After years of litigation, several appeals and multiple overturned rulings, the Third District Court of Appeal has again weighed in on the saga of a 20.64-carat diamond, valued at $4.75 million, but erroneously sold for $235,000.
And in doing so, the court worked to “resolve the lack of uniformity” in its prior decisions on the elements needed to prove unilateral mistakes — the issue at the center of this dispute.
“We conclude that a party seeking rescission of a contract based on a unilateral mistake does not have to prove that she was induced into making the mistake by the other party,” the entire appellate court ruled after a motion for rehearing en banc.
The decision favored Starboard Cruise Services Inc., which inadvertently gave a multimillion-dollar discount on the large gem to passenger Thomas DePrince.
DePrince, a former fine-jewelry dealer, sued the cruise line after it asked him to return a diamond he purchased from a vendor aboard one of their ships in 2013. He had priced the stone and got a quote store manager Mihai Rusan, who inadvertently provided the price per carat as opposed to the jewel’s total cost. Staff didn’t discover the error for days, but by then, DePrince had already paid the full price quoted plus $25 for shipping.
After DePrince refused offers to have future trips with Starboard discounted for the inconvenience, the company gave him a full refund on the diamond purchase, prompting him to sue for breach of contract.
A trial court initially ruled in favor of the cruise line on the grounds that the company made a “unilateral mistake,” significant enough to allow a party to withdraw from a contract that would otherwise be enforceable.
But that ruling was overturned on appeal, when DePrince successfully raised a challenge before the Third DCA, which reversed and remanded the case for a new trial. Another reversal followed after the appellate panel found the jury had received conflicting instructions on “inducement” and other the elements of affirmative defenses hinged on the concept of unilateral mistakes.
The only issue was whether Starboard was excused from that agreement because it made a unilateral mistake,” Judge Robert J. Luck wrote for the appellate court. “According to Starboard, in some of our cases we have required parties claiming a unilateral mistake to meet a four-part test that included inducement as an element. In other cases we have not required inducement. We grant rehearing en banc to resolve this conflict.”
Ultimately, the court ruled that proof of inducement was not required for a legally sound unilateral mistake defense.
“Competent substantial evidence supported the jury’s finding that all the required elements for unilateral mistake had been met,” Luck wrote. “Starboard received incorrect information from its home office, which caused the company to quote a price that was a fraction of the company’s cost to purchase the diamond wholesale. Based on the evidence, the jury was entitled to find that the mistake was not ‘inexcusable,’ and DePrince did not detrimentally rely on the mistake such that it would be unconscionable to rescind the sales contract.”
Eric D. Isicoff, founding partner at Miami law firm Isicoff Ragatz represented Starboard, alongside Carolina A. Latour. He told the Daily Business Review that although the case “went on far longer than anticipated … or than it should have,” he was ultimately pleased with its outcome.
“We believe that the court clarified ‘unilateral mistake’ correctly,” Isicoff said. “In the end we were always confident, and continued pushing forward within the boundaries of the law. Fortunately at the very end, after a long road, the court clarified the law and reinstated the defense verdict.”
DePrince’s attorneys Robert A. Cohen, Mario M. Ruiz and Joelle H. Dvir of Miami-based McDonald Hopkins did not respond for comment by deadline.
Read the Third DCA’s ruling here: