THE BRIEF STAGE. Park 100 Investors, Inc. v. Kartes Indiana Ct. of Appeals (1995) (p.53) Holding:

Transcription

1 THE BRIEF STAGE Park 100 Investors, Inc. v. Kartes Indiana Ct. of Appeals (1995) (p.53) Holding: ROL (Under Indiana law) Fraud requires: 1) a material misrepresentation of past or existing fact by the party to be charged, which 2) was false, 3) was made with knowledge or in reckless ignorance of the falsity, 4) was relied upon by the complaining party, and 5) proximately caused the complaining party injury. (p.55) Scannell found fraudulent for saying that personal guarantee papers were actually lease papers

2 A TYPICAL OUTLINE FORMAT A. MUTUAL ASSENT Ray v. Eurice (Maryland Ct. of Appeals (1952) (p.43)): the plaintiff was building a house and the defendant/contractor didn t look at the plans and blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah. The court held that: law blah blah facts facts facts facts blah facts blah blah blah; see RSTMT 70 & 20. NOTE: 20 bishops rule (Williston) test is objective, not subjective, for whether there was assent. Park 100 Investors, Inc. v. Kartes (Indiana Ct. of Appeals (1995) (p.53)): the plaintiff had an office building and the defendant had a lease and the defendant took the lease to the plaintiff s building when the plaintiff was just leaving to go home with his wife to his daughter s wedding rehearsal and the defendant asked the plaintiff to sign some papers; those papers were labeled lease agreement but really they weren t a lease agreement they were a personal guarantee; the plaintiff called his lawyer but the lawyer said it was ok; plaintiff didn t read the papers; defendant didn t say anything else; plaintiff signed the lease agreement ; defendant later sold the lease; the assignee sued plaintiff on the personal guarantee. Court held that: the defendant had defrauded the plaintiff.

3 THE SAME FORMAT WITH A LOT MORE WORK A. MUTUAL ASSENT Ray v. Eurice (Maryland Ct. of Appeals (1952) (p.43)): the plaintiff was building a house and the defendant/contractor didn t look at the plans and blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah. The court held that: law blah blah facts facts facts facts blah facts blah blah blah; see RSTMT 70 & 20. RSTMT 70: one who makes a written offer which is accepted, or who manifests acceptance of the terms of a writing which he should reasonably understand to be an offer or proposed contract, is bound by the contract, though ignorant of the terms of the writing or of its proper interpretation. RSTMT 20: a manifestation of mutual assent by the parties to an informal contract is essential to its formation and the acts by which such assent is manifested, must be done with the intent to do those acts, but neither mental assent to the promises in the contract nor real or apparent intent that the promises shall be legally binding is essential. NOTE: 20 bishops rule (Williston) test is objective, not subjective, for whether there was assent. Skrbina v. Fleming Cos. (notes, p.52): blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah blah blah facts facts facts facts blah facts blah blah blah. The court held that: law blah blah facts facts facts facts blah facts blah blah blah. Park 100 Investors, Inc. v. Kartes (Indiana Ct. of Appeals (1995) (p.53)): the plaintiff had an office building and the defendant had a lease and the defendant took the lease to the plaintiff s building when the plaintiff was just leaving to go home with his wife to his daughter s wedding rehearsal and the defendant asked the plaintiff to sign some papers; those papers were labeled lease agreement but really they weren t a lease agreement they were a personal guarantee; the plaintiff called his lawyer but the lawyer said it was ok; plaintiff didn t read the papers; defendant didn t say anything else; plaintiff signed the lease agreement ; defendant later sold the lease; the assignee sued plaintiff on the personal guarantee. Court held that: the defendant had defrauded the plaintiff. FRAUD is (1) a material misrepresentation of past or existing fact by the party to be charged, which (2) was false; (3) was made with knowledge or in reckless ignorance of the falsity; (4) was relied upon by the complaining party, and (5) proximately caused the complaining party injury. (Pugh s IGA Super Food Services, cited in Park 100) (p.55) Generally parties are obligated to know the terms of the agreement they are signing and cannot avoid for failure to read it. (p.56) But where one employs misrepresentation to induce a party s obligation under a contract, one cannot bind the party to the terms of the agreement.

