Fraud

An action to rescind a contract for fraud is an action on the contract for purposes of Civil Code 1717.  Section 1717 is not limited to actions for breach of contract or seeking to enforce the contract.  A party is entitled to attorney fees under section 1717 even when the party prevails on grounds the contract is inapplicable, invalid, unenforceable… Read More

Plaintiff wanted to give her cat "a good death."  She alleged an actionable fraud claim against the defendant vet for promising to give the cat a painless death, thereby getting plaintiff to agree to an intracardiac injection.  Plaintiff suffered damage from her reliance on that representation when her cat suffered a long and painful death instead.  Plaintiff also stated a… Read More

The economic loss rule does not bar a claim for fraudulent inducement to buy a car.  Plaintiffs here alleged that Nissan fraudulently induced them to buy a Nissan Sentra by intentionally concealing facts about its defective transmission which caused dangerous gaps in power to the wheels.  Under the reasoning of Robinson Helicopter Co. v. Dana Corp. (2004) 34 Cal.4th 979,… Read More

The trial court erred in vacating entry of judgment in California on a sister state judgment rendered in Missouri where plaintiffs lived.  Missouri had personal jurisdiction over the California defendants since they had sent allegedly fraudulent communications to plaintiffs in Missouri, inducing the Missouri plaintiffs to enter into a contract for defendants' adoption services and pay defendants from Missouri.  An… Read More

Under the out-of-pocket loss rule for fraud damages, a purchaser cannot recover the purchase price as consequential damages.  However, in applying the out-of-pocket loss rule, the trier of fact is not limited to considering the market value of the product or service on the date it was purchased, but may also consider post-sale evidence that bears on its market value… Read More

The trial court correctly denied this lawyer-defendant's Anti-SLAPP motion, finding that this suit to collect the agreed price for its services was not based on protected speech.  The fraud and concealment claim brought against the lawyer was for misrepresentations and concealments about the client-buyer's financial condition which induced plaintiff to enter into the services contract.  Communications at the pre-contract stage… Read More

Plaintiff was the executrix as well as a beneficiary of her parents' estate. She claimed that a relative and co-beneficiary conspired with two other defendants to fraudulently induce her, as executrix, to take a large loan at usurious rates secured by the parents' house, the estate's principal asset, after which the co-beneficiary misappropriated most of the loan funds.  This decision… Read More

The Insurance Fraud Prevention Act (IFPA; Ins. Code 1871, et seq.) allows qui tam plaintiffs to file lawsuits on the government’s behalf and seek monetary penalties against perpetrators of insurance fraud.  To prevent duplicative lawsuits, the IFPA contains a “first-to-file rule” (Ins. Code 1871.7(e)(5)) that bars parties from filing subsequent actions related to an already pending lawsuit.  This decision holds… Read More

A fiduciary owes a duty to disclose material facts to the beneficiary.  The beneficiary is under no duty to investigate whether the fiduciary has told the truth or disclosed all the material facts.  Hence, when a conservatee moves to set aside an order approving the conservator's accounting on the ground of misrepresentations in the conservator's accounting and petition for approval,… Read More

Huy Fong bought peppers from Underwood to manufacture Srirache sauce.  As Huy Fong's sale grew, it repeatedly urged Underwood to increase its acreage devoted to peppers, promising that Huy Fong would buy all the peppers Underwood produced while concealing its plan to start a competing business from which it would buy all its peppers.  Substantial evidence supported the jury verdict… Read More

The nature of the right sued upon and not the form of action nor the relief demanded determines the applicability of the statute of limitations.  So, in this case where plaintiff alleged that the seller's disclosures regarding real property sold to plaintiff were inaccurate or incomplete, the action was governed by the 3-year limitations period for fraud even though the… Read More

To invoke the fraud-on-the-market presumption of reliance under Basic, Inc. v. Levinson (1988) 108 S.Ct. 978, the plaintiff must  prove: (1) that the alleged misrepresentation was publicly known; (2) that it was material; (3) that the stock traded in an efficient market; and (4) that the plaintiff traded the stock between the time the misrepresentation was made and when the… Read More

The Computer Fraud and Abuse Act of 1986 (CFAA), which subjects to criminal liability anyone who “intentionally accesses a computer without authorization or exceeds authorized access.” 18 U. S. C. §1030(a)(2). " Exceeds authorized access” is defined to mean “to access a computer with authorization and to use such access to obtain or alter information in the computer that the… Read More

The trial court did not err in awarding attorney fees to defendant noteholder when it prevailed against plaintiff borrower's negligence and fraud claims that were aimed at preventing enforcement of the note and deed of trust through nonjudicial foreclosure.  Even though the plaintiff pursued tort theories, the gist of the action was to prevent enforcement of the note and deed… Read More

Negligent misrepresentation differs from intentional misrepresentation on at least two elements.  For fraud, the defendant must know the representation is false; whereas, for negligent misrepresentation, lack of a reasonable basis to believe the representation is true will suffice.  Also, for negligent misrepresentation, no showing of intent to deceive is required, just an intent to induce reliance on the misstated fact. … Read More

Under the Uniform Voidable Transfer Act, a "transfer" made with actual intent to defraud creditors is voidable.  This decision holds that the statutory term "transfer" does not impose any requirement that property be transferred from a debtor to a third party.  Instead, a transfer from the debtor to himself can qualify as a voidable "transfer" for purposes of the UVTA… Read More

This decision finds that plaintiff stated a viable claim for fraudulent transfer of properties from Shahen Minassian to his wife Alice via a fraudulent marital dissolution degree with actual intent to hinder, delay or defraud creditors, including plaintiffs who secured a $100 million judgment against Shahen in underlying litigation.  The complaint alleged badges of actual intent to defraud:  transfer to… Read More

Plaintiff sued a corporation, took its default on a breach of contract claim.  Plaintiff also sued the corporation's owner and a related corporation.  After voluntarily dismissing the contract cause of action against those defendants, plaintiff continued to pursue tort claims against them for fraudulent conveyance and conspiracy, attempting to hold them liable on the default judgment against the corporation.  The… Read More

To admit her disabled, ill brother, for whom she acted as conservator, to a skilled nursing facility, plaintiff signed an admission agreement as well as two arbitration agreements, one for medical malpractice disputes, the other for all other disputes.  Plaintiff sued after the facility's poor care led to her brother's death.  The trial court denied the facility's motion to compel… Read More

Plaintiff's False Claims Act complaint alleged that all the defendant health insurers submitted false claims using false diagnoses of patients' medical condition from the same vendor, and no further differentiation among the health insurers was needed to satisfy Federal Rule of Civil Procedure 9(b) since they all acted the same way. Read More