What is fraudulent inducement?

Fraud in the inducement occurs where a party’s assent to a contract is obtained through “conscious misrepresentation, or concealment, or non-disclosure of a material fact which induces the innocent party to enter the contract.” (Odorizzi v. Bloomfield School Dist. (1966) 246 Cal.App.2d 123, 128; see also Civ. Code, § 1572.)

“Fraud in the inducement is a subset of the tort of fraud.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.) It occurs when “the promisor knows what he is signing but his consent is induced by fraud, mutual assent is present and a contract is formed, which, by reason of the fraud, is voidable.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294–295.)

To establish a claim of fraudulent inducement, one must show that the defendant did not intend to honor its contractual promises when they were made. (Agosta v. Astor (2004) 120 Cal.App.4th 596, 603.)

“A promise of future conduct is actionable as fraud only if made without a present intent to perform.... something more than nonperformance is required to prove the defendant's intent not to perform his promise.... '[I]f plaintiff adduces no further evidence of fraudulent intent than proof of nonperformance of an oral promise, he will never reach a jury.'” (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 481.)

To advance a cognizable fraud claim, “every element of the cause of action... must be alleged in full, factually and specifically, and the policy of liberal construction of pleading will not usually be invoked to sustain a fraud claim deficient in any material respect.” (Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1331.) Fraud must be plead with particularity and specificity rather than with general or conclusory allegations. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were made. (Morgan v. AT & T Wireless Services, Inc. (2009) 177 Cal.App.4th 1235, 1261–1262.) To state the claim against an entity, the plaintiff must also include allegations regarding the speaker’s authority to bind the entity. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

A three-year statute of limitation applies to fraud claims. (Code Civ. Proc., § 338, subd. (d).)

Useful Rulings on Fraudulent Inducement

Recent Rulings on Fraudulent Inducement

PAUL EDALAT, ET AL. VS FEDERICO GUILLERMO CABO, ET AL.

The moving party points to the following reasons for consolidating these actions for all pretrial purposes: The cases have common issues of law and fact, including (1) Edalat’s alleged fraudulent inducement of the Vivera and Edalat (Cabo) cross-complainants based on substantially the same misstatements and omissions; and (2) the acquisition of Blaine Labs and any consideration paid by Vivera, at issue in both Vivera and Brown; and (3) the Vivera and Edalat (Cabo) cross-complainants both allege that Edalat and

  • Hearing

    Jul 14, 2020

GUZMAN VS FCA US, LLC

Unlike Dettamanti, Plaintiff has alleged no affirmative duty or special relationship between Plaintiff and FCA that would permit any silence on the part of FCA to show Fraudulent Inducement – Concealment. Plaintiff has not alleged facts sufficient to support a cause of action for fraudulent concealment against FCA. B. Statute of Limitations The 6th cause of action is also time barred by the statute of limitations.

  • Hearing

    Jul 13, 2020

BRUCE A ARONSON VS KIA MOTORS AMERICA, INC

The court agrees with Plaintiff that the claim for fraudulent inducement – concealment - is a separate tort offense and is not barred by the economic loss rule. IV. Motion to Strike A motion to strike lies only where the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws. (Code Civ. Proc. § 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id. § 437.)

  • Hearing

    Jul 10, 2020

KATIE O CONNELL MARSH VS GAUMONT TELEVISION USA LLC

On December 2, 2019, Gaumont filed the operative Second Amended Cross-Complaint (“SAXC”) against Plaintiff arising from the alleged employment and termination of Plaintiff, alleging causes of action for: (1) breach of contract; (2) conversion; (3) possession of personal property; (4) declaratory relief pursuant to California Code of Civil Procedure, Section 1060; (5) fraudulent inducement; and (6) fraudulent concealment.

  • Hearing

    Jul 10, 2020

JOSE MANUEL DUENAS VAZQUEZ, ET AL. VS NISSAN NORTH AMERICA, INC., A CALIFORNIA CORPORATION

Fourth Cause of Action (Fraudulent Inducement – Concealment). A. Re: Economic Loss Rule. Defendant’s argument that the fraud claim is barred by the economic loss rule is not persuasive. The Complaint alleges at ¶ 18 that the transmission defect is unreasonably dangerous to consumers because it increases the risk of a crash when trying to accelerate from a stop, at low speeds when drivers intend to accelerate to merge with highway traffic, and when attempting to drive uphill.

  • Hearing

    Jul 10, 2020

  • Type

    Contract

  • Sub Type

    Breach

KARINA BRAVO VS FCA US, LLC

Plaintiff asserts causes of action for (1) breach of the implied warranty of merchantability, (2) breach of express warranty, and (3) fraudulent inducement – concealment. Demurrer Defendant FCA demurs to the Complaint’s third cause of action for fraudulent inducement – concealment. FCA contends, inter alia, that this claim is barred by the economic loss rule. The Court agrees.

  • Hearing

    Jul 10, 2020

BRUCE A ARONSON VS KIA MOTORS AMERICA, INC

The court agrees with Plaintiff that the claim for fraudulent inducement – concealment - is a separate tort offense and is not barred by the economic loss rule. Motion to Strike A motion to strike lies only where the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws. (Code Civ. Proc. § 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id. § 437.)

