Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Monday, November 9, 2009

Fraudulent Inducement Claim Is Similar to Fraud

FRAUDULENT INDUCEMENT (OF CONTRACT, ETC.) Fraudulent inducement is a type of fraud and, like any cause of action for fraud, requires (1) a material misrepresentation, (2) which was false, (3) which was either known to be false when made or was asserted without knowledge of its truth, (4) which was intended to be acted upon, (5) which was relied upon, and (6) which caused injury. See Formosa Plastics, 960 S.W.2d at 47; Texas S. Univ. v. State St. Bank & Trust Co., 212 S.W.3d 893, 914 (Tex. App.--Houston [1st Dist.] 2007, pet. denied). FRAUDULENT INDUCEMENT AND FRAUD: SHARED ELEMENTS [C]ourts have held that a summary judgment motion--if directed at the element of one cause of action--can be effective against even subsequently pleaded claims if they share that same element. See Wortham v. Dow Chem. Co., 179 S.W.3d 189, 202 (Tex. App.--Houston [14th Dist.] 2005, no pet.); Lampasas v. Spring Center, Inc., 988 S.W.2d 428, 435-37 (Tex. App.--Houston [14th Dist.] 1999, no pet.). Consequently, even though Karbach did not specifically use the term "fraudulent inducement" in his original petition, the district court's order granting summary judgment as to each of Karbach's claims, including fraud, was effective against his later-pleaded fraudulent inducement claim. Even considering the tri-party loan agreement as the basis of the fraudulent inducement claim, as we have discussed, our analysis does not change. SOURCE: 03-06-00636-CV (Third Court of Appeals - Austin) (11/6/09)