Opinion ID: 1418760
Heading Depth: 1
Heading Rank: 1

Heading: Fraud As Against Both Plaintiffs

Text: Northwest contends the trial court erred in denying its motion for a directed verdict upon the ground plaintiffs had not proved fraud. The parties agree that when the alleged fraud consists of promises, as was the case here, the plaintiffs must prove that at the time Northwest made the promises, it did not intend to perform. Fraud can also be established by proving the promisor promised with reckless disregard whether the promisor can or cannot perform. Elizaga v. Kaiser Found. Hospitals, 259 Or. 542, 548, 487 P.2d 870, 874 (1971). A failure to subsequently perform the promise is, of itself, insufficient evidence of fraud. Conzelmann v. N.W.P. & D. Prod. Co., 190 Or. 332, 352, 225 P.2d 757 (1950). We conclude that the testimony can reasonably be construed to support a finding that Northwest did not intend to perform material portions of the promises allegedly made by it or made promises with reckless disregard of whether it would perform. There was testimony that Northwest promised that it would buy the equipment, allow Fall Creek to use it thereafter and, when Fall Creek had finished the jobs, liquidate whatever equipment was necessary to complete the payment of any balance due Northwest. The liquidation was to be on a piecemeal basis so as to yield the highest return. These promises were allegedly made after Northwest had started repossessing but before Fall Creek and Weiss agreed to cooperate in bringing in the equipment. The jury could find that there was a meeting between representatives of Northwest and its dealer, Automotive Equipment, before the equipment started coming in out of the woods. At that meeting it was decided that Automotive would bid on the trucks. The parties did not discuss allowing Fall Creek to use the trucks after the sale. If Automotive bid what it believed to be the value of the trucks, $100,000, it would take a loss as the balance owing which Automotive guarantied was $150,000. For this reason, at this meeting the parties discussed the possibility that Automotive might bid for all the equipment. It was discussed that Automotive might bid the total amount owing Northwest, $472,500 which included the $150,000 for the trucks which Automotive had guarantied. If Automotive Equipment could then sell the equipment for $472,500, plus its selling costs, neither Automotive nor Northwest would suffer any loss. Several days before the sale, Automotive and Northwest decided that Automotive would bid for all the equipment. This decison was not made known to Weiss or Fall Creek. This evidence supports a finding that Northwest never intended to perform material portions of its promises or made promises with reckless disregard whether it would perform. The trial court correctly denied the motion for a directed verdict upon this ground. The trial court's instruction on when promises can constitute fraud likewise was correct.