O. N. CODDING, APPELLANT,
v.
WILLIAM L. PHILLIPS, APPELLEE
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Codding sued Phillips for breach of a franchise agreement and fraudulent misrepresentation. The trial court granted summary judgment to Phillips based on the statute of limitations for fraud claims, and the appellate court affirmed, holding that Codding's claims were barred because any fraud occurred before or at the time of the franchise agreement in November 1968, and the complaint was not filed until March 1972—more than three years later.
The court affirmed the summary judgment, holding that Codding's fraud claims were barred by the statute of limitations because any fraud perpetrated occurred prior to or at the time the franchise agreement was established on November 29, 1968, and Codding was on notice of any falsity once the agreement was executed. The 'Entire Agreement' clause in the franchise contract provided legal support for this conclusion.
[1] The discovery of facts constituting fraud, for purposes of the statute of limitations, is measured by an objective standard requiring due diligence.
[2] A fiduciary relationship may influence the standard of due diligence required to discover facts constituting fraud.
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Join FLexlaw to unlock all legal intelligence“the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud.”
Establishes the discovery rule for fraud claims under Florida's statute of limitations—the cause of action accrues when the facts of fraud are discovered by the aggrieved party.
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Join FLexlaw to unlock all legal intelligenceCodding and Career Enterprises, Inc. (with Phillips as president and chief executive officer) entered into a franchise agreement on November 29, 1968.…
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PER CURIAM.
The plaintiff filed his complaint in the circuit court alleging breach of a franchise agreement and fraudulent misrepresentation. He now seeks review in this court upon a final summary judgment entered in favor only of defendant William L. Phillips.
The sole point raised by the parties is whether or not the trial court erred in granting summary judgment for defendant Phillips on the ground that the statute of limitations, Fla.Stat. § 95.11(5) (d), F.S.A., pertaining to causes of action alleging fraud, had run.
The statute provides that actions for fraud be commenced within three years, “the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud.” The record demonstrates that the franchise agreement between this plaintiff, Codding, and defendant Career Enterprises, Inc. was entered into on November 29, 1968, and the complaint was filed on March 28, 1972, more than three years after the agreement was executed.
The plaintiff alleged that certain enumerated false misrepresentations concerning Career Enterprises, Inc., which is in the business of franchising vocational educational schools, were concealed for over two years from the plaintiff.
The complaint charged Phillips, as Career’s president and chief executive officer, with the same material misrepresentations which induced the plaintiff to purchase one of these franchises for $25,000.
Defendant’s position is that the trial court properly determined that the plaintiff’s action was barred by Section 95.-11 (5) (d) because any fraud perpetrated occurred, if at all, prior to the time of the franchise agreement and that once • the agreement was established, the plaintiff was on notice of the falsity of any representations made to him. The defendant cites the following provision of the franchise contract to buttress this fact:
“Entire Agreement: We have read and understand clearly the contents of this agreement. For our mutual protection we agree that this is the entire understanding between us and that no other agreement or promises were made to us other than those herein given.”
Under Section 95.11(5) (d) “discovery” of facts constituting fraud is measured by an objective standard, meaning those facts which would be discovered through the exercise of due diligence. Matthews v. Matthews, Fla.App.1969, 222 So. 2d 282; Azalea Meats, Inc. v. Muscat, 386 F. 2d 5 (5th Cir. 1967).
The appellant cites language from Azalea Meats, Inc. v. Muscat in which the court acknowledged that the concept of due diligence is not locked into a rigid standard. In that case, the court was considering a stock fraud suit under broadly remedial provisions of S.E.C. rule 10-b-5.
Moreover, the court noted the presence of a corporate fiduciary relationship bearing heavily upon the issue of due diligence. The court said:
“A fraud which is flagrant and widely publicized may require the defrauded party to make immediate inquiry. On the other hand, one artfully concealed or convincingly practiced upon its victim may justify much greater inactivity.” (386 F. 2d at p. 9.)
The statute of limitations in this case must be strictly construed against the party bringing suit, and the issue of whether or not the facts were such that they should have been discovered prior to the execution of the franchise agreement was a legal question. See Matthews v. Matthews, supra.
Therefore, for the reasons stated, the judgment appealed is affirmed.
Affirmed.
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Poulos v. Vordermeier, 327 So. 2d 245 (Fla. 4th DCA 1976)…s than three years prior to the commencement of the action), the narrow question remains as to when plaintiffs should have learned of it using reasonable or due diligence. Matthews v. Matthews, 222 So. 2d 282 (2d DCA Fla. 1969); Codding v. Phillips, 296 So. 2d 554 (3rd DCA Fla.1974); Azalea Meats, Inc. v. Muscat, 246 F.Supp. 780 (S.D.Fla.1965), rev’d on other grounds 386 F. 2d 5 (5th Cir. 1967). Now we turn to the complaint. Plaintiffs are in effect, the insureds and defendants are the insurance agents and…
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Brooks Tropicals, Inc. v. Alcides Acosta, 959 So. 2d 288 (Fla. 3d DCA 2007)…iscovery doctrine has no application to the facts at hand. On these facts, the question of whether this plaintiff should have discovered the basis for a cause of action for fraud was one of law to be determined by the court. See Codding v. Phillips, 296 So. 2d 554, 555 (Fla. 3d DCA 1974). The trial court erred in sending this question to the jury, which in turn incorrectly adopted Acosta’s argument that his causes of action did not accrue until 1997, when his attorney, Sharon Jones, obtained from the Ven-ditt…
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First Fed. Sav. & Loan Ass'n OF Wis. v. Dade Fed. Sav. & Loan Ass'n, 403 So. 2d 1097 (Fla. 5th DCA 1981)…n this section is defined by an objective, not subjective standard and means knowledge of facts which would have been discovered in the exercise of due diligence. Matthews v. Matthews, 222 So. 2d 282 (Fla. 2d DCA 1969). See also Codding v. Phillips, 296 So. 2d 554 (Fla. 3d DCA 1974).3 As stated in Hudak v. Economic Research Analysts, Inc., 499 F. 2d 996 (5th Cir. 1974), under Florida law, a party is charged with knowledge of facts which would have been discovered in the exercise of due diligence for purposes…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Azalea Meats, Inc. v. Muscat, 386 F.2d 5 (5th Cir. 1967)
- Matthews v. Olive M. Matthews, 222 So. 2d 282 (Fla. 2d DCA 1969)