standard jury instructions contracts and business january

Standard Jury Instructions Contracts and Business January 2020 Agenda Meeting Agenda
Thursday, January 23, 2020;1:30 pm–5:30 pm Friday, January 24, 2020; 9:00 am–1:30 pm
Fourth DCA 110 S. Tamarind Avenue West Palm Beach, FL 33401 Multi-purpose Room
The call-in number is 1-888-376-5050 Conference code: 965 874 1256#
1. Welcome and Introductions (Special Welcome to New Members)
2. Approval of August 2019 Minutes ........................................................... p. 4
3. SJI Contract and Business 2020 report filed with the Court on 1/17/20 Affected Instructions/Verdict Forms 416.23 (Anticipatory Breach),
416.50(a) (Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”)); 416.50(b) (Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”)—Legal Cause); 416.50(c) (Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”)—Measure of Actual Damages), Form 416.30 (Model Form of Verdict Waiver); Form 504.1 (Model Form of Verdict for Introduction to Contract Damages in Contract Claim); Form 504.2 (Model Form of Verdict for Breach of Contract Damages in Contract Claim); Form 504.3 (Model Form of Verdict for Lost Profits); Form 504.4 (Model Form of Verdict for Damages for Complete Destruction to Business in Contract Claim); and Form 504.6 (Model Form of Verdict for Obligation to Pay Money Only in Contract Claim).
4. Subcommittee Reports A. Subcommittee Reviewing Section 500 Subcommittee to review the various proposed 504 verdict forms,
suggest any necessary revisions, consider the adoption of a 504.5 form, consider the addition of a damages line in the 504.3 lost profits form, and bring a consolidated proposal back to the full Committee: (Burns, Nations, Sanchez, Croom, and Boyle)
Materials ..................................................................................................... p.24 B. 416.28 (Model Form of Verdict for Affirmative Defense—Fraud) Subcommittee to review the draft model verdict form for instruction
416.28, regarding fraud, to determine whether any changes are necessary and to put together a final proposal for the full Committee’s consideration (Payton, Osherow, Judge Huey, and Gunn)
Materials ..................................................................................................... p.28 SJI Contract and Business January 2020 Agenda Page 1
C. Subcommittee Unilateral Mistake Subcommittee to review the state of the law on unilateral mistake, in light of DePrince v. Starboard, to determine whether an instruction is needed and, if so, to draft a proposal, along with a proposed verdict form: (Altenbernd, Gentile, Gunn, Palmer)
Materials ..................................................................................................... p.39
D. Subcommittee Tortious Interference Subcommittee to review the state of the law on tortious interference and the applicable Civil instruction, and to consider any necessary proposals for the full Committee’s consideration, including whether that instruction should be tweaked and whether it should be moved to the Business instructions: (Turkel, Huey, Altenbernd, Boyle) Materials .....................................................................................p.56
E. 416.27 (Model Form of Verdict for Affirmative Defense—Undue Influence) Subcommittee to review the draft model verdict form for instruction 416.27, regarding undue influence, to determine whether any changes are necessary and to put together a final proposal for the full Committee’s consideration: (Bitman, Serafin, Turkel)
F. Subcommittee Restrictive Covenants Subcommittee to review the state of the law on restrictive covenants to determine whether an instruction is needed and, if so, to draft a p proposal: (Osherow, Serafin, Rost)
G. Subcommittee Independent Tort Doctrine Subcommittee to review the independent tort doctrine to determine whether an instruction is needed: (Burns, Boyle, Croom, Sanchez, Spector)
H. Subcommittee Trespass Subcommittee to review the state of the law on trespass to determine whether an instruction is needed and, if so, to draft a proposal: (Altenbernd, Gewirtz, Palmer, Gentile)
I. New Appointments and Reappoints to the Committee Members whose terms expires 6/30/20: Mark Boyle Ronnie Bitman Jerry Gewirtz
Page 2SJI Contract and Business January 2020 Agenda Page 2
Lee Haas Mark Nation Mark Osherow Steele Williams
5. New Business
A. . 416.24 (Breach of the Implied Covenant of Good Faith and Fair Dealing) Materials .......................................................................................... p.42
B. Open Discussion
B. Dinner tonight and Breakfast tomorrow
7. Upcoming Meeting Discussion
Minutes for Committee meeting held on August 1-2, 2019
Orange County Courthouse, Orlando, Florida
embers Present in Person: Members Appearing by Phone:
on. Paul Huey, Chair Chris W. Altenbernd
. Lee Barrett Richard Benrubi
onald M. Gache Manuel Farach
on. Geoffrey Gentile Adina L. Pollan
rry M. Gewirtz
ee L. Haas
ark A. Nation Mark A. Boyle, Sr., Vice Chair
ark Osherow Ronnie Bitman
cott R. Rost
lbert A. Sanchez
tephanie Serafin N/A
artin B. Sipple
onna G. Solomon
enneth G. Turkel
teele T. Williams
Mikalla Davis, Bar Liaison
Kasey Cisneros (by phone)
1. Welcome and Introductions
The Chair called the meeting to order at 1:38 p.m. on Thursday, August 1, 2019,
and welcomed everyone to Orlando. He reported that Justice Robert Luck is the
new Florida Supreme Court liaison for the Committee.
SJI Contract and Business January 2020 Agenda Page 4
2. Approval of March 2019 Minutes
The Chair raised a question about the reference on page 19 from the minutes of the
Committee’s last meeting, held on March 7-8, 2019, in Tampa, regarding the
subcommittee report form. Eagleton stated that this notation referred to templates
on the Committee’s webpage that can be used for subcommittees to file their
reports for the full Committee meetings. The Chair reminded the Committee that
these forms are available and encouraged subcommittee chairs to use them in the
future.
The Chair then called for approval of the minutes from the March 7-8 meeting. No
further comments were received. Gewirtz moved to approve the minutes as
presented; Barrett seconded. The minutes were unanimously approved by
proclamation.
3. SJI Civil and SJI Contract and Business Joint Report on Fiduciary
Duty
The Chair reported on the status of the model verdict form for breach of fiduciary
duty (form 451.14). This is a joint report submitted with the Civil Committee in
case number SC19-185. The Chair stated that the Committee might consider
adding to this instruction in the future, given that there are so many iterations of
fiduciary duty.
4. Rules Adopted at the March 2019-Awaiting Publication
Davis reported that, at the last meeting, the model verdict form for the affirmative
defense of novation (form 416.31) was the only rule formally approved by the
Committee. She asked for direction regarding whether to publish this one rule for
comment or whether to wait until there were more proposals to bundle together.
The Chair suggested waiting to do a few at the same time. The Committee agreed.
5. Subcommittee Reports
A. 416.27 Model Form of Verdict for Affirmative Defense – Undue
Influence
Turkel reported on the subcommittee’s work regarding the affirmative
defense of undue influence (instruction 416.27). At the last meeting,
the subcommittee was charged with evaluating whether the word
“unfairly” should remain in the instruction. However, Turkel stated
that the subcommittee ended up examining a broader question: whether
undue influence is even a defense to contract claims at all.
According to Turkel, the subcommittee initially could not locate any
case law extending this affirmative defense to a standard contract or
commercial claim. The only cases cited in support of the instruction
are in the context of probate litigation involving wills and trusts.
The subcommittee then located the Jackson case, cited in the
subcommittee’s report at page 29 of the meeting agenda, dealing with
an agreement to arbitrate. That case, which concerned a standard
employment scenario, is the only case outside the testamentary context
to apply undue influence as a defense to a commercial claim. And the
only authority cited in Jackson to support the extension of the defense
beyond testamentary and guardianship disputes appears to be the jury
instruction drafted by this Committee.
Following Turkel’s discussion of the Jackson case, Haas provided the
backstory regarding how this instruction came to be. When this
Committee was first formed, there was nothing. The Committee used
the California instructions as a model, but these issues are all addressed
by statute in California, so the Committee had to improvise. Haas said
that it’s likely the California instruction addressed undue influence and
the Committee wrestled with it because there’s duress and there’s
unconscionability, and the Committee just rolled this all together into
an undue influence instruction.
Barrett stated that he sees this a lot, like in employment cases, where a
new employer comes in and says, “sign this contract by 4 p.m. or
you’re fired.” Similarly, Gache reported that this is usually more
economic duress, not guns-to-your-head duress, in business cases.
Foreclosure, for instance.
