Opinion ID: 1979656
Heading Depth: 1
Heading Rank: 4

Heading: Sufficiency of Pleading the Fraud-Based Claims

Text: The Court of Special Appeals also dismissed the petitioners' fraudulent concealment, intentional failure to warn and Consumer Protection Act claims on the basis that the petitioners failed to allege sufficiently particularized facts with regard to those counts. It concluded: Fraud-based claims, such as unfair trade or deceptive trade practices pursuant to the Maryland Consumer Protection Act, must identify actionable misrepresentations. As to each of their fraud-based claims, appellants make vague assertions about generalized statements attributed to no particular appellee and/or allegedly do not constitute actionable misrepresentations. Such statements do not constitute actionable misrepresentations. The allegations made in appellants' complaint are simply not sufficiently particularized to satisfy Maryland's standard for pleading a fraud action. [18] In their brief in this Court, the respondents argue, that THE INSUFFICIENCY OF THE PLAINTIFF'S FRAUD-BASED CLAIMS IS NOT PROPERLY BEFORE THE COURT. Relying on Maryland Rule 8-303(b)(1), which states that [t]he petition shall present accurately, briefly, and clearly whatever is essential to a ready and adequate understanding of the points requiring consideration, the respondents assert that, because the petitioners failed to include, in their Petition for Writ of Certiorari to this Court, an argument addressing the intermediate appellate court's determination that the fraud-based claims were insufficiently particularized, they have effectively waived that argument. The Court of Special Appeals' decision with regard to that argument, therefore, they argue, should be left undisturbed. This Court disagrees. Although the petitioners did not assert, in their Petition for Writ of Certiorari, a question challenging the propriety of the Court of Special Appeals' dismissal of their consumer protection claim for lack of particularity, the petitioners do, in subsection E of the argument portion of the petition, aver that The Allegations in the TAC are Sufficiently Specific. The petitioners argue at length that they sufficiently pled, with adequate detail, the injury component of the fraud-based claims. [19] On page 15 of the Petition, the petitioners assert that they pled sufficient facts to allege all of the elements of the fraud-based claims. Particularly, the petitioners argue that, in their TAC, they alleged [f]acts further describing the Defect, its origin, its severity, and the exposure to harm to Appellants and Class Members [which were] grouped into sections entitled `Risk of severe injury or death (paragraphs 27-32), `Automobile seat as a safety device (paragraphs 33-39), `Weakness of the Seats' (paragraphs 40-42), `Thirty-year industry awareness of Defect' (paragraphs 43-54), `The 30-year cover-up' (paragraphs 55-70), `Platforms' (paragraphs 71-72), `Coordination of Efforts' (paragraphs 73-77), `Safe alternative designs' (paragraphs 78-80), `Marketing; Concealment of known Defect' (paragraphs 81-85), and `Lack of consumer awareness of Defect' (paragraphs 86-91). Although, it is true that the gist of the petitioners' argument in its Supplemental Petition regarding the dismissal of the fraudulent concealment and consumer protection claims, focused, primarily, on the sufficiency of their allegations of injury, we note that, as a matter of course, the petitioners also included, by recapitulation of those facts supporting each element of the fraud claims, an argument that all of the facts, as pled, were sufficient to state their fraud claims. We conclude that this is sufficient to preserve the arguments on appeal. We also believe that the petitioners amply pled that the respondents made actionable misrepresentations or omissions to support their fraud allegations. For example, with regard to the their fraudulent concealment and intentional failure to warn claims, [20] the petitioners allege, in paragraph number 43 of the TAC that [respondents] GM, Ford and Chrysler have known the risk of injury associated with the [defective seatbacks] for over 30 years. Saturn has known of the risk since Saturn came into existence. Paragraphs 44 through 54 provide facts that support that assertion. Paragraphs 55 through 72 support the petitioners' allegation that, despite their knowledge of the defective seatbacks, the respondents have engaged in a 30-year cover-up of the product malfunction. [21] Paragraphs 81 through 85 allege that the petitioners have concealed the existence of the seatback defect. To that end, the petitioners assert the following: 81. Despite Defendant's knowledge that the seats are unreasonably unsafe and that preventable injuries and death will result, they have continued to manufacture, market, distribute and sell Class Vehicles equipped with the seats. 82. Defendants knowingly and intentionally concealed from the public, including Plaintiffs and the Class Members, the risk of substantial injury or death from Seat Collapses. These allegations, as written, certainly reach the threshold of pleading misrepresentation or omission to withstand the dismissal of the petitioners' fraudulent concealment and Consumer Protection Act claims.
