Opinion ID: 739325
Heading Depth: 2
Heading Rank: 3

Heading: State Law Claims for Actual Fraud and Constructive Fraud

Text: 56 In order to maintain a cause of action for actual fraud under Ohio law, the following elements must be proved: (1) an actual or implied material misrepresentation or concealment of a matter of fact; (2) knowledge of the falsity, or such utter disregard and recklessness toward the truth or falsity of the representation that knowledge may be inferred; (3) intent to mislead; (4) reasonable reliance; and (5) resulting injury. See DiPietro v. DiPietro, 10 Ohio App.3d 44, 46, 460 N.E.2d 657 (1983); Reiner v. Kelley, 8 Ohio App.3d 390, 392, 457 N.E.2d 946 (1983). Constructive fraud is distinguished from actual fraud in that a party need not prove the element of intent. See Perlberg v. Perlberg, 18 Ohio St.2d 55, 58, 247 N.E.2d 306 (1969). 57 The claims against Barnhart and his law firm for fraud under Ohio law suffer from the same defects as the plaintiffs' claims under Section 10(b). For a claim based on an omission or a false representation to be successful under Ohio law, the plaintiffs must have relied on the omission or misrepresentation and such reliance must have been justifiable. Because we conclude that plaintiffs' reliance on Barnhart's representations was not reasonable for purposes of Section 10(b) liability, the District Court also properly dismissed these state law claims.