FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
_____________________________
No. 1D21-806
_____________________________
JOHN D. LEVITAN, SR.,
Appellant,
v.
LUCIAN G. DANCAESCU,
Appellee.
_____________________________
On appeal from the Circuit Court for Escambia County.
Jan Shackelford, Judge.
September 14, 2022
PER CURIAM.
In this appeal from a summary final judgment, Appellant
asserts that the trial court erred in granting Appellee’s motion for
summary judgment while Appellant’s motion for leave to amend
his answer was pending. We decline to address this argument—
which is not preserved for appeal—because Appellant never
requested that the trial court rule on his motion before ruling on
the summary judgment motion. Appellant further asserts that the
trial court erred in concluding that Appellee was entitled to
summary judgment based on the clear and unambiguous language
of the parties’ agreement. Finding merit as to this second
argument, we reverse and remand for further proceedings.
I.
The parties in this case entered into an agreement for
Appellant to purchase LDRK Capital, LLC, (“LDRK”) from
Appellee for $2,000,000.00. The agreement provided that LDRK
was the owner of two Brazilian treasury bonds or LTN bonds and
that “[Appellant] acknowledge[d] that he independently reviewed
the information posted on the website www.tesouro.fazenda.gov.br
prior to this agreement and that no representations as to the
Market Value were made by [Appellee] and [Appellant’s] interest
in these bonds [wa]s strictly speculative.”
Appellee subsequently filed a one-count complaint against
Appellant for breach of contract. Appellant filed a counterclaim for
damages, alleging that the LTN bonds sold to him “were
represented to be true, valid, marketable, and in force,” but were
instead “fraudulent and counterfeit, without value whatsoever,”
and that Appellant relied upon these representations to his
detriment.
Appellee moved for summary final judgment, claiming that
there were no genuine issues of material fact and that he was
entitled to judgment as a matter of law on the complaint and
counterclaim. Specifically, Appellee asserted that the language of
the parties’ agreement refuted the alleged representations made
by Appellee regarding the LTN bonds. In support of the motion,
Appellee filed his sworn affidavit, which stated in pertinent part
that (1) he made no representations to Appellant as to the market
value of LDRK or assets owned by LDRK; (2) Appellant’s interest
was strictly speculative; and (3) he sold LDRK to Appellant based
on representations Appellant made to him that he understood that
he was purchasing a speculative interest.
In opposition to Appellee’s motion for summary judgment,
Appellant filed three affidavits. The first affidavit was executed by
James Tanenbaum, a New York attorney, who stated that in
response to Appellant’s concerns about the genuineness of the
bonds, he contacted the Brazilian firm of Pinherio Guimaraes
about the validity of the bonds and received a letter from the firm,
whose ultimate conclusion was that “the LTN was probably
counterfeit” and that even if “the LTN was authentic, the LTN was
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not redeemable due to the passage of the statute of limitations on
the right to enforce the LTN.” The second affidavit was executed
by Fabio Yanitchkis Couto and Laura Norbert Costa, attorneys
with the Brazilian firm of Pinherio Guimaraes, who stated that
their firm issued a letter to James Tanenbaum informing him of
the firm’s ultimate conclusion that “the LTN was probably
counterfeit” and that even if “the LTN was authentic, the LTN was
not redeemable due to the passage of the statute of limitation on
the right to enforce the LTN.” Attached to the affidavit was a true
and correct copy of the letter. The third and final affidavit was
executed by Appellant who stated that (1) Appellee represented
that the LTN bonds were genuine and in force; that (2) he
subsequently contacted Merrill Lynch Capital Markets and
Emerging Markets Groups as well as Credit Suisse Capital
Markets & Gaming Groups and was told that the bonds were
fraudulent; and that (3) he paid the Brazilian firm of Pinheiro
Guimaraes for a report that concluded the bonds were probably
counterfeit.
Appellee subsequently filed Plaintiff’s Motion to Strike or
Disregard Parol Evidence. Appellee claimed that Appellant could
not use the parol evidence contained in the affidavits to vary the
plain and unambiguous language of the parties’ agreement in
order to impose representations or warranties regarding the
“speculative” bonds that were expressly disclaimed by the parties
as part of their bargain.
At the summary judgment hearing, Appellee’s counsel argued
that parol evidence regarding whether the bonds were legitimate
was not relevant because the parties’ agreement expressly
provided that it was for the sale of a membership interest in LDRK
and that no representations were made regarding the value of the
bonds held by LDRK. Appellant’s counsel responded that the
seminal issue in the case was whether the bonds were genuine,
fraudulent, or counterfeit and that the affidavits submitted by
Appellant were sufficient to create a genuine issue of material fact
as to whether the bonds were genuine so as to defeat Appellee’s
summary judgment motion. Appellee’s counsel replied that the
agreement itself refuted Appellant’s assertion that the legitimacy
of the bonds was a fundamental issue.
