Opinion ID: 1833843
Heading Depth: 1
Heading Rank: 3

Heading: Fisher's Fraudulent Misrepresentation Claims Against Speaks, Locators, and the Owners

Text: Fisher seeks damages from Speaks, alleging that Speaks, on behalf of, and as an agent for, Locators and the owners of Comer Plantation, fraudulently misrepresented the value of the property and the accuracy of Pugh's appraisal. He also seeks to recover damages against Locators, as Speaks's employer, and against the owners of Comer Plantation, based on a theory of derivative liability. Fisher argues that the trial court incorrectly entered the summary judgment on his claims against each of these defendants. To recover on a claim of fraudulent misrepresentation, see § 6-5-101, Ala.Code 1975, Fisher must establish four elements: (1) a false representation (2) concerning a material existing fact (3) relied upon by the plaintiff (4) who was damaged as a proximate result. Baker v. Bennett, 603 So.2d 928, 935 (Ala.1992). The gravamen of Fisher's fraud claim is that Speaks willfully, recklessly, or mistakenly misrepresented the value of Comer Plantation. However, Speaks was a conduit who relayed information compiled and reported by the appraiser. Therefore, we must first examine whether relayed information that is incorrect constitutes a misrepresentation. According to Speigner v. Howard, 502 So.2d 367 (Ala.1987), those who are only conduits through which faulty information is supplied by one person to a third person cannot be held liable for fraud unless they acted in bad faith. Speigner, 502 So.2d at 371; see also Miller v. Sexton, 549 So.2d 10, 12 (Ala.1989). In Speigner, this Court addressed the question whether one who relays information, unaware of its falsity, can be held liable for fraud. 502 So.2d at 370-71. In that case, the plaintiffs asserted that their real-estate agents had informed them that the roof of a house they were considering buying was in good condition and had no defects. The agents, however, had no personal knowledge regarding the condition of the roof and merely relied on representations made to them by the seller that the roof was in good condition. When the plaintiffs bought the house, they experienced massive leaks in the roof over one particular room. We held that the defendants were not liable for fraud for merely conveying the statements of [the seller] to the agent of the [plaintiffs] without evidence of bad faith. Id. at 371 (emphasis omitted). In the present case, the faulty information was supplied by Pugh, who prepared the appraisal report that contained the alleged misrepresentations. No evidence in the record suggests that Thomas or Locators retained the right to direct the manner in which Pugh prepared the appraisal; thus, in making it, Pugh was acting as an independent contractor. See generally Fuller v. Tractor & Equip. Co., 545 So.2d 757, 758-59 (Ala.1989) (discussing what makes one an independent contractor). The report was received from Pugh by Thomas, who was acting in an arm's-length relationship with Pugh. Thomas was a part-owner of Comer Plantation; he passed the report on to Locators, a real-estate agency he owned. Speaks, as an employee of Locators, ultimately received the report and relayed its contents on to Fisher; its contents included an attestation of accuracy. We can find no evidence in the record indicating that Speaks, Locators, or Thomas acted in bad faith. Therefore, under the authority of Speigner, we conclude that the trial court correctly entered the summary judgment as to Fisher's claims against Speaks and Thomas, because they were conduits passing information supplied by Pugh. Because the liability of Locators and the owners is premised on the liability of Speaks, an agent of Locators, we likewise conclude that the summary judgment was proper as to the claims against them. As to the fraudulent-misrepresentation claims against Speaks, Locators, and the owners, the summary judgment is affirmed.