Nielson v. Flashberg

• Decision Date: 27 October 1966
• Docket Number: No. 8101,8101
• Citation: 101 Ariz. 335,419 P.2d 514
• Parties: F. P. NIELSON, dba F. P. Nielson and Sons, Appellant, v. Jack FLASHBERG, Appellee.
• Court: Arizona Supreme Court

Page 514

419 P.2d 514

101 Ariz. 335

F. P. NIELSON, dba F. P. Nielson and Sons, Appellant, v. Jack FLASHBERG, Appellee.

No. 8101.

Supreme Court of Arizona, In Division.

Oct. 27, 1966.

Rhodes, Killian & Legg, by Joe S. Reynolds, Mesa, for appellant.

Langerman & Begam, by Frank Lewis, Phoenix, for appellee.

McFARLAND, Justice:

F. P. Nielson, dba F. P. Nielson and Sons, hereinafter referred to as defendant, was sued by Jack Flashberg, hereinafter referred to as plaintiff, for fraudulent representations. The jury returned a verdict for plaintiff of $600.00 in actual damages and $5,000 punitive damages. Defendant appeals from the verdict and the amount of damages.

Plaintiff was engaged in the scrap iron business in Mesa, Arizona, at the time this cause of action arose. Scrap metals were purchased by plaintiff from various persons who usually delivered them to plaintiff's place of business in truck or carloads. The purchase price was paid according to weight, and as plaintiff's scale was of limited weighing capacity, large truck loads were sent to be weighed on the scales of defendant, a public weighmaster certified under A.R.S. §§ 44--2141 to 44--2145.

During the latter part of 1959 plaintiff commenced buying scrap metals from one Ramon Garcia, and in 1960 made regular purchases from him. On some thirty-seven occasions Garcia brought scrap metal to plaintiff's yard in a truck and was sent to defendant's public scale to have the truck weighed while laden, and then again after unloading, so that the weight of the load might be properly determined. Defendant was fully aware of the fact that plaintiff paid his sellers, including Garcia, on a basis of so many dollars per ton, and that plaintiff relied on defendant's weight certificates in determining the price. On each occasion, defendant's sons (who were partners in the business and generally acted in a managerial capacity) or the employees did the actual weighing and gave Garcia a weight certificate. These weight determinations took place over a period dating from December 31, 1959, to August 29, 1960. During this period, no question was raised as to the propriety of defendant's performance of the weighing. Defendant billed plaintiff monthly, sending a statement of the weighing services performed. In late August or early September of 1960, plaintiff became suspicious upon examining defendant's statement for the previous month, inasmuch as it showed Garcia's truck to have exactly the same unladen weight on several successive occasions. Plaintiff then caused one of his employees to accompany Garcia on his next trip to defendant's scales. On that occasion the truck weighed 7300 pounds. The weight certificates from previous occasions had consistently shown the truck to weigh 4620 pounds.

At the trial plaintiff testified on cross-examination that Garcia had explained to him that defendant had not actually weighed the truck again after unloading, but that Garcia merely told defendant's employees or sons the unladen weight and they entered it on the weight certificate, thereby saving themselves the trouble of weighing the truck twice. Garcia admitted to plaintiff that he had given defendant a false weight in order to receive a higher price per load, and in an effort to make recompense, Garcia had made payments to plaintiff of about $300.00 by the time of the trial.

Many of the material portions of plaintiff's allegations were admitted by defendant or his son at the trial. They admitted knowing the nature of plaintiff's business and that plaintiff relied on the weight certificates in computing payments to those from whom he was purchasing scrap. They also admitted there were times when Garcia's truck was not weighed a second time, and there was no way plaintiff could ascertain this fact by looking at the weight certificate.

The complaint sought actual damages of $910.00 and asked punitive damages of $5,000. The jury was instructed they could set off any compensation plaintiff may have received from other sources, and a verdict was returned of $600.00 compensatory and $5000 punitive damages.