4 OUTLINE 1 STAGE FRAUD / MISREPRESENTATION Fraud requires: 1. a material misrepresentation of past or existing fact by the party to be charged, which a. Examples: i. Saying personal guarantee was lease agreement (Park 100) b. Does omission/silence suffice? Not decided in Park 100 (fn.3, p.55) 2. was false, 3. was made with knowledge or in reckless ignorance of the falsity, 4. was relied upon by the complaining party, and a. Reliance must be reasonable or justified. (Park 100, p. 56) i. Generally there is a duty to read parties are obligated to know the terms of the agreement they are signing. (Eurice) ii. But fraud may overcome duty to read (Park 100, p. 56) b. Whether reliance is reasonable is a question of fact for the jury. 5. proximately caused the complaining party injury.

5 OUTLINE 2 STAGE FRAUD / MISREPRESENTATION Fraud requires: (RSTMT 164) 1. a material misrepresentation of past or existing fact by the party to be charged, which a. Examples: i. Saying personal guarantee was lease agreement (Park 100) ii. Telling Π that she would be an excellent dancer (Syester) b. Does omission/silence suffice? Not decided in Park 100 (fn.3, p.55) c. Mere opinions or puffing don t qualify as facts. (Syester) i. RSTMT 168(1)): assertion = opinion IF - it expresses only a belief, without certainty, as to the existence of a fact OR - expresses only a judgment as to quality, value, authenticity, or similar matters. ii. BUT: statement of opinion = misrep. of FACT IF - person giving opinion misreps. his state of mind. (RSTMT 159, cmnt d) OR - person giving opinion actually knows facts that would make the opinion false OR - person giving opinion knows that he doesn t know enough to be able to render the opinion. (RSTMT 168(2)) OR - person is in fiduciary relationship (RSTMT 169) OR - person is an expert on matters covered by the opinion (RSTMT 169) OR - person gives opinion to someone who is peculiarly susceptible to misrep. (RSTMT 169) iii. Whether statement = opinion or fact = question of fact for jury 2. was false, 3. was made with knowledge or in reckless ignorance of the falsity, a. RSTMT 162(1): fraudulent if you know, if you don t have confidence that you state or imply, or if you know you don t have the basis for the assertion that you state or imply. b. Can also be negligent misrep: ex: real estate agent says house has 5500 Sq. Ft., but it only really has (p.652) 4. was relied upon by the complaining party, and d. Reliance must be reasonable or justified. (Park 100, p. 56) i. Generally there is a duty to read parties are obligated to know the terms of the agreement they are signing. (Eurice) ii. No reasonable reliance where both parties have total access to same business records (notes after Syester, p.651) iii. But fraud may overcome duty to read (Park 100, p. 56) e. Whether reliance is reasonable is a question of fact for the jury. 5. proximately caused the complaining party injury.

6 OUTLINE 3 STAGE FRAUD / MISREPRESENTATION Fraud requires: (RSTMT 164) 1. a material misrepresentation of past or existing fact by the party to be charged, which i. Omission? 1. Fid.rel? 2. prior assertion / correction required? ii. Opinions? (Syester) 1. RSTMT 168(1) belief without certainty OR only a judgment of quality, value, etc. 2. BUT BEWARE: - misrep. of state of mind (RSTMT 159) - actually know opinion is false - no grounds for opinion (RSTMT 168(2)) - fid rel (RSTMT 169) - person is an expert (RSMT 169) - victim is peculiarly susceptible (age?) to opinion (RSTMT 169) 2. was false, 3. was made with knowledge or in reckless ignorance (or negligent) of the falsity (RSTMT 162(1)) 4. was reasonably relied upon by the complaining party, and (Park 100) i. Reas. If: 5. proximately caused the complaining party injury.