  • Hearing

    Jul 10, 2020

THUY CHUNG VS VOLKSWAGEN GROUP OF AMERICA INC ET AL

The Second Amended Complaint (“SAC”) asserts causes of action for violations of the Song-Beverly Act and fraudulent inducement. The VW Defendants[1] now demur to the fraudulent inducement causes of action (concealment, intentional misrepresentation, and negligent misrepresentation). The VW Defendants also move to strike allegations of punitive damages from the SAC. Chung opposes.

  • Hearing

    Jul 10, 2020

  • Type

    Contract

  • Sub Type

    Breach

LUIS VILLA VS FCA US, LLC, ET AL.

Plaintiff filed a complaint against Defendants alleging causes of action for: (1) violation of subdivision (D) of California Civil Code, Section 1793.2; (2) violation of subdivision (B) of California Civil Code, Section 1793.2; (3) violation of subdivision (A)(3) of California Civil Code, Section 1793.2; (4) breach of express written warranty; (5) breach of the implied warranty of merchantability; and (6) fraudulent inducement—concealment.

  • Hearing

    Jul 09, 2020

VALERIE PACHECO VS NISSAN NORTH AMERICA, INC., A CALIFORNIA CORPORATION

Plaintiff asserts the economic loss rule does not apply, because no cases support that fraudulent inducement are barred by the economic loss rule, and because the Robinson court’s holding that the economic loss rule did not bar a claim for fraud based on affirmative misrepresentations addresses only fraud in the performance on an ongoing contract, not fraudulent inducement to enter into a contract. (Opp. at pp. 13-15.)

  • Hearing

    Jul 09, 2020

  • Type

    Contract

  • Sub Type

    Breach

GERALDINE J. TOBAR, ET AL. VS FCA US, LLC, ET AL.

Sixth Cause of Action, Fraudulent Inducement-Concealment: OVERRULED Defendants argue that Plaintiffs’ sixth cause of action for “fraudulent inducement – concealment” fails to state sufficient facts to constitute a valid claim. Defendants also contend that Plaintiffs fail to allege any fraud by Defendant West Valley Chrysler Jeep.

  • Hearing

    Jul 09, 2020

JOSE I. CORDOBA VS NISSAN NORTH AMERICA, INC., A CALIFORNIA CORPORATION

As addressed in this court’s prior ruling, the court has found Plaintiff sufficiently pleads a cause of action for fraudulent inducement-concealment for purposes of demurrer. Plaintiff’s Second Amended Complaint (“SAC”) alleges that Nissan knew of the alleged CVT transmission defect before sale of Plaintiff’s vehicle to Plaintiff. (See SAC, ¶¶ 31, 129.)

  • Hearing

    Jul 09, 2020

  • Type

    Contract

  • Sub Type

    Breach

HUMBERTO SALAZAR, JR., ET AL. VS FCA US LLC, A DELAWARE LIMITED LIABILITY COMPANY, ET AL.

The Complaint alleges three causes of action for: 1) breach of express warranty – violation of Song-Beverly Act; 2) breach of implied warranty – violation of Song-Beverly Act; and 3) fraudulent inducement – concealment. On February 4, 2019, Defendants answered. On February 26, 2020, Defendants move to adjudicate the third cause of action for fraudulent inducement and associated punitive damages request.

  • Hearing

    Jul 08, 2020

  • Type

    Contract

  • Sub Type

    Breach

OUTSTANDING FOODS, INC. VS WARNOCK FOOD PRODUCTS, INC.

., and Does 1-50 for: (1) breach of contract; (2) fraud; (3) fraudulent inducement; (4) promissory estoppel; (5) unjust enrichment; (6) quantum meruit; and (7) declaratory relief. Plaintiff alleges that it develops and markets great-tasting, nutritious, and high-quality plant-based foods. (Compl. ¶ 9.) According to their complaint, Plaintiff has developed a mushroom-and-plant-based “Pig Out” line of snack chips that have the taste and texture of crispy bacon with added seasonings and flavors. (Id. ¶ 10.)

  • Hearing

    Jul 08, 2020

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

LAWRENCE BAUTZER, AN INDIVIDUAL, ET AL. VS ESTATE OF JOHANNA JAYNE GOLDMAN BY AN THROUGH ITS ADMINISTRATOR, ET AL.

In opposition, Plaintiffs argues that they have sufficiently pled a cause of action for fraudulent inducement, citing Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1816. While Medallion, recites the elements of fraud generally, as stated by Lazar v. Superior Court, Medallion does not state the elements for fraudulent inducement. To state a claim for fraudulent inducement, Plaintiffs must allege facts of a written contract.

  • Hearing

    Jul 08, 2020

  • Type

    Collections

  • Sub Type

    Promisory Note

DAVID SCHWARTZ, ET AL. VS MC2 CONSTRUCTION LA, INC., A CALIFORNIA CORPORATION

Demurrer Defendant Michael Lawrence Cimmarrusti (“Defendant”) demurs to 1st (affirmative misrepresentation), 2nd (fraudulent inducement), 3rd (concealment), and 4th (negligent misrepresentation) causes of action in the first amended complaint (“FAC”) of Plaintiff David Schwartz (“Plaintiff”).

