Brown v. Chamax, LLC, ___ So. 3d ___, 35 Fla. L. Weekly D2888 (Fla. 2d DCA 12/22/10)

The buyer agreed to purchase undeveloped land from the seller.  During the negotiations that preceded the agreement, the seller’s representatives told the buyer’s owner that the deal being offered to the buyer was as good as the deal given to the purchaser of an adjacent parcel of land.  The owner formed a trust to develop the land, and the buyer assigned the purchase agreement to the trust. After discovering that its deal was not as good as the one given to the purchaser of the adjacent parcel, the trust sued the seller for fraud in the inducement.  The trial court dismissed the claim, and the appellate court affirmed because “[t]he Trust has not alleged, nor has it claimed it could allege, that at the time [the seller’s representatives] made the representation, [the representatives] intended to induce the Trust, which did not exist at the time, to rely on it.  Although [the owner] eventually represented both [the buyer] and the Trust, the Trust has never alleged that at the time [the seller’s representatives] made the representations to [the owner] as the president of [the buyer], they knew he would later create the Trust and become its Trustee.  Accordingly, we agree with the trial court that the Trust failed to state a cause of action for fraudulent inducement.”  The appellate court, however, reversed the denial of leave to amend so that the buyer could assign its claim for fraud in the inducement to the trust and the trust “could amend its counterclaim to reflect that assignment.”

The appellate court also reversed the dismissal of a separate claim for fraud based upon the economic loss rule.  The trust alleged that the seller misrepresented the amount of certain costs for “which the Trust was contractually obligated to reimburse [the seller].”  “The economic loss rule does not bar tort actions based on fraud if the fraud alleged does not relate to an act of performance under the contract but instead relates to a term of the agreement. . . .  Here, the alleged misrepresentations related to a term of the contract with [the seller], not to any performance [the seller] owed under the contract. . . .  In addition, no contract with [the seller’s representatives] exists; therefore, no breach of contract action could lie against them; rather, the action against them is for intentional or negligent acts independent of any contract. . . .  Accordingly, we reverse the dismissal of the Trust’s fraud claims against [the seller’s representatives].”