Court Opinion

ID: 9522965
Source: CourtListenerOpinion
Date Created: 2023-08-07 02:34:29.661605+00
Date Added: 2024-06-11T13:04:24.905350
License: Public Domain

Kapsner, Justice,
dissenting.
[¶ 21] I respectfully dissent. Summary judgment was improperly granted on Ev-enson’s claim for fraud in the inducement. I would. reverse and remand for further proceedings relating to the claim of fraud.
[¶ 22] Evenson sued for fraud alleging he was induced to enter into a contract as a result of representations made by James Page and Quantum that “they would agree not to sell the Maximan product line or the related rights to manufacture, sell and/or market the Maximan to any third party.”
[¶ 23] Fraud is defined in N.D.C.C. § 9-03-08:
Actual fraud within the meaning of this title consists in any of the following acts committed by a party to the contract, or with his connivance, with intent to deceive another party thereto or to induce him to enter into the contract:
1. The suggestion as a fact of that which is not true by one who does not believe it to be true;
2. The positive assertion, in a manner not warranted by the information of the person making it, of that which *246is not true though he believes it to be true;
3. The suppression of that which is true by one having knowledge or belief of the fact;
4. A promise made without any intention of performing it; or
5. Any other act fitted to deceive.
The party alleging fraud ha§ the burden of proving each element of fraud by clear and convincing evidence. First Union Nat’l Bank v. RPB 2, LLC, 2004 ND 29, ¶22, 674 N.W.2d 1.
[¶ 24] In support of this cause of action, Evenson provided his own sworn testimony about the conversation that he alleges contained the fraudulent representations:
A. The day that I recall was in Brad’s office. Brad was behind his desk, Jim was sitting on a chair in his office. We were talking about some of the problems and so forth that we’d encountered with it and what they were doing to rectify it. I told him that the, you know, I thought it was a great concept. And basically I told him before I would go into a dealership agreement, I wanted to make sure that the product is not going to be sold off.
Q. So that was one of your main concerns at that point? ..
A. ■ Yes.
Q. Okay. And what did they tell you?
A. That it would not be.
Q. Who told you that?
A. Jim.
Q. Do you know the approximate date of that meeting?
A. It was prior to me signing the dealership agreement.
[¶ 25] In addition Evenson provided deposition testimony given by Page that, prior to the- agreement with Evenson, companies owned by Page had developed and sold at least four product lines. During the deposition, Page was also specifically asked about his plans to sell the Maximan line.
Q. Did you plan on selling off the Maximan unit?
A. All of our product lines are for sale at some point.
[¶ 26] For purposes of summary judgment, the trial court was obliged to accept the testimony offered by Evenson as true. Even, applying the heightened burden of proof required to establish fraud, a fact finder who believes the testimony offered could rationally infer that Page intended to sell when he made the representations to Evenson that he would not sell. Much will depend on the fact finder’s determination of the credibility of the witnesses. Even-son has established a genuine issue of material fact on the fraud claim.
[¶ 27] Although the parol evidence rule, as codified in N.D.C.C. § 9-06-07, provides a written contract supercedes oral negotiations, there is an unbroken line of cases recognizing parol evidence is admissible to show a party was fraudulently induced to become a party to a contract, even though the contract is in writing. National Cash Register Co. v. Midway City Creamery Co., 49 N.D. 441, 191 N.W. 762, 764 (1922); Dalheimer v. Lucia, 50 N.D. 78,194 N.W. 925, 928 (1923); Carufel v. Founts, 60 N.D. 91, 232 N.W. 609, 611 (1930); Hartford Accident & Indem. Co. v. Anderson, 155 N.W.2d 728, 730-31 (N.D. 1968); Schue v. Jacoby, 162 N.W.2d 377, 382 (N.D.1968); Frank v. A.O. Smith Harvestore Products, Inc., 456 N.W.2d 125,130-31 (N.D.1990).
[¶ 28] The majority relies upon First State Bank v. Moen Enterprises, 529 N.W.2d 887 (N.D.1995), but I do not find Moen persuasive. In Moen, plaintiffs were alleging the fraud of the bank was to misrepresent that it would provide operating loans for the next year’s crop. The documents signed by the parties said:
*247“Lender has not committed, and is not committing at this time, to finance Borrower’s next year’s farm loan requirements.” Although the contract in this case says it may be terminated by either party for any reason, it is silent about the rights of the company to sell its product line. The writing does not contradict the allegations Ev-enson asserted about Page’s promises not to sell the product.
[¶ 29] Assuming Evenson’s offered testimony to be true for purposes of- deciding the summary judgment motion, it was error for the trial court to decide, as a matter of law, Evenson could not meet his burden of proving the fraud claim.
[¶ 30] CAROL RONNING KAPSNER, J., and JOHN C. McCLINTOCK, D.J., concur.