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Following the hearing, the trial court entered a Summary
Final Judgment for Plaintiff. Upon finding that there was no
genuine issue of material fact and that Appellee was entitled to
judgment as a matter of law, the trial court granted Appellee’s
motion for summary judgment and entered judgment in favor of
Appellee.
Appellant then filed a motion for rehearing, which claimed
that the judgment was not final because it failed to address and
dispose of Appellant’s counterclaim. Appellee responded by
submitting a proposed amended judgment addressing the issues
raised in Appellant’s motion for rehearing and requested that the
court enter the proposed amended judgment and deny the
rehearing motion.
The trial court denied Appellant’s motion for rehearing and
entered an Amended Summary Final Judgment for Plaintiff,
which included additional findings of fact. Specifically, the court
found that (1) no term in the contract conditioned Appellant’s
obligation to pay on the value of the LTN bonds; and that (2) “the
plain and unambiguous language of the Contract expressly
disclaimed any representation regarding the value of the LTN
bonds insomuch as it provided that ‘no representations as to the
Market Value’ of those bonds was [sic] made by Plaintiff to
Defendant, and that Defendant’s interest in the bonds was ‘strictly
speculative.’” Accordingly, the court reaffirmed that Appellee was
entitled to summary judgment, entered judgment in favor of
Appellee, and ordered that Appellant take nothing on his
counterclaim. This appeal followed.
II.
Because a motion for summary judgment requires the trial
court to determine whether the movant is entitled to judgment as
a matter of law, the granting of such a motion is reviewed de novo.
Chirillo v. Granicz,
199 So. 3d 246, 252 (Fla. 2016); Volusia Cnty.
v. Aberdeen at Ormond Beach, L.P.,
760 So. 2d 126, 130 (Fla. 2000);
Castleberry v. Edward M. Chadbourne, Inc.,
810 So. 2d 1028, 1029
(Fla. 1st DCA 2002). “Where no material facts are in dispute and
the ‘determination of the issues of a lawsuit depends upon the
construction of a written instrument and the legal effect to be
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drawn therefrom, the question at issue is essentially one of law
only and determinable by entry of summary judgment.’” Holmes v.
Fla. A & M Univ. ex rel. Bd. of Trs.,
260 So. 3d 400, 403 (Fla. 1st
DCA 2018) (quoting Cox v. CSX Intermodal, Inc.,
732 So. 2d 1092
(Fla. 1st DCA 1999)). “However, ‘[w]here the terms of the written
instrument are disputed and reasonably susceptible to more than
one construction, an issue of fact is presented as to the parties’
intent which cannot properly be resolved by summary judgment.’”
Strama v. Union Fid. Life Ins. Co.,
793 So. 2d 1129, 1132 (Fla. 1st
DCA 2001) (quoting Universal Underwriters Ins. Co. v. Steve Hull
Chevrolet, Inc.,
513 So. 2d 218, 219 (Fla. 1st DCA 1987)). The
initial determination of whether the contract term is ambiguous is
a question of law for the court. Holmes, 260 So. 3d at 404; Strama,
793 So. 2d at 1132. Contractual ambiguities are either patent or
latent. Nationstar Mortg. Co. v. Levine,
216 So. 3d 711, 715 (Fla.
4th DCA 2017). “A patent ambiguity is intrinsically apparent on
the face of the document due to ‘the use of defective, obscure, or
insensible language.’”
Id. (quoting Emergency Assocs. of Tampa,
P.A. v. Sassano,
664 So. 2d 1000, 1002 (Fla. 2d DCA 1995)). In
contrast, a latent ambiguity arises “where the language employed
is clear and intelligible and suggests but a single meaning, but
some extrinsic fact or extraneous evidence creates a necessity for
interpretation or a choice among two or more possible meanings.”
Thompson v. Watts,
111 So. 3d 986, 989 (Fla. 1st DCA 2013);
Barnwell v. Miami-Dade Cnty. Sch. Bd.,
48 So. 3d 144, 145–46
(Fla. 1st DCA 2010). “As a general rule, evidence outside the
contract language, which is known as parol evidence, may be
considered only when the contract language contains a latent
ambiguity.”
Thompson, 111 So. 3d at 989.
