KENNETH A. MARRA, District Judge.
This cause is before the Court upon Defendant Melissa Jackson's Motion to Dismiss Plaintiff's First Amended Complaint (DE 18) and Defendants Heidi Dressage, LLC and Adelheid Degele's Motion to Dismiss Counts III, IV, V, VI, VII and X of Plaintiff's First Amended Complaint (DE 23). The Court has carefully considered the Motions and is otherwise fully advised in the premises.
Plaintiff Terri Smith ("Plaintiff") brings a ten-count Amended Complaint against Defendants Melissa Jackson ("Jackson"), Heidi Dressage, LLC ("Dressage") and Adelheid Degele ("Degele") (collectively, "Degele Defendants"). Plaintiff sues for rescission against Jackson (count one), respondent superior against Jackson (count two), fraudulent inducement against all Defendants (count three), negligent misrepresentation against all Defendants (count four), civil conspiracy against all Defendants (count five), a violation of the Florida's Deceptive and Unfair Trade Practices Act ("FDUPTA"), Florida Statute, Chapter 501, against all Defendants (count six), breach of express warranty of merchantability and/or use of trade pursuant to Florida Statute § 672.313 against all Defendants (count seven), breach of implied warranties of merchantability and use of trade pursuant to Florida Statute § 672.314 against Jackson (count eight), breach of implied warranties of fitness for a particular purpose pursuant to Florida Statute § 672.315 against Jackson (count nine) and unjust enrichment against all Defendants (count ten). (Am. Compl., DE 17.)
According to the allegations of the Complaint, this lawsuit stems from the sale by Jackson to Plaintiff of a thirteen year old horse known as Whirlpool ("horse"). (Am. Compl. ¶ 9.) Jackson is in the business of selling horses for profit. (Am. Compl. ¶ 11.) Plaintiff is a non-professional equestrian who decided she wanted to purchase a horse to compete in dressage. (Am. Compl. ¶ 12.) The Degele Defendants acted as Jackson's agents in connection with the sale of the horse. (Am. Compl. ¶ 14.) Plaintiff asked the Degele Defendants if the horse had any medical issues and was told the horse underwent colic surgery in 2012, fully recovered and had no other health or medical issues. (Am. Compl. ¶ ¶16-17.) The Degele Defendants assured Plaintiff that the horse was healthy, sound and fit to be used as a competitive dressage horse. (Am. Compl. ¶ 18.) Based upon these representations, Plaintiff decided to purchase the horse for $100,000.00, subject to the performance of a pre-purchase examination. (Am. Compl. ¶ 19.) On or about January 30, 2016, the pre-purchase examination was performed. (Am. Compl. ¶ 20.) A MRI was not performed based upon the Degele Defendants' representations. (Am. Compl. ¶ 21).
On February 3, 2016, the Degele Defendants sent Plaintiff a purchase and sale agreement ("PSA"). (Am. Compl. ¶ 23; PSA, Ex. A, DE 17.) Upon receipt, Plaintiff sent an email to the Degele Defendants in which Plaintiff once again asked if the horse had any other known issues such as behavior issues, injury, lameness or material illness. (Am. Compl. ¶ 24.) In response, the Degele Defendants stated the horse had no prior issues and that the "AS IS" clause in the PSA was just a "general clause." (Am. Compl. ¶ 25; Feb. 3, 2016 email, Ex. B, DE 17.) Plaintiff executed the PSA based on the Degele Defendants multiple assurances. (Am. Compl. ¶ 27.) Unbeknownst to Plaintiff, Defendants made misrepresentations and omissions of material facts regarding the horse's health, medical history and fitness for intended purpose. (Am. Compl. ¶ 29.)
On February 8, 2016, Plaintiff's insurance agent contacted an insurance underwriter to insure the horse, and the underwriter advised that the horse had prior insurance exclusions related to degenerative joint disease, bone spurs and arthritis. (Am. Compl. ¶ ¶ 30-32.) On February 15, 2016, Plaintiff spoke to the horse's veterinarian who advised Plaintiff that he had treated the horse for lameness in the left front leg. (Am. Compl. ¶ 41.) Plaintiff then had the horse examined by a veterinarian who diagnosed the horse as being lame in the right, and left front, and possibly left rear. (Am. Compl. ¶ 44.) A MRI revealed significant injuries in both front feet that had scaring and chronicity, which established injuries prior to Plaintiff's purchase. (Am. Compl. ¶ 47.) Plaintiff has offered to return the horse to Jackson. (Am. Compl. ¶ 69.)
In moving to dismiss, Jackson contends that the rescission claim fails because Plaintiff has failed to return the horse and that the written contract contradicts Plaintiff's claim. Next, Jackson states that respondent superior is a doctrine of liability, not a cause of action. With respect to the fraudulent inducement and negligent misrepresentation claims, Defendants argue that these claims are barred by the economic loss rule and that there is no justifiable reliance. In addition, Defendants contend the civil conspiracy claim must be dismissed because it is not based on an independent tort. As for the FDUTPA claim, Defendants assert the allegations are contradicted by the terms of the PSA, and that the PSA provides more information than required by the Florida Administrative Code. With respect to the breach of express warranty claim and breach of implied warranties, Defendants contend that the allegations are contradicted by the PSA. Lastly, Defendants argue that the unjust enrichment count cannot proceed when there is an express contract.
