Court Opinion

ID: 9635088
Source: CourtListenerOpinion
Date Created: 2023-08-22 13:35:57.22062+00
Date Added: 2024-06-11T18:09:17.778781
License: Public Domain

Wendell L. Griffen, Judge, dissenting. I respectfully dissent from the decision reached by the majority and would affirm the trial court’s decision. I agree with the majority that the burden of proof is the clear and convincing standard articulated in Riley v. Hoisington, 80 Ark. App. 346, 96 S.W.3d 743 (2003). However, I think the decision is affirmable under that authority. Once we determine that the appropriate burden of proof was placed on the appellant at the trial court level, we review the trial court’s decision under the clearly erroneous standard of review. Burdette v. Madison, 209 Ark. 314, 719 S.W.2d 418 (1986). We do not decide whether we believe the appellant proved constructive fraud according to the clear and convincing standard. We will only set aside the trial court’s finding of fact if it is clearly against the preponderance of the evidence, giving due regard to the trial court to judge the credibility of witnesses. Id. I do not believe the trial court’s decision was clearly erroneous. In Riley, this court discussed the five elements that have to be proven in order to establish fraud: (1) a false representation of a material fact; (2) knowledge that the representation is false or that there is insufficient evidence upon which to make the representation; (3) intent to induce action or inaction in reliance upon the representation; (4) justifiable reliance on the representation; (5) damage suffered as a result of the reliance. Constructive fraud is a breach of a legal or equitable duty which, irrespective of the moral guilt of the fraud feasor, the law declares fraudulent because of its tendency to deceive others. Riley v. Hoisington, 80 Ark. App. 346, 96 S.W.3d 743 (2003). We have held fraud even in the complete absence of any moral wrong or evil intention. Id. I am unable to hold that the trial court’s ruling was clearly erroneous because appellants did not put forth adequate evidence that appellees made a false representation concerning a material fact. The only proof that goes to whether the excavation and additional concrete at the footing of the house is a material fact is the statement by appellants that they would have not bought the home had they known about the excavation ahead of time. Even appellants’ witnesses did not testify that the excavation was material. Mr. Walker, a home inspector, testified that had he known about the excavation he would have recommended that the appellants hire a structural engineer to find out the purpose of the concrete. Stephen Horvath, a real estate appraiser, testified that had he known of the excavation he would have mentioned it in his appraisal and would have requested that the mortgage company do a structural inspection of the house. The court weighed the testimony of appellees and their witnesses against the testimony of appellants and their witnesses. Appellant James Haggard testified that the purpose for the concrete was to provide a solid material outside of the footing and that the excavation was a precautionary measure. Everyone present for the excavation, David Tindall, John Haggard, and Joe Gormley, agreed with James Haggard that the excavation was to check the footing, the footing did not have any cracks, and the concrete was precautionary. Similarly, it is not clear whether appellees intended to induce action or inaction in reliance upon the representation. As mentioned above, appellees and their witnesses did not regard the excavation as a material change, but rather a cosmetic change. In order to measure justifiable reliance the trial court had to weigh the credibility of the witnesses. Appellants testified that they would not have bought the house had they known of the excavation and additional concrete. However, the testimony of appellants may not be enough to reverse the trial court’s findings. Giving due regard to the trial court’s ability to judge the credibility of the witnesses, I would affirm the trial court’s decision.