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E.I Du Pont De Nemours and Company v. Florida Evergreen Foliage12/6/1999
Submitted: September 21, 1999
Upon Certification of Question of Law in the United States District Court for the Southern District of Florida. Question Answered.
This Court has accepted a certified question of law from the United States District Court for the Southern District of Florida pursuant to Supreme Court Rule 41(a). The question of law concerns the ability of a litigant who signed a settlement and release of a tort claim to bring suit against the released party for fraudulent inducement. We conclude, in answer to the certified question, that, under Delaware law, a tort claimant fraudulently induced to execute a release may opt either for rescission or a separate suit for fraud with damages calculated on the difference between that received under the release and the value of the settlement or recovery achieved had there been no fraud by the released party.
I.
The factual basis for certification is taken from the District Court for the Southern District of Florida's Order and Certificate of Question of Law to the Supreme Court of the State of Delaware, dated May 5, 1999. Our certification acceptance is limited to these facts. Kerns v. Dukes, Del. Supr., 707 A.2d 363, 367 (1998).
In October, 1992, Louis Chang and his nursery business, Florida Evergreen Foilage, (collectively "Plaintiffs") brought a products liability action (the "First Suit") against E.I. duPont de Nemours and Company ("DuPont") alleging that a DuPont fungicide, Benlate, was defective and that it caused damage to their plants and nursery. In May 1994, Plaintiffs entered into a settlement agreement with DuPont that resulted in DuPont's payment of $2.3 million in exchange for Plaintiffs executing a release. The preamble of the settlement agreement states:
WHEREAS, Plaintiff has filed suit against Defendant in the civil action identified on Exhibit 1 attached hereto ("the Action") in which Plaintiff has alleged against Defendant various claims related to Plaintiff's purchase and/or use of Benlate fungicide;
WHEREAS, Defendant has denied the aforementioned allegations;
WHEREAS, Plaintiff desires to terminate said litigation, to release and dispose of all claims against Defendant and all claims incident thereto against Defendant, thereby finally disposing of the same, and to give assurance that Plaintiff will not hereafter prosecute such claims or cause them to be prosecuted.
The settlement agreement also includes the following release language in Paragraph 1:
In consideration of Defendant's payment of the amount set forth in the authorization previously signed by Plaintiff, Plaintiff hereby releases Defendant from any and all causes of action, claims, demands, actions, obligations, damages, or liability, whether known or unknown, that Plaintiff ever had, now has, or may hereafter have against Defendant, by reason of any fact or matter whatsoever, existing or occurring at any time up to and including the date this Release is signed (including, but not limited to, the claims asserted and sought to be asserted in this action).
Further, the settlement agreement, in Paragraph 15, provides:
This release shall be governed and construed in accordance with the laws of the State of Delaware without giving effect to the choice of laws provisions thereof.
On September 23, 1998, Plaintiffs filed the present action ("Present Action") for fraudulent inducement in the United States District Court for the Southern District of Florida. In their Amended Complaint, Plaintiffs allege that during the course of the litigation of the First Suit, DuPont wrongfully, illegally, and fraudulently
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