Present: All the Justices 

GIOVANNI MORTARINO, ETC., ET AL. 

OPINION BY JUSTICE LEROY R. HASSELL, SR. 

v. Record No. 951129 March 1, 1996 

CONSULTANT ENGINEERING 

SERVICES, INC., ET AL. 

 FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH 

A. Bonwill Shockley, Judge 

 The primary issue we consider in this appeal is whether 

certain statements contained in a report constitute facts that 

are actionable in a motion for judgment alleging constructive 

fraud. 

 The trial court decided this case on demurrer and, 

therefore, we shall recite as true the facts alleged in the 

motion for judgment and its exhibits and fair inferences 

deducible therefrom. Palumbo v. Bennett, 242 Va. 248, 249, 409 

S.E.2d 152, 152 (1991). 

 Giovanni Mortarino was the trustee of MGT Virginia, Inc., an 

employee profit sharing trust established under the laws of 

Virginia. Mortarino, individually, and MGT Virginia 

(collectively referred to as Mortarino), desired to purchase and 

develop about 73 acres of real property (the property) fronting 

on Johnstown Road in the City of Chesapeake. 

 Mortarino made arrangements with James A. Morrow, sole 

proprietor of the Morrow Group of Companies (hereinafter referred 

to as Morrow), to acquire the property. Morrow would serve as a 

"strawman" to obtain a purchase agreement and ultimately assign 

its interests in that agreement to Mortarino. Morrow, acting as 

agent for Mortarino, executed a contract dated March 1988 to 

purchase the property from Great Bridge Baseball, Inc. 
 Mortarino's purchase of the property from Morrow "was 

contingent upon the feasibility of development of the [p]roperty, 

unimpeded by governmental wetlands regulations." Morrow executed 

a contract with Consultant Engineering Services, Inc. (CES), 

which agreed to conduct a wetlands and drainage feasibility study 

for the property. 

 CES retained H. Clayton Bernick, III, a purported expert 

investigator and consultant on the existence and extent of 

wetlands with proposed development. Dean G. Vincent, vice 

president of CES, stated in a report to Morrow: 

 We contracted with Mr. Clay Bernick who 

specializes in investigating and consulting civil 

engineering firms on the existence and extent of 

wetlands with proposed development. Mr. Bernick's 

experience and knowledge in this field is extensive and 

therefore his findings are quite reliable. However, 

the presence of wetlands are [sic] so opinionated that 

there is always the possibility that a different 

interpretation could be made. However if that were the 

case the only location that is remotely possible for a 

contrary determination to be made is a small area on 

the southern boundary of the property and the chances 

of this are only slight. On the vast majority of the 

property Mr. Bernick finds nothing to indicate that 

wetlands are present. 

 In reliance upon these representations, the market value of 

the property was deemed to be $570,000. Subsequently, Morrow 

assigned its interests in the contract to Mortarino, who acquired 

the property from Great Bridge Baseball. 

 In 1992, CES retained Davis Environmental Consultants, Inc., 

to ascertain the extent of wetlands on the property. Davis 

Environmental Consultants determined that "[a]pproximately 80% of 

the property . . . is clearly jurisdictional wetlands." 

Subsequently, CES changed its earlier position and acknowledged 

that most of the property constitutes wetlands. Ultimately, the 
United States Army Corps of Engineers determined that most of the 

property is jurisdictional wetlands. Hence, Mortarino was unable 

to develop the property. 

 Mortarino filed a motion for judgment against CES, Bernick, 

and Morrow, alleging that the defendants had committed acts of 

constructive fraud. The defendants filed demurrers asserting 

that Mortarino failed to plead a cause of action for constructive 

fraud against them because the aforementioned statements in CES' 

report constitute opinions and, therefore, cannot be the basis of 

a cause of action for constructive fraud. Additionally, 

defendant Bernick asserted that Mortarino failed to allege that 

Bernick made any representation to Mortarino and, therefore, no 

cause of action for constructive fraud was stated against 

Bernick. The trial court sustained the demurrers and also 

refused to permit Mortarino to amend the motion for judgment. We 

awarded Mortarino an appeal. 

