Facts
- Bryan G. Boles held a stock option under an agreement requiring satisfaction of specified conditions precedent to exercise the option.
- Boles, through counsel, sent a letter purporting to exercise the option, but the letter did not satisfy all contractual conditions precedent.
- North American Philips Corporation, Inc. (NAPC) refused to honor the attempted exercise, asserting noncompliance with the conditions precedent.
- Boles sued for damages and/or specific performance of the stock-option agreement.
- NAPC answered and asserted affirmative defenses, including that Boles failed to fulfill the required conditions precedent.
- Boles filed a reply denying the affirmative defenses but did not plead waiver (or any other avoidance) to neutralize NAPC’s conditions-precedent defense.
- At a bench trial, Boles offered evidence and argument that NAPC waived strict compliance with the conditions precedent; NAPC objected that waiver was outside the issues framed by the pleadings.
- The trial court admitted waiver evidence and entered judgment for Boles, finding either that he complied with the conditions precedent or that they were waived.
- NAPC appealed.
Issues
- Whether Fla. R. Civ. P. 1.100(a) requires a plaintiff to plead waiver as an avoidance in a reply before introducing waiver evidence to defeat an affirmative defense.
- Whether admitting and relying on waiver evidence not pleaded as an avoidance constitutes reversible error when the judgment rests in part on waiver.
Decision
- The appellate court reversed the judgment for Boles and remanded.
- The court held that waiver is an avoidance of an affirmative defense and must be pleaded in a reply under Fla. R. Civ. P. 1.100(a).
- Because Boles did not plead waiver as an avoidance, the trial court erred by admitting evidence of waiver over NAPC’s objection.
- The error was not harmless because the judgment expressly rested on an alternative finding of waiver.
Legal Principles
- Under Fla. R. Civ. P. 1.100(a), when an answer asserts an affirmative defense and the opposing party seeks to avoid it, the opposing party must file a reply stating the avoidance.
- A general denial disputes the truth of an affirmative defense; an avoidance introduces new matter (such as waiver or estoppel) that defeats the defense even if its basic allegations are assumed true.
- Evidence supporting an unpleaded avoidance is outside the issues made by the pleadings and is inadmissible when a timely objection is made.
- Admission of unpleaded avoidance evidence is reversible when the trial court’s judgment relies on that evidence.
Conclusion
The court required strict compliance with Florida pleading rules: waiver used to defeat an affirmative defense must be specifically alleged as an avoidance in a reply, and allowing waiver proof without such pleading warrants reversal when it affects the judgment.