Vokes v. Arthur Murray, Inc.

District Court of Appeal of Florida, Second District · 1968 · Contracts

ContractsFraudMisrepresentationRescissionUndue Influencefraudmisrepresentationopinion vs fact

Facts

Plaintiff, a 51-year-old widow, was induced by defendants operating an Arthur Murray dance school to purchase fourteen dance-course contracts over less than sixteen months, totaling 2302 hours of lessons and $31,090.45. She alleged defendants used a continuous barrage of flattery and praise about her grace, poise, improvement, and dancing potential to sell her increasingly large blocks of lessons, medals, and memberships, even while she still had many unused hours remaining. The complaint alleged these representations were false, known by defendants to be false, and made despite defendants' superior knowledge that she lacked dance aptitude and had difficulty hearing the musical beat. Plaintiff sought cancellation of the contracts, an accounting, and recovery of the portion of her payments not attributable to lessons actually given.

Issue

Whether a complaint states a cause of action for rescission and related equitable relief when it alleges that defendants procured contracts through flattering statements about plaintiff's abilities and progress that would ordinarily resemble opinion or sales puffing, but were made by parties with superior knowledge and accompanied by suppression of the truth and undue influence.

Rule

Although generally a misrepresentation must be one of fact rather than opinion to be actionable, that rule does not apply where there is a fiduciary relationship, some artifice or trick, a lack of arm's-length dealing, or unequal opportunity to know the truth. A statement by a party with superior knowledge may be treated as a statement of fact, and if one undertakes to speak, one must disclose the whole truth. An improvident agreement may be avoided for surprise, mistake, want of freedom, undue influence, suggestion of falsehood, or suppression of truth.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Phoenix, Nora Ellison enrolled at Desert Crest Voice Academy, where instructor Liam Porter sold her a series of expensive coaching packages. He repeatedly told her she had "exceptional natural pitch" and was "rapidly developing into a performance-ready singer," even though he knew from the academy's internal evaluations that she consistently could not match pitch and was unlikely to improve enough to benefit from more lessons.

If Nora sues in equity to rescind the later coaching contracts, which is the strongest argument for allowing her claim to proceed past a motion to dismiss?

Explanation. The majority recognized the general rule that misrepresentation ordinarily must concern fact rather than opinion, but also emphasized an exception when the speaker has superior knowledge or the parties are not dealing on equal terms. Here, the instructor allegedly knew from internal evaluations that Nora lacked the represented ability, so praise about her talent and progress may be treated as more than mere puffing. That is enough to state a claim for equitable relief at the pleading stage.