Case ID: mich-app_237/html/0095-01.html
Source: Caselaw Access Project
Author: {"author": "Grebbs, J. Hoekstra, RJ.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HORD v ENVIRONMENTAL RESERACH INSTITUTE OF MICHIGAN (ON REMAND)
    Docket No. 200481.
    Submitted April 20, 1999, at Lansing.
    Decided August 10, 1999, at 9:10 am.
    Leave to appeal sought.
    R. Michael Hord brought an action in the Washtenaw Circuit Court against Environmental Research Institute of Michigan, alleging fraudulent misrepresentation and silent fraud in connection with the defendant’s hiring and firing of the plaintiff. The court,- Donald E. Shelton, J., entered judgment on a jury verdict and award of damages for the plaintiff. The Court of Appeals, Wahls and Geibbs, JJ. (Hoekstra, P.J., dissenting), affirmed, holding in part that the trial court properly denied the defendant’s motion for a directed verdict because the plaintiff presented sufficient evidence of an affirmative statement in support of the claim of fraudulent misrepresentation. 228 Mich 638 (1998). The defendant sought leave to appeal to the Supreme Court, which, in lieu of granting leave, remanded the case to the Court of Appeals for reconsideration in light of M&D, Inc v McConkey, 231 Mich App 22 (1998). 459 Mich 954 (1999).
    On remand, the Court of Appeals held:
    
    Silent fraud involves a failure to disclose information where there is a duty to do so. One such duty is the duty to disclose subsequently acquired information that renders untrue or misleading previous representations that were true or believed to be true when they were made. In this case, the jury could fairly infer that the defendant showed the plaintiff its 1991 operating summary with the intent that the plaintiff would rely on it. The defendant therefore had a duty to disclose the subsequently acquired information of its financial position in 1992, which rendered untrue any implications from the 1991 figures.
    Affirmed.
    Hoekstra, P.J., dissenting, stated that the plaintiffs inference from the 1991 financial figures that the defendant’s financial condition remained unchanged in 1992 is unwarranted and cannot serve as a basis for his fraud claim. There is no evidence that the defendant intended the 1991 operating summary to demonstrate the company’s financial condition in 1992 such that the defendant was under a duty to disclose its financial condition in 1992 in the absence of an inquiry by the plaintiff. The trial court’s judgment should be reversed.
    Fraud — Silent Fraud.
    An action for silent fraud lies for the failure to disclose subsequently acquired information that renders untrue or misleading previous representations that were true or believed to be true when they were made.
    
      Green, Green, Adams, Palmer & Craig, PC. (by Philip Green), for the plaintiff.
    
      Dickinson Wright PLLC (by Robert W. Powell), for the defendant.
   ON REMAND

Before: Hoekstra, P.J., and Gribbs and Murphy, JJ.

Grebbs, J.

This matter has been remanded to us for reconsideration in light of M&D, Inc v McConkey, 231 Mich App 22, 25; 585 NW2d 33 (1998), where a panel of this Court considered the issue of silent fraud. 459 Mich 954 (1999). We again affirm.

In the case before us, plaintiff alleged both fraudulent misrepresentation and silent fraud. As we noted in our previous opinion, 228 Mich App 638, 641, n 1; 579 NW2d 133 (1998), “fraudulent misrepresentation” denotes a standard fraud claim based on an affirmative statement, while “silent fraud” involves a failure to disclose information where there is a duty to do so. We specifically held that, in this case, plaintiff presented sufficient evidence of an affirmative misrepresentation to support the jury verdict on plaintiff’s claim of fraudulent misrepresentation. Because we concluded that the trial court properly denied defendant’s motion for a directed verdict on this basis, the question of silent fraud was never raised or relied on in the majority opinion. We remain convinced that the trial court properly found evidence of fraudulent misrepresentation in this case, and this Court’s decision in M&D, Inc, supra, does not change that previous finding.

Having nonetheless reviewed this matter in light of our Supreme Court’s remand, we find that the evidence here also supported plaintiff’s silent fraud theory. As this Court stated in M&D, Inc, supra at 29, quoting and adopting Judge Young’s opinion in the previous M&D, Inc v McConkey, 226 Mich App 801 (1997), defendant “also has a duty to disclose “ ‘subsequently acquired information which he recognizes as rendering untrue, or misleading, previous representations which, when made, were true or believed to be true.” ’ ” 231 Mich App 29. (Citations and emphasis omitted.)