A claim for civil conspiracy requires proof of the following elements: 1) A confederation of two or more persons by agreement or understanding; 2) some unlawful or tortious act done in furtherance of the conspiracy or use of unlawful or tortious means to accomplish an act not in itself illegal; and 3) Actual legal damage resulting to the plaintiff. Van Royen v. Lacey, 262 Md. 94, 97-98, 277 A.2d 13, 14-15 (1971); Damazo v. Wahby, 259 Md. 627, 270 A.2d 814 (1970); Green v. Washington Suburban Sanitary Comm'n, 259 Md. 206, 221, 269 A.2d 815, 824 (1970). This Court has consistently held that `conspiracy' is not a separate tort capable of independently sustaining an award of damages in the absence of other tortious injury to the plaintiff. Alleco Inc. v. The Harry & Jeanette Weinberg Foundation, Inc., 340 Md. 176, 189, 665 A.2d 1038, 1044-45 (1995), quoting Alexander & Alexander v. B. Dixon Evander & Associates, Inc., 336 Md. 635, 645 n. 8, 650 A.2d 260, 265 n. 8(1994); Van Royen, supra. Similar to its reason for affirming the dismissal of the fraud claim, the intermediate appellate court affirmed the dismissal of the civil conspiracy count on the basis that the petitioners failed to allege sufficient facts adequately to plead the elements of civil conspiracy. To that end, quoting Manikhi v. Mass Transit Admin., 360 Md. 333, 359, 758 A.2d 95, 109 (2000), the court held that the petitioners' civil conspiracy charge amounted to `vague, confused, and extremely ambiguous' allegations [that were] insufficient to state a claim for civil conspiracy. As we have seen, this Court has already determined that the petitioner's tort claims were sufficiently pled. Therefore, the petitioner has alleged a tortious act upon which the conspiracy claim could be based. The question then is, whether the petitioners have pled adequate facts to allege that the respondents worked in concert to carry out the fraudulent concealment. In the Civil Conspiracy count, the petitioners state, as a preliminary matter, that [t]he allegations in the preceding paragraph are hereby incorporated by reference. Paragraphs 73 through 77 then detail the facts upon which the petitioners rely for support of their conspiracy claim: 73. GM, Ford and Chrysler coordinated their efforts, shared information and planned together to oppose the implementation of any reasonable standard for seat backrest strength. Consistent with this effort, Defendants went three decades without strengthening the seat backrests in most of their vehicles . . . 74. In 1992 the television program, 60 Minutes aired a story on auto seat failures. This prompted Ford to start a project code-named, Straw-Dog, to develop defenses against claims based on seat failures. Straw Dog was coordinated with similar projects by GM and Chrysler. 75. In 1993, while it was aware that moving barrier tests were more realistic and accurate than static tests for assessment of seat integrity in rear-impact collisions, Ford recommended static tests to NHTSA. As a result of collusion with GM, and while aware of the falsity of its position, Ford argued to NHTSA that a yielding seat was preferable to a rigid seat for purposes of occupant protection. 76. Defendants agreed and conspired among themselves to share and coordinate their knowledge, data, research activity, and decisions respecting the design and testing of seatbacks. For example, internal communications in 1992 among members of Ford's internal Seat Back Task Force investigating Ford's yielding front seatbacks refer to the desirability of using the auto industry's Crash Dummy Consortium, which included all Defendants, to ensure such coordination among Defendants. One such communication noted that it would be worse than silly for Ford's seat Back Task Force to be going in one direction regarding front seatback design and for the auto industry's industry-wide research program on this subject to be going in a `conflicting direction' with Ford not `know[ing] it'. 77. The purpose and intended effect of Defendants' conspiracy and the overt acts in furtherance thereof have been to stabilize, suppress, and lock competition among Defendants in designing, manufacturing, and selling reasonably crashworthy front seatbacks for Defendants' 1990-1999 cars. Such a conspiracy in restraint of trade is per se illegal under federal an state antitrust laws. As a result of this conspiracy and its execution, the Class Vehicles are defectively designed, are unreasonably dangerous and unsafe, and are not reasonably crashworthy, and the owners and consumers of such cars are substantially exposed to serious injury and death in the event of a rear-impact collision. It is clear to this Court that the facts pled in the TAC were not vague assertions, but rather were pointed facts alleging specific acts of conspiracy on the part of the respondents. Therefore, the Court of Special Appeals' decision to affirm the Circuit Court's grant of summary judgment on this ground is reversed.