 Mortarino argues that the trial court erred by holding that 

the alleged fraudulent misrepresentation is an opinion which 

cannot form the basis for a cause of action for constructive 

fraud. Defendants assert that the alleged misrepresentations do 

not refer to a present or past fact, but are expressions of 

opinion. 

 Mortarino and defendants correctly observe that expressions 

of opinion cannot form the basis of an action for fraud: 

 It is well settled that a misrepresentation, the 

falsity of which will afford ground for an action for 

damages, must be of an existing fact, and not the mere 

expression of an opinion. The mere expression of an 

opinion, however strong and positive the language may 

be, is no fraud. Such statements are not fraudulent in 

law, because . . . they do not ordinarily deceive or 

mislead. Statements which are vague and indefinite in 

their nature and terms, or are merely loose, 
conjectural or exaggerated, go for nothing, though they 

may not be true, for a man is not justified in placing 

reliance upon them. 

Saxby v. Southern Land Co., 109 Va. 196, 198, 63 S.E. 423, 424 

(1909). Additionally, "fraud must relate to a present or a preexisting fact, and cannot ordinarily be predicated on unfulfilled 

promises or statements as to future events." Patrick v. Summers, 

235 Va. 452, 454, 369 S.E.2d 162, 164 (1988) (quoting Soble v. 

Herman, 175 Va. 489, 500, 9 S.E.2d 459, 464 (1940)). 

 We have not, however, established a bright line test to 

ascertain whether false representations constitute matters of 

opinion or statements of fact. Rather, "each case must in a 

large measure be adjudged upon its own facts, taking into 

consideration the nature of the representation and the meaning of 

the language used as applied to the subject matter and as 

interpreted by the surrounding circumstances." Packard Norfolk, 

Inc. v. Miller, 198 Va. 557, 562, 95 S.E.2d 207, 211 (1956). 

And, as we observed in Garrett v. Finch, 107 Va. 25, 28, 57 S.E. 

604, 605 (1907): 

 It is not always an easy matter to determine 

whether a given statement is one of fact or opinion. 

The relative knowledge of the parties dealing, their 

intentions and all of the surrounding circumstances, 

which can only be gathered from the evidence, affect 

the interpretation which the courts put upon the 

representations in determining whether they be of fact 

or opinion. 

 We hold that the alleged misrepresentations contained in 

CES' report to Morrow are statements of fact. CES represented in 

its report that "[o]n the vast majority of the property Mr. 

Bernick finds nothing to indicate that wetlands are present" and 

"the only location that is remotely possible for a contrary 

determination to be made is a small area on the southern boundary 
of the property and the chances of this are only slight." These 

statements are unambiguous representations of the present quality 

or character of the property and, thus, are representations of 

fact, and not mere expressions of opinion. 

 It is true, as the defendants point out, that CES stated in 

its report, "[h]owever, the presence of wetlands are [sic] so 

opinionated that there is always the possibility that a different 

interpretation could be made." This statement, however, is not 

sufficient to absolve the defendants of any liability that might 

ensue because of the purported factual misrepresentations that 

are contained in this report. For example, this purported 

disclaimer does not affect Vincent's factual representation that 

Bernick "finds nothing [on the property] to indicate that 

wetlands are present." 

 Mortarino also argues that the trial court erred in holding 

that the motion for judgment fails to state a cause of action for 

constructive fraud against Bernick. Mortarino says that the 

motion for judgment alleges that Morrow acted as Mortarino's 

agent and that "[a] person who enters into a fraudulent 

transaction with an agent, acting within the scope of his 

authority to bind a principal, is subject to liability to the 

principal whether the fraud is practiced upon the agent or upon 

the principal." 