We remain convinced that the jury in this case could fairly infer that defendant showed plaintiff the 1991 operating summary with the intention that plaintiff would rely on the information it contained. 228 Mich App 642-643. Therefore, in addition to finding that the evidence here supports a claim of simple fraud, we also find that defendant had a duty in this case to disclose the subsequently acquired information of defendant’s financial position in 1992^ which clearly rendered untrue any implications from the 1991 figures.

Affirmed.

Murphy, J., concurred.

Hoekstra, RJ.

(dissenting). Consistent with the remand order, I have reconsidered my opinion in light of M&D, Inc v McConkey, 231 Mich App 22; 585 NW2d 33 (1998). In my judgment, McConkey supports the conclusions I reached in my original dissent, and, consequently, I remain convinced that the trial court’s judgment should be reversed. Therefore, I respectfully dissent.

Here, plaintiff does not claim that defendant’s 1991 operating summary contained false or misleading information regarding the company’s financial status as of 1991. Thus, standing alone, the summary provides no support for plaintiff’s claims, because it accurately presents the 1991 figures. Plaintiff inferred from the 1991 financial figures that the company’s situation remained unchanged through 1992. This inference, when coupled with a failure by defendant to disclose more current information, provides the basis for plaintiff’s allegation of fraud. Id. at 29. However, I understand McConkey to hold that plaintiff’s inference is unwarranted; therefore it cannot serve as the basis for his fraud claim. There is no evidence that defendant intended the 1991 operating summary to demonstrate the company’s financial condition at the time it hired plaintiff. To the contrary, the document is clearly a report from fiscal year 1991, and any other inferences plaintiff may have made lack a discernible or objective basis. In addition, I see no basis for the conclusion that plaintiff had a right to rely oh the 1991 summary as an accurate picture of the company’s performance in fiscal year 1992, without some additional inquiry or affirmative representation by defendant. Both of these conclusions, that the 1991 figures were intended to represent financial performance in 1992 and that defendant had a duty to provide additional financial information, are essential to the majority’s finding of fraud. Unfortunately, no evidence, beyond pure speculation, supports such conclusions. Accordingly, I find plaintiff’s fraud claim to be unsupported by any evidence.

In addition to there being no basis for plaintiffs assumptions about the company’s performance in 1992, plaintiff never requested more recent financial information during the hiring process. Given that the report he received was clearly labeled as financial figures for fiscal year 1991, I can find no duty to provide additional information on the company’s performance during fiscal year 1992. While 1992 figures were available, they had yet to be compiled into a report like the one defendant gave plaintiff. Therefore, plaintiff received the most current report of its type available. Absent a request from plaintiff for more current information, defendant had no. duty whatsoever to provide it. The holding in McConkey teaches us that the failure to do something that one is not required to do is not fraud. Id. at 32.

The most disconcerting aspect of the majority’s opinion is that it expects that defendant will anticipate plaintiff’s inference and then requires defendant to take appropriate remedial action. Because defendant failed to anticipate how plaintiff would interpret its 1991 operating summary, the majority finds that defendant has committed fraud. This result is most troubling. To elevate an inference made by another party’s interpretation of a document that, on its face, is clear and unambiguous, puts every supplier of information in jeopardy for the unforeseen misinterpretation of that information. In a case like this one, where the data were clearly labeled as pertaining to the company’s 1991 fiscal year, plaintiff should not be permitted to argue that he thought the figures also represented the company’s performance in 1992. Plaintiff had a simple, straightforward avenue to discover defendant’s current financial condition. He simply had to ask. Now he expects the courts to bail him out because his assumption about defendant’s financial condition was incorrect. I find it noteworthy that McConkey holds that fraud requires some evidence of a false representation and that knowledge, coupled with failure to disclose, does not give rise to fraud unless the party is duty-bound to disclose and intentionally suppresses the information, thereby creating a false impression. McConkey, supra at 25. There is no evidence of a such a duty in this case, nor do I find evidence that defendant intentionally suppressed relevant information.