Court Opinion

ID: 9603218
Source: CourtListenerOpinion
Date Created: 2023-08-22 02:04:19.264247+00
Date Added: 2024-06-11T18:02:09.856001
License: Public Domain

THOMAS, Justice,
specially concurring.
I do not disagree with what is said in the opinion of the court in this case, and I do concur in the result. I would resolve the issues in a different manner, however, which would still require a new trial to evaluate damages and the contractual bases for recovery. My position is that the evidence in this case was not sufficient to justify the submission of the fraud issue to the jury. A directed verdict for the defendant on the issue of fraud would, of course, resolve the problem of duplicate recovery to which the opinion of the court speaks.
One who relies upon fraud is charged with alleging with certainty and definiteness the tangible facts to support aver-ments of fraud, and the burden of proof is upon the person charging fraud to prove it by clear and convincing evidence. Schaffer v. Standard Timber Company, 79 Wyo. 137, 331 P.2d 611 (1958). The elements of fraud are that the defendant did make false representations of material facts, knowing them to be false, and that the plaintiffs, without knowledge of the falsity, reasonably relied upon them to their detriment. Davis v. Schiess, Wyo., 417 P.2d 19 (1966). The general rule is that the law will not afford relief to one who suffers because he did not use ordinary means of information, whether that neglect be attributable to indifference or credulity. Gladstone Hotel, Inc. v. Smith, Wyo., 487 P.2d 329 (1971).
In this instance the plaintiffs relied upon three misrepresentations to support their claim of fraud. They claimed that the defendants misrepresented the total sales or the gross income of the business; that the defendants misrepresented the acreage in the real property involved in the sale; and that the defendants misrepresented the amount of money in the business checking account.
As to the latter basis for recovery on the ground of fraud, the contract provided that an adjustment would be made in the purchase price for any deviation in the business bank account either upward or downward from $1,000 as of May 4,1977. Consequent*1327ly a misstatement of the figure in the bank account could not be a material fact in the context of this transaction, and my understanding of the evidence is that there was more than $1,000 in the business bank account as of that date. I therefore cannot fathom any theory that there was detriment to the purchasers. Their complaint is that they were defrauded because there was more money in the bank account as of the time of closing than sellers agreed to have in the account.
With respect to the claimed misstatement of the area of the tract of real property, the plaintiffs alleged that the representation was made that it consisted of a minimum of 1½ acres. The legal description of the tract of real property appears in a warranty deed and in a quitclaim deed attached to the agreement of purchase and sale, and it also appears in Exhibit A attached to that contract. This same information was attached to an Offer to Purchase, Acceptance and Deposit Receipt which the buyers signed on February 25, 1977. In each of those documents it is described as being .42 acres. Having that information in front of them at the time the agreement of purchase and sale was executed, and having had it called to their attention previously, I cannot see how the plaintiffs can claim reasonably to have relied upon the statement of a different area by the defendant. While they may not be charged with a duty to investigate in order to discover facts, they certainly cannot ignore information that was before them at the time the contract was executed. In addition, Mr. Reynolds was asked if he could form an opinion as to the value of the land he actually received, which appears to be .9 of an acre. His response was that it would be worth around $54,000. In the agreement of purchase and sale an allocation of the purchase price of the business is made in paragraph 4 providing:
“(a) The price paid for the real estate shall be $50,000;”
This refutes any claim by the plaintiffs of detriment related to the valuation of the tract of real property.
Finally, turning to the claim of misrepresentation with respect to the gasoline sales, or alternatively the gross income of the business, paragraph 8 of the agreement of purchase and sale which was prepared by counsel for the buyers contains “Representation of Warranty Buyers.” The last sentence of paragraph (b) of that clause states:
“The Buyers acknowledge that no representations have been made to them concerning the sales, volume, gross profits or net income of the .business, other than those attached hereto.”
While Mr. Reynolds did testify that information concerning those matters was furnished to him, no documents containing such information were attached to the agreement of purchase and sale. Consequently the buyers are foreclosed by their agreement from claiming that they relied upon those figures. Furthermore, it is my understanding from the record that the figures which were furnished to the buyers were based upon the books and records of the sellers which they kept in the normal course of their business operations. While it appears to be agreed by the expert witnesses that the method of accounting used by the sellers did result in a duplication of sales figures since it included sales from the bulk plant to the retail stations for which no payment was made by the retail stations, it also appears that the retail stations were shown as having paid for this gas as a part of their costs. The result was that total gross profit was correctly stated although the sales by the retail stations were duplicated. Gross income misrepresentation alone was alleged in the complaint. Given this set of circumstances and a standard of clear and convincing proof, while the buyers testified that the seller knew they were projecting future sales based upon the duplicated sales figures, the evidence is far from clear and convincing in demonstrating that the seller understood and appreciated the significance of that use. The information furnished was that used by the seller as his accounting records for his business, and in terms of profit and loss these documents accurately reflected the situation. The buyers took part of that information and *1328attached a particular materiality to it for their own purposes. The evidence is not clear and convincing that the seller understood the special materiality attached to the sales to a degree which on that basis alone would permit charging him with making false representations of material facts knowing them to be false.
I therefore would reverse the case and remand it for a new trial with the direction that the evidence was insufficient to sustain the claim of fraud, apd that the case must go to the jury only on evidence demonstrating breaches of contract.