fraudulent-mis-representation | fraud | fraud vs breach of contract | statutory fraud | fraud in real estate
transactions |
fraudulent inducement of contract | fraudulent concealment of tort or breach as limitations tolling
theory | fraudulent misrepresentation | negligent misrepresentation | breach of contract vs. fraud claim |
Deceptive Trade
Practices (DTPA) claim |


FRAUDULENT MISREPRESENTATION

Under Texas law, common-law fraud and misrepresentation are the same cause of action. See Snyder
Commc'ns, L.P. v. Magana, 142 S.W.3d 295, 298 (Tex. 2004). A cause of action for fraud "requires a material
misrepresentation, which was false, and which was either known to be false when made or was asserted without
knowledge of its truth, which was intended to be acted upon, which was relied upon, and which caused injury."
Formosa Plastics Corp. v. Presidio Eng'rs and Contractors, Inc., 960 S.W.2d 41, 47-48 (internal quotations
omitted). "Proof that a party relied to its detriment on an alleged misrepresentation is an essential element of a
fraud claim." Haase v. Glazner, 62 S.W.3d 795, 798 (Tex. 2001). If a defendant induces a plaintiff into a
contract by using false representations, the plaintiff may claim fraud or fraudulent inducement. See Formosa
Plastics Corp., 960 S.W.2d at 46.

Intentional misrepresentation is essentially fraud. RenCare, Ltd. v. United Med. Res., Inc., 180 S.W.3d 160, 166
(Tex.App.-San Antonio 2005, no pet.); Smith v. Tilton, 3 S.W.3d 77, 88 (Tex.App.-Dallas 1999, no pet.); see
also T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 222 (Tex.1992); Farah v. Mafrige & Kormanik,
P.C., 927 S.W.2d 663, 673 (Tex. App.-Houston [1st Dist.]1996, no writ) (agreeing that "fraudulent
misrepresentation . . . is another name for common law fraud."). The elements of actionable fraud in Texas
were stated in Wilson v. Jones, 45 S.W.2d 572, 574 (Tex. Comm.App.1932, holding app'd): (1) that a material
representation was made; (2) that it was false; (3) that, when the speaker made it, he knew it was false or made
it recklessly without any knowledge of its truth and as a positive assertion; (4) that he made it with the intention
that it should be acted upon by the party; (5) that the party acted in justifiable reliance upon it; and (6) that he
thereby suffered injury. Trenholm v. Ratcliff, 646 S.W.2d 927, 930 (Tex.1983); see also Ernst & Young, L.L.P.
v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex.2001).

Negligent misrepresentation requires the following elements: (1) the representation is made by a defendant in
the course of his business, or in a transaction in which he has a pecuniary interest; (2) the defendant supplies
"false information" for the guidance of others in their business; (3) the defendant did not exercise reasonable
care or competence in obtaining or communicating the information; and (4) the plaintiff suffers pecuniary loss
by justifiably relying on the representation. Fed. Land Bank Ass'n v. Sloane, 825 S.W.2d 439, 442 (Tex.1991);
see also Henry Schein 102 S.W.3d at 686 n. 24.


HOUSTON CASES

Schafer v. Frost National Bank (Tex.App.- Houston [14th Dist.] May 22, 2008)(Frost) (fraudulent
representation) AFFIRMED IN PART; REVERSED & REMANDED IN PART: Opinion by
Justice Frost  
Before Justices Fowler, Frost and Seymore
14-06-00673-CV Susana Raquel Schafer and Cynthia Victoria Lentino, Marta A. Lentino Individually, Marta A.
Lentino as Assignee of Fabiola Vanesa Lentino, Michelle M. Lentino, Natalia Lentino, The Eduardo P. Lentino
Childrens Trust Fund and agent of Maria Raquel Lentino v. Frost National Bank f/k/a Cullen Center Bank and
Trust
Appeal from 281st District Court of Harris County
Trial Court
Judge: David J. Bernal




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