Opinion ID: 675766
Heading Depth: 2
Heading Rank: 3

Heading: Arkansas claims

Text: 32 Arkansas law governs the claims brought by Ronald and Sharon Eubanks, M-E and HOMAI. They argue that the district court should not have applied a reasonableness standard to their claims for fraud, constructive fraud and fraudulent concealment. The plaintiffs rely solely on two Arkansas cases holding that a buyer has no duty to investigate a seller's representations. Whaley v. Niven, 175 Ark. 839, 1 S.W.2d 3 (1927); Fausett & Co. v. Bullard, 217 Ark. 176, 229 S.W.2d 490 (1950). The absence of a duty to investigate, however, is not a license to ignore clear risks or make unwarranted leaps of faith. And it is well settled that fraud under Arkansas law includes all of the common law elements--including the requirement of reasonable reliance. Interstate Freeway Services, Inc. v. Houser, 310 Ark. 302, 835 S.W.2d 872, 873-74 (1992); see also New Equity Sec. Holders Committee for Golden Gulf, Ltd. v. Phillips, 97 B.R. 492, 501 (E.D.Ark.1989) (reasonable reliance required for fraudulent concealment claim); Cardiac Thoracic and Vascular Surgery, P.A. Profit Sharing Trust v. Bond, 310 Ark. 798, 840 S.W.2d 188 (1992) (reasonable reliance required for constructive fraud claim). As indicated, this requirement is unchanged whether the plaintiffs claim to have relied on omissions or affirmative misstatements. The district court did not err in requiring the plaintiffs to prove that they reasonably relied on Hardee's representations.V. 33 For the reasons given above, the decisions of the district court are 34 AFFIRMED.