Opinion ID: 1703208
Heading Depth: 2
Heading Rank: 3

Heading: The Promissory-Fraud Claim

Text: To prove a claim of promissory fraud, the plaintiff must show (1) that the defendant made a misrepresentation, in the form of a promise, (2) that the representation concerned a material existing fact, (3) that the plaintiff relied on it, (4) that the reliance proximately caused injury or damage to the plaintiff, and (5) that when the defendant made the promise he intended not to do the act or acts promised, but intended to deceive the plaintiff. See Goodyear Tire & Rubber Co. v. Washington, 719 So.2d 774, 776 (Ala.1998). Grand Manor argues that the trial court erred in denying its motion for a JML on the promissory-fraud claim, arguing (1) that Grand Manor did not make the representation that all of the problems with the Dykeses' mobile home would be repaired by January 17, 1996, but, rather, that that representation was made to the Dykeses by Better Cents employee Robert Banks; (2) that Grand Manor did not represent to the Dykeses that it would repair all the problems with the mobile home, but only those problems that were its responsibility; (3) that the Dykeses failed to present sufficient evidence showing that they relied on Grand Manor's alleged representation; and (4) that the Dykeses failed to prove that Grand Manor intended to deceive the Dykeses and not to perform. In Henson v. Celtic Life Insurance Co., 621 So.2d 1268, 1272 (Ala.1993), this Court held that it is not necessarily a requirement of a fraud claim that there be a direct communication between the one who makes the representation and the one to whom the representation is made. If the fraudulent statement is made with the intent and expectation that the one to whom it is made will pass the statement on to the plaintiff, then the plaintiff is entitled to rely on that statement, even if it is not made personally or directly to the plaintiff. See id. It is undisputed that Grand Manor made no direct representation to the Dykeses at the closing. However, Mrs. Dykes testified at trial that while she and her husband were at the closing, and in their presence, Banks spoke by telephone with Grand Manor employee J.T. Hogan and that Banks told the Dykeses that Grand Manor had agreed to repair all the problems on the list and to do so by January 17, 1996. Although Banks's testimony was at times conflicting, he also testified at trial that Hogan had told him that Grand Manor would correct, by January 17, 1996, all the problems on the list. Viewing the evidence in a light most favorable to the Dykeses, the jury could reasonably infer that the statement made by Hogan to Banks during their telephone conversation, while Banks was in the Dykeses' presence, was made with the intent and expectation that Banks would pass it along to the Dykeses and, thus, could find that Grand Manor promised to repair all the items on the Dykeses' list. Grand Manor argues that the Dykeses did not rely on the representation by Grand Manor because, it says, even after Banks told the Dykeses that Grand Manor had agreed to repair all the items on the list, the Dykeses still refused to sign the closing documents unless Better Cents executed a written agreement promising to repair those items. Thus, Grand Manor contends, the Dykeses relied on their agreement with Better Cents, and not on Grand Manor's representation. However, Mrs. Dykes testified at trial that, based on Banks's relayed representation that Grand Manor would correct all the problems on the list and would do so by January 17, 1996, she closed the transaction. Viewing the evidence in a light most favorable to the Dykeses, the jury could reasonably infer that the Dykeses closed the sale in reliance on Grand Manor's oral representation, as relayed by Banks. Finally, Grand Manor argues that the Dykeses failed to present sufficient evidence to support a finding that Grand Manor intended to deceive the Dykeses. In Washington, supra, this Court stated the plaintiffs burden in proving fraudulent intent: The burden is on the plaintiff to prove that when the promise was made the defendant intended to deceive. The plaintiff cannot meet his burden merely by showing that the alleged promise ultimately was not kept; otherwise, any breach of contract would constitute a fraud. It is well settled that a `jury does not have untrammeled discretion to speculate upon the existence of [the requisite] intent [for promissory fraud].' There must be substantial evidence of a fraudulent intent that existed when the promise was made. 719 So.2d at 776 (citations omitted) (alteration in Washington ). While the mere failure to perform the promised act is not by itself sufficient evidence of fraudulent intent, for purposes of a promissory-fraud claim, the factfinder may consider that failure, together with other circumstances, in determining whether, at the time the promise was made, the promisor intended to deceive. Murphy v. Droke, 668 So.2d 513, 516 (Ala.1995) (citing First Bank of Boaz v. Fielder, 590 So.2d 893 (Ala.1991)). A plaintiff may meet the burden of proving fraudulent intent through circumstantial evidence, but the circumstances shown by the evidence of record must be such that the jury, as reasonable persons, may fairly and reasonably infer the ultimate fact sought to be proved. Ex parte Lumpkin, 702 So.2d 462, 466 (Ala.1997) (quotation marks and citations omitted). The Court of Civil Appeals concluded that this case is not a situation where Grand Manor `merely failed' to make repairs. 778 So.2d at 172. We agree. Although no direct evidence indicated that Grand Manor, when it made the alleged representation, did not intend to make all the repairs, the circumstantial evidence was sufficient for the jury to reasonably infer that fact. Banks testified that during the closing he read the Dykeses' list of problems to Hogan over the telephone and that he also faxed the same list to him. Banks further testified that while he was reading Hogan the list of problems, Hogan did not object to making any repairs and did not state that Grand Manor would not repair certain of the problems. Banks also testified that Grand Manor told him after the closing that it would not repair several of the problems on the Dykeses' list because those problems, it said, were not its responsibility. The Dykeses presented testimony indicating that they would not close the purchase of the mobile home unless all of the problems they had listed were corrected and that Grand Manor, through Banks, told them that all the problems on the list would be corrected by January 17, 1996. Although a service representative from Grand Manor, Mike Mathis, twice went to the Dykeses' mobile homeon January 3 and on January 9, 1996and made some of the listed repairs, the Dykeses also presented testimony indicating that Grand Manor did not repair all of the problems and that, on the second service visit, Hogan told Mrs. Dykes, in a telephone conversation, that Grand Manor would not correct several of the listed problems. Viewing this evidence in a light most favorable to the Dykeses, the jury could reasonably infer that when Grand Manor represented that it would correct all the problems on the Dykeses' list, with knowledge of what those problems were, it did not intend to perform all of the promised repairs, but intended, instead, to repair only those problems that it considered to be its responsibility. Therefore, the trial court properly submitted the Dykeses' promissory-fraud claim to the jury.