Monday, August 31, 2009

Element of reliance: reasonable and justified


Fraud, fraudulent inducement, negligent misrepresentation, and promissory estoppel all require reasonable and justified reliance upon a misrepresentation or promise. See Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001) (fraud); TMI, Inc. v. Brooks, 225 S.W.3d 783, 792, 795 (Tex. App.- Houston [14th Dist.] 2007, pet. denied) (fraudulent inducement); Ortiz v. Collins, 203 S.W.3d 414, 421 (Tex. App.- Houston [14th Dist.] 2006, no pet.) (fraud, negligent misrepresentation, and promissory estoppel).
When the parties' written agreement addresses the substance of the oral statement and contains language precluding reliance on external representations, Texas courts find reliance on subsequent oral promises unreasonable. See Simpson v. Woodbridge Props., L.L.C., 153 S.W.3d 682, 684 (Tex. App.- Dallas 2004, no pet.) (holding that disclaimer of reliance clause in contract negated reliance on post contract oral misrepresentations); Atlantic Lloyds Ins. Co. v. Butler, 137 S.W.3d 199, 226 (Tex. App.- Houston [1st Dist.] 2004, pet. denied) (holding that reliance on misrepresentation that was easily refutable with reasonable diligence was not justified or reasonable where two opposing parties were engaged in litigation and negotiating from equal bargaining positions); DRC Parts & Accessories, L.L.C. v. VM Motori, S.P.A., 112 S.W.3d 854, 856, 858-59 (Tex. App.- Houston [14th Dist.] 2003, pet. denied) (holding that reliance on both pre- and post-contractual oral representations, directly contradicted by express terms of contract, was not justified as matter of law); Airborne Freight Corp. v. C.R. Lee Enters., Inc., 847 S.W.2d 289, 297 (Tex. App.- El Paso 1992, writ denied) (finding that written contract containing ample cautionary language precluded exclusive reliance by reasonable businessperson on verbal statements contradicting written agreement).

SOURCE: Biosilk Spa, LP v. HG Shopping Centers, LP (Tex.App.- Houston [14th Dist.] May 8, 2008) (Yates) (fraud, fraudulent inducement, negligent misrepresentation, and promissory estoppel, no reasonable reliance)

Elements of fraud in Texas law, common-law fraud cause of action


In order to prove fraud, a plaintiff must show that (1) the defendant made a material representation that was false, (2) the defendant knew the representation was false or made it recklessly as a positive assertion without any knowledge of its truth, (3) the defendant intended to induce the plaintiff to act upon the representation, and (4) the plaintiff actually and justifiably relied on the representation, which caused the injury. Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001). 
SOURCE: Wood v. Texas Chiropractic College (Tex.App.- Houston [1st Dist.] July 24, 2008) (Jennings) (suit by student against private educational institution, DTPA claim, misrepresentation, summary judgment affirmed, no showing of reliance


Bystander Claims by witnesses of accident, calamity, explosion, death

To recover as a bystander, a plaintiff must establish that she (1) was located near the scene of the accident, as contrasted with one who was a distance away from it; (2) suffered shock as a result of direct emotional impact upon the plaintiff from a sensory and contemporaneous observance of the accident, as contrasted with learning of the accident from others after its occurrence; and (3) was closely related to the primary victim of the accident. United Services Automobile Association v. Keith, 970 S.W.2d 540, 541-42 (Tex. 1998). SOURCE: Godfrey v. BP Products North America (Tex.App.- Houston [14th Dist.] Aug. 25, 2009) (refinery blast explosion; siblings cannot recover under wrongful death act, no recovery as bystanders either as they did not witness the calamity, negligent infliction of emotional distress generally not actionable, IIED cause of action not available here)

Elements of promissory note suit, suit on note

To recover for a debt on a promissory note, a party must establish that it is the legal holder of the note, the debtor’s execution of the note, and that an outstanding balance is due and owing. Austin v. Countrywide Homes, 261 S.W.3d 68, 72 (Tex. App.—Houston [1st Dist.] 2008, pet. denied). SOURCE: McShaffry v. Amegy Bank N.A. (Tex.App.- Houston [1st Dist.] Apr. 2, 2009)(Bland) (promissory note suit, extinguishment by guarantor)

Elements of breach of fiduciary duty (BoFD)


The elements of a breach of fiduciary duty claim are: (1) a fiduciary relationship must exist between the plaintiff and defendant; (2) the defendant must have breached this duty; and (3) the breach must result in injury to the plaintiff or benefit to the defendant. Jones v. Blume, 196 S.W.3d 440, 447 (Tex. App.—Dallas 2006, pet. denied).
SOURCE: Hill v. Hoelke (Tex. App.- Houston [1st Dist.] Mar. 12, 2009)(Taft) (investment dispute, breach of fiduciary duty, breach of contract, fraud, and promissory estoppel)

Elements of IIED cause of action in Texas

To recover for intentional infliction of emotional distress, a plaintiff must prove that: (1) the defendant acted intentionally or recklessly; (2) the defendant's conduct was extreme and outrageous; (3) the defendant's conduct proximately caused the plaintiff emotional distress; and (4) the emotional distress suffered by the plaintiff was severe. Standard Fruit and Vegetable Co., Inc. v. Johnson, 985 S.W.2d 62, 65-66 (Tex. 1998). In addition, the intended or primary consequence of the defendant's conduct must be to cause emotional distress, not physical injury. Id. at 68; Durckel v. St. Joseph Hosp., 78 S.W.3d 576, 586 (Tex. App.-Houston [14th Dist.] 2002, no pet.).Therefore, a claim of intentional infliction of emotional distress will not lie if emotional distress is not the intended or primary consequence of the defendant's conduct. Durckel, 78 S.W.3d at 586.

Elements of breach of contract cause of action

The elements of breach of contract include (1) the existence of a valid contract, (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach. Eckland Consultants, Inc. v. Ryder, Stilwell Inc., 176 S.W.3d 80, 86 (Tex. App.—Houston [1st Dist.] 2004, no pet.). 

A breach of contract occurs when a party fails to perform an act that it has expressly or impliedly promised to perform. Methodist Hosps. of Dallas v. Corporate Communicators, Inc., 806 S.W.2d 879, 882 (Tex. App.—Dallas 1991, writ denied).