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See Besett, 389 So.2d at 997 ("The recipient of a fraudulent misrepresentation is not justified in relying upon its truth if he knows that it is false or its falsity is obvious to him.") (quoting Restatement § 541). I thus am concerned with the majority's dicta that singles out the chain of title for discussion when that issue is not before us in this case. Even though the majority still embraces our decision in Besett, 389 So.2d at 998, I am concerned that in its broad sweep, the majority's statement could signal a return to caveat emptor. One of the misrepresentations in Besett, the size of the land offered for sale, id. at 996, is an item that may be contained in a chain of title. Certainly the size of a parcel, if not in the chain of title, would be contained in a survey that would be part of the real estate transaction. Indeed, in Besett we broadly held, “ recipient may rely on the truth of a representation, even though its falsity could have been ascertained had he made an investigation, unless he knows the representation to be false or its falsity is obvious to him.” 389 So.2d at 998.
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Azam v. M/I Schottenstein Homes, Inc.
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Stein Construction Builders
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See Hillcrest Pacific Corp. v. Yamamura, 727 So.2d 1053, 1055 (Fla. 4th DCA 1999) . Accordingly, we hold that dismissal of their cause of action for fraud was improper. We wholly agree with Judge Gross' concurring opinion in this regard. See Besset v. Basnett, 389 So.2d 995, 998 (Fla. 1980) (holding that "a recipient may rely on the truth of a representation, even though its falsity could have been ascertained had he made an investigation, unless he knows the representation to be false or its falsity is obvious to him"). To be located approximately 500 feet from Brindlewood.
Mi Schottenstein Homes Inc.
We hold that a recipient may rely on the truth of a representation, even though its falsity could have been ascertained had he made an investigation, unless he knows the representation to be false or its falsity is obvious to him. In Johnson v. Davis, this Court extended the Besett reasoning from affirmative misrepresentations to the arena of nondisclosure of material facts. The court very clearly stated that “where the seller of a home knows of facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them to the buyer.” Johnson v. Davis, 480 So.2d 625, 629 (Fla.1985). The court very clearly stated that "where the seller of a home knows of facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them to the buyer." Johnson v. Davis, 480 So.2d 625, 629 (Fla. 1985). Schottenstein filed a motion to dismiss the complaint with prejudice.
I write only to note that I disagree with that broad language inPressman v. Wolf, 732 So.2d 356, 361 (Fla. 3d DCA), rev. denied, 744 So.2d 459 (Fla. 1999), that "tatements concerning public record cannot form the basis for a claim of actionable fraud." . Whether a fraudulent statement about a public record is actionable is a question of fact. The law should not expect every potential homeowner in every case to root around the bowels of the courthouse for those surveys, plats, and records which would verify or contradict a seller's representations about the property. We disagree with the broad prohibition in Pressman. Rather, whether a fraud claim may lie with respect to statements about matters outside the property being sold, the status of which matters can be determined from a public record, is a factual question. Thus, we believe that whether the buyer exercised ordinary diligence in discovering the falsity of such statements should be determined on a case-by-case basis, and not by some bright-line rule.
Dave Kirby Construction
Petitioner seeks review of the holding of the Fourth District Court of Appeal, which requires a case-by-case analysis under such circumstances. In addition to adopting sections 540 and 541 of the Restatement and explaining their proper application, this Court held that the plaintiffs there had stated a viable cause of action for fraudulent misrepresentation. Poignantly, the purchasers alleged as part of the fraud claims that the seller had misrepresented the size of the purchased parcel during the parties' negotiations. Clearly, the size of a parcel of land would have been contained in the public record. The court then proceeded to make clear that when faced with a choice between a fraudulently misrepresenting seller and a negligently inattentive purchaser, it would prefer to favor the negligent conduct as less objectionable than fraud.
In reaching this determination, we hold that Johnson v. Davis, 480 So.2d 625 (Fla. 1985), does not apply to this case. In contrast, this case involves the alleged fraudulent misrepresentation of facts concerning an off-property site that do not affect the physical condition of the properties sold. We, therefore, decline to extend Johnson to the nature of the claim alleged here. The main issue on appeal is whether appellants alleged sufficient facts to support a cause of action for fraud in the inducement against Schottenstein. Specifically, they alleged that Schottenstein made a misrepresentation of a material fact; Schottenstein knew or should have known of the statement's falsity; Schottenstein intended that the representation would induce appellants to rely and act on it; and they suffered injury in justifiable reliance on the representation.
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When due consideration is given to the previous decisions of this Court, as well as to practical realities in real estate transactions, we must approve the decision of the Fourth District below and disapprove the broad blanket statement of the Third District in Pressman. Clearly, the question of whether a cause of action for fraudulent misrepresentation exists in the instant case is one of fact that cannot be resolved based exclusively upon the parties' pleadings. The complaint states a cause of action which is not negated by the attached exhibit. For these reasons, we hold that the question of whether a cause of action for fraudulent misrepresentation exists where the putatively misrepresented information is contained in the public record is one of fact that should not be resolved through a motion to dismiss and the use of a bright-line rule of preclusion. The concurrence is unduly concerned in its statement that today's decision “could signal a return to caveat emptor.” Concurring op. at 98.
The district court affirmed the trial court's dismissal of the negligence and recision counts; however, it disagreed with the trial court's determination with regard to the fraud claim. The court held that respondents had alleged sufficient facts to support a cause of action for fraud in the inducement against Schottenstein, notwithstanding the presence of the site plan in the Palm Beach County public records. Specifically stating, “We disagree with the broad prohibition in Pressman,” the court held that whether a fraud claim is properly asserted with respect to matters contained in the public record is a factual question that should be determined on a case-by-case basis.
None of the cases cited by the majority, all of which predate our opinion in Besett, involve the right of a purchaser to bring a cause of action against a seller who has made an affirmative misrepresentation to a purchaser on a material matter in order to induce the purchaser to buy the property. Rather, these cases deal generally with the rights of innocent third parties to enforce restrictive covenants that are deemed to run with the land against a subsequent purchaser. Finally, because this case involves the purchaser's right to sue the seller for damages resulting from the wrongful conduct, there should be no concern over the stability of real estate transactions. Rather, creating the possibility of a broad exception for information within the public record could have the effect of shielding sellers from their wrongdoing in making blatant misrepresentations of material fact to unsophisticated buyers regarding information within the chain of title. I am certain that the majority does not intend this result, but I am concerned that the dicta regarding the chain of title could be misconstrued to create this result. For all these reasons, I concur in result only.
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