Haas wondered if there’s three separate situations here: duress,
economic duress, and unconscionability.
Turkel said there’s a Fourth DCA case talking about business
compulsion. There, the factual scenario involved an expert witness
who, three days before trial, said he wasn’t going to testify unless the
attorney paid all of the expert’s fees. The attorney felt the fees weren’t
reasonable, but he was forced to pay to get the expert to show up.
Spector found some other cases along these lines.
Haas asked about the difference between duress and coercion. Turkel
was not totally sure and said the subcommittee would have to run that
down. But he said that, in the meantime, the subcommittee’s
recommendation is to remove the undue influence instruction and draft
separate instructions for duress, coercion, and unconscionability.
The Chair wondered if this is even an affirmative defense: there has to
be capacity to consent in order to form a contract. So the lawyers must
take the jury through the elements, including that there’s a meeting of
the minds, acceptance, consideration, and capacity. The typical
example is how a 16-year-old cannot enter into a contract. The Chair
questioned whether this is a situation where the defendant simply says
“denied” in answering the complaint because there was no capacity to
form the contract.
Gache stated that he thinks the answer is a “yes, but,” which makes it
an affirmative defense. Turkel expressed his view that there is
language in the cases that it’s a formative defense, meaning it negates
the formation of the contract in the first place because the defendant did
not have free agency. More discussion ensued on this issue.
Rost raised a question about substantive versus procedural
unconscionability. Serafin agreed that comes up in the cases.
Turkel said that the subcommittee can take a deeper dive into all this, if
the Committee agrees. The Chair said that the Committee obviously
wasn’t going to create a verdict form at this point. He suggested that
the subcommittee move forward with its plan to consider replacing this
instruction with, at least, duress. The subcommittee will report back at
the next meeting.
B. 416.28 Model Form of Verdict for Affirmative Defense – Fraud
(Payton, Osherow, Huey, and Gunn)
Payton reported on the subcommittee’s progress in creating a model
form of verdict for the affirmative defense of fraud. Working on the
verdict form led the subcommittee to also suggest improvements to the
language of the substantive instruction.
The subcommittee’s principal proposed change to the instruction
concerns the use of the word “persuade,” rather than “induce.” The
cases talk about “inducing” action, according to Payton, and that would
thus be a more appropriate word to use.
Another question is whether the instruction should be limited to
inducement in the context of a contract, or whether the object of the
inducement should be left blank to be filled in depending on the nature
of the case. Payton said that not every fraud involves a contract.
Others may induce action, such as a misrepresentation inducing
forbearance.
Osherow would prefer to leave “induce contract” in the instruction. He
felt that Payton’s concern was more in the nature of a note on use and
would make the instruction more confusing. He suggested leaving the
instruction as is and adding a note on use that there may be other
contexts in which the instruction would be appropriate. The Chair
tended to agree.
Haas said that, looking to instruction 409.7 in the Civil instructions, it
has a model verdict form for the affirmative claim of fraud. So the
Committee is proposing a jury instruction on the defense but not on the
affirmative claim. He said that the Committee previously discussed
putting together a whole fraud grouping of instructions on both the
affirmative side and the defense. He expressed concern that it’s strange
to have a verdict form on the defense and not on the affirmative claim.
Osherow asked whether the Committee could adopt instructions that
are duplicative of the Civil instructions, for purposes of making the
Contract & Business instructions complete. Haas said yes, that’s why
there are joint instructions and why the Committee has talked about
doing some other ones. Osherow stated that the Committee could also
do this by reference. Haas then said that the question is whether to do a
verdict form at the same time. Osherow said the Committee could put
in a reference to the existing Civil instruction, then do its own verdict
form.
If the Committee were going to do that, Judge Gentile said that he
would want something in a comment, saying that the instruction was
approved by the Supreme Court as a Civil instruction.
The Chair expressed his view that the Committee go ahead and adopt
the verdict form for the affirmative defense and then talk to the Civil
Committee about adopting a joint instruction for the affirmative cause
of action later. Gowdy thought that sounded fine. He said that he
would connect with Haas after the meeting and bring the issue up at the
next meeting of the Civil Committee in October.
C. 416.30 Model Form of Verdict for Affirmative Defense – Waiver
(Boyle, Gentile, and Williams)
Williams reported on the subcommittee’s progress in drafting a model
verdict form for the affirmative defense of waiver. After recapping the
discussion from the last meeting on this issue, set forth on pages 11-13
of the agenda, Williams stated that the subcommittee came up with
three different versions for the Committee to choose from. These
versions are set forth on page 48 of the agenda.
The subcommittee likes version two the best. Version one is a little bit
overly simple and version three is perhaps more complicated than
necessary. According to Judge Gentile, the subcommittee preferred
version two because it would be easy for a jury to read and apply.
Discussion ensued, particularly about whether “should have known” in
version three is contrary to the definition of waiver as the “intentional
relinquishment of a known right.” Payton expressed that view. Haas
responded that, according to the case law cited in the note on use,
actual or constructive knowledge works. Haas was unsure whether
“constructive knowledge” is the same as “implied actual notice.” The
Committee continued to discuss that issue.
Barrett suggested that the language in version two, favored by the
subcommittee, was a little awkward. Instead of “did defendant prove
by the conduct or communication of claimant,” Barrett said that it
should say “did defendant prove that the claimant, by his/her/its
conduct or communication, waived.” That also gets rid of the “freely
and intentionally” part that was causing some Committee members to
be concerned.
Barrett further suggested a change to the “Yes” or “No” prompt in
version two, which should instead say “insert description of
performance.” Serafin did not think that change was necessary, and the
Chair agreed. He said it’s either yes or no and doesn’t require an
explanation about why.
Barrett moved to accept the model verdict form, version two, as
presented by the subcommittee and amended through discussion;
Sipple seconded. The Committee unanimously approved the proposal.
D. Subcommittee Reviewing Section 500 (Burns, Nation, Sanchez, Croom,
and Boyle)
Led by the Chair, the Committee engaged in a discussion about the status
of various proposed 504 verdict forms, beginning with instruction 504.3
concerning lost profits.
504.3 Lost Profits
Sanchez updated the Committee on the status of this verdict form based
on comments at the last meeting, where the focus was whether to add a
third line for damages. The Chair saw no harm in adding this line.
Sipple agreed.
Rost suggested something like, “If the answer is yes, what is the amount
of damages?” Palmer then stated that, if the Committee was going to add
a third line, then it needed to also change the “yes”/“no” structure of the
form, so that the jury will proceed if answering yes. So it should read, “If
your answer to question 2 is YES, your verdict is for (claimant) on this
claim, and you should proceed to question 3.” Then adding “3. What is
the amount of lost profits?” as suggested by Palmer, with a blank line for
the amount.
Sipple expressed some concern that the structure of this proposal could
be perceived as defense-friendly, in that the jury has to check two yes’s
for the claimant to get any money. The jury also would’ve had to check
something on the substantive contract claim before even getting to this
instruction. Sipple wondered whether questions 1 and 2 could be
combined.
Haas said, though, that you must prove two things to get lost profits.
Gache agreed. Turkel commented that there must be a nexus between the
conduct and the profits and this is a bifurcated inquiry; the real part that
has to be proven with reasonable certainty is the number.
Haas stated that the case law is pretty clear that establishing lost profits
with reasonable certainty is not just a gross profits number, but requires
showing a net profit number. The connection must be established. He
said that lots of plaintiffs can get a yes on question 1, that the defendant’s
actions caused the claimant to lose profits. But lots of plaintiffs then fail
on establishing the amount of those profits with reasonable certainty.
Williams described one of his cases in this context, the Asset
Management decision out of the Second DCA, which contains a good
description of the law regarding lost profits. Palmer wondered if we
should add this case to the list of sources in the jury instruction.
Sipple agreed with the comments from others that these are separate
elements, and that’s why the substantive instruction breaks it down. But
he’s still unsure there need to be two lines on the verdict form.
The Chair said that the proof on lost profits is often anemic. That’s why
it’s broken into two questions.
Haas suggested that, to address Sipple’s concern, perhaps the language
could be reversed: if your answer is yes, go to question 2; if your answer
is no, then stop. However, Palmer said that the usual practice is to
provide the stop option first, not second, so he did not think the
Committee should do this.
The Chair said that in this situation, the appellate arguments, and what
people focus on in preparing for trial, are these very two questions. He
said that question 2 is a big deal and should remain.
