A fraud case is a civil cause of action you can bring against a defendant who makes a false statement to you that causes you injury. To succeed in a fraud case, you must prove the following:
1. The defendant made a representation (i.e. statement) to you.
2. The statement was material.
3. The statement was false.
4. The defendant made the statement knowing it was false, or made the statement recklessly, as a positive assertion, without knowledge of its truth.
5. The defendant made the statement with the intent that you act on it.
6. You relied on the representation.
7. The statement caused you injury.
The defendant must have made the false statement to you either directly or indirectly. A defendant commits fraud indirectly when he or she makes a false statement to a third party with the intent that it be repeated in order to deceive you. In order to be material, the statement must be important to you in making a decision – in other words, would a reasonable person attach importance to and be induced to act on the statement in determining whether to make a transaction.
Most importantly, the material statement must be false. Almost always, the false statement must be an untrue, deceptive, or misleading statement concerning a past or present fact. As a general rule, a statement of opinion is not considered a false representation. Rare exceptions to this rule are: (1) the defendant knows the opinion is false; (2) the opinion is based on or supported by false statements of fact; or (3) the opinion is based on the defendant’s special knowledge that he or she knew the plaintiff was justified in relying upon.
A defendant makes a false statement “knowingly” when he or she is aware of its falsity or understands it is false. Making a statement with knowledge of its falsity is equivalent to an intentional act. A defendant makes a statement recklessly when he or she knows they do not have sufficient information or basis to support the statement, or when the defendant realizes it does not know whether the statement is true.
The defendant also must have intended for you to rely upon the material false statement. In order to prove intent, you must show that the defendant desired to cause the consequences of its act or believed the consequences were substantially certain to occur. With respect to proving actual reliance, you must show that you knew of the defendant’s false statement and acted upon it. In addition, the false statement must have caused you injury, usually economic or pecuniary. Finally, a suit for fraud has a four-year statute of limitations. So in most circumstances, suit must be brought within fours years of the date the defendant made the false statement.
Watts Guerra has an experienced team of fraud lawyers ready to prosecute your case and fight for your rights.
Written by*:
Travis C. Headley
WATTS GUERRA, LLP
Four Dominion Drive, Bldg. Three, Suite 100
San Antonio, Texas 78257
Phone: (210) 447-0500
Email: theadley@guerrallp.com
*This information is provided to supply relevant information concerning breach of fiduciary duty claims in commercial litigation and should not be received as legal advice. Legal advice is only given to persons or entities with whom Watts Guerra LLP has established an attorney-client relationship.
© Watts Guerra LLP 2015