Defendant's first assignment of error is predicated upon the trial court's refusal to set aside the verdict and judgment and to enter judgment in accordance with defendant's motion for a directed verdict for the reason that the elements of fraud were not established by clear and convincing proof, or at all.

We have held there is no actionable fraud without a concurrence of all the elements thereof. The elements of fraud have been established in this court by a long line of decisions. Wilson v. Byrd, 79 Ariz. 302, 288 P.2d 1079; Koen v. Cavanagh, 70 Ariz. 389, 222 P.2d 630; Rice v. Tissaw, 57 Ariz. 230, 112 P.2d 866; Waddell v. White, 56 Ariz. 420, 108 P.2d 565 (rehearing denied 56 Ariz. 525, 109 P.2d 843); Sims Printing Co. v. Kerby, 56 Ariz. 130, 106 P.2d 197; Stewart v. Phoenix National Bank, 49 Ariz. 34, 64 P.2d 101; Law v. Sidney, 47 Ariz. 1, 53 P.2d 64; Mutual Benefit H. & A. Ass'n v. Ferrell, 42 Ariz. 477, 27 P.2d 519; Moore v. Meyers, 31 Ariz. 347, 253 P. 626. As set forth in the case of Moore v. Meyers, supra, (rev. on other grounds), the elements are:

'* * * (1) A representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted upon by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon; (9) his consequent and proximate injury. * * *' 31 Ariz. at 354, 253 P. at 628.

With these principles in mind, we proceed to analyze the evidence to determine whether each of the elements are present. The elements which defendant claims were not present were:

(1) A representation. Defendant was a public weighmaster authorized and qualified under the provisions of A.R.S. § 44--2141. As authorized by this statute, he issued a certificate purporting to state the laden and unladen weight of the truck. The issuance of this certificate was a representation to plaintiff that defendant had weighed the truck while it was loaded, and again after it was unloaded.

(2) Its falsity. In an interrogatory, one of defendant's sons admitted he believed there were occasions when the truck was not actually weighed after unloading. Plaintiff testified on cross-examination, without contradiction, that Garcia had admitted to him that he simply told the unladen weight and that was what was recorded. The evidence that the truck was not weighed after unloading is uncontradicted and certificates which represent that the truck was weighed twice are false.

(4) The speaker's knowledge of its falsity or ignorance of its truth. Defendant dishonestly, intentionally and deliberately issued a certificate purporting to show that the truck had been weighed after unloading, when in truth and fact it had not been weighed. The certificate was issued in order that he might collect his fee for this service. It was therefore with a wicked motive to cheat and deceive plaintiff in that regard. In brief, these were the acts which were fraudulent.

(8) The right of plaintiff to rely thereon. The inspection of the scales as provided for in A.R.S. § 44--2122 is for the purpose of protecting the public in ensuring that the certificate issued by a public weighmaster contains the correct weight. A.R.S. § 44--2145 provides that a public weighmaster who issues a false or fraudulent certificate is guilty of a misdemeanor. It is for this work and responsibility that the public weighmaster charges a fee for his services. Plaintiff, who paid a fee for these services, had a right to rely on the representation of defendant that he had performed the statutory duty imposed upon him by law. There is no question but that the certificates were issued with the intent that they would be relied upon by plaintiff, and plaintiff certainly had a right to rely upon the certificate of the weights, otherwise the object of the law providing for a public bonded weighmaster would be defeated.

(9) His injury. Plaintiff's injury was a direct and proximate result of the fraud because it was upon the net weights as evidenced by the weight certificates that the weight of the purchased load was determined and paid for. The evidence shows that for over twenty consecutive weighings the weight was listed as 4,620 pounds, but when it was actually weighed unladen, the truck weighed well over 7,000 pounds. The computed damage due to the discrepancy was approximately $900.00. The jury was properly instructed that they could offset any compensation plaintiff may have received for his losses in computing the compensatory damages. Plaintiff, in his own testimony, admitted that Ramon Garcia had paid him $300.00 in partial recompense for the losses the plaintiff suffered.

Defendant's second and third assignments of error deal with the wrongful...