Osherow said a jury could find that there was cause for damages but find
that only half of those damages were proven with reasonable certainty.
He wondered whether the second question should set forth the amount,
rather than a “yes” or “no.”
Haas suggested that question 3 should add “that (claimant) proved with
reasonable certainty.” But the Chair said that this would require
answering the same question twice.
Altenbernd agreed with the Chair. He said that we don’t generally put
things that are part of the burden of proof on the verdict form, so he did
not believe the “reasonable certainty” language should be included there.
Williams expressed his view that question 2 is okay as is, because it
reflects that the claimant cannot recover speculative damages and that the
“reasonable certainty” standard is a fair splitting of the road. The Chair
said that the standard is set forth in the substantive instruction and will be
the focus of opening and there’ll be witnesses and there’ll be 30 minutes
of closing on what “reasonable certainty” means. So he agreed with
Altenbernd that it does not need to go on the verdict form.
Solomon questioned what a jury was supposed to do if they thought some
damages were proven with reasonable certainty and some were not.
Osherow agreed.
Nation was unsure that the burden of proof is always omitted. He said
that the “greater weight of the evidence” is in some first-party insurance
instructions. Haas agreed and said that this could be helpful to the jury.
Serafin wondered whether the burden could be set forth in question 2,
asking something like, “did claimant establish with reasonable certainty
that defendant’s actions caused lost profits?” The Chair said this might
be too confusing. Judge Munyon agreed that short, plain statements are
generally better.
The Chair inquired whether to leave “reasonable certainty” in there on
question 3. The majority of the group wanted to leave it in.
Rost moved to approve the addition of a third line to the draft 504.3
verdict form and to approve the form for publication and submission
to the Supreme Court; Haas seconded. The Committee approved the
verdict form by majority vote. Payton dissented.
The Chair raised a question about the Committee’s policy for updating
case law in the notes on use/authorities section of the instructions. Haas
said, historically, it’s always been ad hoc, whenever someone on the
Committee sees something. The Chair said he thinks there have been
some significant cases, especially in this area of lost profits. He tasked
the subcommittee with updating the law and creating a revised note on
use with some of the new cases, such as Katz Deli and Asset
Management.
504.4 Damages for Complete Destruction to Business
The Chair then turned to the draft verdict form for 504.4, concerning
damages for complete destruction to business. With a change to the
proposed language inadvertently referencing the companion “Civil”
instruction—it should be “Contract and Business”—the Chair suggested
that this appeared ready to approve.
Judge Scaglione moved to approve the verdict form for 504.4 as
proposed on page 70 of the agenda with the change suggested by the
Chair; Rost seconded. The Committee unanimously voted to approve.
504.5 Owner’s Damages for Breach of Contract to Construct
Improvements to Real Property
Croom, Boyle) on a model verdict form for instruction 504.5.
The subcommittee addressed two situations, one involving economic
waste and one if there’s no waste. Judge Croom reached out to the
Construction Law Committee and the consensus response is that they
want a verdict form because they use it. They do not want any
substantive changes made, but they did suggest some minor changes,
which the subcommittee has set forth on page 49 of the agenda. For
instance, question 4b has a redundant phrase that can be eliminated.
The Construction Law Committee also asked the subcommittee to
investigate developing the term “unreasonable economic waste” in the
instruction. There’s no defined term for that, and they would like for the
Committee to add it in. There’s a Supreme Court case to support it,
Grossman Holdings, which the construction litigators believe would help
clarify the issue for the jury.
Sanchez reported that the subcommittee adopted the feedback they
received from the experienced construction litigators, and those proposed
revisions to the verdict form are laid out in the agenda. Sanchez also
agreed that the substantive jury instruction itself does need a definition of
what unreasonable economic waste is.
Haas discussed his experience on this issue. He said that the Committee
really needs two instructions, one subject to Grossman Holdings and one
based on the exception under the Restatement of Contracts. That
exception does not apply under the Restatement of Torts, which the
Committee should be clear about, perhaps in a note on use. The Chair
agreed that a note on use would be fine, although he noted that the
instruction’s title clearly says it applies to breach of contract actions.
Payton questioned the wording of question number 1. He does not like
the syntax. Shouldn’t the question really be, “What are the reasonable
costs to claimant of completing the work in accordance with the contract,
minus the balance remaining under the contract?”
The Chair said that the instruction itself is exactly what Payton
suggested. He does not think that’s legalese and thus likes it for the
verdict form. The Chair said that the Committee does not need to stick to
“damages” all the time.
Palmer noted that questions 2 and 3 carry over the use of “damages,” so
if we’re changing question 1, we need to change those too, to stay
consistent. The Chair said that “damages” could just be changed to
“costs” there.
The Committee amended proposed question 1, through various group
input, in accordance with Payton’s suggestion, to say, “What are the
reasonable costs (claimant) proved are required to complete the work in
accordance with the contract, minus the balance remaining under the
contract?” The Committee also adopted the Chair’s suggestion of
changing “damages” to “costs” in questions 2 and 3.
The Chair also said that the Committee should add a note on use that this
only applies to breach of contract and not tort claims, per Haas’
suggestion regarding a negligence case. “This model verdict form does
not apply to independent tort claims, such as against licensed
professionals.”
The Chair also said that the Committee should add a note on use
regarding consequential damages—“The case may include other damages
like consequential damages.”
The Committee then engaged in some additional discussion about the
flow of the instruction. For example, Sipple thought the blank 4, before
a, is confusing. Palmer wondered if these should actually be two separate
verdict forms, one for cases involving economic waste and a separate one
for cases that do not. Barrett liked that idea.
After some additional discussion, Sanchez suggested that the
subcommittee would split this into 2 separate forms, look at it fresh, and
try to improve the flow. Per Judge Croom’s suggestion, the Committee
decided to table this and revisit it at the next meeting.
504.6 Obligation to Pay Money Only
After a brief discussion, the Committee agreed that there was no need for
a model verdict form for instruction 504.6 at this time.
504.7 Buyer’s Damages for Breach of Contract for Sale of Real Property
Like the proposed verdict form for instruction 504.4, discussed
previously, this proposed form inadvertently refers to the “Civil”
instruction in the note on use, when it should refer to the “Contract and
Business instruction.” The Committee unanimously agreed to make that
change.
Rost wondered whether the expenses a claimant can recover are limited
to examining title. He asked about due diligence, for instance.
The Chair stated that the note on use has a case, with a two-paragraph
quote, addressing this. It’s an older case, though.
Rost and Haas engaged in some additional discussion on this point. They
suggested that the law probably has evolved since that case, because
there wasn’t a phase-two environmental survey at the time.
The Chair said that Williams, Rost, Payton, and Haas, who do this work
regularly, should take a look at this issue a little more closely, including a
renewed look at the entire instruction itself, along with the verdict form,
and report back at the next meeting. The Chair suggested including
Farach in the discussion as well.
Payton then inquired about proposed question 3 on the draft verdict form,
regarding bad faith. Gache said there’s case law about additional
damages interacting with a bad faith breach. Payton wanted to know
what more you get for bad faith. Gache said that, according to the cases
in the note on use, you get the amount paid toward the purchase price
(the deposit) and reasonable expenses of examining title, in addition to
benefit of the bargain damages. Haas said this is the unique circumstance
where bad faith matters.
Turkel asked if this concept of a bad faith breach is peculiar to sales of
real property. Gache said yes. Haas said it’s the only context where the
nature of the breach matters.
Separately, Barrett expressed his view that questions 2 and 3 should be
broken down in brackets. Gache said the questions should mirror the
instruction. The Chair thought those were good comments and asked the
subcommittee to review the issue holistically.
504.8 Seller’s Damages for Breach of Contract to Purchase Real
Property
This is the flip side of the previous instruction. The Chair designated the
same subcommittee (Haas, Payton, Rost, and Williams) to review this
instruction and verdict form too, so that the Committee can examine both
sides of the coin.
504.9 Mitigation of Damages
The Chair turned next to the draft model verdict form for instruction
504.9 regarding mitigation of damages.
Altenbernd asked if the jury would have already determined an amount
of gross damages by this point, and then this form represents the amount
to be subtracted? He wondered whether the verdict form should better
explain the concept to the jury. He also commented that, if the jury is
required to do math, it will inevitably get messed up.
The Chair appreciated Altenbernd’s concerns but was not sure how else
to do this. It’s the law, and it’s a subtraction.
