Caseflicks

District Court of Appeal of Florida • 1968

Vokes v. Arthur Murray, Inc.

212 So. 2d 906 | 28 A.L.R. 3d 1405

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Takeaway

In short, this case holds that sales praise may become actionable fraud when a party with superior knowledge uses it, along with concealment and undue influence, to induce an unequal and improvident transaction.

Background

Audrey Vokes, a 51-year-old widow with no family, enrolled at an Arthur Murray dance school operated in Clearwater by J.P. Davenport, an Arthur Murray franchisee. After an initial $14.50 purchase of eight half-hour lessons, she bought fourteen separate dance-course contracts in less than sixteen months. The contracts covered 2,302 hours of instruction and cost her $31,090.45.

Vokes alleged that the school repeatedly flattered her, told her she had grace, poise, and exceptional dance potential, and represented that she was steadily improving. It sold her large additional blocks of lessons to qualify for Bronze, Silver, Gold, and Gold Bar designations, life membership, and student trips, often while she still had hundreds or more than a thousand unused lesson hours. She alleged that the defendants knew she lacked dance aptitude and had trouble hearing the musical beat, but concealed those facts to induce further purchases.

Vokes sought rescission and cancellation of the contracts, an accounting, and recovery of the money paid that was not attributable to lessons actually provided. The trial court dismissed her fourth amended complaint with prejudice for failure to state a cause of action. She appealed.

Issues

Issue #1

Whether Vokes's complaint stated a claim for rescission based on fraudulent representations and inequitable conduct, even though many of the defendants' statements could be characterized as opinions or sales puffery.

Holding

Yes. Accepting the complaint's allegations as true, Vokes alleged sufficient facts to support equitable relief; the trial court therefore erred in dismissing the complaint with prejudice.

Reasoning

On a motion to dismiss for failure to state a cause of action, the court must accept the complaint's material allegations as true. Vokes alleged a sustained campaign of praise, pressure, and sales inducements that led her to spend more than $31,000 for an extraordinary number of dance lessons. Those allegations had to be taken as true at the pleading stage.

The usual rule is that an actionable misrepresentation must concern a fact rather than an opinion, prediction, or expectation. But that rule is qualified where the parties are not dealing at arm's length, where the speaker uses artifice or trickery, where the speaker has superior knowledge, or where the recipient lacks an equal opportunity to learn the truth.

The defendants plausibly possessed superior knowledge of Vokes's actual dance ability and progress. Their assessments that she had substantial potential and was improving could therefore be treated as factual representations rather than mere nonactionable opinions, particularly because they allegedly knew that she had little aptitude and concealed that truth while selling her more lessons.

A party who elects to speak about matters within its knowledge must tell the whole truth, even if it initially had no general duty to disclose. The complaint alleged that the defendants praised Vokes's progress while withholding their alleged knowledge that her ability and advancement did not justify the enormous additional purchases they urged upon her.

The alleged conduct went beyond ordinary promotional puffing. The repeated flattery, aptitude tests, escalating achievement levels, and sales of additional hours despite her substantial unused balance could support an inference of undue influence, suppression of truth, and interference with her free exercise of rational judgment. Equity may relieve a party from an improvident agreement produced by such circumstances.