Opinion ID: 1852432
Heading Depth: 1
Heading Rank: 2

Heading: 1. The Difference Between Represented Value and True Value

Text: Liberty National and Mahone specifically argue that Sanders failed to prove any actual damage inasmuch as Sanders testified that she would not have purchased the policy if she had known of the three-year waiting period. A fraud victim's proof of reliance, however, hardly negates the victim's proof of damages. This Court has held: [T]here is [a] well-settled rule pertaining to the measure of damages resulting from fraudulent conduct or representations, to the effect that such damages will be fixed by an amount which would place the defrauded person in the position he would occupy if the representations had been true. Fogleman v. National Surety Co., 222 Ala. 265, 268, 132 So. 317 (1931) (emphasis added). See also Buchanan v. Collier, 555 So.2d 134, 136 (Ala.1989), John Hancock Variable Life Ins. Co. v. Pierce, 530 So.2d 719, 725-26 (Ala.1987), and Morris v. Westbay Auto Imports, Inc., 512 So.2d 1373, 1374 (Ala.1987). See also Hartselle Real Estate & Ins. Co. v. Atkins, 426 So.2d 451 (Ala.Civ.App.1983) (citing Boriss v. Edwards, 262 Ala. 172, 77 So.2d 909 (1954), and Martin v. Honeycutt, 341 So.2d 171 (Ala.Civ.App.1976)) (the measure of damages for a fraudulent misrepresentation of a thing purchased is the difference in the value of the thing as represented and the value of the thing as actually received). The evidence viewed in the light most favorable to Sanders establishes that, although Mahone represented the policy to be worth $10,000.00 for the death of Ogle regardless of when or how he died, in reality the policy, as it would have been received by Sanders, was worth only the paid premium plus ten percent. The evidence is undisputed that Liberty National did not tender $10,000 to Sanders and that Sanders did not accept the $193.30 tendered to her by Liberty National. The law of fraud measures Sanders's actual damages as the almost-$10,000 difference between the value of the policy as represented and the value in reality. Therefore, the evidence supported an award for that difference plus the $193.30 tendered and refused. Indeed, the jury did award Sanders compensatory damages in precisely that sum, $10,000, which placed Sanders in the monetary position she would have occupied if Mahone's representations about the life insurance policy had been true. Sanders's statement that she would not have purchased the policy if she had known of the three-year waiting period proved the reliance elements of her fraud and suppression claims and did not negate her proof of actual damage. See Buchanan, supra . Sanders's proof of mental anguish is further support for the $10,000 compensatory award, already entirely supported by the economic proof.