Altenbernd said that the proposed verdict form does not come to a
number the jury is awarding. Rather, it comes to two numbers and the
judge then has to do the math. And, this form does not tell the jury that’s
what’s going to happen. So Altenbernd said that this form is necessary
only if one side wants to preserve issues regarding the amount of
mitigation.
Judge Scaglione commented that he’d rather do the math himself and
thinks the trial judge should do that, not the jury. The Chair wondered
whether the verdict form should explain that to the jury. Altenbernd said
that the standard verdict form in a comparative negligence case tells the
jury to just answer the questions and the judge will figure out the impact
later.
Turkel asked whether a duty to mitigate always exists. The Chair said
no, the note on use explains this. He expressed his view that the concept
is often misunderstood.
The Committee then engaged in a discussion about the substance of the
form. Gache suggested that the draft is a bit of a mess and is not
accurately stating the law.
Haas commented that there is no reason to include question 3. Palmer
and Barrett have seen this in the construction defect context a lot. Barrett
said that could be what question 3 is driving at—if you have to pay
someone $500 to tarp your roof, to avoid the whole house being ruined,
you get that money back.
Haas, though, said that the defendant has to prove that the claimant had a
burden. Gache disagreed. If you look at the instruction, he said, it’s the
claimant’s burden to show what was spent in mitigation.
Barrett said that the last part of question number 1, “and you should
proceed to question 3,” should also be in brackets, to go with question 3
itself being in brackets, because more often than not, there’s nothing the
plaintiff should have or could have done. So if the answer to question 1
is a no, oftentimes that’s the end of the inquiry.
Gache, though, thought there are times when the claimant spent
something, but the jury reasonably decided the claimant could’ve done
more. Haas suggested a note on use to address partial mitigation, so the
judge can do some combination in that situation.
Sanchez asked for a hypothetical to see how the calculations work. After
working through some hypos, the Committee became concerned that a
yes on question 1 and a yes on question 3 are impossible to have
together, and that the draft form is punishing a claimant for engaging in
reasonable efforts to mitigate.
Gache suggested that the whole form be reworked to address the issues
raised by the various hypothetical scenarios. The Chair agreed that the
Committee should revisit the issue at its next meeting. He appointed
Gache, Benrubi, Pollan, and Barrett to a subcommittee to review the
issue.
504.10 Present Cash Value of Future Damages
The Committee agreed that there is no need for a verdict form.
504.11 Nominal Damages
The Committee agreed that there is no need for a verdict form.
E. Subcommittee Restrictive Covenants (Osherow, Serafin, and Rost)
Osherow reported that he planned to continue working on a potential
instruction regarding restrictive covenants and would report back to the
Committee at the next meeting. The Chair indicated that, although
there’s no harm in continuing to research the issue, he did not think it
was worth a lot of additional time because this issue doesn’t come up
very often and typically doesn’t get to the jury. The Committee has
spent considerable time debating this topic in the past.
F. Subcommittee Tortious Interference (Turkel, Huey, Altenbernd, and
Boyle)
Turkel reported that the subcommittee does not yet have anything ready
to present to the Committee. He continues to believe that the
instructions from Manny Farach’s book should be part of the standard
instructions.
The Chair will take the lead on this issue and bring a proposal to the
Committee at the next meeting.
G. Subcommittee Independent Tort Doctrine (Burns, Boyle, Croom,
Sanchez, Spector)
Judge Burns stated that the most recent appellate opinions have
clarified that this is a question of law and not of fact. A May decision
from the Fifth DCA, involving Mark Boyle on the losing side, put the
nail in the coffin on this issue.
Judge Burns suggested tabling the discussion one last time for Boyle to
address at the next meeting, given his involvement in the recent Fifth
DCA case. But the Chair expressed his view that this isn’t going
anywhere. He suggested that Judge Burns check with Boyle and leave
it to him to decide whether to bring this back up for any further
discussion.
Solomon reported on the subcommittee’s most recent work towards
developing a proposed instruction addressing FDUTPA. The
subcommittee’s charge, based on the discussion at the last meeting, was
to come up with different versions of a potential instruction, based on
the goods and services context and the competitor context. But, as they
looked at it, the basic law is the same in those situations. The
differences, according to Solomon, mostly have to do with the
determination of damages. She therefore summarized the
subcommittee’s proposal, set forth on page 82 of the agenda.
Sipple said that the middle part of the proposed instruction, concerning
legal cause, raises a nagging question. He did some additional research
and noted that there are two kinds of plaintiffs in a FDUTPA case: (1)
an aggrieved party, and (2) an enforcing party. These instructions were
crafted with the idea of the plaintiff being an aggrieved party. And he
believes they are correct in that context.
If published, though, the Attorney General’s office might pipe up and
say the legal cause standard is not correct when the AG is the plaintiff,
as an enforcing party, based on State v. Wyndham International, 869
So. 2d 592 (Fla. 1st DCA 2004), which says that the AG doesn’t have
to prove actual causation or reliance, just that the practice was likely to
deceive a consumer acting reasonably under the circumstances. Sipple
therefore suggested that the Committee add a note on use disclaiming
any attempt to draft jury instructions when the AG is the plaintiff,
based on the Wyndham case.
Osherow moved to adopt the instructions, as proposed by the
subcommittee, with the additional note on use suggested by Sipple;
Payton seconded. The Committee unanimously approved the
proposal. The Chair thanked the subcommittee for its good work on
this issue.
I. Subcommittee Trespass (Altenbernd, Gewirtz, Palmer, and Gentile)
Gewirtz took a quick look at this issue, as did Altenbernd, but the
subcommittee has not yet gotten this in a format that’s ready to share
with the entire Committee. Judge Gentile volunteered to quarterback it
moving forward.
Palmer)
The Committee engaged in a discussion regarding the state of law on
unilateral mistake, in light of DePrince v. Starboard, to determine
whether an instruction is needed and, if so, whether to draft a proposal,
along with a proposed verdict form.
Palmer reminded the Committee of his attempt to craft a new
instruction back in December, taking into account the DePrince
decision, but the remainder of the subcommittee has not had a chance
to review and comment on Palmer’s draft. The Chair stated that
Palmer’s draft, as updated by the subcommittee if necessary, should be
distributed as part of the agenda for the next meeting.
K. Anticipatory Breach (Payton, Benrubi, and Huey)
Payton raised a concern with the instruction on anticipatory breach,
416.23, based on a case he is currently litigating. He believes that the
current instruction does not correctly define an anticipatory breach, it
simply expresses the rule pertaining to breach. What’s missing is the
fact that, to be an anticipatory breach, there must be a time for
performance that is in the future. Payton suggested a revised
instruction, set forth on page 103 of the agenda.
Barrett questioned the use of “purpose” rather than “intent” in Payton’s
proposal, but Payton said that “purpose” comes from the cases.
Haas expressed his view that the instruction is already pretty clear
about repudiation, citing to the note on use. But Payton disagreed and
stated that the note on use is a little mushy. He used his current case as
an example, in which the seller claims “the market is slow” was an
anticipatory breach whereas the buyer says it always had an intention to
purchase more.
Payton then discussed a case called 24 Collection, where a contractor in
Miami made extra-contractual demands on the other party, said if you
don’t agree I’m not doing any more work under the contract, and that
was found to be an anticipatory breach.
After some additional discussion, the Chair summarized the issue. He
said the problem is that the current instruction says nothing about the
required element that the action alleged to cause the anticipatory breach
is something done before the time it was due. So, the current
instruction is really just a breach of contract instruction.
The Committee then considered the phrase “clearly and positively” in
the instruction. The Chair does not think “distinct, unequivocal, and
absolute,” which comes from the case law, is an overly legalese-y
phrase, and he does not believe “clearly and positively” means the
same thing.
Page 21SJI Contract and Business January 2020 Agenda Page 21
Palmer suggested that “indicated” also isn’t consistent with direct and
unequivocal. Barrett suggested that it could be “communicate” or
“convey.” Payton said the case law uses “demonstrate.” Rost said
“demonstrate” is used in other contexts. Palmer agreed that
“demonstrate” is better than “communicate.”
The Chair said that the phrasing should be active, rather than passive.
So, “demonstrated distinctly, unequivocally, and absolutely that …”
Some additional grammatical suggestions were made. Rost stated that
the instruction should say “would not or could not,” rather than “would
or could not.” Serafin agreed.
