Fraudulent Misrepresentation under Florida Law
In Florida, “there are four elements of fraudulent misrepresentation: ‘(1) a false statement concerning a material fact; (2) the representor’s knowledge that the representation is false; (3) an intention that the representation induce another to act on it; and (4) consequent injury by the party acting in reliance on the representation.’” Butler v. Yusem, 44 So. 3d 102, 105 (Fla. 2010) (quoting Johnson v. Davis, 480 So. 2d 625, 627 (Fla. 1985)). Although earlier decisions suggested otherwise, “[j]ustifiable reliance is not a necessary element of fraudulent misrepresentation.” Id.
False Statement
A false statement or misrepresentation, is satisfied not only where the person who made it knew it was false at the time but also where the representation is made “without knowledge as to either truth or falsity’’ or when the representation is made “under circumstances in which the representor ought to have known, if he did not know, of the falsity thereof.” Thor Bear, Inc. v. Crocker Minzer Park, Inc., 648 So. 2d 168, 172 (Fla. 4th DCA 1994).
Fraud also includes the intentional omission of a material fact. Consequently, the intentional withholding of information for the purpose of inducing action has been regarded as equivalent to a fraudulent misrepresentation. Ward v. Atl. Sec. Bank, 777 So. 2d 1144, 1146 (Fla. 3d DCA 2001); Solorzano v. First Union Mortg. Corp., 896 So. 2d 847, 849 (Fla. 4th DCA 2005).
Statement of Material Fact
Not every false statement constitutes actionable fraudulent misrepresentation. As a general rule the misrepresentation must be of a past or present material fact. “A material fact is one that is of such importance that (claimant) would not have [entered into the transaction] [acted], but for the false statement.” Florida Standard Jury Instructions (Civil) § 409.5. Three categories of false statements are generally not considered actionable fraud: opinions, sales or trade talk, or statements of intention or promises. 37 Am. Jur. 2d Fraud and Deceit §§ 41–44 (1974).
As just noted, “[a] false statement amounting to a promise to do something in the future is [usually] not actionable fraud.” Sleight v. Sun and Surf Realty, Inc., 410 So. 2d 998, 999 (Fla. 3d DCA 1982). However, there is a narrow exception, if it can be shown that “the promisor had a specific intent not to perform at the time the promise was made.” Century Props., Inc. v. Machtinger, 448 So. 2d 570, 572 (Fla.2d DCA 1984). Nevertheless, it must be remembered that proving someone’s internal state of mind is difficult.
Generally there is No Duty to Investigate a Fraudulent Misrepresentation
“A person guilty of fraudulent misrepresentation should not be permitted to hide behind the doctrine of caveat emptor.” Besett v. Basnett, 389 So. 2d 995, 997 (Fla. 1980). Consequently, the recipient of a fraudulent misrepresentation of fact is justified in relying upon its truth, although he might have ascertained the falsity of the representation had he made an investigation. See Restatement (Second) of Torts § 540 (1976). However, the recipient of a fraudulent misrepresentation is not justified in relying upon its truth if he knows that it is false or its falsity is obvious to him. Id. at § 541. See also Gilchrist Timber Co. v. ITT Rayonier, Inc., 696 So. 2d 334, 336 (Fla. 1997).
Fraudulent and Negligent Misrepresentation Compared
Fraudulent misrepresentation and negligent misrepresentation are very similar. See 21 Fla. Prac., Elements of an Action § 52:1 (2009–2010 ed.) (“The elements of claims for fraud in the inducement, fraud in the performance, fraudulent misrepresentation, and negligent misrepresentation are identical and differ only by the underlying facts supporting each claim.”).
A misrepresentation is fraudulent when the person making it either (a) knew it was false, (b) should have known it was false, or (c) made the misrepresentation without knowledge of whether it was truth or false. A misrepresentation is negligent when a party transmits false information but is not aware of the falsehood.