In response, Plaintiff contends that the claim for rescission is valid because she did offer to return the horse and the language in the PSA does not release Defendants from fraudulent misconduct. Plaintiff also contends that respondent superior is a cause of action. Next, Plaintiff argues that the economic loss rule does not bar the fraudulent inducement claim and justifiable reliance is not an element for fraudulent inducement. Plaintiff also asserts the integration clause does not bar the fraudulent inducement and negligent misrepresentation claims. Plaintiff then contends that because the economic loss rule does not bar the tort claims, the conspiracy claim survives. Further, Plaintiff claims that failure to provide a complete medical history is a violation of Florida Administrative Code and FDUTPA. Plaintiff argues that the express and implied warranty claims are properly pled, and Defendants' arguments rely on the resolution of factual issues. Lastly, as for the unjust enrichment claim, Plaintiff states that it is valid and pled in the alternative.
Rule 8(a)(2) of the Federal Rules of Civil Procedure requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The Supreme Court has held that "[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the `grounds' of his `entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level."
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face."
To state a cause of action for rescission under Florida law, a party must allege:
With respect to the rescisison claim, the parties disagree only on one element; namely, does a rescission claim require Plaintiff to plead that she returned the horse or is it is sufficient for her to plead that she offered to restore the benefit she received under the contract by offering to return the horse?
Florida law requires a rescission claim to plead that "[i]f the moving party has received benefits from the contract, he should further allege an offer to restore these benefits to the party furnishing them, if restoration is possible."
Next, Jackson claims that "impossibility of performance" and "frustration of purpose" have not been properly alleged. "Impossibility of performance refers to those factual situations where purposes for which the contract was made, have, on one side, become impossible to perform."
Here, the Amended Complaint alleges that Plaintiff purchased the horse to use as a competitive dressage horse, Plaintiff relied upon Defendants' representations about the horse's health, the horse is lame and cannot serve that intended purpose. Thus, the Amended Complaint alleges defects in the horse that "substantially frustrate the purpose and benefit of the bargain."
For these reasons, the Court denies the motion to dismiss count one.
The Court grants Jackson's motion to dismiss the separate count labeled "respondeat superior." Respondeat superior is a legal doctrine of liability, not a cause of action.
Defendants move to dismiss the claims for fraudulent inducement and negligent misrepresentation on the bases that (1) the Amended Complaint can not establish justifiable reliance on the false representation when the subsequent written contract contradicts an oral misrepresentation and (2) the claims are barred by the economic loss rule.
With respect to the element of justifiable reliance, the Court observes that both causes of action require the element of justifiable reliance.
With that in mind, the Court must examine whether reliance on an oral misrepresentation is unreasonable when there is a subsequent written contract with an integration clause. In
[I]ntegration clauses do not cloak defendants with immunity from fraudulent statements.
The cases relied upon by Defendants do not convince the Court otherwise. Recently, the Eleventh Circuit reversed a district court's granting of summary judgment to a defendant on a fraudulent inducement claim.
Next, the Court addresses whether the economic loss rule applies. In
In the wake of
Courts in this District have continually followed the interpretation of Tiara suggested by the Eleventh Circuit in
Recently, the Eleventh Circuit described the "minimal requirement" for a fraudulent inducement claim to be independent from a breach of contract claim; namely, the fraud allegations must be "separate and distinct" from a defendant's performance under the contract.
Defendants move to dismiss the civil conspiracy claim because such a claim relies upon an independent tort, and the Amended Complaint fails to state claims for fraudulent inducement and negligent misrepresentation.
Under Florida law, in order to state a claim for civil conspiracy, a plaintiff must allege: "(a) an agreement between two or more parties, (b) to do an unlawful act or to do a lawful act by unlawful means, (c) the doing of some overt act in pursuance of the conspiracy, and (d) damage to plaintiff as a result of the acts done under the conspiracy."
Here, Plaintiff relies upon its tort claims which the Court has found viable. Therefore, the motion to dismiss count five is denied.
The FDUTPA claim is partly based on Rule 5H-26.004 of the Florida Administrative Code, which contains certain regulations relating to dual agents involved in the sale of horses. The Degele Defendants contend that the bill of sale and the PSA provide more information than required by the administrative code.
Plaintiff alleges that the bill of sale did not include paragraphs 7 and 8 as required by the Florida Administrative Code. (Am. Compl. ¶ 102.) The Degele Defendants state that they provided more information than provided by those paragraphs. However, in support, the Degele Defendants point to that information in the PSA, not the Bill of Sale.
The Court concludes that the purpose of the administrative code provision is to require the seller to provide certain information to a buyer. It does not matter if the information is contained in a document labeled a "bill of sale" or in some other document, as long as the required information is provided. Given that all the information required under the administrative code is contained in the PSA, the Court grants the motion to dismiss the FDUTPA claim to the extent it claims a violation of the administrative code.
Defendants move to dismiss these three claims on the basis that the allegations are contradicted by the plain language of the contract, and the written contract therefore controls, including language that the PSA waives all warranty claims. For the reasons stated
Defendants contend that there cannot be a cause of action for unjust enrichment when the parties' relationship is governed by an express contract. Even if the claim is pled in the alternative, Defendants argue that unjust enrichment may only pled in the alternative when at least one of the parties contests the existence of an express contract. Plaintiff responds that a motion to dismiss for unjust enrichment on these grounds is premature until an express contract is proven. The Court agrees. As this Court stated in
For this reason, the Court denies the motion to dismiss the unjust enrichment claim.
Accordingly, it is hereby