Court Opinion

ID: 9535195
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:46:33.08683+00
Date Added: 2024-06-11T13:33:11.255211
License: Public Domain

Hoekstra, P.J.
(dissenting). I respectfully dissent. I would conclude that the trial court erred in denying defendant’s motion for a directed verdict. Accordingly, I would reverse the judgment for plaintiff.
The majority supplies the following six elements of a fraud claim: (1) that the defendant made a material representation; (2) that it was false; (3) that when the defendant made it the defendant knew that it was false, or that the defendant made it recklessly, without any knowledge of its truth and as a positive assertion; (4) that the defendant made it with the intention that it should be acted on by the plaintiff; (5) that the plaintiff acted in reliance on it; and (6) that the plaintiff thereby suffered injury. Clement-Rowe v Michigan Health Care Corp, 212 Mich App 503, 507; 538 NW2d 20 (1995). Although these are the proper elements for a traditional common-law fraud claim, the majority blurs the factual and legal distinctions between this and a second fraud theory under which plaintiff proceeded at trial. See Lorenzo v Noel, 206 Mich App 682, 684-685; 522 NW2d 724 (1994). Here, plaintiff alleged that defendant committed not only traditional common-law fraud on the basis of a false representation to plaintiff, but also silent fraud on the basis of its failure to disclose material facts. A silent fraud *647claim differs from a traditional fraud claim in that the false representation needed to establish the first three elements of fraud may be shown by the defendant’s failure to divulge a fact that the defendant had an affirmative duty to disclose. Clement-Rowe, supra at 508.
Plaintiff’s silent fraud claim is based on the fact that early in the five-month courtship of plaintiff, defendant gave plaintiff a 1991 operating summary, which demonstrated consistent growth in revenue, but defendant later failed to disclose its changing financial condition in the form of 1992 financial statements, which showed a loss in revenue. Additionally, plaintiff claims that defendant failed to disclose that it laid off approximately seventy employees in 1992. Thus, plaintiff argues that defendant had a duty to disclose its adverse financial conditions to him and intended to induce him to rely on its nondisclosure.
However, on the facts of this case, defendant had no affirmative duty to disclose the 1992 financial information. This Court in Clement-Rowe, supra at 508-509, stated that an employer may not be permitted to avoid liability after omitting to disclose, when asked, known economic instability that later led to economically based layoffs. Here, plaintiff never asked defendant about its financial condition during the interview process. Because plaintiff did not present evidence to support the threshold element of defendant’s duly to disclose, I would conclude that the trial court erred in denying defendant a directed verdict with regard to plaintiffs silent fraud claim.
Plaintiff’s second theory of recovery, his false representation or traditional common-law fraud claim, is based on defendant’s alleged representations during *648the interview process that it intended to provide plaintiff with sufficient time and resources to establish his program. Specifically, plaintiff relies on an anecdote about a past program that defendant supported for ten years before the program was profitable and a statement in defendant’s subsequent offer of employment that defendant was “highly committed over the near- and long-term” to participation in defendant’s specialty area.
Even assuming that these two items constitute representations of defendant’s intent, plaintiff has presented no evidence to establish that the statements were, in fact, false when defendant made them. The fact that plaintiff inferred from the anecdote and the statement in the letter an amount of time longer than that which actually transpired, does not constitute fraud on the part of defendant when neither party stipulated a specific length of time. Therefore, I would conclude that the trial court erred in denying defendant a directed verdict with regard to plaintiff’s false representation claim as well.
Last, I note that I agree with the majority’s analysis of defendant’s remaining issues on appeal, although my resolution of the directed verdict issue makes it unnecessary to reach these issues.