Oftentimes, when we think of fraud, we think of an elaborate scheme that may have been used in order to lead someone to believe false information. While this is true, majority of the time fraud cases aren’t as complicated as we might envision. In fact, a recent Texas appeals court decision outlines the specific criteria that must be proven in order to maintain a cause of action for civil fraud.
In the case of Bombardier Aero. Corp. v. Spep Aircraft Holdings, No. 17-0578, 2019 Tex. LEXIS 101 (Tex. February 1, 2019), the plaintiff sued the defendant after purchasing what he believed to be a brand new airplane. The plaintiff would later find out parts of the aircraft had in fact been used previously and sued the defendant for fraud and breach of contract. The jury found in favor of the plaintiff and awarded actual damages and punitive damages.
Fraud such as this is often referred to as fraud by nondisclosure. Fraud by nondisclosure can occur when a party has a duty to disclose certain necessary information but fails to do so. In order to establish such a claim, the plaintiff must show the defendant deliberately failed to disclose material facts, the plaintiff was ignorant to the facts and did not have ample time to discover them, the defendant intended for the plaintiff to act or refrain from acting based on the nondisclosure, and the plaintiff relied on the non-disclosure, which resulted in injury.
Generally, there is no legal duty to disclose without evidence of a confidential or fiduciary relationship. A confidential relationship refers to one in which the parties have dealt with each other for such a long period of time that one party is justified in expecting the other to act in its best interest. Whereas, a fiduciary relationship is a more formal relationship with someone of superior knowledge, such as with an attorney, a business partnership, or a trustee relationship.
While we’d like to think our colleagues and trusted friends have our best interests at heart when it comes to business transactions, unfortunately however, sometimes the unexpected happens. The laws regarding fraud and misrepresentation are often very complex and require certain criteria to be met in order for the injured party to obtain compensation.
Houston Business Litigation Attorneys
At Adair Myers Graves Stevenson, our experienced fraud and misrepresentation litigators are equipped with decades of experience. If you or your business have been the victim of fraud or misrepresentation or have been accused of fraud or misrepresentation, our attorneys can explain your legal options. Contact us today to discuss your case.