Opinion ID: 1903255
Heading Depth: 1
Heading Rank: 6

Heading: Breach of Contract and Proof of Fraud

Text: At trial, Azarig Kooloian, Jr. (Ozzie), an agent for Kooloian, his father, testified that no one had informed plaintiff about any issues with the property's title, nor that Reedy had already conveyed the property to Murphy Financial. According to Ozzie, he or plaintiff first learned about the title defects after the contract had been signed by the parties. Ozzie recalled that, by the time plaintiff purchased the property at the foreclosure sale, CVS had decided to develop a pharmacy at a different location and no longer was interested in the property. Reedy's deposition and affidavit were admitted into evidence as full exhibits. In the affidavit, dated July 27, 1995, Reedy acknowledged that he had deeded the property to Raposa, but because Raposa had not recorded the deed, Reedy negotiated and signed a sales agreement with plaintiff. In his deposition, Reedy stated that he meant to disclose the title problems to plaintiff at the time they signed the contract but did not remember doing so. At trial, Reedy's then-attorney, Edward A. DiPippo (DiPippo), testified that Raposa was making payments under the defaulted note during the foreclosure proceedings, but DiPippo did not know whether Reedy disclosed to plaintiff Raposa's payments on the note. The testimony and evidence adduced at trial supported the trial justice's finding that defendants not only breached the contract but also acted in bad faith and committed fraud. It is well settled that [t]o establish a prima facie damages claim in a fraud case, the plaintiff must prove that the defendant `made a false representation intending thereby to induce plaintiff to rely thereon' and that the plaintiff justifiably relied thereon to his or her damage. Travers v. Spidell, 682 A.2d 471, 472-73 (R.I.1996) (quoting Cliftex Clothing Co. v. DiSanto, 88 R.I. 338, 344, 148 A.2d 273, 275 (1959)). [W]hen a person claims to own certain property, such representations may be justifiably relied upon by a plaintiff who is transacting business with that person without first investigating or verifying the accuracy of such a claim. Id. at 474. In particular, the trial justice found that defendants breached the contract by representing that Suburban was the owner in fee of the property with authority to enter into the contract. The trial justice observed that defendants failed to inform plaintiff that Suburban had already conveyed the property before plaintiff signed the contract. Also, the trial justice characterized Reedy's decision to convey the property to Green Acres as made with the further intent to further defeat plaintiff's interest in the property. The trial justice noted that Reedy continued to receive partial payments of the property's purchase price from Raposa during the foreclosure proceedings. She found that Reedy was intentionally deceptive in the conversation with plaintiff during the course of the proceedings. The trial justice explained that plaintiff relied upon defendants' misrepresentations in deciding to continue negotiating with CVS and to persist in his efforts to acquire the property. Ultimately, plaintiff purchased the property at the foreclosure sale and incurred costs beyond the purchase price negotiated in the contract. Our review of the record discloses evidence supporting the trial justice's finding that defendants breached the contract and committed fraud. We are satisfied that the trial justice conducted the appropriate analysis, neither overlooked nor misconceived any material evidence, and did not otherwise fail to do substantial justice between the parties. With respect to the finding of fraudulent conduct by defendants, we can hardly envision a clearer case of fraud  contracting to sell property that a party had already sold to someone else.