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Lower Fees, Inc. v. Bankrate, Inc.

Lower Fees, Inc. v. Bankrate, Inc.

Court of Appeal of Florida, Fourth District

October 19, 2011, Decided

No. 4D10-1695

Opinion

 [*517]  CORRECTED OPINION

Conner, J.

Lower Fees, Inc. ("Lower Fees") appeals the dismissal of its third amended complaint with prejudice. The issue presented by this appeal is whether a "no-reliance" clause in a purchase contract precludes a claim of fraud in the inducement as grounds for rescinding the contract. Although Appellee, Bankrate, Inc. ("Bankrate"), contends the issue is a matter of first impression in Florida, we determine that our supreme court has already spoken on the issue and reversal is required.

Lower Fees is a corporation that provided comprehensive closing cost information to consumers and real estate and mortgage professionals, as well as a unique listing service for real estate service providers. As part of its business, Lower Fees created an internet-based  [**2] system called the "Lower Fees System" and sold memberships in the system to real estate service providers. The Lower Fees System was designed using a group of four software systems and programming languages collectively called "LAMP".

Bankrate entered into an asset purchase agreement with Lower Fees to purchase the Lower Fees System and other assets.  [*518]  In addition to a cash payment and assumption of certain liabilities, Bankrate hired Lower Fees's president and promised to pay Lower Fees a portion of the net revenue from membership sales in the Lower Fees System over a five-year period. The parties contemplated that the Lower Fees System would be integrated and merged into the main computer operating system maintained by Bankrate. The asset purchase agreement was forty-seven pages in length with seventy-six pages of attachments and related agreements. The largest section of the agreement contained more than two hundred representations upon which the parties relied.1 Both parties consider themselves "sophisticated" business entities, and both were represented by skilled attorneys in negotiating and preparing the agreement.

At issue in this case is the effect of Section 7.17 of the asset purchase agreement, titled "Entire Agreement" but referred to by the parties as the "no-reliance clause," which states:

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74 So. 3d 517 *; 2011 Fla. App. LEXIS 16358 **; 36 Fla. L. Weekly D 2302

LOWER FEES, INC., Appellant, v. BANKRATE, INC. and THOMAS EVANS, Appellees.

Subsequent History: As Corrected November 14, 2011

Rehearing denied by Lower v. Bankrate, 2011 Fla. App. LEXIS 20189 (Fla. Dist. Ct. App. 4th Dist., Dec. 8, 2011)

Prior History:  [**1] Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; Joseph Marx, Judge; L.T. Case No. 502008 CA 035421 AF.

CORE TERMS

parties, asset purchase agreement, no-reliance, rescission, technology, inducement, representations, integration, lease, fraudulent inducement, fraud claim, misrepresentations, grounds

Civil Procedure, Appeals, Standards of Review, De Novo Review, Responses, Defenses, Demurrers & Objections, Motions to Dismiss, Contracts Law, Affirmative Defenses, Fraud & Misrepresentation, Intentional Fraud, Torts, Actual Fraud, Defenses, Remedies, Rescission & Redhibition, General Overview, Contract Conditions & Provisions