ALVIN WATSON, APPELLANT,
v.
CHASE CHEMICAL CORPORATION, A FLORIDA CORPORATION, APPELLEE
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Watson, a distributor of Chase Chemical's product, sued for damages based on alleged fraudulent inducement to enter a distribution contract containing an arbitration clause. The court affirmed dismissal of Watson's complaint, holding that by suing for breach of contract damages rather than seeking rescission, Watson elected a remedy inconsistent with challenging the contract's validity and thereby bound himself to the arbitration clause.
The court held that Watson waived any challenge to the arbitration clause by electing to sue for damages on the contract rather than seeking rescission. A party cannot pursue both inconsistent remedies; one who accepts the contract's existence while suing for breach cannot simultaneously challenge the contract's validity through non-arbitration.
[1] A party who alleges fraudulent inducement to enter a contract may elect to affirm the contract and seek damages for breach, rather than pursue rescission.
[2] A claim for damages based on fraudulent inducement does not, by itself, put the making of the contract in issue for purposes of avoiding an arbitration clause.
Previewing 2 of 4 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“Where a party elects to adopt one of two inconsistent remedies, he cannot afterwards pursue the other, even though he fails in the remedy elected and used.”
Establishes the fundamental principle that election of remedies is binding and prevents pursuit of inconsistent alternatives.
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Join FLexlaw to unlock all legal intelligenceWatson entered into a contract with Chase Chemical to distribute Ice-O-Magic in Greenville County, South Carolina. The contract contained a provision …
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Appellant Watson entered into a contract with appellee Chase Chemical Corporation whereby Watson was named as distributor of Chase’s product known as “Ice-O-Magic” within the geographical area of Greenville County, South Carolina. A material provision of the contract between the parties is:
“This agreement shall be governed by and construed under the laws of Florida. Any controversy whatsoever relating to this agreement shall be settled by arbitration at Jacksonville, Florida, under the rules of the American Arbitration *54Association, before any action or proceeding can be brought or maintained.”
The trial judge dismissed Watson’s complaint, with prejudice, by reason of the foregoing contractual provision. Appellant-plaintiff Watson, by this appeal, contends that the trial court should not have dismissed the instant complaint, and in support thereof argues that he was fraudulently induced to enter a contract which contained the arbitration clause.
In order to evaluate Watson’s point on appeal, it is necessary to examine the relief sought in the instant complaint. At the outset, Watson alleged: “This is an action for damages”. He next alleged that the controverted contract was entered into between the parties; that Chase Chemical promised to furnish sales assistance; that these promises and other representations were false; and that Chase falsely made such inducements to get Watson to enter into the contract. Watson concluded his complaint by alleging: “By reason of defendant’s false representations as aforesaid, Plaintiff has been damaged * * * Wherefore, Plaintiff sues Defendant and demands judgment for compensatory and punitive damages.”
It is our view that the complaint is a suit upon a contract seeking damages. Plaintiff, at the outset had two courses available: 1. To recognize the contract and sue for damages for the breach thereof, or 2. To seek rescission of the contract upon established equitable principles and seek relief pursuant thereto. The two remedies are inconsistent. In Weeke v. Reeve,1 the Supreme Court held:
“Where a party elects to adopt one of two inconsistent remedies, he cannot aft-erwards pursue the other, even though he fails in the remedy elected and used. Where the election of a remedy assumes the existence of a particular status or relation of the party to the subject-matter of litigation, the party cannot afterwards pursue another remedy by which he assumes a different and inconsistent status or relation to the subject-matter.”
In the case sub judice, in order to have relieved himself of the binding contractual provision of an agreement to arbitrate, it was incumbent upon plaintiff to sue for rescission of the entire contract.2
The instant complaint does not in any respect allege the necessary elements of a suit in rescission or cancellation. Plaintiff did not at any time seek to amend in order to plead for such relief, but to the contrary alleged that a contract existed, had been breached, and that he was entitled to damages for such breach.
Affirmed.
WIGGINTON, Acting C. J., and MELVIN, WOODROW M., Associate Judge, concur.
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VIC Potamkin Chevrolet, Inc. v. Bloom, 386 So. 2d 286 (Fla. 3d DCA 1980)…damages. In their complaint, the Blooms did not seek rescission or cancellation as they might, R.B.F. Management Co. v. Sunshine Towers Apartment Residences Association, Inc., 352 So. 2d 561 (Fla. 2d DCA 1977); Watson v. Chase Chemical Corporation, 249 So. 2d 53 (Fla. 1st DCA 1971), or place in issue the validity of the entire contract. Caltagirone v. School Bd. of Hernando Cty., 355 So. 2d 873 (Fla. 2d DCA 1978). On deposition, respondents admitted that they had made and signed a purchase invoice which con…
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R. B. F. Mgmt. Co. v. Sunshine Towers Apt. Residences Ass'n, Inc., 352 So. 2d 561 (Fla. 2d DCA 1977)…at we conclude is the proper disposition of this difficult problem. While we do not attempt to deal with all of the appellate decisions bearing on the question, we hereafter deal with certain representative cases. In Watson v. Chase Chemical Corp., 249 So. 2d 53 (Fla. 1st DCA 1971) Watson entered into a contract with Chase whereby Watson was named as distributor of a Chase product. The arbitration clause contained in the contract provided as follows: This agreement shall be governed by and construed under…
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Morton Z. Levine & Assocs., Chartered v. van Deree, 334 So. 2d 287 (Fla. 2d DCA 1976)…ad acted inconsistently with its demand, which constituted a waiver of any contractual right to arbitration. None of these facts are present in this case. This case is more nearly in line with Watson v. Chase Chemical Corporation, Fla.App.lst 1971, 249 So. 2d 53. In Watson, although the complaint alleged fraud and misrepresentation, it demanded damages and the appellate court affirmed the trial court where it dismissed the complaint because of the agreement to arbitrate set forth in the contract between the…
Previewing 3 of 5 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Weeke v. Reeve, 65 Fla. 374 (Fla. 1913)
- Lummus Co. v. Commonwealth OIL Ref. Co., Inc., 280 F.2d 915 (1st Cir. 1960)
- Marks v. Fields, 160 Fla. 789 (Fla. 1948)
- Conner Air Lines, Inc. v. Aviation Credit Corp., 364 U.S. 911 (U.S. 1960)
- Bindley v. Metro. Life Ins. Co., 364 U.S. 911 (U.S. 1960)