Court Opinion

ID: 9461948
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:28:33.582807+00
Date Added: 2024-06-11T17:37:20.229719
License: Public Domain

CLARK, Circuit Judge
(dissenting).
In my view the failure of the Property Report to state that the senior parent in the developer’s corporate ancestry was bankrupt was a clear violation of the Interstate Land Sales Full Disclosure Act. That Act requires that disclosure *1112be made of all material facts. According to the test recognized by the majority, a fact is material if a reasonable investor may have considered it important in making a decision. The significance of the present omission to one in Paquin’s position can best be demonstrated by reviewing the Property Report with the pass over supplied in italics. The paragraph in question would then read:
No assurances of completion can be given for any of the above services to; be expressly provided by the developer at Four Seasons of Georgia other than the good faith and past reputation of the developer. Completion of these, as in other areas of development, will be dependent upon the satisfactory sale of lots at Four Seasons of Georgia and the developer’s ability to secure adequate financing. The corporation which owns all of the stock of the corporation which owns all of the stock of the developer is now in bankruptcy.
This omission should have appeared a total of seven times throughout the Report. The vital import of the left ■ out fact to potential purchasers is self-evident.
The “Additional Point” which appears in the majority opinion finds that Cronk did not “sell” the lot to Paquin within the meaning of § 1410(b). The district court, on the other hand, found that Cronk was an agent under § 1402(5) and that he made offers to sell and was present at the sale. However, because it found the property report sufficient and no misrepresentations by Cronk, that, court never reached the need to find' whether Cronk’s intimate involvement in Paquin’s purchase transaction made him one who “sells” within the meaning of § 1410(b). If Cronk was a seller the deficient Property Report renders him liable under the act. I would remand the “seller” issue to the district court rather than making that fact determination in this appellate forum.
I respectfully dissent.