Brown v. CHAMAX, LLC
51 So. 3d 552
Fla. Dist. Ct. App.2010Background
- J. Robert Brown, as Trustee under the Buckeye Road Trust, sues Chamax, Chapman, Schreiber, and Maxwell for fraud-related claims.
- Lerian Investment assigned a purchase agreement to the Buckeye Road Trust after Lerian sought zoning for development.
- Trust alleged Chapman/Schreiber misrepresented parity with Ryland and Trust relied on these misrepresentations in accepting the assignment.
- Trust amended counterclaims to include fraud counts after discovery revealed costs Chamax allegedly incurred were misrepresented.
- Trial court dismissed fraud claims with prejudice, finding no intended reliance or assignment basis; appeal followed.
- Appellate court reverses in part, finds abuse of discretion on denial to amend, and analyzes economic loss rule applicability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraudulent inducement—intent to induce Trust | Trust alleges Chapman/Schreiber intended Lerian to induce later Trust. | No intent to induce the Trust existed when representations were made to Lerian. | Fraudulent inducement claim fails for lack of intended reliance. |
| Amendment and assignment of fraud claims | Lerian could assign its fraud claim to the Trust; amendment should be allowed. | Assignment impliedly limited or did not authorize Trust to amend accordingly. | Trial court abused discretion by denying amendment. |
| Economic loss rule and fraud claims | Fraud claims relate to contract terms, not performance, so not barred. | Misrepresentations relate to contractual performance; fraud should be barred by economic loss rule. | Fraud claims not barred; economic loss rule inapplicable to these misrepresentations. |
Key Cases Cited
- Hillcrest Pac. Corp. v. Yamamura, 727 So. 2d 1053 (Fla. 4th DCA 1999) (intent element for fraudulent inducement)
- HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 685 So. 2d 1238 (Fla. 1996) (economic loss doctrine and contract relation)
- Allen v. Stephan Co., 784 So. 2d 456 (Fla. 4th DCA 2000) (fraud relates to contract term, not performance)
- Spradley v. Stick, 622 So. 2d 610 (Fla. 1st DCA 1993) (leave to amend freely granted; abuse when prejudicial)
- Video Indep. Med. Examination, Inc. v. City of Weston, 792 So. 2d 680 (Fla. 4th DCA 2001) (abuse of discretion standard for amendments)