Opinion ID: 1865218
Heading Depth: 1
Heading Rank: 13

Heading: Cash Account on the April 30, 1979 Balance Sheet.

Text: The trial court determined Hagen overstated the cash account of Dittmann on the April 30, 1979 financial statement because CAB regulations required more money be in the escrow accounts on that date. Based on this violation, the trial court ruled Hagen had fraudulently misrepresented the cash account of Dittmann on the balance sheet. Evidence in the record does not support this holding. First, Hagen did not misrepresent the cash account. He represented a specific amount was in the account and that amount was there. He did not make representations as to what should have been in the cash accounts. More importantly, the element of knowledge is lacking. The trial court found Hagen had no personal knowledge of the CAB escrow requirements for public charters. Respondent urges us to overturn this finding as clearly erroneous. We decline to do so. The evidence reasonably supports the conclusion that Hagen had no actual knowledge of any violations of CAB regulations. Furthermore, Hagen did not have personal knowledge of any violated regulations as of July 3, 1979, when the sale was consummated. In light of the trial court's own finding of lack of actual knowledge, we reverse the court's ruling on this fraud claim as an error of law.