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DePrince v. Starboard Cruise Services, Inc.

Florida Court of Appeals, Third District

August 1, 2018

Thomas DePrince, Appellant,
v.
Starboard Cruise Services, Inc., Appellee.

         Not final until disposition of timely filed motion for rehearing.

          An Appeal from the Circuit Court for Miami-Dade County, Lower Tribunal No. 13-16523 Michael Hanzman, Judge.

          McDonald Hopkins, and Robert A. Cohen, Mario M. Ruiz and Joelle H. Dvir, for appellant.

          Isicoff Ragatz and Eric D. Isicoff and Carolina A. Latour, for appellee.

          Before ROTHENBERG, C.J., and SUAREZ, LAGOA, SALTER, EMAS, FERNANDEZ, LOGUE, SCALES, LUCK and LINDSEY, JJ.

         On Motion for Rehearing En Banc

          LUCK, J.

         In 1965, our state Supreme Court held that Florida law allowed for rescission of a contract based on unilateral mistake. Maryland Cas. Co. v. Krasnek, 174 So.2d 541, 542 (Fla. 1965) ("Although there is little doubt that the statement in the District Court's opinion that unilateral mistake provides no basis for rescission of a contract or for other equitable relief therefrom, represents the majority view, we are of opinion that it does not accurately reflect Florida case law." (citations omitted)). But what elements are required to prove unilateral mistake? Our court has read Krasnek to answer the question in two ways. In one line of cases, we have read Krasnek to require that the party seeking rescission prove "the mistake was induced by the party seeking to benefit from the mistake." DePrince v. Starboard Cruise Servs., Inc., 163 So.3d 586, 592 (Fla. 3d DCA 2015) (DePrince I); Rachid v. Perez, 26 So.3d 70, 72 (Fla. 3d DCA 2010); Lechuga v. Flanigan's Enters., Inc., 533 So.2d 856, 857 (Fla. 3d DCA 1988). In another line of cases, we have not required the party seeking rescission to prove that she was induced to make the mistake. See U.S. Alliance Corp. v. Tobon, 715 So.2d 1122, 1123 (Fla. 3d DCA 1998); Penn. Nat'l Mut. Cas. Ins. Co. v. Anderson, 445 So.2d 612, 613 (Fla. 3d DCA 1984). To address the lack of uniformity, we grant Starboard Cruise Service's motion for rehearing en banc, vacate the panel opinion, DePrince v. Starboard Cruise Servs., Inc., 43 Fla.L.Weekly D171 (Fla. 3d DCA Jan. 17, 2018) (DePrince II), and recede from Lachuga, Rachid, and DePrince I to the extent they require inducement as an element of unilateral mistake. We conclude that a party seeking rescission of a contract based on a unilateral mistake does not have to prove that she was induced into making the mistake by the other party, and affirm the judgment for Starboard.

         FACTUAL AND PROCEDURAL BACKGROUND

         1. The cruise.

         On February 11, 2013, Thomas DePrince, a passenger aboard a cruise ship, visited the ship's jewelry boutique, operated by Starboard, where he indicated his interest in purchasing a fifteen to twenty carat loose diamond.[1]DePrince specified he wanted an emerald cut, high quality, color D, E, or F diamond with a G.I.A. certificate.[2] Because the shipboard jewelry store did not have such a diamond, the store's manager, Mr. Rusan, electronically mailed Starboard's corporate office.

         Ms. Jimenez, at the corporate office, reached out to Starboard's diamond vendor in California, Sophia Fiori. Mr. Bachoura from Sophia Fiori, with some reservations because he did not believe a sale of this magnitude should take place aboard a ship, called a diamond broker in New York, Julius Klein, for its available inventory. Julius Klein sent Mr. Bachoura a list of diamonds available with the desired specifications. The list provided a per-carat price and a net price for each diamond. Mr. Bachoura selected two diamonds from the inventory listing, and electronically mailed the following information to Ms. Jimenez:

These prices are ship sailing prices based on the lowest tier diamond margin we have. Let me know if you have any questions.
EC 20.64 D VVS2 GIA VG G NON selling price $235, 000
EC 20.73 E VVS2 GIA EX EX FNT selling price $245, 000

         Ms. Jimenez forwarded this information to Mr. Rusan on the ship. Mr. Rusan, in turn, presented the information to DePrince and his partner, Mr. Crawford.

         Neither Ms. Jimenez nor Mr. Rusan had ever sold a large loose diamond before, and did not realize the quoted price was per carat. Mr. Crawford, who was a certified gemologist, asked the opinion of DePrince's sister, a graduate gemologist. Ms. DePrince warned that something was not right because the price for a diamond of that size should be in the millions and recommended not buying the diamond.

         Disregarding his sister's advice, DePrince contracted with Starboard to purchase the 20.64 carat diamond for the quoted $235, 000 price, paying with his American Express credit card. Shortly after the sale, Starboard discovered that the $235, 000 price was per carat. Starboard immediately notified DePrince of the error and reversed the charges to his credit card. DePrince then filed this complaint seeking to enforce the parties' contract.[3]

         2. DePrince I.

         The trial court initially granted summary judgment in favor of Starboard on June 20, 2014, based on Starboard's defense of unilateral mistake. This court reversed that judgment in DePrince I. There, the court reviewed the various tests for determining whether a party's agreement could be rescinded based on a unilateral mistake. Concluding that the panel and trial court were bound by the "four-prong test to establish unilateral mistake," the court

held that in order to rescind an otherwise-valid contract based on a unilateral mistake, the party seeking to avoid the contract must show:
(1) [T]he mistake was induced by the party seeking to benefit from the mistake, (2) there is no negligence or want of due care on the part of the party seeking a return to the status quo, (3) denial of release from the agreement would be inequitable, and (4) the position of the opposing party has not so changed that granting the relief would be unjust.

Id. at 592 (quotation omitted; footnote omitted). The court explained that "this panel - along with the trial court - is of course bound by" the four-prong test. Id. at 591. Later in the opinion, the court "reiterate[d] our position" that we "currently adhere[] to the four-prong test." Id. at 594. The court then went on to apply the four-prong test to the facts in the record at the summary judgment hearing.

         The court concluded that there was a genuine issue of material fact on the inducement prong because "knowledge of an error is markedly different than inducement of that error." Id. at 592. As an example of inducement, the court quoted ...


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