 Bernick responds that there are no factual allegations 

concerning him other than the fact that he performed a wetlands 

study for CES. Bernick asserts that Mortarino does not allege 

Bernick was aware of Morrow or knew that a report was being 

furnished which would be used to establish a value on the 
property. Further, Bernick asserts that "no contract, contact, 

knowledge, meetings, [or] representations between Bernick and 

either of the Plaintiffs are alleged." 

 Initially, we observe, that "'[w]here fraud is relied on, 

the [pleading] must show specifically in what the fraud consists, 

so that the defendant may have the opportunity of shaping his 

defence accordingly, and since [fraud] must be clearly proved it 

must be distinctly stated.'" Ciarochi v. Ciarochi, 194 Va. 313, 

315, 73 S.E.2d 402, 403 (1952) (quoting Alsop v. Catlett, 99 Va. 

364, 370, 34 S.E. 48, 50 (1899)); accord Campbell v. Bettius, 244 

Va. 347, 351, 421 S.E.2d 433, 435-36 (1992); Tuscarora v. B.V.A. 

Credit Corp., 218 Va. 849, 858, 241 S.E.2d 778, 783 (1978); 

Temple v. Jones, Son & Co., 179 Va. 286, 297, 19 S.E.2d 57, 61 

(1942). We have stated that the elements of a cause of action 

for constructive fraud are a showing by clear and convincing 

evidence that a false representation of a material fact was made 

innocently or negligently, and the injured party was damaged as a 

result of his reliance upon the misrepresentation. Evaluation 

Research Corp. v. Alequin, 247 Va. 143, 148, 439 S.E.2d 387, 390 

(1994); accord Nationwide Mut. Ins. Co. v. Hargraves, 242 Va. 88, 

92, 405 S.E.2d 848, 851 (1991); Kitchen v. Throckmorton, 223 Va. 

164, 171, 286 S.E.2d 673, 676 (1982). Additionally, "[a] finding 

of . . . constructive fraud requires clear and convincing 

evidence that one has represented as true what is really false, 

in such a way as to induce a reasonable person to believe it, 

with the intent that the person will act upon this 

representation." Alequin, 247 Va. at 148, 439 S.E.2d at 390. 

 Here, the trial court properly sustained Bernick's demurrer 
because Mortarino failed to plead, with the requisite degree of 

particularity, facts which support all the elements of a cause of 

action for constructive fraud. For example, Mortarino failed to 

plead that Bernick knew or had reason to know that Mortarino 

would rely upon Bernick's alleged misrepresentations or that 

Bernick knew that his representations would be placed in a report 

that would be used to determine the value of the property. 

 Next, Mortarino asserts that the trial court abused its 

discretion by denying his motion for leave to amend the motion 

for judgment. The defendants do not respond to this assignment 

of error in their respective briefs. 

 Rule 1:8 states in part: "[l]eave to amend shall be 

liberally granted in furtherance of the ends of justice." 

Whether to grant leave to amend "is a matter resting within the 

sound discretion of the trial court." Kole v. City of 

Chesapeake, 247 Va. 51, 57, 439 S.E.2d 405, 409 (1994). Here, 

nothing in the record suggests that the defendants would have 

been prejudiced by allowing an amended motion for judgment. 

Additionally, Mortarino had not previously amended his motion for 

judgment. We conclude, therefore, that the trial court abused 

its discretion in failing to allow the filing of the amended 

motion for judgment. 

 Accordingly, we will affirm that portion of the trial 

court's judgment holding that Mortarino failed to plead a cause 

of action for constructive fraud against Bernick. We will 

reverse that portion of the judgment denying Mortarino's motion 

to amend the motion for judgment. We will also reverse that part 

of the judgment sustaining the demurrers on the basis that the 
statements in Consulting Engineering Services' report constitute 

opinions. We will remand this case for further proceedings 

consistent with this opinion. 

Affirmed in part, reversed in part, and remanded.