MMGF #350: The Case of the $4.85 Million Diamond

Originally released January 19, 2018

Check out these two cases issued this week.

What a Cruise Ship’s Accidental Sale of a $4.85 Million Diamond for Less Than a Quarter Million Tells You About Prenups and MSAs

I’m not going to regurgitate the entire 38-page opinion and dissent in DePrince v. Starboard Cruise Services, Inc., Case No. 3D16-1149 (Fla. 3d DCA Jan. 17, 2018). You can read the entire opinion and dissent here.

This is the ongoing saga of the accidental sale of a 20+-carat diamond to a customer for $235,000. The case last resulted in a reversal of summary judgment in 2015 in DePrince v. Starboard Cruise Services, Inc., 163 So. 3d 586 (Fla. 3d DCA 2015). Here, the district court said the trial court got it wrong again.

A passenger on a cruise ship wanted a 15-20 carat diamond from the ship’s jewelry store. The manager reached out to the diamond vendor and misunderstood the $235,000 per-carat price – the customer ended up paying $235,000 for a 20.64-carat diamond.

This led to years of litigating over whether the corporation should be excused from the contract for unilateral mistake. And it looks to be headed to more, based on this decision.

So why do I mention this contractual dispute in an MMGF geared to family law? Contracts, of course. Of the prenuptial agreement or MSA variety. Your ears should always perk up when reading a contractual dispute addressed in a DCA opinion, and the discussion of unilateral mistake here was critical.

The opinion here reiterated, as it had in the 2015 DePrince opinion, that to prove unilateral mistake sufficient to set aside a contract, the party 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.

The court cited a variety of cases, including Rachid v. Perez, 26 So. 3d 70 (Fla. 3d DCA 2010) – a case you surely know in which the court affirmed an order denying a former wife’s attempt to set aside an order granting former husband’s motion to enforce a mediated settlement agreement.

On the first factor, inducement is required. An action or representation doesn’t have to be as severe as fraudulent inducement, but there must be some action beyond mere knowledge of an error to constitute inducement that could bring unilateral mistake into play.

Which means that, “he or she knew that I was signing a terrible deal” isn’t grounds to set aside an agreement. The general rule that parties will be held to their bad bargains still holds.

There’s more to dig into in the opinion and dissent, if you like, which you can read here.

Statutory Findings Help Even If They’re Not Required

The Second District decided Verrier v. Oaks, Case No. 2D17-1027 (Fla. 2d DCA 2018), today.

It doesn’t tell us much. The trial court properly found that a substantial change of circumstances had occurred, but it erred by adopting former wife’s provision that essentially terminated all contact between former husband and the children for at least two years.

Here’s what stands out.

The DCA noted that the trial court didn’t make Section 61.13(3) findings. It wasn’t required to, but the Second District emphasized that, “we would encourage the circuit court … to set forth factual findings relating to any restrictions it imposes on remand and explain how such restrictions are in the children's best interests.”

Even if it’s not strictly required, get the court to include findings in your proposed judgment. That allows you to establish that the trial court considered the pertinent evidence, and reached its conclusion based on the children’s best interests accordingly. The more firmly you can root the trial court’s decision in abuse of discretion, the more likely you can ensure that the decision will stand on appeal.

This looks like it was a pretty big victory for the former wife and her trial lawyer below. But this shows one reason why, when you work with appellate lawyers, you’ll hear us say that our job is to help you win, but to help keeping you from winning too big without laying out the foundation to lock it down on appeal. Convince the trial court to adopt your proposed provisions – that’s fine. Convince it to do that without laying out the supporting factual findings and equitable considerations that would justify your result? A recipe for a partial reversal and more litigation.

Click here to read all of Verrier v. Oaks.

--Mike Giel

About Michael Mattson, by Sheryl Carter

Disclaimer: This Mattson Memo/Giel File was originally released in January 2018. But please do not consider it legal advice. And do not assume it reflects the current state of the law. Family law changes all the time. Statutes are enacted, amended, or repealed. Case law goes on, and the apparent effect of a case decided years ago may be limited, or expanded, by other courts considering the same or similar issues.

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