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Can You Sue in California Courts for Being Lied To?

In California, fraud actions are commonplace and can arise from a variety of situations. However, winning a fraud case is difficult unless you have an experienced attorney helping you prove all elements of fraud.


What is Fraud?

Fraud occurs when a party makes dishonest or untrue statements, makes false promises, or otherwise tricks a victim in order to deprive her of money, property, or rights.

Types of Fraud Actions in California

In California, there are three main categories of fraud, each requiring unique approaches to successfully prevail or defend against. The three broad categories are misrepresentation, false promise and concealment. At Brown & Charbonneau, LLP, our business attorneys can help you select the proper theory of fraud for the greatest chance of success.

Misrepresentation. Misrepresentation occurs when a party convinces a victim that an important false fact is true.

Proving misrepresentation requires the following:

1) The false statement must have been a false statement of fact, not opinion. “Puffery” – grandiose embellishment in the form of an opinion about one’s own skills – is allowable. For example, a salesman is allowed to brag about his store, even if he is exaggerating its good qualities.

2) There must be intent to actually defraud or, in the alternative, the offending party should have known that his false statements were likely to defraud.

3) The victim relied on the false statements, and such reliance was reasonable. If the victim should have known the statements were false, then the victim’s reliance on the false statements was unreasonable. Whether a victim should have known that the statements were false is fact specific and requires a skilled attorney to successfully prove that reliance was reasonable.

4) The victim suffered damages as a result of the fraud. Lazar v. Superior Court (1996) 12 Cal. 4th 631, 638.

Concealment. Concealment occurs when an offending party has a duty to disclose important terms of a contract or agreement but fails to do so in order to deprive the victim of money, property or rights.

Proving concealment requires the following:

1) The offending party had a duty to disclose certain facts. Any party can incur a “duty to disclose.” For example, let’s say you want to lease commercial property for your business. If the leasing company starts to explain your obligations under the lease but misrepresents your obligations or does not disclose the whole truth, then that leasing company may incur a duty to fully disclose all material terms that qualifies the statements they make to you.

2) The offending party makes specific statements but does not explain the whole truth in order to defraud the victim.

3) The victim is not aware of the concealed facts and would not have acted has she known of the concealments; and the offending party activity conceals the discovery of the concealments.

4) The victim suffers damages. Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248

False Promise. False promise occurs when a party makes a promise that he or she does not intend to fulfill.

Proving false promise fraud requires the following:

1) A promise was made related to the contract.

2) The offending party did not intend to fulfill the promise at the time it was made.

3) The offending party intended that the victim would rely on the promise, and the victim did, in fact, reasonably rely on the promise.

4) The victim suffered damages as a result of their reliance on the false promise. Regus v. Schartkoff (1957) 156 Cal.App.2d 382, 389.

What Should You Do?

Being deceived can cause serious harm to you and your business. Therefore, it is important to seek the advice of an experience attorney before entering into a contract. However, if you find yourself in a situation where you have been defrauded, contact an attorney at Brown & Charbonneau, LLP to find a legal remedy that addresses your situation.

Brown & Charbonneau, LLP attorneys are experienced litigators who take the time to understand your desired outcomes and develop the best and most strategic approach to achieving your goals. Our attorneys have over 75 years of collective experience. We have Board Certified Trial Specialists, American Board of Trial Advocates members, and a Top 100 Trial Lawyer as ranked by the National Trial Lawyers. Let us put our legal experience to work for you! Call 714-505-3000 or contact us online today to speak with a legal professional and learn more about how we can assist with your case.