Gache questioned whether this instruction is different from prior breach
or first breach. That’s not anticipatory breach. If this is used as an
affirmative defense, Gache said it should be called first breach, not
anticipatory breach. Haas said that the Committee could express that
difference in a note on use.
The Chair said that the Committee should approve the revision to the
affirmative instruction first, then have a subcommittee take a look at
the defense. The same subcommittee that reviewed the affirmative
instruction will take a look at the affirmative defense.
Payton moved to adopt the instruction, as proposed by the
subcommittee and revised by the Committee during the meeting;
Rost seconded. The Committee unanimously approved the revision.
The Committee also approved an update to the notes on use to add
additional cases found by the subcommittee during its review.
L. CLE Credit (Payton)
Payton reported on his attempts to see whether members can obtain
CLE credit for their work on the Committee. The Board of Legal
Specialization and Education cannot approve the request; rather, it must
go directly to the Board of Governors.
Davis stated that the Board of Governors recently told the Civil
Procedure Rules Committee no when that Committee made a similar
request.
M. New Appointments and Reappoints to the Committee
The Chair thanked Sipple for heading up the subcommittee on
applications for new membership on the Committee. Two potential
new members applied—Judge Gary Wilkinson from Jacksonville and
James McCann from West Palm Beach. Those applicants were
approved by the Committee and have been forwarded to Justice Luck
for consideration.
6. Upcoming Meeting Discussion
The Committee engaged in a discussion about the timing of its next meeting.
Various dates and locations were floated as possibilities, including November,
January, and February, and north and south Florida spots. Ultimately, the
Committee settled on January 23 and 24 in West Palm Beach, most likely at the
Fourth District Court of Appeal if it is available. The Committee will consider
Tallahassee for its second meeting next year. Gache and Serafin will work to
coordinate the Fourth DCA and Davis will report back to the Committee when the
location has been confirmed.
7. Adjournment
The Chair adjourned the meeting at 12:41 p.m. on Friday, August 2, 2019.
FORM 504.5 MODEL FORM OF VERDICT FOR OWNER'S DAMAGES FOR BREACH
OF CONTRACT TO CONSTRUCT IMPROVEMENTS ON REAL PROPERTY
VERDICT
[Issues of contract formation and liability will be determined utilizing the appropriate
interrogatory verdict questions regarding those issues]
In cases where the defendant does not contend that the damages claimed by the claimant
constitute unreasonable economic waste:
1. What is the amount of damages (claimant) proved were reasonable to
complete the work in accordance with the contract, minus the balance remaining under the
contract?
$________________________
In cases where the defendant contends that the damages claimed by the claimant constitute
unreasonable economic waste:
2. Did Defendant prove that any part of the damages claimed by (claimant)
constitute unreasonable economic waste?
YES___________ NO___________
If your answer to question number 2 is NO, proceed to Question 3.
If your answer to question number 2 is YES, skip Question 3 and proceed to Question 4.
contract?
4.
a. For that part of the damages, if any, that DO NOT constitute unreasonable
economic waste: What is the amount of damages (claimant) proved were reasonable to
contract?
b. For that part of the damages, if any, that DOES constitute unreasonable
economic waste: What is the difference between the fair market value of (claimant's) real
property as improved and its fair market value if (defendant) had constructed the
$________________________
NOTES ON USE
1. This model verdict form should be used in conjunction with Standard Jury
Instruction--Contract and Business 504.5 (Owner's Damages for Breach of Contract to Construct
Improvements on Real Property).
FORM 504.5(A) MODEL FORM OF VERDICT FOR OWNER'S DAMAGES FOR
BREACH OF CONTRACT TO CONSTRUCT IMPROVEMENTS ON REAL
PROPERTY WHERE NO UNREASONABLE ECONOMIC WASTE IS CLAIMED
VERDICT
contract?
NOTES ON USE
FORM 504.5(B) MODEL FORM OF VERDICT FOR OWNER'S DAMAGES FOR
BREACH OF CONTRACT TO CONSTRUCT IMPROVEMENTS ON REAL
PROPERTY WHERE UNREASONABLE ECONOMIC WASTE IS CLAIMED
VERDICT
1. Did Defendant prove that any part of the damages claimed by (claimant)
constitute unreasonable economic waste?
YES___________ NO____________
2. For that part of the damages that constitute unreasonable economic waste:
What is the difference between the fair market value of (claimant's) real property as
$________________________
NOTES ON USE
From: Harry Payton To: Gunn, Tracy R Cc: Davis, Mikalla; [email protected]; Osherow, Mark R Subject: RE: Fraud 416.28 Date: Saturday, July 20, 2019 3:49:52 PM Attachments: image001.png
Tracy: Thanks for the response. I am cutting and pasting the civil fraud charge, which I think states the law very well.
409.7 ISSUES ON PLAINTIFF’S CLAIM — FRAUDULENT MISREPRESENTATION
The issues for you to decide on (claimant’s) claim [for fraudulent misrepresentation] are:
The bracketed language should be used for clarity when there are also claims for negligent misrepresentation and/or negligently supplying false information for the guidance of others.
First, whether (defendant) [intentionally]* made a false statement concerning a material fact;
*The word “intentionally” should be used for clarity when there is also a claim for negligent misrepresentation.
Second, whether (defendant) knew the statement was false when [he] [she] [it] made it or made the statement knowing [he] [she] [it] did not know whether it was true or false;
Third, whether (defendant) intended that another would rely on the false statement;
Fourth, whether (claimant) relied on the false statement; and, if so,
Fifth, whether the false statement was a legal cause of [loss] [injury] [or] [damage] to (claimant).
[On this claim for fraudulent misrepresentation, the]** (claimant) may rely on a false statement, even though its falsity could have been discovered if (claimant) had made an investigation. However, (claimant) may not rely on a false statement if [he] [she] [it] knew it was false or its falsity was obvious to [him] [her] [it].
**The bracketed language should be used for clarity when there is also a claim for negligent misrepresentation.
NOTES ON USE FOR 409.7
1. It appears that Florida recognizes two separate theories of recovery for damage occurring as a result of misrepresentation. One basis of recovery is for fraud and the other is for
negligent misrepresentation. The elements of those two theories are set forth in First Interstate Development Corp. v. Ablanedo, 511 So.2d 536 (Fla. 1987); Johnson v. Davis, 480 So.2d 625 (Fla. 1985); Lance v. Wade, 457 So.2d 1008 (Fla. 1984); Wallerstein v. Hospital Corp. of America, 573 So.2d 9 (Fla. 4th DCA 1990); Atlantic National Bank v. Vest, 480 So.2d 1328 (Fla. 2d DCA 1985).
2. One or more issues in instruction 409.7 may need to be omitted and the issues
renumbered if there is no question of fact for determination by the jury. A preemptive instruction on omitted issues should be given only if required by events during the trial.
3. The recipient of a fraudulent misrepresentation is justified in relying upon its truth,
even when an investigation might have revealed its falsity, unless he or she knows the representation to be false or its falsity is obvious to him or her. Besett v. Basnett, 389 So.2d 995 (Fla. 1980).
4. There must be actual damage for recovery in a fraud action. Fraud that does not

H a r r y a . P a y t o n , B .C .S . P a y t o n & a S S o C i a t e S , L L C 2 S. Biscayne Blvd., Suite 2300 Miami, FL 33131 t 305.372.3500 | m 305.213.3500 [email protected] | www.payton-law.com Board Certified Specialist: Business Litigation and Civil trial
SJI January 2020 Agenda Page 29SJI Contract and Business January 2020 Agenda Page 29
On Jul 20, 2019, at 2:49 PM, Harry Payton <[email protected]> wrote:
Mikalla: I posed to the subcommittee that the current affirmative defense of fraud charge and verdict form are too limiting because it references a misrepresentation “inducing a contract.” Attached is my email to the subcommittee members with proposed changes. Mark Osherow responded. His comments are below in bold. I think the matter is worthy of discussion. Good points. However, I think it is fine the way it is. This is more in the nature of a comment on use. I think the change makes use of the instruction more confusing. So I would suggest that if any change is made we indicate this instruction is limited to contractual setting and the instruction can be modified for other types of situations that fall within a claim for fraudulent misrepresentation. Indeed this is a defense which will by its nature be subject to what the actual instruction is on the claim.
'
Please note: Florida has very broad public records laws. Many written communications to or from The Florida Bar regarding Bar business may be considered public records, which must be made available to anyone upon request. Your e-mail communications may therefore be subject to public disclosure.
