THOMAS V. MULLE, ET AL., APPELLANTS,
v.
ALBERT SCHEILER, APPELLEE

Fla. 5th DCA | 1986-02-13
No. 85-423
COBB, C.J. and SHARP, J., concur.
484 So. 2d 47 Florida District Court of Appeal, Fifth District (1986) Positive Treatment
Cited by 13 cases

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.

Synopsis

In a commercial fraud dispute, the court affirmed a jury verdict allowing rescission of a business sale where sellers fraudulently misrepresented store income and expenses. The court held that the rescission remedy was available despite the buyer's inability to fully restore the businesses because the fraud itself prevented restoration, and affirmed compensatory and punitive damages while reversing an improper civil theft damage award.


Holding

The trial court properly denied the motion for directed verdict and submitted the case to the jury because there was sufficient evidence of fraudulent misrepresentation and reliance. Rescission was available as an equitable remedy despite restoration being impossible, because the sellers' own fraud caused the inability to restore. The compensatory and punitive damages and denial of recovery on the note and mortgage were affirmed, but the civil theft damage award was reversed because the sellers did not obtain or use funds beyond those already accounted for in compensatory damages.


Headnotes

[1] Sufficient evidence of fraudulent misrepresentation regarding business income, expenses, and profits supports a jury's finding of fraud and denial of a directed verdict.

[2] A defrauded party is excused from restoring the status quo prior to rescission to the extent that the wrongdoer's conduct rendered restoration impossible.

Previewing 2 of 6 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.

Join FLexlaw to unlock all legal intelligence

Key Quotes

“A defrauded person is excused from restoration to the extent he is rendered incapable thereof by reason of the wrongful conduct of the wrongdoer.”

Establishes the exception to the general rescission rule allowing remedy when fraud prevents restoration

Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.

Join FLexlaw to unlock all legal intelligence

Facts & Procedural History

Appellants (sellers) negotiated the sale of two stores to appellee (buyer), providing fraudulent financial statements regarding gross income, expenses…

The full statement of facts, procedural history, and disposition for this case are member content.

Join FLexlaw to unlock all legal intelligence

© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.


Opinion of the Court
ORFINGER, Judge.

ORFINGER, Judge.

There was sufficient evidence that the sellers, appellants here, fraudulently misrepresented the gross income, expenses and profits of the two stores they were negotiating to sell to appellee and that appellee justifiably relied thereon, as to support the trial court’s denial of appellants’ motion for directed verdict and submission of the case to the jury.

Although the equitable remedy of rescission is generally not available unless the condition of the parties as it existed prior to the execution of the contract can be restored, Steak House, Inc. v. Barnett, 65 So. 2d 736 (Fla.1953), there are recognized exceptions to the general rule, such as in the case here, where the inability of the buyer to restore is caused by the very fraud perpetrated by the sellers. See Willi-ston on Contracts, (3d ed. 1937). Vol. 12, §§ 1460A, 1463. A defrauded person is excused from restoration to the extent he is rendered incapable thereof by reason of the wrongful conduct of the wrongdoer. 17A, C.J.S. Contracts § 439. See also Janeczek v. Embry, 330 So. 2d 837 (Fla. 3d DCA 1976); Dobbs, Handbook on the Law of Remedies, § 9.4 (1973).

The record reflects offers by the appellee to restore the businesses to appellants prior to the suit, when such restoration was fully possible, which offers the appellants rejected.

The evidence of active participation in the fraud and misrepresentation on the part of at least two of the appellant partners in negotiating the sale of the business is sufficient to support the punitive damage award against all of the partners. §§ 620.62, 620.63, Fla.Stat. (1983).

The jury verdict had the effect of cancelling the note and mortgage given by appellee to appellants and the trial court, on remand, should reflect this finding as well as ordering restoration to appellants of whatever assets are capable of restoration. To the extent that the verdict and judgment thus reflect rescission and cancellation of the note and mortgage, the portions of the judgment awarding damages to appellee of $56,300 and punitive damages in the total amount of $22,500, and denying recovery to appellants on the note and mortgage are affirmed.

The award of damages to appellee for civil theft, (section 812.035(7), Florida Statutes (1983)), however, cannot stand because it is wholly unsupported by the evidence. The only money or property obtained by appellants from appellee was the down payment for the businesses plus the payments made on the purchase money promissory note. All this money is accounted for in the compensatory damage award to appellee previously sustained. Any other money lost by appellee would have been in the operation of the businesses, and although this loss too might have been the subject of a damage award based on the fraud of appellants, the jury did not make such award. Despite the broad defi nition of “obtain and use” reflected in section 812.012(2), Florida Statutes (1983) it is clear that appellants did not “obtain or use” any of these funds. The damage award for civil theft is therefore reversed, and it follows that the retention of jurisdiction to award attorney’s fees under the civil theft statute is also reversed.

AFFIRMED in part, REVERSED in part and REMANDED.

COBB, C.J. and SHARP, J., concur.


Cases With Similar Vibessemantic neighbors from the corpus


Citator

Cited By

  • Bass v. Farish, 616 So. 2d 1146 (Fla. 4th DCA 1993)
    …not possible for the opposing party to be put back into his pre-agreement status. The general rule is subject to an exception when the inability of one party to restore is caused by the very fraud perpetrated by the other party. Mulle v. Scheiler, 484 So. 2d 47 (Fla. 5th DCA), rev. denied, 492 So. 2d 1334 (Fla.1986). In this situation, the defrauded person is excused from restoration if the inability to restore is caused by the wrongdoer’s conduct. Id. at 48. In their brief, the appellants rely on Braman…
  • Henson v. James M. Barker Co., Inc., 555 So. 2d 901 (Fla. 1st DCA 1990)
    …ot necessarily limited to situations where the parties can be restored to the status quo; that general rule is subject to exception where the inability of one party to restore is caused by the fraud perpetrated by the other party. Mulle v. Scheiler, 484 So. 2d 47 (Fla. 5th DCA), rev. denied, 492 So. 2d 1334 (Fla.1986). The court in that case summarized the pertinent principles as follows: Although the equitable remedy of rescission is generally not available unless the condition of the parties as it existed…
  • Bush v. Palm Beach Imports, Inc., 610 So. 2d 68 (Fla. 4th DCA 1992)
    …misrepresentations where it is not possible to put the parties back in their original positions and with their original rights.’ ”) (quoting Pryor v. Oak Ridge Dev. Corp., 97 Fla. 1085, 1094, 119 So. 326, 329 (Fla.1929)). But see Mulle v. Scheiler, 484 So. 2d 47 (Fla. 5th DCA) (there are exceptions to the general rule that rescission is not an adequate remedy where the parties cannot be restored to their status quo), rev. denied, 492 So. 2d 1334 (Fla.1986). Because the remedy of rescission is not appropria…

Previewing 3 of 7 citing cases — full citator treatment, depth of discussion, and citing context are member features.

Join FLexlaw to unlock all legal intelligence

Authorities Cited

Full citator, related cases, and AI research tools

Open in FLexlaw