DePrince v. Starboard Cruise Services, Inc.
163 So.3d 586 (2015)
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Rule of Law:
To rescind a contract based on a unilateral mistake, the mistaken party must prove that (1) the mistake was induced by the other party, (2) the mistaken party was not negligent or lacking in due care, (3) denying rescission would be inequitable, and (4) the other party's position has not so changed that granting relief would be unjust.
Facts:
- In February 2013, Thomas DePrince, while on a cruise, visited an onboard jewelry shop operated by Starboard Cruise Services, Inc.
- DePrince expressed interest in a large loose diamond (15-20 carats) to the sales manager, Mihai Rusan.
- Rusan sent an inquiry to Starboard's corporate office, which in turn contacted its supplier, Sophia Fiori.
- Fiori emailed Starboard a price of '$235,000' for a 20.64 carat diamond, which was intended to be the per-carat price, not the total price.
- Starboard's office relayed the price to Rusan without verifying it, and Rusan quoted DePrince a total price of $235,000 for the diamond, which had an actual value of over $4.8 million.
- DePrince consulted his gemologist partner and sister, who advised him the price was 'too good to be true' and likely a mistake.
- Ignoring the advice, DePrince signed a sales agreement for $235,000 and paid Starboard in full over two days.
- Five days after the sale, Starboard discovered the pricing error, unilaterally refunded DePrince's money, and repudiated the contract, refusing to deliver the diamond.
Procedural Posture:
- Thomas DePrince filed a complaint in a Florida trial court against Starboard Cruise Services, Inc., alleging breach of contract, specific performance, and conversion.
- Starboard answered, asserting the affirmative defense of unilateral mistake, and counterclaimed for declaratory judgment and rescission of the contract.
- Starboard filed a motion for summary judgment, arguing the contract was unenforceable due to its unilateral mistake in pricing.
- The trial court granted Starboard's motion for summary judgment on all of DePrince's claims.
- DePrince, as the appellant, appealed the trial court's summary judgment order to the Florida Third District Court of Appeal.
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Issue:
Does a party's unilateral mistake in quoting a price for a good justify rescission of the contract on summary judgment when genuine issues of material fact exist regarding whether the mistake was induced by the other party or resulted from the mistaken party's own negligence?
Opinions:
Majority - Rothenberg, J.
No. Summary judgment based on a defense of unilateral mistake is improper where genuine issues of material fact remain. To justify rescission of a contract for a unilateral mistake under this Court's binding four-prong test, the mistaken party must prove all four required elements. In this case, Starboard failed to conclusively demonstrate the first two prongs. First, Starboard presented no evidence that DePrince induced the mistake; knowledge of a potential error is not equivalent to inducement. Second, whether Starboard's misinterpretation and communication of the price constituted a lack of due care or negligence is a disputed issue of fact that is not appropriate for resolution on summary judgment. As material factual disputes exist, the trial court's order granting summary judgment in favor of Starboard was in error and must be reversed.
Analysis:
This decision reaffirms the stringent requirements for rescinding a contract based on unilateral mistake within Florida's Third District, solidifying its adherence to the demanding four-prong test. By emphasizing that negligence and inducement are fact-intensive inquiries for a jury, the court significantly raises the bar for obtaining summary judgment in such cases. The ruling clarifies that a buyer's mere knowledge of a potential bargain, even if 'too good to be true,' does not satisfy the 'inducement' element, thereby placing a heavier burden of diligence on sellers to avoid pricing errors. This precedent will likely make it more difficult for commercial vendors to escape unfavorable contracts resulting from their own internal mistakes.
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