Regards, Harry <image001.png>
H a r r y a . P a y t o n , B .C .S . P a y t o n & a S S o C i a t e S , L L C 2 S. Biscayne Blvd., Suite 2300 Miami, FL 33131 t 305.372.3500 | m 305.213.3500 [email protected] | www.payton-law.com Board Certified Specialist: Business Litigation and Civil trial <image002.jpg>
<Email to subcommittee re modifying aff. def. of fraud.pdf>
'
Email to subcommittee re modifying aff. def. of fraud.pdf

H a r r y a y t o n

a . P , B .C .S .
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Dear Subcommittee Members:
I think the charge and the verdict form are too limiting because each refers to a misrepresentation inducing a contract. A fraudulent misrepresentation may be made for many more reasons than inducing a contract. Business torts are not always based on contracts. I think it is best said that the representation was made to induce action, and we should leave it open for the court to describe what action the misrepresentor sought to induce. It is not always execution of a contract. It could be forbearance of one sort or another. Or, it could be a misrepresentation to induce other conduct than forbearance—the examples are limitless. Fraud is a false statement, knowingly made, with intent to deceive, relied upon and proximately resulting in injury to the representee. Turning to 416.28, I would propose the following: To establish the defense of fraud, (defendant) must prove all the following (eliminating the article “the”):
1. (Claimant) represented that (insert alleged fraudulent statement) and that representation was material
(omitting “to the transaction”); 2. (Claimant) knew the representation was false;
3. (Claimant) made the representation to induce (defendant) to (describe
what defendant was induced to do); 4. (Defendant) would not have (describe defendant’s action resulting from the
misrepresentation) had [he, she, it] known the representation was false. On this defense, (defendant) may rely on a false statement, even though its falsity could have been discovered if (defendant) had made an investigation. However, (defendant) may not rely on a false statement if [he, she, it] knew it was false or its falsity was obvious to [him, her, it]. In making this determination, you should consider the totality of the circumstances surrounding the type of information transmitted, the nature of the communication between the parties, and the relative position of the parties.
H a r r y a . P a y t o n , B .C .S .
416.28 AFFIRMATIVE DEFENSE – FRAUD
To establish the defense of fraud, (defendant) must prove all of the following:
1. (Claimant) represented that (insert alleged fraudulent statement) and that representation was material to the transaction;
2. (Claimant) knew that the representation was false;
3. (Claimant) made the representation to persuade induce (defendant) to agree to the contract;
4. (Defendant) relied on the representation; and
5. (Defendant) would not have agreed to the contract if had [he] [she] [it] had known that the representation was false.
On this defense, (Defendant) may rely on a false statement, even though its falsity could have been discovered if (defendant) had made an investigation. However, (defendant) may not rely on a false statement if [he] [she] [it] knew it was false or its falsity was obvious to [him] [her] [it]. In making this determination, you should consider the totality of the circumstances surrounding the type of information transmitted, the nature of the communication between the parties, and the relative positions of the parties.
SOURCES AND AUTHORITIES FOR 416.28
1. Fraud must be pled as an affirmative defense or it is waived. Cocoves v. Campbell, 819 So.2d 910, 912 (Fla. 4th DCA 2002); Peninsular Fla. Dist. Council of Assemblies of God v. Pan Am. Inv. & Dev. Corp., 450 So.2d 1231, 1232 (Fla. 4th DCA 1984); Ash Chem., Inc. v. Dep’t of Envtl. Regulation, 706 So.2d 362, 363 (Fla. 5th DCA 1998).
2. In order to raise an affirmative defense of fraud, the “pertinent facts and circumstances constituting fraud must be pled with specificity, and all the essential elements of fraudulent conduct must be stated.” Zikofsky v. Robby Vapor Systems, Inc., 846 So.2d 684, 684 (Fla. 4th DCA 2003) (citation omitted).
3. The party seeking to use the defense of fraud must specifically identify misrepresentations or omissions of fact. Cocoves v. Campbell, 819 So.2d 910, 912-13 (Fla. 4th DCA 2002).
4. Fraud must be pled with particularity. Cocoves v. Campbell, 819 So.2d 910, 913 (Fla. 4th DCA 2002); Thompson v. Bank of New York, 862 So.2d 768 (Fla. 4th DCA 2003).
5. Mere statements of opinion are insufficient to constitute the defense of fraud. Thompson v. Bank of New York, 862 So.2d 768, 769 (Fla. 4th DCA 2003); Carefree Vills. Inc. v. Keating Props., Inc., 489 So.2d 99, 102 (Fla. 2d DCA 1986).
6. The elements of fraudulent misrepresentation are: “(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).
7. “Justifiable reliance is not a necessary element of fraudulent misrepresentation.” Butler
v. Yusem, 44 So.3d 102, 105 (Fla. 2010).
FORM 416.28 MODEL FORM OF VERDICT FOR AFFIRMATIVE DEFENSE-FRAUD
VERDICT
1. a. Did (defendant) prove that (claimant) represented that (insert alleged fraudulent statement)?
YES .......... NO ..........
If your answer to question 1.a. is NO, then verdict is for (claimant) on this defense, and you should not proceed further except to date and sign this verdict form and return it to the courtroom. If your answer to question 1.a. is YES, please answer question 1.b.
1. b. Was Did defendant prove the (alleged fraudulent statement) represen ta t ion was false?
YES .......... NO ..........
If your answer to question 1.b. is NO, then verdict is for (claimant) on this defense, and you should not proceed further except to date and sign this verdict form and return it to the courtroom. If your answer to question 1.b. is YES, please answer question-i 2 - /,<:!-'1.c. Formatted: Font: Not Italic
1. c. Did (defendant) prove that the representation was material to the contract?
YES .......... NO ..........
If your answer to question 1.c. is NO, then verdict is for (claimant) on this defense, and you should not proceed further except to date and sign this verdict form and return it to the courtroom. If your answer to question 1.c. is YES, please answer question 2.
2. Did (defendant) prove that (claimant) knew that the representation was false?
YES .......... NO ..........
If your answer to question 2 is NO, your verdict is for (claimant) on this defense, and you should not proceed further except to date and sign this
verdict form and return it to the courtroom. If your answer to question 2 is YES, please answer question 3.
rep
3. Did (defendant) prove that (claimant) made the resentation to persuade induce (defendant) to agree to the contract?
YES .......... NO ..........
If your answer to question 3 is NO, your verdict is for (claimant) on this defense, and you should not proceed further except to date and sign this verdict form and return it to the courtroom. If your answer to question 3 is YES, please answer question 4.
4. l
t- ,/
yf•.3: Did (defendant) prove that (defendant) relied on the representation?
YES .......... NO ..........
If your answer to question 4 is NO, your verdict is for (claimant) on this defense, and you should not proceed further except to date and sign this verdict form and return it to the courtroom. If your answer to question 4 is YES, please answer question 5.
6 £ 5. Did (defendant) prove that (defendant) would not have agreed to the contract if (defendant) had known that the representation was false?
YES .......... NO ..........
If your answer to question 5 is NO, your verdict is for (claimant) on this defense, and you should not proceed further except to date and sign this verdict form and return it to the courtroom. If your answer to question 5 is YES, your verdict is for (defendant) on this defense, and you should not proceed further except to date and sign this verdict form and return it to the courtroom.
ljnsert further instructions regarding proceeding to additional questions, as
appropriate. 7
NOTES ON USE
1. This model verdict form should be used in conjunction with Standard Jury Instruction-Contract and Business 416.28 (Affirmative Defense-Fraud).
2. This verdict form is for use in the case in which there is an alleged misrepresentation. Formatted: List Paragraph, Numbered + Level: 1 +
Cases involving omissions or concealment require modification to the instruction and Numbering Style: 1, 2, 3, … + Start at: 1 + Alignment: Left + Aligned at: -0.41" + Indent at: 0.08"
verdict form.
o Other Committee members found cases holding that undue influence is an affirmative defense.
o This verdict form was tabled until the June 2017 meeting. • The discussion turned to form 416.28 for the affirmative defense of fraud.
o The Committee discussed whether element 2 is falsity or knowledge of falsity.
o The Chair suggested breaking out the elements of making the representation and that the representation was false.
o The Committee discussed when a statement by omission applies and whether the corresponding instruction applies broadly to fraud or just to fraudulent misrepresentation.
o There was a suggestion to break out element 1 into: (a) representation; (b) falsity; and (c) materiality
o The Chair tabled the rest of this discussion and the other verdict forms for the next meeting.
