Opinion ID: 1740168
Heading Depth: 1
Heading Rank: 3

Heading: Issue of the Lesters' Fraudulent Misrepresentation Claim

Text: The defendants contend that the trial court erred in submitting the Lesters' fraudulent misrepresentation claim to the jury. They argue that the statements made by defendant Botsford to plaintiff James Lester constituted an opinion or a prediction of a future event, not a misrepresentation of fact. Whether a given representation is an expression of opinion or a statement of fact depends upon all the circumstances of the particular case, such as the form and subject matter of the representation and the knowledge, intelligence and relation of the respective parties. Executive Dev., Inc. v. Smith, 557 So.2d 1231, 1233 (Ala.1990) (quoting earlier cases). Classifying a defendant's statement as an opinion is not necessarily fatal to a plaintiff's claim for fraud: Normally, the courts will not allow a statement of opinion to be a basis on which to predicate a claim of fraud. However, if there is proof of actual fraudulent intent at the time the representation is made and the person succeeds in the deception and injury results, an action for fraud may be predicated on such a representation, notwithstanding the opinion nature of the representation. Shepherd v. Kendrick, 236 Ala. 289, 181 So. 782 (1938); see also Army Aviation Center Federal Credit Union v. Poston, 460 So.2d 139 (Ala.1984); Clanton v. Bains Oil Co., 417 So.2d 149 (Ala.1982); Birmingham Broadcasting Co. v. Bell, 259 Ala. 656, 68 So.2d 314 (1953). Where the representation of an opinion is involved, a person must prove not only that there was an intent to deceive, but also that his reliance was reasonable. See Bedwell Lumber, Inc. v. T & T Corp., 386 So.2d 413 (Ala.1980). In certain situations a person may reasonably rely on the representation of an opinion. For instance, where the facts are not equally known to both sides, a statement of opinion by the one who knows the facts better, often involves a statement of a material fact that justifies his opinion, Scholz Homes, Inc. v. Hooper, 287 Ala. 628, 254 So.2d 328 (1971), quoting Kefuss v. Whitley, 220 Mich. 67, 189 N.W. 76 (1922); therefore, in such a situation, an action for fraud may be predicated on an opinion, depending on whether the reliance on the representation of the opinion is reasonable. Cf. Shepherd v. Kendrick, 236 Ala. 289, 181 So. 782 (1938); Scholz Homes, Inc. v. Hooper, 287 Ala. 628, 254 So.2d 328 (1971). .... ... Whether a fraudulent intent has been proven is a matter peculiarly within the province of the jury, where there is evidence of such an intent. State Farm Mut. Auto. Ins. Co. v. Borden, 371 So.2d 28 (Ala.1979); Southeastern Properties, Inc. v. Lee, 368 So.2d 288, on remand, 368 So.2d 289 (Ala.Civ.App. 1979). Reynolds v. Mitchell, 529 So.2d 227, 231 (Ala.1988). The record reflects that a dry creek bed for a tributary of Turkey Creek runs along the back of the lots on which the plaintiffs' homes were built in the Sunchase subdivision. Each plaintiff couple suffered three or four floods between the time the couple bought their home and the time the couple filed suit. Plaintiff James Lester testified that in January 1994 he and his wife Sandy visited the Sunchase subdivision and noticed open house signs. He stated that they then walked through one of the open houses. James Lester noticed that the front and side yards of the open house had been sodded but that the backyard had not been sodded. Although James Lester did not walk in the backyard, he noticed that the backyard area was kind of wooded and trees and brushy and those kudzu and weeds and stuff. As the Lesters walked through the open house, defendant Botsford, a one-sixth owner of Cooper & Company, approached them and visited with them for twenty minutes. The Lesters told Botsford that the house suited them. As the Lesters and Botsford were discussing items in the house that needed to be completed, they walked out onto the back patio, where James Lester asked Botsford about the drainage of rainwater falling from the roof onto the patio and washing away dirt at the edge of the patio. In this discussion, James Lester asked Botsford if there was a problem with water. Botsford responded, [N]o, there shouldn't be a problem. James Lester then asked Botsford, if there was ever a problem with water, to which Botsford replied, there is a fifteen-foot easement back there that should handle the water. Relying on Botsford's statement that the easement should handle the drainage of rainwater, the Lesters purchased the house on lot 17. The following facts support the jury's conclusion that Botsford intentionally misrepresented the ability of the easement to handle the drainage of rainwater from the Sunchase subdivision. In September 1993, Botsford had been questioned about flooding by Chris Clements, a prospective purchaser of the house on lot 18, on the south side of the Lesters' house. Clements had noticed the ponding of water that extended to a tree by the driveway close to the house. He specifically asked Botsford about flooding. Botsford told Clements that the flooding would subside as more houses were built and the land was more developed. Relying on Botsford's representation, Clements purchased the house on lot 18. In December 1993, Botsford tried to sell the house on lot 17, the lot that the Lesters subsequently purchased, to Keith Bryant. During a visit to lot 17, Bryant observed a pond in the backyard that extended approximately 40 feet toward the house. Bryant demanded a written assurance from the developer that the swale in the backyard would work. When he did not receive such an assurance, Bryant purchased a house and lot across the street from lot 17 and the plaintiffs' homes, on the high side of the Sunchase subdivision. Although Botsford's statements to the Lesters can be characterized as opinions, Botsford had knowledge of flooding of lot 17 and the other lots bordering the 15-foot easement, a material fact, not known to the Lesters or the builder of the Lesters' house. The Lesters presented substantial evidence from which the jury could have concluded that Botsford gave his opinion with the intent to deceive and that the Lesters' reliance on his opinion was reasonable. See Reynolds, supra . Therefore, the trial court did not err in submitting the Lesters' fraudulent misrepresentation claim to the jury. Id.