In this case, Appellant claims that the trial court erred in
granting Appellee’s motion for summary judgment because a
genuine issue of material fact existed as to whether Appellee
falsely represented that the LTN bonds were valid. Appellee
responds that the trial court properly granted his motion for
summary judgment because the plain and unambiguous language
of the parties’ agreement disclaimed that any representation had
been made regarding the value of the speculative bonds.
Specifically, Appellant acknowledged in the agreement that “he
independently reviewed the information posted on the website
www.tesouro.fazenda.gov.br prior to this agreement and that no
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representations as to the Market Value were made by [Appellee]
and [Appellant’s] interest in these bonds [wa]s strictly
speculative.” However, Appellant counters that the agreement’s
failure to define “Market Value” and “speculative” created a latent
ambiguity as to whether the disclaimer negated his claim for
fraudulent inducement, requiring the consideration of parol
evidence.
The Florida Supreme Court in Oceanic Villas, Inc. v. Godson,
4 So. 2d 689 (1941), addressed the issue whether contractual
language barred a claim for fraudulent inducement. In that case,
the court held that the clause in a lease—which provided that its
execution was not governed or influenced by any representations
of the lessors as to the earning capacity of the leased property and
that the lessee was guided only by its own judgment without
influence, representation, fraud, or duress by the lessors—did not
estop the lessee from seeking rescission of the lease on the ground
that it was procured by the lessors’ fraudulent representations as
to previous gross earnings of property.
Id. at 690. In doing so, the
court explained:
To hold that by the terms of the contract which is alleged
to have been procured by fraud, the lessor could bind the
lessee in such manner that lessee would be bound by the
fraud of the lessor would be against the fundamental
principles of law, equity, good morals, public policy and
fair dealing. It is well settled that a party can not [sic]
contract against liability for his own fraud. We do not
mean by this, however, to hold that a contract may not be
made incontestable by the terms thereof on the ground of
fraud. We recognize the rule to be that fraud in the
procurement of a contract is ground for rescission and
cancellation of any contract unless for consideration or
expediency the parties agree that the contract may not be
cancelled or rescinded for such cause, and that by such
special provisions of a contract it may be made
incontestable on account of fraud, or for any other reason.
The clause of the contract here relied on does not
stipulate that the lease may not be rescinded for fraud,
but it does stipulate ‘and that no verbal agreements,
stipulations, representations, exceptions or conditions
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whatsoever have been made or entered into in regard to
the above described property which will in any way vary,
contradict or impair the validity of this lease, or of any of
the terms and conditions herein contained.’ This
provision in the contract does not make the contract
incontestable because of fraud, but evidences an
agreement between the parties that no fraud had been
committed. We think there is clearly a distinction in the
effect of a stipulation of a contract which recognizes that
fraud may have been committed and stipulates that such
fraud, if found to have been committed, should not vitiate
the contract, and one in which the parties merely
stipulate that no fraud has been committed and that
neither party has relied upon the representations of the
other party made prior to the execution of the contract.
Id. at 690–91 (citations omitted). Courts have construed this
decision as standing for the proposition that “one can avoid a
fraudulent inducement claim only by contract language which
specifically and explicitly negates the right to bring such a claim.”
Lower Fees, Inc. v. Bankrate, Inc.,
74 So. 3d 517, 519 (Fla. 4th DCA
2011); accord Viridis Corp. v. TCA Global Credit Master Fund, LP,
721 F. App’x 865, 875 (11th Cir. 2018); Global Quest, LLC v.
Horizon Yachts, Inc.,
849 F.3d 1022, 1027–28 (11th Cir. 2017);
Onemata Corp. v. Rahman, No. 20-cv-62002-WPD,
2021 WL
5175544, at *4 (S.D. Fla. Oct. 12, 2021); Best Fabrications, Inc. v.
Navistar, Inc., No. 8:19-cv-815-T-24TGW,
2019 WL 9089595, at *2
(M.D. Fla. June 3, 2019); but see Billington v. Ginn-La Pine Island,
Ltd.,
192 So. 3d 77, 83 (Fla. 5th DCA 2016) (attempting to reconcile
Oceanic Villas with an earlier Florida Supreme Court decision on
the basis that a “merger” clause negates a fraud claim but a “non-
reliance” clause does not).
Appellant claims on appeal that he alleged a viable claim for
fraud in the inducement, even though his counterclaim below was
not explicitly designated in those words. “It is axiomatic that
fraudulent inducement renders a contract voidable, not void.”
Mazzoni Farms, Inc. v. E.I. DuPont De Nemours & Co.,
761 So. 2d
306, 313 (Fla. 2000). As a result, “Florida law provides for an
election of remedies in fraudulent inducement cases: rescission,
whereby the party repudiates the transaction, or damages,
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whereby the party ratifies the contract.”
