Opinion ID: 1770743
Heading Depth: 1
Heading Rank: 1

Heading: Was There Substantial Evidence of Fraud?

Text: The plaintiffs made two fraud claims one alleging a fraudulent misrepresentation and one alleging promissory fraud. In order to succeed on their fraudulent-misrepresentation claim, the plaintiffs must prove: (1) that the defendants made a false representation concerning an existing material fact; (2) that the defendants either knew the representation to be false, made it recklessly, or made it with no knowledge of whether it was true; (3) that the plaintiffs justifiably relied on the representation; [2] and (4) that the plaintiffs incurred damage as a proximate result of their reliance on the representation. Ex parte Household Retail Services, Inc., 744 So.2d 871, 877 (Ala.1999), citing Cato v. Lowder Realty Co., 630 So.2d 378, 381 (Ala.1993). It is undisputed that neither Shelley nor Koenig misrepresented any facts to the plaintiffs themselves, but the plaintiffs claim that Engle was acting as their agent and that his acting as a real-estate agent when he in fact held no license was a misrepresentation for which they are liable. The plaintiffs also contend that Engle made a misrepresentation to them when he promised to build an apartment complex on the Shelby County land. Therefore, we focus on the evidence relating to the actions of Engle to determine if the factfinder could find, on the basis of substantial evidence, that he in fact made a misrepresentation of material fact. Fred Ledford stated in deposition testimony that the only misrepresentations Engle made were representations to the effect that he would find a suitable buyer for the Chilton County land and that he was going to build an apartment complex on the Shelby County property. It is clear from the record that Engle did find buyers for the Chilton County landShelley and Koenig. While it might be unusual for buyers to be so closely tied to an agent through whom they are buying real estate, the plaintiffs made no complaints when Engle found these buyers. The plaintiffs were not forced into the sale and the loan transactions, but entered them voluntarily. Consequently, it is clear that Engle did find buyers that the plaintiffs agreed were suitable. The second alleged misrepresentation involves a claim by the plaintiffs that Engle told them he was going to build an apartment complex on the two parcels of Shelby County property, which were owned by the Ledfords and Fred's parents. There was no written contract calling for Engle to build apartments on that land, nor was there any timetable as to when the project would begin. Essentially, the plaintiffs are basing this fraud claim on a promise they say Engle made to them; consequently, this claim is a claim of promissory fraud. See Ex parte City of Gadsden, 718 So.2d 716, 721 (Ala.1998); Cabnetware, Inc. v. Birmingham Saw Works, Inc., 614 So.2d 1034 (Ala.1993). A promissory-fraud claim requires a plaintiff to prove that the defendant had no intention of performing as promised and that the defendant made the promise with an intent to deceive. Bailey v. Rowan, 751 So.2d 504, 507 (Ala.1999); Ex parte Lumpkin, 702 So.2d 462, 466 (Ala.1997). The record contains no evidence indicating that Engle had any intent to deceive the plaintiffs. Therefore, they failed to present evidence of one of the essential elements of their promissory-fraud claim. The summary judgment was proper as to both fraud claims. [3] The judgment of the Court of Civil Appeals is affirmed as to those claims.