of the underlying fraud claim and record evidence supporting the other conspiracy elements required reversal of summary judgment on the civil conspiracy claim.
- Whether Puleo's settlement with the Johnston Defendants barred his conspiracy claims against the remaining alleged coconspirators.
Holdings
- Justifiable reliance is not a necessary element of fraudulent misrepresentation. A recipient may rely on the truth of a representation unless the recipient knows it is false or its falsity is obvious.
- The record contained sufficient evidence from which a reasonable jury could find that Puleo relied on the alleged misrepresentations to his detriment; the after-acquired mortgage appraisals at most created a factual dispute concerning the measure of damages.
- Because the underlying fraudulent misrepresentation claim remained viable and the record supported the remaining elements of conspiracy, summary judgment on the conspiracy count was improper.
- Puleo's settlement with the Johnston Defendants did not bar the conspiracy action against the other alleged coconspirators who were not included in the settlement.
Key quotations
“In fraud cases, summary judgment is rarely proper as the issue so frequently turns on the axis of the circumstances surrounding the complete transaction, including circumstantial evidence of intent and knowledge.” (5)
“Justifiable reliance is not a necessary element of fraudulent misrepresentation.” (5)
“By law, Puleo was entitled to rely on the misrepresentations and had no duty to inquire further.” (6)
Factual background
In 2019, Marc Puleo sold his Miami Beach residence for $13 million after being led to believe that Maria Drummond was the buyer and intended to live there with her family. In reality, Edmund Irvine, a sophisticated real estate developer and Drummond's long-term domestic partner, forged Drummond's signatures, assigned the purchase rights to Spanish Rose, LLC, and intended to demolish and resell the property. Spanish Rose relisted the property shortly after closing and resold it within a year. Puleo alleged that the transaction participants concealed the buyer's identity and intended use of the property, causing him to accept less than his $18 million listing price.
Procedural history
Puleo sued the parties and professionals involved in the sale, alleging fraudulent misrepresentation and civil conspiracy based on concealment of the buyer's identity and intended redevelopment and resale of the property. The trial court granted partial summary judgment to the Johnston Defendants on the fraud and conspiracy claims and later granted summary judgment on the remaining conspiracy counts, reasoning that the foundational fraud claim failed for lack of justifiable reliance, materiality, and damages. Puleo settled with the Johnston Defendants, voluntarily dismissed the remaining count against them, unsuccessfully moved for rehearing, and appealed.
Remand instructions
Reverse the summary judgments as to the fraudulent misrepresentation and conspiracy claims and remand for further proceedings. The court affirmed the remaining orders under review, including the negligence and breach of fiduciary duty claims against Cohen and Old Florida.