Lehman v. Whitehead

• Decision Date: 15 June 1965
• Docket Number: CA-CIV
• Citation: 1 Ariz.App. 355,403 P.2d 8
• Parties: Carl LEHMAN and Syivia Lehman, husband and wife, Appellants, v. W. W. WHITEHEAD and Margaret Whitehead, husband and wife, Don Woods Realty, an Arizona corporation, Jack Solomon, Appellees. * 148.
• Court: Arizona Court of Appeals

Page 8

403 P.2d 8

1 Ariz.App. 355

Carl LEHMAN and Syivia Lehman, husband and wife, Appellants, v. W. W. WHITEHEAD and Margaret Whitehead, husband and wife, Don Woods Realty, an Arizona corporation, Jack Solomon, Appellees. ^*

1 CA-CIV 48.

Court of Appeals of Arizona.

June 15, 1965.

Cox & Cox, by Alfred S. Cox, Phoenix, for appellants.

Lewis Roca, Scoville, Beauchamp & Linton by Monroe G. McKay, Phoenix, for appellees Don Woods Realty and Jack Solomon.

William L. McClain, Phoenix, for appellees W. W. Whitehead and Margaret Whitehead.

DONOFRIO, Judge.

Appellants Carl Lehman and Sylvia Lehman, his wife, who were plaintiffs below, appeal from a judgment in favor of W. W. Whitehead and Margaret Whitehead, his wife, Don Woods Realty, an Arizona corporation, and Jack Solomon, who were defendants. Hereafter the parties will be referred to as they appeared in the trial court.

The defendants Whitehead were the owners of a shopping center in Phoenix, which consisted of seven rentals. They listed the property for sale with the defendant, Don Woods Realty, in June, 1958. The property was shown by the defendant, Jack Solomon, a salesman for Don Woods Realty, to Mr. and Mrs. William Chester. The Chesters were related to the plaintiffs, who lived in New Mexico, and were looking for a piece of rental property for the plaintiffs. The Chesters, learning the real estate agency had the property listed, contacted Mr. Solomon. Mr. Solomon, in interesting the Chesters and plaintiff in the property, represented what the income from the shopping center was by telling them what the monthly amounts of the leases from the individual tenants were. The leases for two of the store rooms were to Mr. George F. Watson, who ran a grocery store in one and a meat market in the other. The particular leases which were for four and one half years, provided for a combined monthly rental of $525.00. Actually Mr. Watson, whose business was slow, had been paying $400.00 a month on the leases. This fact was not known to the plaintiffs. The Chesters had made some investigation of the store by conversing with Mr. Watson and trading there for groceries. Mr. Chester also checked with the Associated Grocers with whom Mr. Watson did business. Mr. Chester, on behalf of the plaintiffs also employed a professional appraiser to get an opinion as to the value of the shopping center, informing him of the amounts of the rentals provided in all of the leases as reported to him. The appraiser gave plaintiffs an opinion that the property was worth $100,000.00. Plaintiffs thereafter made an offer to the owners, through the real estate agent, of $100,000.00 for the shopping center which was accepted. It was not until after the sale had been consummated that the plaintiffs learned through Mr. Chester that the monthly rental payment from Mr. Watson on the grocery and meat market had been $400.00 rather than $525.00 as called for in the leases.

Plaintiff electing to keep the property, filed this action against the owners, the real estate agency and the salesman who sold the property, seeking to recover damages based upon misrepresentations of these defendants as to the rental income of the tenant Watson. The case was tried before the court on the theory of fraud and at the close of the plaintiffs' case the court, on motions duly made, granted judgment for all the defendants under Rule 41(b) Rules of Civil Procedure, making findings and conclusions. The court's findings were that the plaintiff had failed to prove by clear and convincing evidence (1) that the defendants made any false representations to the plaintiffs, (2) that the plaintiffs relied upon the allegedly false representations, (3) that the representations allegedly false and allegedly relied on were material to the decision to purchase the property, and (4) and, as to defendants Don Woods Realty and Jack Solomon, the plaintiffs had failed to prove by clear and convincing evidence that these defendants had any knowledge of any facts which would make the representations made false.

The court made conclusions of law whereby it concluded that a judgment for fraud required clear and convincing proof of the nine elements of fraud and that defendants were entitled to judgment because plaintiffs failed to prove by clear and convincing evidence these elements.

First, we shall consider the conclusions of law applied by the court. Since the nine elements of fraud which we deem unnecessary to list at this time were first set out in Moore v. Meyers, 31 Ariz. 347, 253 P. 626 (1927), the Supreme Court has without exception held that '[i]t is fundamental in this jurisdiction that 'there can be no actionable fraud without a concurrence of all the elements thereof'. Wilson v. Byrd, 79 Ariz. 302, 304, 288 P.2d 1079, 1081'. Cullison v. Pride O'Texas Citrus Association, 88 Ariz. 257, 259, 355 P.2d 898 (1960). A failure to prove any one of the elements by proof which is clear and convincing would be fatal to any case sounding in fraud. Cullison v. Pride O'Texas (supra).

We have examined the elements of fraud and burdens of proof employed by the trial court and find they are in keeping with the principles of law announced by the above cited and other decisions by our Supreme Court.

Counsel are in accord and we are in agreement with them that under Rule 41(b) Rules of Civil Procedure, 16 A.R.S., a trial court in deciding a motion to dismiss at the end of plaintiff's case may pass on the credibility and conflicts of evidence and grant a motion on the merits provided special findings are made. Joseph v. Tibsherany, 88 Ariz. 205, 354 P.2d 254 (1960).

Rule 52(a), Rules of Civil Procedure, A.R.S. provides:

'* * * Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of witnesses. * * *'

The sole issue now before us is whether the evidence...