Opinion ID: 2641133
Heading Depth: 2
Heading Rank: 2

Heading: Kesling’s Common Law Fraud Claim.

Text: Kesling’s common-law fraud claim is based on the salesperson’s claim that the car “would just need a tune-up,” rather than on Hubler’s ad. As a result, her fraud claim fares better than her deception claims. The elements of common-law fraud are “(1) a material misrepresentation of past or existing fact which (2) was untrue, (3) was made with knowledge of or in reckless ignorance of its falsity, (4) was made with the intent to deceive, (5) was rightfully relied upon by the complaining party, and (6) which proximately caused the injury or damage complained of.” Lawyers Title Ins. Corp. v. Pokraka, 595 N.E.2d 244, 249 (Ind. 1992). And unlike deception, “fraud is not limited only to affirmative representations; the failure to disclose all material facts can also constitute actionable fraud.” Lawson, 902 N.E.2d at 275. In particular, “[w]hen a buyer makes inquiries about the condition, qualities, or characteristics of property,” the seller must “fully declare any and all problems associated with the subject of the inquiry,” or else risk liability for fraud. Id. (internal quotation marks omitted) (finding “textbook case of fraud” where seller told buyer that a tractor leaked oil and gas, but claimed to know nothing else about it, when he in fact knew the engine block had cracked and been welded). 9 Those settled principles are enough for Kesling’s fraud claim to survive summary judgment. It is undisputed that Kesling asked the salesperson why the car’s idle was rough—and while there is some dispute about the precise response, the evidence most favorable to Kesling is that the salesperson told her the car “would just need a tune-up” because “it had been sitting for a while.” Regardless of whether that statement was qualified with the word “probably,” as some of the evidence suggests, “just need[s] a tune-up” can reasonably be understood as a representation of past or existing fact—as can the supporting claim that the car “had been sitting for awhile.” And a jury could reasonably find both claims untrue, because the car needed extensive repair and not just a tune-up, and because the car had been taken on trade just two weeks before and hadn’t really “been sitting for awhile.” Similarly, there is evidence to support an inference that the salesperson knew his statements to be false, but made them anyway with intent to deceive Kesling. Hubler admitted that it inspected the car when it accepted it on trade, so the salesperson as Hubler’s agent may be inferred to have at least constructive knowledge of the inspection—and of the car’s defects, which reportedly would have been obvious to anyone who would have inspected or serviced the car at a dealership. Failing to disclose those defects and instead representing that the car “would just need a tune-up” not only permits an inference of fraudulent intent, but also runs afoul of the related duty to “fully declare any and all problems associated with the subject of” a buyer’s inquiry “about the condition, qualities, or characteristics of property.” Lawson, 902 N.E.2d at 275. Finally, the summary judgment record shows a genuine issue of fact as to Kesling’s reliance on the salesperson’s statements. In her deposition, Kesling stated that she offered less than the asking price for the car because of the statement that the car needed a tune-up—in other words, that she relied on that statement in deciding how much she was willing to pay for the car. To be sure, other evidence implies that she didn’t actually rely on the statement—for example, taking the car to have its computer-diagnostic codes read immediately after purchase—but on summary judgment, we may only consider the evidence in the light most favorable to Kesling. Nor is she barred from claiming reliance because of signing an acknowledgement that she was buying the car “AS IS—NO WARRANTY . . . regardless of any oral statements about the vehicle.” An as-is provision disclaims implied warranties, but it “provides no insulation from fraudulent misrepresentations.” Fimbel v. DeClark, 695 N.E.2d 125, 128 (Ind. Ct. App. 1998), trans. denied; see also Lawson, 902 10 N.E.2d at 274–76 (allowing fraud claim for nondisclosure of cracked engine block to proceed, even though “as-is” disclaimer barred any claim for breaching implied warranty of merchantability).