Court Opinion

ID: 9603890
Source: CourtListenerOpinion
Date Created: 2023-08-22 02:10:45.749588+00
Date Added: 2024-06-11T18:02:14.861361
License: Public Domain

LANDAU, J.,
concurring in part; dissenting in part.
I agree with the majority in affirming the trial court’s entry of summary judgment in favor of defendant on plaintiffs’ breach of contract and wrongful termination claims. I disagree with the majority in reversing the trial court’s similar disposition of the misrepresentation and franchise law claims. Accordingly, I dissent from that portion of the majority’s opinion.
*105Plaintiffs allege that they are entitled to damages on their misrepresentation claim, because defendant approved their proposed business plan, which estimated that they would need to generate $3,400 monthly net income from the store to break even. Defendant argues that the claim fails as a matter of law, because the undisputed evidence shows that plaintiffs cannot establish at least one of the requisite elements of the tort. According to defendant, the approval of the business plan does not constitute a representation of fact and is, at best, a nonactionable expression of opinion as to a possible future occurrence. The trial court apparently agreed and entered summary judgment for defendant on that claim. The majority holds that the approval of the business plan could be considered a representation of fact which, in turn, could support a jury verdict in plaintiffs’ favor on the misrepresentation claim. The majority is wrong.1
Expressions of opinion are not generally representations of fact. In Frederici et ux v. Lehman etal, 230 Or 70, 368 P2d 611 (1962), for example, the plaintiffs alleged that they were fraudulently induced to enter into an agreement to purchase commercial real estate by the defendants’ representations that there “wouldn’t be any problem” obtaining enough tenants to make a planned office building profitable. The trial court denied a motion for a directed verdict on the fraud claim, and the jury returned a verdict in favor of the plaintiffs. The Supreme Court reversed, holding that no reasonable juror could construe the defendants’ statements to be anything but nonactionable expressions of opinion as to possible future events. 230 Or at 83.
In this case, plaintiffs allege that they were induced to enter into the franchise agreement by defendant’s statements that they should have no problem generating a monthly net income of $3,400 from the store. Those statements are indistinguishable from those found wanting as a matter of law in Frederici. They are not misrepresentations of fact. They are merely expressions of opinion as to future events. As such, they are not actionable.
*106The majority argues that the general rule that expressions of opinion are not actionable depends on the “object and design” of the opinion and that on that basis, Frederici is inapplicable. According to the majority, the general rule was properly applied in Frederici, because the parties were on equal footing. The majority finds wholly distinguishable the facts of this case, in which the “object and design” of defendant supposedly was to take advantage of the unequal bargaining position of the parties:
“If the object and design of defendant’s statements were to induce plaintiffs to rely on its assessment of the ability of a franchise to service the debt incurred in purchasing the franchise as an asserted fact, then those statements could be more than mere opinions.” 127 Or App at 100.
I have two problems with the majority’s analysis.
First, it needlessly confuses the elements of the tort of misrepresentation. A defendant’s intentions are the subject of a separate element of the tort. See, e.g., Webb v. Clark, 274 Or 387, 391, 546 P2d 1078 (1976). An opinion is not transformed into a representation of fact because of the speaker’s intentions. A statement either is or is not a statement of fact. Then, if it is, it will be actionable if it also can be established that the speaker knew it was false and intended reliance on it. 274 Or at 391.
Second, the majority’s “object and design” test is at odds with the case law of this state. Expressions of opinion are actionable only
“if a fiduciary relation exists between the parties as, for example, representations of value made by a real estate broker to his principal, or where the parties are not on equal footing and do not have equal knowledge or means of knowledge.” Holland v. Lentz, 239 Or 332, 345, 397 P2d 787 (1964).
That rule says nothing about the defendant’s “object and design” in offering an opinion. Instead, it focuses on the relationship of the parties and their relative knowledge of the material facts as the basis for treating an opinion as an actionable representation of fact. That is precisely the holding of Patterson v. Western L. & B. Co., 155 Or 140, 62 P2d 946 (1936), on which the majority relies. In that case, the court held that the expression of what would otherwise have *107been regarded as opinion would be considered a statement of fact, because the plaintiff was “ignorant of the facts.” 155 Or at 144.
In this case, there is neither án allegation nor proof that plaintiffs were ignorant of any material facts. There is evidence, as the majority vigorously asserts, that plaintiffs were inexperienced in the franchise business. Under Holland v. Lentz, supra, however, that evidence is insufficient to permit an expression of opinion to be regarded as a representation of fact. There must be evidence of unequal footing and evidence of plaintiffs’ actual lack of “knowledge or means of knowledge” about the facts. 239 Or at 345. (Emphasis supplied.)
The majority asserts that plaintiffs arguably were unaware that the store had generated substantially less than $3,400 monthly net income under prior management. In support of that assertion, the majority relies on the fact that defendant failed to include in the records it gave to plaintiffs a document indicating a monthly net income of $1,340 over a several-year period. In my view, that document does not suffice to create a genuine dispute as to plaintiffs’ ignorance of material facts.
To begin with, plaintiffs failed to allege the concealment of that information as a basis for their fraud claim. Accordingly, evidence regarding defendant’s nondisclosure of the document is irrelevant. Myers v. MHI Investments, Inc., 44 Or App 467, 473, 606 P2d 652, rev den 289 Or 107 (1980). Moreover, it is undisputed that defendant disclosed other documents concerning the history of the store’s operations, which revealed an average monthly net income of $1,232. No reasonable juror could infer active concealment of the fact that the store could generate only $1,340 per month when defendant freely disclosed that the store generated $100 per month less than that amount. The trial court correctly determined that there is insufficient evidence to send plaintiffs’ misrepresentation claim to a jury. Seeborg v. General Motors Corporation, 284 Or 695, 700-01, 588 P2d 1100 (1978); King v. Talcott, 80 Or App 701, 705, 723 P2d 1058, rev den 302 Or 158 (1986). I would affirm its decision to grant defendant summary judgment on that claim.
*108Plaintiffs also allege a claim for violation of the state franchise law. ORS 650.020(l)(b) provides that anyone who sells a franchise is liable to the franchisee if the seller
“[m]akesany untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.”
Because an essential element of the claim is proof of an untrue statement of fact, for the reasons that the record reflects a complete failure of proof on the same element of plaintiffs’ common law misrepresentation claim, I would hold that the trial court did not err in granting summary judgment on the franchise law claim.

 Defendant also argues that plaintiffs’ claims are barred by certain disclaimers in the approved budget and the franchise agreement. Because I would affirm on the basis of the lack of any evidence of a misrepresentation of a material fact, I would not reach defendant’s other arguments.