Id. Appellant sought
damages instead of rescission. Although no case law has been
uncovered expressly limiting Oceanic Villas to fraudulent
inducement claims seeking rescission, the Fourth District in two
cases involving contractual “as is” clauses distinguished between
fraudulent inducement claims seeking rescission and those
seeking damages. In both cases—which involved fraudulent
inducement claims seeking damages—the court applied the
following principle of law: “[A] party cannot recover in fraud for
alleged oral misrepresentations that are adequately covered or
expressly contradicted in a later written contract.” Fla. Holding
4800, LLC v. Lauderhill Mall Inv., LLC,
317 So. 3d 121, 123 (Fla.
4th DCA 2021); Mac-Gray Servs., Inc. v. DeGeorge,
913 So. 2d 630,
634 (Fla. 4th DCA 2005). However, the Second District recently
applied Oceanic Villas to a fraud claim which sought damages or,
alternatively, rescission. NM Residential, LLC v. Prospect Park
Dev., LLC,
336 So. 3d 807 (Fla. 2d DCA 2022).
To the extent that Appellant raises a claim of fraud in the
inducement, we conclude that the disclaimer or “no-reliance”
clause in the parties’ agreement does not preclude Appellant’s
claim because the clause neither (1) specifically and explicitly
negates the right to bring such a claim; nor (2) adequately covers
or expressly contradicts Appellee’s alleged representation that the
bonds were valid. While the parties’ agreement disclaimed that
any representations had been made regarding the “Market Value”
of the “speculative” bonds, it did not go so far as to disclaim that
the bonds were genuine. On that basis, the trial court erred in
granting summary judgment for Appellee. To the extent Appellant
sought to introduce parol evidence, this was unnecessary because
there is no latent ambiguity in the parties’ agreement.
III.
Thus, the trial court erred in granting Appellee’s motion for
summary judgment because the disclaimer language in the
parties’ agreement did not negate Appellant’s counterclaim for
fraudulent inducement based on the alleged invalidity of the LTN
bonds. Accordingly, we reverse and remand for further
proceedings.
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REVERSED and REMANDED.
ROWE, C.J., and LONG, J., concur; JAY, J., concurs with opinion.
_____________________________
Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
_____________________________
JAY, J., concurring.
I agree that the disclaimer language in the parties’ agreement
did not negate Appellant’s counterclaim for fraudulent inducement
based on the alleged invalidity of the LTN bonds. I write to further
note that Appellant also appears to allege fraud in the performance
of the contract, which would constitute a breach of the contract. La
Pesca Grande Charters, Inc. v. Moran,
704 So. 2d 710, 712 (Fla. 5th
DCA 1998). If Appellee represented that the LTN bonds were
genuine—without actual knowledge of the alleged falsity of the
statement—and Appellant subsequently determined that the
bonds were counterfeit, Appellant would have a breach of contract
claim. See Johnson v. Bokor,
548 So. 2d 1185, 1186 (Fla. 2d DCA
1989).
The issue would then become whether the disclaimer
language in the parties’ agreement negated a claim for breach of
contract based on the alleged invalidity of the LTN bonds. Appellee
made no attempt to counter Appellant’s affidavits challenging the
validity of the bonds and asserted that the bonds’ legitimacy was
irrelevant because the parties’ agreement was for the sale of
LDRK, which owned the bonds, and expressly disclaimed that any
representations were made regarding the bonds’ value. Appellant
responds that the agreement was for the sale of the bonds because
the bonds were the only asset of LDRK. This argument is
consistent with the language of the agreement, which states that
LDRK owns the bonds—without referencing any other assets.
In a contract for the sale of securities, there is an implied
warranty that the securities are genuine. See Meyer v. Richards,
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163 U.S. 385, 405–15 (1896) (holding that under the common law,
in a contract for the sale of commercial paper, there is an implied
warranty that the paper is what it purports to be); 17 Williston on
Contracts §51:85 (4th ed.) (recognizing that in the sale of
securities, the law charges the seller with certain implied
warranties, including that a security is genuine and in all respects
what it purports to be). While the parties’ agreement disclaimed
that any representations were made regarding the “Market Value”
of the “speculative” bonds, it did not go so far as to deny that the
bonds were genuine. Because the disclaimer language did not
negate a claim for breach of contract based on the alleged
invalidity of the bonds, this was an additional reason why
summary judgment was improper.
_____________________________
Bart A. Houston, Fort Lauderdale, for Appellant.
T. A. Borowski, Jr. and Darryl Steve Traylor, Jr. of Borowski &
Traylor, P.A., Pensacola, for Appellee.
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