  • Hearing

    Jul 08, 2020

  • Type

    Business

  • Sub Type

    Intellectual Property

SANCHEZ-URQUIZA VS NISSAN NORTH AMERICA

The complaint sets forth the following causes of action: (1) Violation of Song-Beverly Act— Breach of Express Warranty; (2) Violation of Song-Beverly Act—Breach of Implied Warranty; (3) Violation of the Song-Beverly Act Section 1793.2; (4) Fraudulent Inducement—Concealment. The present motion is brought by plaintiff to compel the attendance of defendant’s person most knowledgeable (PMK) at a deposition.

  • Hearing

    Jul 07, 2020

ARIF KHAN GLOBAL, INC., A CALIFORNIA CORPORATION VS STATE BANK OF INDIA (CALIFORNIA), A CALIFORNIA CORPORALLON, ET AL.

Demurrer Defendant State Bank of India (“Defendant”) demurs to 1st (breach of contract), 2nd (promissory estoppel), 3rd (fraudulent inducement, fraud – material misrepresentation and omission of material fact), and 4th (negligent misrepresentation) causes of action in the second amended complaint (“SAC”) of Plaintiff Arif Khan Global, Inc. (“Plaintiff”). Defendant demurs on the grounds that Plaintiff failed to allege sufficient facts to support the causes of action and/or are uncertain.

  • Hearing

    Jul 07, 2020

MONICA LLERENAS, ET AL. VS KIA MOTORS AMERICA, INC., A CALIFORNIA CORPORATION

OPPOSITION: Plaintiffs Monica Llerenas and Alenjandro Llerenas On October 9, 2019, Plaintiffs filed a Complaint against Defendant, alleging causes of action for: 1) Violation of Song-Beverly Act - Breach of Express Warranty; 2) Violation of Song-Beverly Act - Breach of Implied Warranty; 3) Violation of Song-Beverly Act - Section 1793.2; 4) Fraudulent Inducement-Concealment; 5) Fraudulent Inducement-Intentional Misrepresentation.

  • Hearing

    Jul 07, 2020

  • Type

    Contract

  • Sub Type

    Breach

FLAG & SYMBOL, LLC. VS VALUE PRICE, LLC.

Such actions depict, at most, a breach of contract, not fraudulent inducement. The economic loss rule bars Plaintiff’s fraud claims. 2. Specificity Fraud must be pleaded with specificity rather than with general and conclusory allegations. (Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248.) This means that a plaintiff must plead every element of fraud with specificity (Tarmann v. State Farm Mut. Auto. Ins.

  • Hearing

    Jul 06, 2020

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

JENNIFER LECHTER VS JOSEPH LAM, ET AL.

However, Lechter does not oppose or address the issue of the $300,000 kickback or fraudulent inducement. Accordingly, this remains an outstanding issue. Conclusion In reviewing the Motions, Oppositions, and Declarations for all parties, and in balancing the harm to befall either party, the Court finds that Lam and Chen et al. have presented a justification for a preliminary injunction.

  • Hearing

    Jul 06, 2020

  • Type

    Real Property

  • Sub Type

    other

JENNIFER LECHTER VS JOSEPH LAM, ET AL.

However, Lechter does not oppose or address the issue of the $300,000 kickback or fraudulent inducement. Accordingly, this remains an outstanding issue. Conclusion In reviewing the Motions, Oppositions, and Declarations for all parties, and in balancing the harm to befall either party, the Court finds that Lam and Chen et al. have presented a justification for a preliminary injunction.

  • Hearing

    Jul 06, 2020

  • Type

    Real Property

  • Sub Type

    other

ANDREA CARRILLO, ET AL. VS PACE FUNDING GROUP, LLC

On 7/9/19, Plaintiffs’ filed their complaint which contains causes of action for: (1) fraudulent inducement, (2) negligence, (3) rescission, (4) violation of Business & Professions Code 17200 and (5) declaratory relief. On 9/13/19, Defendants filed an answer to the complaint. At the 11/5/19 Case Management Conference, the Court set the trial date for 7/27/20. The court may continue the trial date upon a showing of good cause. See Rapid Transit Advocates, Inc. (1986) 185 CA3d 996, 1003; CRC 3.1332(c).

  • Hearing

    Jul 02, 2020

CANDICE, AN INDIVIDUAL WARREN VS FOXPOINT MEDIA, LLC, A MISSOURI CORPORATION, ET AL.

The Court finds that Plaintiff has pled facts sufficient to state causes of action for fraudulent inducement and fraudulent concealment against Defendants.

  • Hearing

    Jul 02, 2020

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

JUAN ARREGUIN, ET AL. VS KIA MOTORS AMERICA, INC. A CALIFORNIA CORPORATION

Fifth Cause of Action (Fraudulent Inducement–Intentional Misrepresentation)., A. Re: Failure to Allege Specific Facts.

  • Hearing

    Jul 02, 2020

  • Type

    Contract

  • Sub Type

    Breach

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