According to the case law as of the date of this article, in order to rescind a contract, you must prove fraud or misrepresentation using clear and convincing evidence.
The Case Of A Real Estate Buyer Failing To Ascertain The Truth By Ordinary Care And Attention
In Scocozzo, John and Sylvia Scocozzo lived in New York. Their controversy began on March 7, 1958, as the Scocozzos were driving along U.S. Highway 1. They decided to stop at the sales office for the riverfront Sebastian Highlands Yacht Club in Sebastian, Florida.
They were shown brochures of the new Sebastian Highlands development by the sales agents. There was a map on a wall in the Yacht Club that showed the proposed development of Sebastian Highlands Subdivision.
They liked the development and selected a certain lot off of the plans. They went out to look it over, as well as its neighboring Collier Creek. Upon returning to the Yacht Club, they put down a $10.00 deposit on the lot, and then headed home to Islip, Long Island, New York.
On March 11, 1958, a purchase agreement (with more brochures) was mailed to the couple’s home address in Long Island, which they signed.
On April 2, 1958, they returned the signed agreement with a check covering balance of the down payment.
Over a year passed. On June 12, 1959, the couple returned to Sebastian Highlands Subdivision to see what was happening with the project. They saw their lot and Collier Creek, which had been improved, with widening and bulkheading.
While at Sebastian Highlands, they selected a home to be built on their property, and executed a contract for it to be built on their lot. They returned to their home in New York.
Six months later, on December 1, 1959, John and Sylvia Scocozzo returned to Florida. They moved into their new home in the Sebastian Highlands Subdivision and they never moved out.
Meandering through the community was an actual creek. It was understood by the Scocozzos that Collier Creek was going to be developed into a waterway that would link with the Sebastian and Indian rivers.
They testified that the sales agent told them they would be able to boat from their home down the Collier Creek to the Sebastian River, then onward to the Indian River, and eventually reach the Atlantic Ocean.
This was especially inviting to the Scocozzos, as a “boating” family and the idea that the waterway was being developed was a key factor in their decision to buy the place.
However, the creek never became a navigable waterway. It remained only a mile long and completely landlocked and useless for boating purposes. So, they sued.
The seller had two of its corporate officers, as well as its land developing architect and its engineer, testify at trial. They all stated that there was never any plan to connect Collier Creek as a navigable waterway to the Sebastian River. It was “an engineering impossibility.”
Furthermore, the seller never okayed any sales agent to make any such representation to potential buyers.
The couple lost at trial, so they appealed the trial court’s decision. They presented the following three questions to the appellate court:
- Was there sufficient proof at trial sufficient to prove clearly and convincingly the seller’s fraud and misrepresentation on the buyer, to induce them to purchase the property?
- Were the representations made by the seller’s sufficient to constitute fraud as a matter of law and sufficient to void the contract, allowing the court to set aside the contract on the grounds that it had been induced by fraud?
- Did the trial judge err in holding that the acceptance of a heating system which the buyers were entitled to receive under a prior agreement was a waiver of their right to question the failure of the seller to fulfill its representation that it would extend Collier Creek to the river?
The appellate found that their was no basis to overturn the lower court’s decision and that there was no breach of contract.
First, the evidence as a whole demonstrated that an inspection of Sebastian Highlands Subdivision and Collier Creek would have raised doubts in the mind of a reasonably prudent individual as to the likelihood of Collier Creek being made navigable into the Sebastian River.
In Florida, a person to whom false representations have been made is not entitled to relief just because they were made. If this person might readily have ascertained the truth by ordinary care and attention, then his failure to do so and then suffer damages is considered to be the result of his own negligence.
In this case, the means of knowledge regarding the creek was available to the couple, and open to their inspection. If John and Sylvia did not inspect the creek, or hire an inspector to do so, then the court would not find that they were deceived by the other’s misrepresentations.
Finally, if the alleged misrepresentation was made, and even if plaintiffs had a right to and did rely thereon, plaintiffs waived their right to rescind the contract because they ratified it. They moved into the home and lived there. Having accepted the benefits, they could not rescind the contract.
- Misrepresentation by a Real Estate Professional: Claims for Negligent or Unintentional Misrepresentation
- Fraud in Your Florida Home Purchase?: Water Leaks and Flooding In Your New Home
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