Opinion ID: 1689582
Heading Depth: 1
Heading Rank: 1

Heading: The Claim of Direct Misrepresentation

Text: The plaintiffs argue that Primus directly misrepresented to them facts concerning an acquisition fee. Specifically, they contend that Crow told them they would not have to pay an acquisition fee, and that the documents related to the lease indicated that they were not paying such a fee. However, they say they later discovered that while they did not pay such a fee up-front, a $450 acquisition fee had in fact been charged to them and had been incorporated into their monthly payments. A party alleging fraud by misrepresentation must prove four elements: (1) that the defendant made a false representation concerning an existing material fact; (2) that the defendant made that misrepresentation while knowing that it was false, or made it recklessly, or made it with no knowledge as to its truth or falsity; (3) that the plaintiff reasonably relied on the misrepresentation; and (4) that the plaintiff incurred damage proximately caused by the reliance. Ex parte Government Employees Ins. Co., 729 So.2d 299, 304 (Ala.1999). While the general rule, as just stated, contains the element of reasonable reliance, that element is not applicable in this particular case. This case was filed before this Court released its opinion in Foremost Insurance Co. v. Parham, 693 So.2d 409 (Ala.1997), on March 14, 1997. The Foremost Insurance opinion substituted the reasonable reliance element for the element of justifiable reliance, which had formerly applied in fraud cases. That change in the law was prospective. Thus, in this particular case, the plaintiffs would have to prove justifiable reliance on Primus's alleged misrepresentations. The plaintiffs failed to prove the first element of misrepresentation. They presented no evidence indicating any contact between them and Primus at any time during this transaction. Crow handled all of the negotiations on behalf of Jack Ingram. Primus was not involved until after the lease had been negotiated. Having no contact with the plaintiffs, it was impossible for Primus to falsely misrepresent a fact to them. Thus, the plaintiffs have no valid claim based on an alleged direct misrepresentation. The plaintiffs claim that the financing forms themselves, furnished by Primus to Jack Ingram, make a misrepresentation. The plaintiffs' brief, however, more accurately reflects an argument that the wording and the numbers entered on the form by Crow constitute a misrepresentation i.e., a statement to the effect that they would not be paying an acquisition fee, when in fact they were paying such a fee. The blank forms themselves contain no misrepresentation. The plaintiffs failed to prove that Primus had a part in negotiating the transaction, or had a part in any other aspect of the transaction as it pertained to the acquisition fee, and they failed to prove their contention that the forms themselves misrepresent the facts concerning the acquisition fee. Thus, they failed to present substantial evidence of one of the elements of fraud. The summary judgment was proper as to the plaintiffs' claim of fraud based on alleged misrepresentations made directly by Primus.