A Misrepresentation is Not the Same as a Breach of Contract
A claim based on a misrepresentation is NOT the same as a claim based on a breach of contract. Two notes to self one must consider before throwing a misrepresentation-type claim into the fray:
First note to self: when pleading a claim based on a misrepresentation, whether fraudulent misrepresentation, fraudulent inducement, or negligent misrepresentation, it is imperative to plead those misrepresentations with specificity. See Fla. R. Civ. P. 1.120.
Second note to self: a fraud claim is NOT a replacement to a breach of contract claim. “It is well settled that a party may not recover damages for both breach of contract and fraud unless the party first establishes that the damages arising from the fraud are separate or distinguishable from the damages arising from the breach of contract.” Williams v. Peak Resorts Intern. Inc., 676 So.2d 513, 517 (Fla. 5th DCA 1996).
For example, in Island Travel & Tours, Ltd., Co. v. MYR Independent, Inc., 45 Fla. L. Weekly D704a (Fla. 3d DCA 2020), the parties entered into a joint venture agreement relating to travel between Miami and Cuba. The joint venture agreement lasted just over a month because a dispute arose regarding the distribution of money. One partner sued the other and included claims for breach of contract, fraudulent inducement and negligent misrepresentation claiming there were misrepresentations that the profits and costs would be divided in equal shares. The jury returned a verdict in favor of the plaintiff-partner finding the other partner committed misrepresentations to support a fraudulent inducement and negligent misrepresentation claim. This was appealed and reversed.
The first problem for the plaintiff was that the misrepresentations it relied on at trial were NOT pled in its operative complaint and the law requires misrepresentations to be pled with specificity. See Island Travel & Tours, supra (“As an initial matter, we agree with the [defendant] that [plaintiff’s] claims cannot be based on alleged misrepresentations that were never mentioned in the operative complaint.”).
The second problem was that the misrepresentation stated in the complaint—that profits and costs would be shared equally—was based on the exact same actions, and not independent actions, forming the plaintiff’s breach of contract claims. See Island Travel & Tours, supra (“Because [plaintiff’s] tort claims are ultimately based on the same underlying conduct giving rise to its contract claim…we hold that [plaintiff] is, as a matter of law, unable to establish its claims for fraud in the inducement and negligent misrepresentation.”).
Remember the notes to self above: (1) misrepresentations must be pled with specificity in the operative complaint; and (2) fraud is not a replacement for breach of contact — the conduct supporting the misrepresentation must be independent of the alleged contractual breaches.
Please contact David Adelstein at [email protected] or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.