Opinion ID: 2448172
Heading Depth: 1
Heading Rank: 3

Heading: Intention to Induce to Act

Text: Fidelity vigorously contends that it had no knowledge of Cook's involvement when it issued the loan commitment to Staggers on September 23 and that Cook's reliance on the commitment was revealed to it after the construction was virtually complete. The record, though, does not support this contention. Cook's attorney testified that he followed up with Trimble the first week of construction to make certain that the loan funds would be paid to Cook according to the construction contract. He was assured that they would be. Trimble recalled talking to Cook's attorney but was uncertain about the details of the conversation. He did recall that Staggers asked him in the last part of September to write a letter identifying the loan with the hunting lodge property and the construction contract. Moreover, W.R. Parker testified that he knew before the commitment letter was issued that the loan would be used to build a hunting lodge. Under such facts, we cannot say that the circuit judge's finding that Fidelity knew from Cook's counsel that Cook was relying on the loan commitment and doing the work because of it was clearly erroneous. As the trial judge said, the only reason to issue a loan commitment was to give assurances upon which someone will rely. Cook clearly did rely on it and Fidelity, through Trimble, knew early on in the construction that Cook was doing so. The doctrine of transferred intent is generally not applicable in cases of misrepresentation. See Prosser and Keeton, Law of Torts, ch. 18, § 107, p. 743 (5th ed. 1984). But where a document is intended to be directed to others in addition to the immediate recipient, or where it is customary for the document to be relied upon by third parties, the doctrine of transferred intent will be applied to support a case of misrepresentation. Prosser and Keeton at p. 744. This principle furnishes legal support for the circuit judge's finding of scienter in this case.