Opinion ID: 723951
Heading Depth: 2
Heading Rank: 1

Heading: Statement as to Type of Coverage Purchased

Text: 19 The plaintiffs argue that every insurance notice sent to them included the statement This Insurance Protects in the Interest of the Lender in the Vehicle. The plaintiffs contend that this statement is a false statement of fact that was reasonably calculated to deceive them. Specifically, the plaintiffs argue that this statement led them to believe that they were only paying for loss and damage insurance when in fact they were also buying insurance that protected the Bank from malfeasance by the plaintiffs and from losses connected to the loan that might occur even if a secured automobile were not damaged or stolen. The plaintiffs stress that the word Vehicle is misleading and contend that to be correct the statement should have informed them that the insurance also protected the interest of the Bank in the loan. 20 This statement is not sufficiently misleading to form the basis of a fraud claim. The Interest of the Lender could be read to mean its interest in the vehicle as collateral. When read in this way, all of the insurance coverage can be construed to protect the Bank from diminution in value of its collateral, whether through damage, theft, or other costs incurred because the plaintiffs failed to make their payments (such as the cost of repossession). All of the coverage is designed to insure that the Bank will be fully secured up to the amount of the loan balance. While we recognize that one could read this statement another way, the language is too vague for us to conclude that the statement was reasonably calculated to deceive the plaintiffs. Furthermore, the same notice on which this statement appears includes a section which lists by number all of the policy endorsements about which the plaintiff complains. Although the plaintiffs would have had to ask the Bank or Transamerica what these codes stood for, it would have required minimal effort to do so. If the Bank or Transamerica were attempting to deceive the plaintiffs, it is hardly likely that they would have placed all of the endorsements on the notices sent to the plaintiffs. In addition, the presence of these endorsements on the face of the notices undermines the plaintiffs' claims that they reasonably relied on the statement they cite as misleading. A claim of fraud does not inevitably follow from every breach of a contract. Even if the Bank breached the loan agreements here, the plaintiffs still must point to a falsehood that would form the basis for fraud. They have failed to do so. Consequently, the district court properly granted summary judgment for the defendants on this issue because the plaintiffs failed to state with particularity a false statement of fact. 21