Opinion ID: 551885
Heading Depth: 3
Heading Rank: 2

Heading: The Law Regarding Fraudulent Statements of Intent to Act in the Future

Text: This court has previously recognized that 169 [u]nder Kansas law, [w]hen alleged fraud relates to promises or statements concerning future events, the gravamen of such a claim is not the breach of the agreement to perform, but the fraudulent representation concerning a present, existing intention to perform, when such intention is in fact nonexistent. 170 Mackey v. Burke, 751 F.2d 322, 328 (10th Cir.1984) (quoting Modern Air Conditioning, Inc. v. Cinderella Homes, Inc., 226 Kan. 70, 78, 596 P.2d 816, 824 (1979)). In Mackey, the plaintiff sold the defendants a number of Holstein heifers, many of which the defendants later learned were too ill to be exported to Korea when they attempted to ship them from Seattle, Washington. Mackey, 751 F.2d at 324. The defendants stopped payment on the check to the plaintiff, and the plaintiff called the Seattle Port Authority to prevent shipment of the cows. However, one of the defendants later persuaded the plaintiff to allow the shipment by promising to return to Kansas and straighten everything out. The defendant never returned to Kansas as promised. Applying Modern Air Conditioning, the court in Mackey held that the plaintiffs failed to present any clear evidence at trial that [the defendant] did not intend to return to [Kansas] at the time that he made the promise. Id. at 328. Thus, the punitive damage award based on fraud was reversed. Id. at 328-329. 171 In this case, the district judge entered a directed verdict against General Poly on its fraud claim without specifying the basis of his ruling. The court simply stated, I see no basis for fraudulent misrepresentation. R. Vol. 41 at 4596. When defendant's counsel inquired further as to the court's ruling on the hopper car replacement issue, the court answered, I don't see that as fraudulent misrepresentation and proceeded to direct a verdict in favor of Allied. Id. at 4597. Although the district court did not elaborate on its analysis, we hold that the court reached the correct conclusion. 172 General Poly asserts that on June 3, 1981, Allied's Wiley had no present intention to effect a swap when he proposed an exchange of off-grade rail cars for rail cars containing resin equivalent to that tested in the May test. However, even viewing the record in the light most favorable to General Poly, we find only a single piece of evidence which even arguably supports that conclusion--the statement by Hans Traver in his July 25, 1981, letter to George Jecha that Wiley had informed him that [t]he material which we tested here in our plant and liked very much, namely lot # 103 and lot # 154008, were never available in hopper car quantities. Plaintiff's Ex. 1586, Addendum to Appellant's Br., Doc. 32. General Poly is unable to point to any evidence whatsoever in the record which would suggest that Wiley knew the promised upgraded resin was unavailable at the time he made the offer to exchange. The testimony that Allied's Heath had decided not to replace the two cars prior to the time they were picked up is unavailing because there was no evidence suggesting that Heath communicated that intent to Wiley before Wiley made representations concerning the exchange to the General Poly representatives. Furthermore, Heath only testified that he had decided not to provide replacement cars prior to the time the two off-grade railcars were picked up. Nothing in his testimony suggests that he or anyone else at Allied had formulated such an intent as of the earlier time when Wiley told Traver that replacement cars would be shipped. Therefore, because General Poly presented no evidence, much less clear and convincing evidence, indicating that at the time Wiley suggested the exchange to General Poly he did not intend to carry through with his proposal, we affirm the district court's ruling entering a directed verdict in favor of Allied. 173