Opinion ID: 1354462
Heading Depth: 2
Heading Rank: 4

Heading: Defendants' Reliance on Plaintiffs' Representations as to Profitability

Text: The Webbs challenge the trial court's finding that they did not rely on the Ledbetters' other misrepresentations. There was testimony that Clifford Webb had asked Burt Ledbetter for financial statements because he was primarily concerned with the net profits of the business. He was given an income statement for 1980 and a statement of gross sales for the first six months of 1981. The 1980 income statement omitted or understated certain expenses such as depreciation, interest, car expense and wages, which appeared in the Ledbetters' tax return. When asked whether he had requested a copy of the Ledbetters' tax return, Mr. Webb replied, Income tax returns to me were essentially irrelevant. What I wanted to know was what the bottom line was after operating expense. His testimony that, had he been shown a full income statement rather than just gross sales for the first six months of 1981, he would not have purchased the business, was for the trial court to weigh. Webb's experience as a vice-president of a loan company which had included researching the background of property for possible financing, taken together with his testimony that he had decided to spend more on advertising than had the Ledbetters, could have raised such doubt in the mind of a reasonable factfinder that evidence of reliance on Ledbetter's profitability representations was not clear and convincing. The Webbs rest their argument, i.e., that failure to find reliance was a result of erroneous reasoning, on some of the court's verbal comments. Those comments, although they may be used to clarify a finding of fact, may not provide the basis for reversing that finding. See Balboa Construction Co. Moreover, the trial judge concluded his comments concerning reliance by saying,    and generally based on [ Mr. Webb's ] testimony, I don't feel that there was reliance.