Legal Memorandum: Promissory Fraud Claim in CA

Issue: Under California law, is a claim for promissory fraud based on recklessly made misrepresentations the same as a claim based on knowing misrepresentations?

Area of Law: Business Organizations & Contracts, Personal Injury & Negligence
Keywords: Promissory fraud; Recklessly made misrepresentations; Knowing misrepresentations
Jurisdiction: California
Cited Cases: 12 Cal. 4th 631; 215 Cal. App. 3d 977; 29 Cal. App. 4th 1459
Cited Statutes: None
Date: 04/01/2001

          There is no authority for a court to adopt a new and different set of rules regarding a fraud cause of action in place of well-established rules of law. See Lazar v. Superior Court (1996) 12 Cal. 4th 631; Yellow Creek Logging Corp. v. Dare (1963) 216 Cal. App. 2d 50, 55.

There is a well-settled rule that promissory fraud is actionable where the defendant’s false promises have induced plaintiff’s detrimental reliance, even if the promises could not be enforced contractually.  See Lazar v. Superior Court (1996) 12 Cal. 4th 631, 639.  Moreover, a cause of action for fraud does not require proof that the defendant subjectively believed what he said was false.  Instead, "[f]alse representations made recklessly and without regard for their truth in order to induce action by another are the equivalent of misrepresentations knowingly and intentionally uttered."  Yellow Creek Logging Corp. v. Dare (1963) 216 Cal. App. 2d 50, 5.  This "equivalence" between misrepresentations made recklessly and misrepresentations "knowingly and intentionally uttered" is not novel, uncertain or unclear, and may be used in applying a de novo review of a summary judgment motion.  See Tsemetzin, 57 Cal. App. 4th at 1342.

In some cases, appellants have attempted to raise new causes of action and new factual theories which had not been fully developed below.  Thus, in Jordan-Lyon Prods., Ltd. v. Cineplex Odeon Corp. (1994) 29 Cal. App. 4th 1459, the plaintiff-appellant argued on appeal […]

Subscribe to Litigation Pathfinder

To get the full-text of this Legal Memorandum ... and more!

(Month-to-month and annual subscriptions available)