Old Business
• The Chair explained that the instructions listed in Agenda item 4 have been
approved but not published. • Bar Liaison Krys Godwin explained that the goal is to get the approved
instructions in the Florida Bar News for comment. • Godwin is working on the numbering for the fiduciary duty instructions with the
Liaison for the SJI Civil Committee. As soon as both committees approve the fiduciary duty instructions, they are ready to file.
• 451.1-451.4 will be placeholders for prefatory instructions. Upcoming Meeting and Adjournment. The next Committee meeting was tentatively scheduled for June 1-2, 2017 in Orlando (exact location to be determined). The Chair adjourned the meeting at 12:05 p.m. on February 17, 2017.
14
416.26 AFFIRMATIVE DEFENSE – UNILATERAL MISTAKE OF FACT
(Defendant) claims that [he] [she] [it] should be able to set aside the contract because [he] [she] [it] was mistaken about (insert description of mistake). To establish this defense, (defendant) must prove all of the following:
1. (Defendant) was mistaken about (insert description of mistake) at the time the parties made the contract;
2. The mistake was not the result of an inexcusable lack of due care;
3. Denial of release from the contract would be inequitable;
4. (Plaintiff) has not so changed its position in reliance on the contract that rescission would be unconscionable;
and
5. (Defendant) did not bear the risk of mistake. A party bears the risk of a mistake when
[the parties’ agreement assigned the risk to [him] [her] [it]]* [or] [[he] [she] [it] was aware, at the time the contract was made, that [he] [she] [it]
had only limited knowledge about the facts relating to the mistake but decided to proceed with the contract].**
*The court should give the first option only if the court finds that the contract is ambiguous regarding whether the contract assigns the risk to the defendant. **The court should give the second option only if there is competent, substantial evidence that, at the time the contract was made, the defendant had only limited knowledge with respect to the facts relating to the mistake but treated the limited knowledge as sufficient.
1. The court should not give this instruction if it determines that the alleged mistake was not material.
2. The court should not give this instruction if it finds that the contract unambiguously assigns the risk to the defendant or if the court assigns the risk of mistake to the defendant on the ground that it is reasonable under the circumstances to do so.
1. A contract may be “set aside on the basis of unilateral mistake unless (a) the mistake is the result of an inexcusable lack of due care or (b) the other party has so changed its position in reliance on the contract that rescission would be unconscionable.” BMW of N. Am. v. Krathen, 471 So. 2d 585, 588 (Fla. 4th DCA 1985) (citing Maryland Cas. Co. v. Krasnek, 174 So. 2d 541 (Fla. 1965); Orkin Exterminating Co. v. Palm Beach Hotel Condo. Ass’n, Inc., 454 So. 2d 697 (Fla. 4th DCA 1984); Pennsylvania Nat’l Mutual Cas. Ins. Co., v. Anderson, 445 So. 2d 612 (Fla. 3d DCA 1984)); DePrince v. Starboard Cruise Services, Inc., No. 3D16-1149, 2018 WL 3636849 (Fla. 3d DCA Aug. 1, 2018). 2. Sections 153 and 154 of the Restatement (Second) of Contracts (1979) provide: § 153. When Mistake of One Party Makes a Contract Voidable. Where a mistake of one party at the time a contract was made as to a basic assumption on which he made the contract has a material effect on the agreed exchange of performances that is adverse to him, the contract is voidable by him if he does not bear the risk of the mistake under the rule stated in § 154, and (a) the effect of the mistake is such that enforcement of the contract would be unconscionable, or (b) the other party had reason to know of the mistake or his fault caused the mistake. § 154. When a Party Bears the Risk of a Mistake. A party bears the risk of a mistake when (a) the risk is allocated to him by agreement of the parties, or (b) he is aware, at the time the contract is made, that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient, or (c) the risk is allocated to him by the court on the ground that it is reasonable in the circumstances to do so. Initial draft prepared by Mitchell O. Palmer on 12-20-18
From: Mitchell Palmer To: Altenbernd, Chris; Gentile, Geoffrey ; Gunn, Tracy R Cc: Huey, Paul ; Davis, Mikalla Subject: Jury Instruction 416.26--Affirmative Defense--Unilateral Mistake of Fact.docx Date: Thursday, December 20, 2018 11:54:56 AM Attachments: Jury Instruction 416.26--Affirmative Defense--Unilateral Mistake of Fact.docx
Dear subcommittee members:
Since I am new to the Committee on Standard Jury Instructions in Contract and Business Cases (our recent meeting in Orlando was my first meeting), I am unsure of protocol. Nevertheless, I have ventured out on a limb and have prepared a proposed instruction on unilateral mistake. Each of us is on the “unilateral mistake” subcommittee.
Attached is my draft for your review. It is patterned, of course, on the “old” version of the instruction, but with modifications that reflect the Supreme Court’s Krasnek decision and the Third DCA’s August 1, 2018, DePrince decision. Based on DePrince, the element of inducement has been removed.
Finally, DePrince has been added to the string cite under Sources and Authorities (the case does not yet have a Southern Reporter citation).
I hope that I have not been too bold in striking out on my own, but thought that everyone might appreciate my efforts.
Mitchell O. “Mickey” Palmer County Attorney Manatee County Government
416.26 AFFIRMATIVE DEFENSE – UNILATERAL MISTAKE OF FACT
(Defendant) claims that [he] [she] [it] should be able to set aside the contract because [he] [she] [it] was mistaken about (insert description of mistake). To establish this defense, (defendant) must prove all of the following:
1. (Defendant) was mistaken about (insert description of mistake) at the time the
parties made the contract;
2. The mistake was not the result of an inexcusable lack of due care;
3. Denial of release from the contract would be inequitable;
4. (Plaintiff) has not so changed its position in reliance on the contract that rescission would be unconscionable;
and
5. (Defendant) did not bear the risk of mistake. A party bears the risk of a mistake when
[the parties’ agreement assigned the risk to [him] [her] [it]]*
[or]
[[he] [she] [it] was aware, at the time the contract was made, that [he] [she] [it] had only limited knowledge about the facts relating to the mistake but decided to proceed with the contract].**
*The court should give the first option only if the court finds that the contract is ambiguous regarding whether the contract assigns the risk to the defendant.
**The court should give the second option only if there is competent, substantial evidence that, at the time the contract was made, the defendant had only limited knowledge with respect to the facts relating to the mistake but treated the limited knowledge as sufficient.
1. The court should not give this instruction if it determines that the alleged mistake was not material.
2. The court should not give this instruction if it finds that the contract unambiguously assigns the risk to the defendant or if the court assigns the risk of mistake to the defendant on the ground that it is reasonable under the circumstances to do so.
1. A contract may be “set aside on the basis of unilateral mistake unless (a) the mistake is the result of an inexcusable lack of due care or (b) the other party has so changed its position in reliance on the contract that rescission would be unconscionable.” BMW of N. Am. v. Krathen, 471 So. 2d 585, 588 (Fla. 4th DCA 1985) (citing Maryland Cas. Co. v. Krasnek, 174 So. 2d 541 (Fla. 1965); Orkin Exterminating Co. v. Palm Beach Hotel Condo. Ass’n, Inc., 454 So. 2d 697 (Fla. 4th DCA 1984); Pennsylvania Nat’l Mutual Cas. Ins. Co., v. Anderson, 445 So. 2d 612 (Fla. 3d DCA 1984)); DePrince v. Starboard Cruise Services, Inc., No. 3D16-1149, 2018 WL 3636849 (Fla. 3d DCA Aug. 1, 2018).
2. Sections 153 and 154 of the Restatement (Second) of Contracts (1979) provide:
§ 153. When Mistake of One Party Makes a Contract Voidable.
Where a mistake of one party at the time a contract was made as to a basic assumption on which he made the contract has a material effect on the agreed exchange of performances that is adverse to him, the contract is voidable by him if he does not bear the risk of the mistake under the rule stated in § 154, and
(a) the effect of the mistake is such that enforcement of the contract would be unconscionable, or
(b) the other party had reason to know of the mistake or his fault caused the mistake.
§ 154. When a Party Bears the Risk of a Mistake.
