The Benefits and Challenges of Bringing a CA Intentional Misrepresentation Claim

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If “intentional misrepresentation” sounds like a slightly softer way of referring to a lie, fraud, or verbal act of deceit, well that is essentially what it is. In California, an intentional misrepresentation claim is the cause of action brought by a plaintiff who has been defrauded by a defendant and suffered losses as a result. Proving such a claim before a judge or jury is often challenging, but the benefits of doing so are often worth it when the evidence supports such a claim.

Why Bring an Intentional Misrepresentation Claim?

Intentional misrepresentation claims are generally brought with regard to some type of business transaction that did not work out as planned. The underlying scenario could be a home sale, a contract for services completed, a deal to buy inventory or other goods, an employment agreement, or any other type of contract, oral or written.

 

Which leads to the question of why a plaintiff who did not receive the benefit of the bargain would not simply bring a breach of contract action. There are a number of reasons, including:

  • A plaintiff may be limited by the contract itself in the type of action or damages he may pursue based on a breach of contract action
  • A plaintiff can seek punitive damages via an intentional misrepresentation claim
  • The reputational damage that a successful fraud claim can inflict on a defendant may provide additional leverage to settle in a plaintiff’s favor

Why Bringing an Intentional Misrepresentation Presents Challenges

While the potential benefits to a plaintiff in bringing an intentional misrepresentation are clearly greater than in a typical breach of contract action, proving an intentional misrepresentation claim can be more challenging. Rather than showing that the defendant simply failed to hold up his end of the bargain (e.g. the defendant was paid to build a new garage and never followed through), there are additional factors that must be proven regarding the defendant’s state of mind as well as the plaintiff’s reliance on the defendant’s misrepresentation.

 

The steps in proving an intentional misrepresentation claim include showing:

  • The defendant made a representation to the plaintiff that a particular important fact was true
  • The representation made by the defendant was in fact false
  • The defendant knew the statement was false when it was made, or made the statement with a reckless disregard of whether the statement was true or not
  • The defendant intended for the plaintiff to rely upon the representation
  • The plaintiff did in fact reasonably rely on the representation (e.g. the plaintiff entered into a contract with the defendant as a result of the misrepresentation)
  • The plaintiff suffered harm (e.g. lost business profits)
  • The misrepresentation was a substantial factor in causing the harm

While a plaintiff may feel that all of the above factors are clearly true, actually providing evidence of the above factors to a judge and jury can be a challenge, especially where the defendant denies having known of the falsity of the statement. That said, an experienced business litigation attorney will aggressively pursue documentary and testimonial evidence to prove the above factors in order to obtain the tort recovery a plaintiff deserves.

Work With an Experienced Los Angeles Business Litigation Attorney

At Wagenseller Law Firm in downtown Los Angeles, our attorneys have extensive experience in resolving all types of business litigation matters, including those related to fraud and intentional misrepresentation. Contact the Wagenseller Law Firm today to schedule a consultation to discuss your matter.