A Fraud Lawsuit Under California Law by Michael Abney

Punitive damages are not available for negligent misrepresentations.

b. But even if a wrongful action does not fall under the definition of "fraud," it still may lead to a
valid legal claim. If the victim knew or should have known the statement was false, the victim did not
reasonably rely. While punitive damages and emotional distress damages are generally not available
for breach of contract in California, the victim still should be able to recover his or her monetary
damages.
d. Also, the victim's reliance on the false statement must be reasonable. The elements of a claim for
fraudulent concealment are:
This article constitutes general information only and should not be relied upon as legal advice.
c. False Promise. The victim must have actually relied upon the statement to change his or her
position (e.g., the victim would not have purchased the house if he or she knew the truth). h. The
promise was important to the transaction. The victim's reliance on the defendant's promise was a
substantial factor in causing the victim's harm.
4. The defendant failed to disclose or concealed a material fact with an intent to defraud the victim.
d. Not every false statement is a false statement of "fact." Statements of opinion generally are not
actionable. Also, the measure of damages is generally more liberal under fraud and other "tort"
theories, allowing victims a more complete recovery. The victim was harmed as a result of defendant
not carrying out his or her promise.
a. Negligent Misrepresentation. Intentional Misrepresentation. If the defendant's false statement
was both honestly made and based upon reasonable grounds, however, there is no claim. The false
statement need not be the only reason the victim changed his or her position, but it must be at least
part of the reason. Odell (1941) 18 Cal. The victim must also prove that the defendant did not intend
to perform the promise at the time the promise was made. For instance, a best lsat test prep broken
promise - while not necessarily fraudulently - may still constitute a valid breach of contract claim.
The defendant intended the victim to rely upon the promise.
b. A claim of fraud may arise if a defendant entered into a contract and made promises that it never
intended content to perform.
2. Probably the most common type of fraud is a false statement. For instance, if the defendant made
the false statement to a third person with the expectation that the statement would be repeated to
the victim, the victim may have a valid claim for fraudulent misrepresentation. . The defendant did
not perform the promise.
The various ways a victim can be defrauded are as limitless as the bounds of human ingenuity. The
defendant had a duty to disclose. For example, sellers of residential property in California generally
are required to make written disclosures about the condition of the house.
d. 2d 409.

f. The victim must have been unaware of the fact and would not have acted as he or she did if he or
she knew of the fact.
g. A claim for fraud may also arise if the defendant concealed or failed to disclose a material fact
during a transaction, causing damage to the victim. There must be measurable damages that were
caused by the fraud. If a representation of fact was intentionally false and a material part of the
transaction (e.g., "this house does not have flooding problems"), it is likely the false promise was
made with the intention to defraud the victim.
3. The elements of a false promise claim are:

b. In addition, California laws may create a duty to disclose in certain transactions. The victim
sustained damages as a result of the concealment.
It is important to understand that a broken promise, alone, is not a sufficient basis for a fraud claim.
The elements of a claim for intentional misrepresentation are:

c. In practice, it is usually difficult to tell the difference between a broken promise and a promise
made without an intention to perform. Resulting in damages. A claim for negligent
misrepresentation is generally the same as a claim for intentional misrepresentation, except the
victim must only prove the defendant did not have "a reasonable basis" to believe its statement of
fact was true (as opposed to proving the defendant knew its statement was false). The defendant
made a promise.
c. But not every false statement is fraudulent. At the time he or she made the promise, the defendant
did not intend to perform it.
Fraud Lawsuits in California
1. The sophistication of the victim will play a role in determining whether his or her reliance on the
statement was reasonable; e.g., a sophisticated real estate investor's reliance on a representation
about the qualities of a house may not be reasonable while an unsophisticated buyer's reliance may
be. An intentionally or recklessly false statement of fact. There is not always a duty to disclose facts
during a transaction. Even an unsophisticated victim, however, "may not put faith in representations
which are preposterous, or which are shown by facts within his observation to be so patently and
obviously false that he must have closed his eyes to avoid discovery of the truth." Seeger v. Intention
to defraud. The victim reasonably relied upon the promise.
a. Sales talk, or "puffing" ("This is the best location in the county!"), is generally not actionable. Also,

a statement need not be made directly to the victim. More than a mere broken promise is required.
Reasonable reliance upon the false statement. It is not enough that the victim was told a lie (e.g., "A
famous movie star once slept in this house"); the victim must also be able to prove some type of
damage resulted from the lie.
e. However, if the defendant claims to be an ca bar association attorney search expert or there are
other reasons to expect that the victim would rely upon the defendant's opinion as a statement of
"fact," an opinion may be treated by the court as a statement of fact. If there is a duty, it generally
arises in one of four different circumstances: (i) The defendant is in a "fiduciary relationship" (such
as being a partner) with the victim; or (ii) The defendant took steps to hide important information
from the victim (as opposed to simply failing to tell the victim); or (iii) The defendant disclosed some
information to the victim, but the disclosed information is misleading unless more information is
given; or (iv) The defendant is aware of key information and knows the victim is unlikely to discover
that information. But under California law, wrongful actions are generally characterized as civil
"fraud" only under one of the following legal theories:
Characterization of a claim as fraud has many advantages to http://www.martindale.com/ a victim;
primarily, the victim may be able to recover punitive damages in addition to actual damages.
Concealment. Courts generally look for circumstantial evidence to support a false promise claim (as
opposed to a broken promise claim), such as the defendant broke its promise immediately after
making it.
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