A party bears the risk of a mistake when
(a) the risk is allocated to him by agreement of the parties, or
(b) he is aware, at the time the contract is made, that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient, or
(c) the risk is allocated to him by the court on the ground that it is reasonable in the circumstances to do so.
Initial draft prepared by Mitchell O. Palmer on 12-20-18
To: Contract Jury Instruction Committee
From: Chris W. Altenbernd
Standard Instruction 416.24 Breach of the implied covenant of good faith and fair dealing
January 13, 2020
I have recently had several occasions to deal with this instruction and I have
some doubts about its accuracy or at least its sufficiency. My concern boils down
to whether this covenant is a stand-alone duty that is breached or whether it is
merely an “implied” covenant that allows a judge or jury to add content to a
contract—followed by a question of whether there is a breach of contract with the
added material.
The quote below is from Speedway SuperAmerica, which was written by
Chief Justice Canady when he was on the 2DCA. It is clearly designed to keep this
covenant narrow and not allow it to turn into an equitable remedy in disguise. If
this doctrine only “fills gaps” or creates reasonable standards for discretionary
decisions, and I think that may be its only role, then it is not really a separate,
implied clause in the contract with its own remedies for breach of the covenant.
Instead, it allows someone to add language to fill the gap or create reasonable
standards. Frankly, whether that someone should be a judge, a jury, or a mixture
thereof is a little confusing to me.
The standard instruction, which is quoted below in its entirety states: “(Claimant) contends that (defendant) violated the duty to act in good faith and fairly under [a] specific part[s] of the contract. To establish this claim, (claimant) must prove all of the following:”
If I am right, the instruction would be more along the lines of “Claimants contends
that defendant breached the contract by violating terms of the contract that are not
express within the contract but are implied under the law by the duty to act in good
faith….
This may require some explanation as to whether the remedy is already in
the contract or is something added by implication.
At the end of this memo, mostly for an interesting contrast, I cite a couple
cases from Montana. That state has extensive case law and treats the doctrine as
both a contract breach and a tort. That approach, which is not Florida law, seems
closer to our current jury instruction.
I think it may be worthwhile to have a committee do a thorough research of
the law, including national law, to see if we need to adjust our instruction.
We have stated that “[t]he implied covenant of good faith exists in virtually all contractual relationships.” Sepe v. City of Safety Harbor, 761 So.2d 1182, 1184 (Fla. 2d DCA 2000); see also County of Brevard v. Miorelli Eng'g, Inc., 703 So.2d 1049, 1050 (Fla.1997) (“ ‘[E]very contract includes an implied covenant that the parties will perform in good faith.’ ” (quoting Champagne–Webber, Inc. v. City of Fort Lauderdale, 519 So.2d 696, 697 (Fla. 4th DCA 1988))); Restatement (Second) of Contracts § 205 (1981) (“Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.”).
34 Despite broad characterizations of the implied covenant of good faith, we have recognized that it “is a gap-filling default rule,” which comes into play “when a question is not resolved by the terms of the contract or
when one party has the power to make a discretionary decision without defined standards.” Publix Super Markets, Inc. v. Wilder Corp. of Del., 876 So.2d 652, 654 (Fla. 2d DCA 2004). “[T]he implied covenant of good faith and fair dealing is designed to protect the contracting parties' reasonable expectations.” Cox v. CSX Intermodal, Inc., 732 So.2d 1092, 1097 (Fla. 1st DCA 1999). “[W]here the terms of the contract afford a party substantial discretion to promote that party's self-interest, the duty to act in good faith nevertheless limits that party's ability to act capriciously to contravene the reasonable contractual expectations of the other party.” Id. at 1097–98.2
Speedway SuperAmerica, LLC v. Tropic Enterprises, Inc., 966 So.2d 1, 3 (Fla.App. 2 Dist.,2007)
416.24 BREACH OF IMPLIED COVENANT OF
GOOD FAITH AND FAIR DEALING
In the contract in this case, there is an implied promise of good faith and fair dealing. This means that neither party will do anything to unfairly interfere with the right of any other party to the contract to receive the contract’s benefits; however, the implied promise of good faith and fair dealing cannot create obligations that are inconsistent with the contract’s terms. (Claimant) contends that (defendant) violated the duty to act in good faith and fairly under [a] specific part[s] of the contract. To establish this claim, (claimant) must prove all of the following:
1. (Claimant) and (defendant) entered into a contract;
2. (Claimant) did all, or substantially all, of the significant things that the contract required [him] [her] [it] to do [or that [he] [she] [it] was excused from having to do those things];
3. All conditions required for (defendant’s) performance had occurred;
4. (Defendant’s) actions [or omissions] unfairly interfered with (claimant’s) receipt of the contract’s benefits;
5. (Defendant’s) conduct did not comport with (claimant’s) reasonable contractual expectations under [a] specific part(s) of the contract; and
6. (Claimant) was harmed by (defendant’s) conduct.
NOTE ON USE FOR 416.24
The question of whether a particular contract is one in which an implied covenant of good faith and fair dealing applies is a question for the trial court to answer in the first instance.
1. The implied covenant of good faith and fair dealing exists in virtually all contractual relationships. Sepe v. City of Safety Harbor, 761 So.2d 1182, 1184 (Fla. 2d DCA 2000); RESTATEMENT (SECOND) OF CONTRACTS § 205 (1981).
2. The purpose of the implied covenant of good faith is “to protect the reasonable expectations of the contracting parties.” Ins. Concepts & Design, Inc. v. Healthplan Services, Inc., 785 So.2d 1232, 1234-35 (Fla. 4th DCA 2001). See also Cox v. CSX Intermodal, Inc., 732 So.2d 1092, 1097 (Fla. 1st DCA 1999) (“[T]he implied covenant of good faith and fair dealing is designed to protect the contracting parties’ reasonable expectations.”).
3. The implied covenant of good faith “is a gap filling default rule” which comes into play “when a question is not resolved by the terms of the contract or when one party has the power to make a discretionary decision without defined standards.” Speedway SuperAmerica, LLC v. Tropic Enterprises, Inc., 966 So.2d 1, 3 n.2 (Fla. 1st DCA 2007); see also Cox, 732 So.2d at 1097.
4. “Because the implied covenant is not a stated contractual term, to operate it attaches to the performance of a specific or express contractual provision.” Snow v. Ruden, McClosky, Smith, Schuster & Russell, P.A., 896 So.2d 787, 792 (Fla. 2d DCA 2005).
5. The implied covenant of good faith cannot override an express contractual provision. Snow, 896 So.2d at 791-92; see also Ins. Concepts, 785 So.2d at 1234.
6. “The implied obligation of good faith cannot be used to vary the terms of an express contract.” City of Riviera Beach v. John’s Towing, 691 So.2d 519, 521 (Fla. 4th DCA 1997); see also Ins. Concepts, 785 So.2d at 1234-35 (“Allowing a claim for breach of the implied covenant of good faith and fair dealing ‘where no enforceable executory contractual obligation’ remains would add an obligation to the contract that was not negotiated by the parties.”) (citations omitted).
7. Good faith means honesty, in fact, in the conduct of contractual relations. Burger King Corp. v. C.R. Weaver, 169 F.3d 1310, 1315 (11th Cir. 1999) (citing Harrison Land Dev. Inc. v. R & H Holding Co., 518 So.2d 353, 355 (Fla. 4th DCA 1987)); see also RESTATEMENT (SECOND) OF CONTRACTS § 205 cmt. a (1981).
Montana law.
Kinniburgh v. Garrity, 798 P.2d 102, 105, 244 Mont. 350, 354 (Mont.,1990)
“Moreover, for a plaintiff to maintain a cause of action for breach of the implied covenant, whether it is based in contract or based on the special relationship criteria giving rise to a tort, he must first show breach of the “honesty in fact” standard:”
Dunfee v. Baskin-Robbins, Inc., 720 P.2d 1148, 1154, 221 Mont. 447, 457 (Mont.,1986) (allows for emotional distress damages for breach of the duty of good faith).
COMMITTEE ROSTER Supreme Court of Florida
Committee on Standard Jury Instructions Contract and Business Cases
Per Administrative Order No. AOSC17-91
Not yet assigned (Supreme Court Liaison)
Hon. Paul Huey, Chair Thirteenth Judicial Circuit 800 E. Twiggs Street Room 527 – Edgecomb Courthouse Tampa, FL 33602 Telephone: 813.272.5414 E-Mail: [email protected]

standard jury instructions contracts and business january

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