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Inflated Bidder Qualifications Amount To Fraud

Saturday, October 01, 2011 08:56 am

 

Fraud - Misrepresentation

Community Maritime Park Assoc., Inc. v. Maritime Park Dev. Partners, LLC, 2011 U.S. Dist. Lexis 76322 (D. Fla. July 14, 2011)

A Florida district court found that a development firm's misrepresentations regarding its experience and ability to perform a contract fraudulently induced the contract award.

Community Maritime Park Associates, Inc. (CMPA) manages a park property owned by Pensacola City, Florida. CMPA conducted a public bidding process, pursuant to Florida statute, in search of a developer to provide architecture, engineering and surveying services at the property. In the end, CMPA selected developer Maritime Park Development Partners, LLC (MPDP). However, CMPA later claimed that MPDP had misrepresented its qualifications and financial capacity, and CMPA sued to have the contract set aside due to fraud.

MPDP claimed the alleged misrepresentations were insufficient to satisfy the criteria of fraud and misrepresentation claims. CMPA argued to the contrary, and the court agreed.

In Florida, to state a claim for fraud in the inducement, (1) there must have been a false statement of material fact; (2) the maker of the false statement must have known or should have known of the falsity; (3) the maker must have intended that the false statement induce another's reliance; and (4) the other party must have justifiably relied on the false statement to its detriment. Rose v. ADT Sec. Servs., Inc., 989 So. 2d 1[...]

 
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