Opinion ID: 2818115
Heading Depth: 2
Heading Rank: 1

Heading: Deceit and Fraud

Text: Under North Dakota law, “the same conduct, a promise made without any intention of performing, may constitute both deceit and fraud.” Erickson v. Brown, 747 N.W.2d 34, 44 (N.D. 2008); see also N.D. Cent. Code §§ 9-03-08(4), 9-10-02(4). Such a promise constitutes “deceit if there is no contract between the parties, or fraud if there is a contract and one party’s apparent consent to the contract is obtained as a result of that promise.” Delzer v. United Bank of Bismarck, 527 N.W.2d 650, 656 n.4 (N.D. 1995). “[P]roof of actual damage proximately caused by the -10- misrepresentation or nondisclosure is an essential element of a tort action for . . . deceit.” Schneider v. Schaaf, 603 N.W.2d 869, 874 (N.D. 1999). Summary judgment is appropriate if the plaintiff has not offered sufficient proof of actual damages caused by the deceitful act. See id. at 875-76. Deceit and fraud claims must be proved by clear and convincing evidence, and “it is appropriate to consider the quantum of proof necessary to support liability” when determining the propriety of summary judgment in a deceit or fraud case. Erickson, 747 N.W.2d at 45, 47. Macquarie Bank contends that when leases serving as collateral for Macquarie Bank’s loan to LexMac and Novus were set to expire, Knickel orally promised to renew them. Instead, Knickel leased the acreage in the name of Lexar so that the new leases would not serve as collateral. Macquarie Bank does not dispute the district court’s holding that Knickel’s oral promises did not rise to the level of a contract, which meant that they could not constitute fraud under North Dakota law. The fact that Knickel’s oral promises are not enforceable as a contract, however, does not preclude Macquarie Bank’s deceit claim. See Erickson, 747 N.W.2d at 48. Macquarie Bank argues that in September 2007, before the leases serving as collateral expired, its lease brokers were poised to re-lease the acreage in the names of LexMac and Novus and thereby preserve the leases as collateral. Because of Knickel’s promise to renew the leases, however, Macquarie Bank instructed its lease brokers not to act. Had they done so, Macquarie Bank contends that the leases would have been renewed and preserved as collateral and Macquarie LLC would have acquired them at the foreclosure sale in April 2008. Instead, Macquarie LLC was required to expend funds to top lease Lexar’s leases, a consequence that Macquarie Bank argues resulted from Knickel’s deceit. Macquarie Bank cannot establish that it was damaged as a result of Knickel’s promise because the lease brokers would not have been able to renew the leases in the names of LexMac and Novus over Knickel’s objections. Macquarie Bank’s argument -11- is premised on its belief that the Mortgage and Credit Agreement required LexMac and Novus to preserve the leases as collateral, but as discussed above, LexMac and Novus were under no such obligation. Even if Knickel had been forthcoming about his intentions to lease the acreage in the name of Lexar, there was nothing that Macquarie Bank or its lease brokers could have done to compel him to renew the leases in the names of LexMac and Novus. Accordingly, the district court did not err in granting summary judgment against Macquarie Bank on its claims of deceit and fraud.