Opinion ID: 877952
Heading Depth: 1
Heading Rank: 2

Heading: fraud allegation

Text: The trial court found defendant, acting through Keith Gustin, to be guilty of fraud. The court concluded: Keith Gustin is the President of Wildwood, Inc., and is its duly authorized agent and the representations made by him are binding on Wildwood, Inc. Said agent made representations that were false, material, known to be false, with the intent that the representation should be acted upon by Ryckman, and that Ryckman was ignorant of the falsity of the statements, and relied on the truth of the statements, and he had a right to rely thereon, to his damages. Wildwood, Inc. is guilty of fraud and deceit. Plaintiffs argue that there is support in the record for this finding premised upon two things. First, plaintiffs argue that the evidence shows Gustin never intended to pay Ryckman a 6% commission, contrary to the representation made at the inception. Secondly, plaintiffs argue that Gustin misrepresented the state of Montana law by informing Ryckman that, under Montana law, the activity they proposed was legal. There is no evidence in this record from which a trier of fact could infer that Gustin, from the inception of the agreement, did not intend to pay Ryckman for services rendered. In fact, the evidence is all to the contrary. The evidence conclusively establishes that Gustin intended to pay compensation to Ryckman but that the dispute arose because: (1) the parties did not agree on the form of compensation, and (2) the parties could not agree on how many condominium sales were due to the efforts of plaintiffs. It is true that Gustin represented to the plaintiffs that, under Montana law, their plan for sales was legally permissible. Generally, fraud must be premised upon a misrepresentation of material fact, rather than law. However, there is an exception. As plaintiffs note, there is authority supporting fraud based upon a misrepresentation of foreign law. See Restatement of Law of Torts, Second, Section 545; 37 Am.Jur.2d, Fraud and Deceit, Section 80; Annotation at 24 A.L.R.2d, Foreign Law  Misrepresentation, 1039. There is no evidence in the record from which a trier of fact could infer that Gustin was misstating the Montana law as he knew it at the time the representation was made. Gustin personally acknowledged that he owed some compensation to the plaintiffs. During the pendency of the litigation, counsel for defendant, raised section 37-51-401, MCA, pertaining to standing, and section 28-2-903, MCA, the statute of frauds, as defenses. There is no evidentiary support in the record for plaintiffs argument that Gustin knew of the state of law in Montana at the time the representations were made. In fact, we are here holding at least part of the agreement to be enforceable. The trial court's finding of fraud on Gustin's part is without support and must be set aside.