There are six elements required to prove a fraud claim: (1) a material representation was made; (2) the representation was false; (3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the representation was made with the intention that it be acted upon by the other party; (5) the party acted in reliance upon the representation; and (6) the party suffered damages. Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 337 (Tex. 2011).
A material representation is one in which a reasonable person would attach importance to and would be induced to act on the information in determining his choice of actions in the transaction in question. Id. (citing Smith v. KNC Optical, Inc., 296 S.W.3d 807, 812 (Tex. App.—Dallas 2009, no pet.)). Pure expressions of opinion are not representations of material fact, and thus cannot provide a basis for a fraud claim. Id. at 338 (citing Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 163 (Tex. 1995)) "Whether a statement is an actionable statement of 'fact' or merely one of 'opinion' often depends on the circumstances in which a statement is made." Id. (citing Transport Ins. Co. v. Faircloth, 898 S.W.2d 269, 276 (Tex. 1995)). Special or one-sided knowledge may help lead to the conclusion that a statement is one of fact, not opinion. Id.
A statement is not fraudulent unless the speaker knew it was false when made or the speaker made it recklessly without knowledge of the truth. Prudential Ins. Co. v. Jefferson Assocs., 896 S.W.2d 156, 163 (Tex. 1995). Proof that a defendant made a statement knowing of its falsity or without knowledge of its truth may be proved by direct or circumstantial evidence. Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 435 (Tex. 1986). If the claim is that the speaker falsely promised to do an act in the future, the plaintiff must show that the speaker had no intention of performing at the time the promise was made.
Privity is not required to show intent to defraud. Intent can be found even when the representation is made through an intermediary, as long the representation was intended to influence a third person’s conduct. A person who makes a misrepresentation is liable to the person or class of persons the maker intended or “ has reason to expect” will act in reliance upon the misrepresentation. Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 580 (Tex. 2001)(finding that Texas law is consistent with the “reason to expect” standard of the Restatement (Second) of Torts § 531 (1977)). The reason-to-expect standard requires more than mere foreseeability; the claimant's reliance must be "especially likely" and justifiable, and the transaction sued upon must be the type the defendant contemplated. Id.
To show reliance, the Plaintiff must show actual and justifiable reliance on the representation. Ernst & Young, L.L.P., 51 S.W.3d at 577; Fed. Land Bank Ass'n v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991).
When a party fraudulently procures a contract by making a promise without any intent of keeping the promise in order to induce another into executing the contract, a tort cause of action for that fraud exists. Formosa Plastics Corp. USA v. Presidio Eng’rs and Contractors, Inc., 960 S.W.2d 41 (Tex. 1998). Where several species of fraud, such as material misrepresentation, fraudulent inducement, fraudulent concealment, and fraudulent performance, are alleged it is not error to submit the issues to the jury in one controlling question of fraud. Formosa Plastics Corp., USA v. Presidio Eng’rs and Contractors, Inc., 941 S.W.2d 138, 146 (Tex. App.--Corpus Christi 1995), rev. on other grounds, 960 S.W.2d 41 (Tex. 1998).
A corporate officer who knowingly participates in tortious or fraudulent acts may be held individually liable to third persons even though he performed the act as an agent of the corporation. Walker v. Anderson, 232 S.W.3d 899, 918 (Tex. App.—Dallas 2007, no pet.); Glattly v. CMS Viron Corp., 177 S.W.3d 438, 448 (Tex. App.—Houston [1st Dist.] 2005, no pet.).
Fraudulent Inducement. Fraudulent inducement is a subcategory of fraud. Fraudulent inducement arises only in the context of a contract and requires the existence of a contract as part of its proof. Haase v. Glazner, 62 S.W.3d 795, 798–99 (Tex. 2001). In a fraudulent inducement claim, the same elements of fraud must be established as they relate to an agreement between the parties. Id. So in addition to showing the existence of a contract, the same fraud elements of proof are required: (1) a material misrepresentation, (2) made with knowledge of its falsity or asserted without knowledge of its truth, (3) made with the intention that it should be acted on by the other party, (4) which the other party relied on and (5) which caused injury to the plaintiff. Anderson v. Durant, 550 S.W.3d 605, 614 (Tex. 2018).
Fraudulent Concealment. Concealment or fraud by non-disclosure is another subcategory of fraud where a party has a duty to disclose, but the non-disclosure is misleading as a positive misrepresentation of facts. Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 181 (Tex. 1997). The concealment is only actionable if the plaintiff proves the defendant was silent when the defendant had a duty to disclose the correct information to the plaintiff. Id.; Bombardier Aerospace Corp. v. SPEP Aircraft Holdings LLC, 572 S.W.3d 213, 219 (Tex. 2019). Therefore in a concealment case, the plaintiff must also show that the defendant was under a duty to disclose, along with specific facts giving rise to the duty. Texas courts recognize a duty to disclose in five situations: (1) a fiduciary relationship; (2) a confidential relationship; (3) a voluntary disclosure of information, giving rise to a duty to disclose the whole truth; (4) a partial disclosure that conveys a false impression; and (5) upon discovery of new information that makes a prior representation false or misleading. Bombardier, 572 S.W.3d at 219.
Statute of Limitations. Statute of limitations refers to the time within which a claim must be brought or the claim will be barred as a matter of law. Cadle Co. v. Wilson, 136 S.W.3d 345, 350 (Tex. App.- Austin 2004, no pet.). Normally the limitations period begins when cause of action accrues. A cause of action accrues, and the statute of limitations begins to run, when facts come into existence that authorize a claimant to seek a judicial remedy. Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 202 (Tex. 2011) (op. on reh'g). There is a four year statute of limitations for breach of fraud. Tex. Civ. Prac. & Rem Code. § 16.004(a)(4).
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