Misrepresentation: Fraudulent Misrepresentation, Negligent Misrepresentation, Due Diligence, Justifiable Reliance, Comparative Negligence, Reasonable Person Standard, Pleading: Affirmative Defenses, Waiver

Butler v. Yusem, ___ So. 3d ___, 35 Fla. L. Weekly S493 (Fla. 9/8/10)

Justifiable reliance is unnecessary to prevail on a claim for fraudulent misrepresentation.  Justifiable reliance is necessary to prevail on a claim for negligent misrepresentation, but justifiable reliance is not synonymous with due diligence.  Comparative negligence is a defense to a claim for negligent misrepresentation.

In the present case, the trial court applied the wrong standard when it denied the plaintiff’s claims for fraudulent misrepresentation and negligent misrepresentation.  Instead of applying the reasonable person standard, the trial court denied the plaintiff’s claims because he failed to exercise due diligence based upon his background as a sophisticated businessman and an experienced lawyer, who conducted an investigation but failed to ask the right questions.  The trial court also erred by considering the plaintiff’s alleged lack of due diligence because it was not raised as an affirmative defense.  The court remanded for reconsideration whether the plaintiff was “entitled to relief based on his claims for fraudulent misrepresentation and negligent misrepresentation.”