Opinion ID: 2227467
Heading Depth: 3
Heading Rank: 2

Heading: The representation was false.

Text: 3. When the defendant made the representation, it knew that it was false, or the defendant made the representation recklessly, without any knowledge of its truth, and as a positive assertion. 4. The defendant made the representation with the intention that it should be acted on by the plaintiff. 5. The plaintiff acted in reliance on the representation. 6. The plaintiff suffered injury due to his reliance on the representation. See 228 Mich.App. at 642, 579 N.W.2d 133. The majority then explained why it believed the plaintiff had made out a case of fraud: Defendant's contention that it made no affirmative misrepresentations ignores the fact that the jury could have found that defendant's presentation of its 1991 operating summary to plaintiff in September 1992 was a misrepresentation. Defendant repeatedly argues that the 1991 operating summary was clearly labeled For the Fiscal Year Ending September 30, 1991, and, therefore, that it could not have constituted a misrepresentation regarding defendant's financial position in 1992, and that plaintiff could not have been misled by it. The flaw in this argument is exposed by simply asking: Why did defendant give plaintiff a copy of its 1991 operating summary? Clearly, the act of giving plaintiff the operating summary constituted an endorsement of its contents and a representation that the summary was somehow a reflection of defendant's current financial strength.2 This was obviously a material representation, and the act of giving the operating summary to plaintiff during a job interview allowed the jury to infer that defendant intended that plaintiff act on it. In addition, there was evidence that, at the time defendant gave plaintiff the 1991 operating summary, it had more current financial information that suggested that it was in a much weaker financial position than it was in September 1991. From this evidence, the jury could have concluded that the representation regarding defendant's financial strength was false and that defendant knew that it was false when made. Finally, plaintiff testified that he relied on this representation in making his decision to accept defendant's offer of employment, and there was evidence that plaintiff suffered injury. Consequently, we find no error in the trial court's decision to deny defendant's motions for a directed verdict and for JNOV regarding plaintiff's fraudulent misrepresentation claim. 2Defendant would have us construe its action as no more than a statement of its financial condition as of September 31, 1991. Such a construction defies common sense. When defendant gave plaintiff the operating summary in September or October 1992, it was clearly offering it as some indication ol its current financial strength. Thus, the representation was not Here is our 1991 operating summary, which is irrelevant in regard to our current financial strength. Rather, it was effectively Here is our 1991 operating summary which reflects, at least to some degree, our current financial situation. [228 Mich.App. at 642-643, 579 N.W.2d 133.] Our remand order directed the Court of Appeals to reconsider its decision in light of M & D, Inc. v. McConkey, supra , which principally dealt with the question of silent fraud. The Court of Appeals majority reiterated its view that there was sufficient evidence of fraudulent misrepresentation in the case, and then also concluded that the evidence supported the silent fraud theory. It explained: Having nonetheless reviewed this matter in light of our Supreme Court's remand, we find that the evidence here also supported plaintiff's silent fraud theory. As this Court stated in M & D, Inc., supra at 29, 585 N.W.2d 33, quoting and adopting Judge Young's opinion in the previous M & D, Inc. v. McConkey, 226 Mich.App. 801, 573 N.W.2d 281 (1997), defendant also has a duty to disclose `subsequently acquired information which he recognizes as rendering untrue, or misleading previous representations which, when made, were true or believed to be true.` 231 Mich.App. at 29, 585 N.W.2d 33 (1997). (Citations and emphasis omitted.) We remain convinced that the jury in this case could fairly infer that defendant showed plaintiff the 1991 operating summary with the intention that plaintiff would rely on the information it contained. 228 Mich.App. at 642-643, 579 N.W.2d 133. Therefore, in addition to finding that the evidence here supports a claim of simple fraud, we also find that defendant had a duty in this case to disclose the subsequently acquired information of defendant's financial position in 1992, which clearly rendered untrue any implications from the 1991 figures. [237 Mich.App. at 97, 601 N.W.2d 892.] Judge Hoekstra dissented from both the initial decision and that on remand. In his latter opinion, he emphasized that there was no claim that the 1991 operating summary contained false or misleading information regarding the company's financial status during the time covered by the report. Rather, plaintiff's claim was that he inferred from the 1991 figures that the situation remained unchanged through 1992. However, Judge Hoekstra interpreted McConkey to establish that where the plaintiff's inference is unwarranted, it cannot serve as a basis for a fraud claim. He explained: There is no evidence that defendant intended the 1991 operating summary to demonstrate the company's financial condition at the time it hired plaintiff. To the contrary, the document is clearly a report from fiscal year 1991, and any other inferences plaintiff may have made lack a discernible or objective basis. In addition, I see no basis for the conclusion that plaintiff had a right to rely on the 1991 summary as an accurate picture of the company's performance in fiscal year 1992, without some additional inquiry or affirmative representation by defendant. Both of these conclusions, that the 1991 figures were intended to represent financial performance in 1992 and that defendant had a duty to provide additional financial information, are essential to the majority's finding of fraud. Unfortunately, no evidence, beyond pure speculation, supports such conclusions. [237 Mich.App. at 98-99, 601 N.W.2d 892.] Judge Hoekstra emphasized that the plaintiff never requested more recent information during the hiring process. Given that the report was clearly labeled as covering fiscal year 1991, Judge Hoekstra found no duty to provide additional information. He noted that while later figures were available, they had yet to be compiled in a report like the one defendant gave the plaintiff. Judge Hoekstra concluded that the majority's decision placed an unreasonable burden on a party in the position of the defendant: The most disconcerting aspect of the majority's opinion is that it expects that defendant will anticipate plaintiff's inference and then requires defendant to take appropriate remedial action. Because defendant failed to anticipate how plaintiff would interpret its 1991 operating summary, the majority finds that defendant has committed fraud. This result is most troubling. To elevate an inference made by another party's interpretation of a document that, on its face, is clear and unambiguous, puts every supplier of information in jeopardy for the unforeseen misinterpretation of that information. In a case like this one, where the data was clearly labeled as pertaining to the company's 1991 fiscal year, plaintiff should not be permitted to argue that he thought the figures also represented the company's performance in 1992. Plaintiff had a simple, straightforward avenue to discover defendant's current financial condition. He simply had to ask. Now he expects the courts to bail him out because his assumption about defendant's financial condition were incorrect. I find it noteworthy that McConkey holds that fraud requires some evidence of a false representation and that knowledge, coupled with failure to disclose, does not give rise to fraud unless the party is dutybound to disclose and intentionally suppresses the information, thereby creating a false impression. McConkey, [231 Mich.App. at] 25, 585 N.W.2d 33. There is no evidence of such a duty in this case, nor do I find evidence that defendant intentionally suppressed relevant information. [237 Mich.App. at 99-100, 601 N.W.2d 892.]