Fraud

Common Law Fraud

The elements of an action for common law fraud claim are: (1) the defendant made a representation to the plaintiff, (2) the representation was material, (3) the representation was false, (4) the defendant made the representation either (a) knowing it was false, or (b) recklessly, as a positive assertion, and without knowledge of its truth, (5) the defendant made the representation with the intent that the plaintiff act on it, (6) the plaintiff justifiably relied on the representation, and (7) reliance on the representation caused the plaintiff injury. Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 337 (Tex. 2011). 


Fraud by Nondisclosure

The elements of an action for fraud by nondisclosure are: (1) the defendant concealed from or failed to disclose certain facts to the plaintiff, (2) the defendant had a duty to disclose* the facts to the plaintiff, (3) the facts were material, (4) the defendant knew (a) the plaintiff was ignorant of the facts, and (b) the plaintiff did not have an equal opportunity to discover the facts, (5) the defendant was deliberately silent when it had a duty to speak, (6) by failing to disclose the facts, the defendant intended to induce the plaintiff to take some action or refrain from acting, (7) the plaintiff relied on the defendant’s nondisclosure, and (8) the plaintiff was injured as a result of acting without the knowledge of the undisclosed facts. Bradford v. Vento, 48 S.W.3d 749, 754-55 (Tex. 2001); In re C.M.V., 479 S.W.3d 352, 362 (Tex. App.—El Paso 2015, no pet.).

*A duty to disclose may arise (1) when the parties have a confidential or fiduciary relationship, (2) when one party voluntarily discloses information, which gives rise to the duty to disclose the whole truth, (3) when one party makes a representation, which gives rise to the duty to disclose new information that the party is aware makes the earlier representation misleading or untrue, or (4) when one party makes a partial disclosure and conveys a false impression, which gives rise to a duty to speak. White v. Zhou Pei, 452 S.W.3d 527, 538 (Tex. App.—Houston [14th Dist.] 2014, no pet.).


Statutory Fraud

The elements of an action for statutory fraud are: (1) there was a transaction involving real estate or stock, (2) during the transaction, the defendant (a) made a false representation of fact, (b) made a false promise, or (c) benefited by not disclosing that a third party’s representation or promise was false, (3) the false representation or promise was made for the purpose of inducing the plaintiff to enter into a contract, (4) the plaintiff relied on the false representation or promise by entering into the contract, and (5) the reliance caused the plaintiff injury. Tex. Bus. & Com. Code § 27.01; Ginn v. NCI Bldg. Sys., 472 S.W.3d 802, 823 (Tex. App. —Houston [1st Dist.} 2015, no pet.).


If you believe you have a claim for either common law fraud, fraud by nondisclosure, or statutory fraud, or you have been wrongly sued for any of these types of fraud, please contact Mr. Browning for a free phone consultation.