Opinion ID: 2569319
Heading Depth: 1
Heading Rank: 5

Heading: Claims against Pearson

Text: Fraud is established when a plaintiff demonstrates, by clear and convincing evidence, that (1) the defendant made a false representation intended to induce action by the plaintiff; (2) the plaintiff reasonably believed the representation to be true; and (3) the plaintiff relied on the false representation and suffered damages. Jurkovich v. Tomlinson, 905 P.2d 409, 411 (Wyo.1995); Lavoie v. Safecare Health Service, Inc., 840 P.2d 239, 252 (Wyo.1992); Husman, Inc. v. Triton Coal Co., 809 P.2d 796, 799 (Wyo.1991). See also Britton v. Bill Anselmi Pontiac-Buick-GMC, Inc., 786 P.2d 855, 860 (Wyo.1990); Rocky Mountain Helicopters, Inc. v. Air Freight, Inc., 773 P.2d 911, 919 (Wyo.1989). Conduct or words which tend to produce an erroneous impression may satisfy the plaintiff's burden. Britton, 786 P.2d at 860. In addition, even if someone is not under a duty to speak, if he does speak, he is under a duty to speak truthfully and to make a full and fair disclosure. Id.; Meeker v. Lanham, 604 P.2d 556, 558 (Wyo.1979). Reliance is reasonable when false representations have occurred prior to the execution of the contract which is sought to be avoided or for which damages are sought to be recovered. Schepps v. Howe, 665 P.2d 504, 508 (Wyo. 1983). Sundown contends that Pearson's fraudulent representations before the contract was executed appeared in the brochure statements and the map of restricted grazing, both of which failed to disclose the Arch Agreements and the significant impact of the Arch Agreements on the use of the land. Pearson contends that the map represented present grazing restrictions, not future, and represented proposed areas for coal mining and not all areas subject to the Arch Agreements. He contends that the brochure statements were opinions that are not subject to a fraud action, pointing to the rule that in order for the brochure statements to be actionable, any false representation must relate to a matter of fact rather than of opinion. Twing v. Schott, 80 Wyo. 100, 113-14, 338 P.2d 839, 843-44 (Wyo.1959). He contends that the existence of the Arch Agreements was properly disclosed before the contract was signed in the Addendum B-1, that he had no duty to read the agreements before the purchase contract was signed, and the agreements were properly disclosed after signing. He claims, further, that he owed no other duty to a non-client buyer. The duty of care owed by real estate brokers and salespersons to a non-client buyer is: (1) to not perpetuate a material representation of the seller which the broker/salesperson knows or should know is false, and (2) to take reasonable steps to avoid giving the buyer false information. Hagar v. Mobley, 638 P.2d 127, 137-38 (Wyo.1981). Nogle's testimony at trial establishes that the map purported to show areas of restricted grazing. He testified that it confirmed his understanding that the mining activity was limited and would not affect ranching operations. Nogle did not testify that Pearson or the sellers represented that the map reflected future restrictions. The brochure statements are opinions that are not actionable under the law. The failure to disclose the existence and the effect of the Arch Agreements in the brochure and the map are not fraudulent unless the statements violate the accepted standards in the real estate field as provided by Wyoming statute. Snyder v. Lovercheck, 992 P.2d 1079, 1090 (Wyo.1999) (citing Hagar, 638 P.2d at 138). When the contract was executed in 1996, Wyoming statute made general prohibitions against substantially misrepresenting facts and making false promises in order to induce action. Wyo. Stat.Ann. § 33-28-111(a)(i) (Lexis 1999). Under this general fraud standard, we do not find that failing to disclose the existence and the effect of the Arch agreements in the brochure and map are fraudulent misrepresentations. Sundown next contends that, after the contract was executed, Pearson drafted a seriously misleading cover letter to the Arch Agreements stressing the value the coal companies had added to the ranch but saying nothing about the burdens it imposed on the surface. It also claims that Pearson's property disclosure statement did not identify the Arch Agreements although the statement was prepared on August 27, 1996, after Pearson claims to have first read and delivered the Arch Agreements to Kornkven. Sundown contends these misrepresentations induced it to rely on Pearson's representations that ranching operations were not affected by the agreements rather than closely reading the accompanying Arch Agreements, and his reliance caused him to decide to range lamb his sheep and thereby incur damages. Although the trial court determined that Sundown's possession of the agreements before damages were incurred precluded recovery, we find that the cover letter is not fraudulent, but expresses mere opinion about the future winding down of mining operations that is not actionable. Sundown's contentions amount to a claim of fraudulent nondisclosure and fraudulent concealment. See Richey v. Patrick, 904 P.2d 798, 801 (Wyo.1995) (citing Restatement (Second) of Torts §§ 551, 550 (1977)). Before nondisclosure or fraudulent concealment can be considered, Sundown must show that Pearson had a duty to disclose the information. Burman v. Richmond Homes Ltd., 821 P.2d 913, 918 (Colo.App.1991). Sundown has made no such showing either in this appeal or at trial, and we find no error in entry of the directed verdict on the issue of fraud. Sundown next contends that Pearson's representations were negligent. The elements of negligent misrepresentation are false information supplied in the course of one's business for the guidance of others in their business; failure to exercise reasonable care in obtaining or relating the information; and pecuniary loss resulting from justifiable reliance thereon. Richey, 904 P.2d at 802; Restatement (Second) of Torts § 552(1) (1977). In Snyder v. Lovercheck , however, we decided that where the contract includes a disclaimer provision, stating that the buyer is not relying upon any representation of seller or seller's agents, the buyer may not assert a claim for negligent misrepresentation. Snyder, 992 P.2d at 1089. The real estate contract executed by Nogle for Sundown contained such a disclaimer provision, and a claim for negligent misrepresentation cannot be asserted. Sundown also argues that nondisclosure of the information discussed previously was negligent. We have previously determined that Wyoming does not recognize a cause of action for negligent nondisclosure, Sundown does not provide authority or argument that we should adopt that cause of action in this case, and the issue is not further considered. Givens v. Fowler, 984 P.2d 1092, 1097 (Wyo.1999). In summary, we affirm the directed verdict for all claims against Pearson.