Opinion ID: 312332
Heading Depth: 3
Heading Rank: 1

Heading: Delivery and Supervision

Text: 67 In Questions Nos. 1, 2, and 6 the jury made findings as to whether RCA made certain fraudulent misrepresentations to Fredonia. The jury found in Question No. 1 that the defendant warranted and represented that if it got the contract it would deliver the equipment so as to meet the air date of June 1, 1969. The jury found in Question No. 2 that the defendant warranted and represented that if it got the contract it would supervise the installation of the equipment. The jury further found in subparts to Questions Nos. 1 and 2 that (1) the representations as to delivery date and supervision were made for the purpose of inducing the plaintiff into a contract [Questions 1(b) and 2(b)]; (2) the representations as to delivery date and supervision were believed and relied upon by Fredonia [Questions 1(c) and 2(c)]; (3) the representations as to delivery date and supervision were made with the intent, design, and purpose of deceiving the plaintiff [Questions 1(d) and 2(d)]; and (4) the representations as to delivery date and supervision were a proximate cause of Fredonia's damages [Questions 1(e) and 2(e)]. 68 The jury found in Question No. 6(a) that the plaintiff relied on the defendant's agents' statements as to delivery date. The jury further found in Question No. 6(b) that the plaintiff relied on the defendant's agents' statements as to the supervision that the defendant would furnish. However, in Question No. 6(c) the jury was asked whether the plaintiff's reliance on the defendant's agents' statements as to date of delivery and supervision of the installation was justified. The jury answered that the reliance was not justified. 69 After the jury returned its answers to the questions on liability, the District Court realized that there was a possible inconsistency 9 to the jury's answer in No. 6(c) [where the jury found reliance was not justified] with the jury's answers in Nos. 1(c), 2(c), 6(a), and 6(b) [where the jury found Fredonia relied on RCA's statements]. 70 The District Court in its order denying RCA's posttrial motions held it not to be required that the reliance induced by the alleged fraudulent conduct must be reasonable. The District Court, citing no cases, stated the law to be: 71 [i]f an actor induces another by fraudulent misrepresentations to rely on a false promise, and a detriment thereby is suffered by that other, the actor is guilty of fraud although the other's reliance on the promise was unreasonable. 72 RCA contends that if the reliance was not justified as to these two misrepresentations, then there can be no recovery in damages stemming from these two misrepresentations. RCA states that Texas cases require that for fraud to attach the reliance must be reasonable. 73 This Court said in Edwards v. Allied Chemical, 5 Cir., 1969, 414 F.2d 60 that: 74 Texas allows recovery for fraud only where the defrauded party 'had a right to rely' on the misrepresentation. Bell v. Henson, Ct. of Civil Appeals, 1934, 74 S.W.2d 455 (err. dism'd). 75 Id. at 64. 76 We must agree with RCA that the District Court erred and that the reliance must be justified. Any damages stemming from RCA's fraudulent misrepresentations as to date of delivery and installation of the equipment cannot lie. Therefore, we need not consider other reasons RCA alleged for overturning the jury's findings in Questions Nos. 1 and 2.