Plymale v. Upright

• Decision Date: 21 April 1981
• Docket Number: No. 2-680A188,2-680A188
• Citation: 419 N.E.2d 756
• Parties: O. C. PLYMALE, Laurajene Plymale and the Canan Company Relators, Inc., Defendants-Appellants, v. Joe UPRIGHT, Roy Case and Quality Homes Sales, Inc., Plaintiffs-Appellees.
• Court: Indiana Appellate Court

Page 756

419 N.E.2d 756

O. C. PLYMALE, Laurajene Plymale and the Canan Company Relators, Inc., Defendants-Appellants, v. Joe UPRIGHT, Roy Case and Quality Homes Sales, Inc. Plaintiffs-Appellees.

No. 2-680A188.

Court of Appeals of Indiana, First District.

April 21, 1981.

Perry W. Cross and P. Gregory Cross, Cross, Marshall, Schuck & DeWeese, P. C., Muncie, for defendants-appellants.

Michael J. Alexander, Alexander & Reed, Muncie, for plaintiffs-appellees.

NEAL, Presiding Judge.

STATEMENT OF THE FACTS

Defendants-appellants O. C. and Laurajene Plymale and the Canan Company Realtors, Inc. (Canan Realtors) appeal a judgment entered upon a jury verdict in Delaware Superior Court No. 2, awarding plaintiffs-appellees Joe Upright, Roy Case, and Quality Homes Sale, Inc. $7,500 in damages for fraud.

We reverse.

STATEMENT OF THE FACTS

The evidence most favorable to the judgment is as follows: O. C. and Laurajene Plymale own an unimproved lot located at 3801 North Virginia Avenue in the City of Muncie. In September of 1977 O. C. Plymale contacted Ed Canan of Canan Company regarding a listing. On September 23, O. C. Plymale signed a standard listing agreement; Vicki Huddleston, a Canan Company associate, signed on the company's behalf. The asking price was $6,250.

Joe Upright and Roy Case are the sole owners of Quality Motor Sales, Inc., d/b/a Quality Homes Sales, an Indiana corporation engaged in the business of selling mobile and modular homes in the City of Muncie. On October 3, 1977, Ricardo and Betty Diaz executed an agreement according to the terms of which they purchased a modular home for $29,350. At the time the agreement was signed, Quality Homes Sales owned a lot upon which the modular home was to be erected. However, it was later discovered county land use regulations prohibited the construction. In an effort to obtain a suitable replacement, the plaintiffs contacted Patti Taylor, a real estate agent associated with Canan Realtors, with whom they had previously dealt. Taylor brought the Plymales' property to the plaintiffs' attention.

On October 26, 1977, Upright executed a standard proposal to purchase the property. The plaintiffs offered $5,500. An earnest money deposit in the amount of $100 accompanied the offer. Taylor delivered the executed proposal to Huddleston; Huddleston conveyed its terms over the phone to the Plymales; the Plymales rejected the offer; Huddleston notified Taylor.

On October 27, Taylor informed Case the Plymales would accept only a full-price offer. Case executed a second standard proposal to purchase showing an offer of $6,250. The offer required acceptance on or before the end of the next day. The previous $100 earnest money deposit was carried over. It is not clear whether this offer was in fact tendered to the Plymales.

Later in the evening of October 27, Upright executed a third offer to purchase for $6,250, said offer open until the close of the next day. This offer was accompanied by a check in the amount of $6,150, which, when combined with the other $100, matched the full asking price.

On the morning of October 28, agents of the plaintiffs commenced bulldozing and At approximately 5:00 p.m. the Plymales arrived at the offices of Canan Realtors where for the first time they were tendered and read the third offer. This offer was immediately rejected. O. C. Plymale testified that he and his wife were "upset" by the unauthorized excavation. The plaintiffs' money was returned a few days later.

excavating operations on the Plymales' property. The Plymales' parents, whose residence is on an adjacent lot, notified them of the operations. O. C. Plymale called Ed Canan of Canan Realtors and informed him of the goings-on. In turn, Ed Canan contacted Upright and inquired whether it was indeed the plaintiffs who had entered upon the land. The report verified, Canan advised Upright that neither he nor Case was the owner of the property and that the property had been withdrawn from the market.

The Diazes were informed the offer had not been accepted. The plaintiffs then had only ten days to obtain a lot and commence construction; otherwise, the Diazes would seek to cancel the contract. The plaintiffs apparently were unable to do so, and the modular home sale fell through.

The plaintiffs filed a complaint in the superior court. The cause was stated in two paragraphs, the first alleging breach of contract and the second alleging fraud; the plaintiffs sought $15,000 in compensatory damages for the expenses incurred and the loss of profits, and $30,000 in punitive damages. Following the close of the plaintiffs' evidence, the trial court granted the defendants' motion for judgment on the evidence, Ind.Rules of Procedure, Trial Rule 50, with regard to the first paragraph of the complaint, but denied the motion with regard to the second paragraph, alleging fraud. At the close of all the evidence defendants again moved for a judgment on the evidence, which was denied. The jury returned a verdict in favor of the plaintiffs awarding damages in the amount of $7,500. The defendants appeal the judgment.

ISSUES

The defendants present the following issues for review:

"1. Whether the Trial Court committed error in overruling the defendants' Motion for Judgment on the Evidence made at the conclusion of the trial;

2. Whether there was sufficient evidence to sustain the verdict of the jury;

3. Whether the verdict of the jury was contrary to law;

4. Whether the trial court erred in overruling the defendants' objection and admitting into evidence testimony regarding plaintiffs' lost profits;

5. Whether the damages awarded to the plaintiffs by the jury were excessive."

Our determination on the first is dispositive of the appeal.

DISCUSSION

In Daly v. Showers, (1937) 104 Ind.App. 480, 485-486, 8 N.E.2d 139, the Appellate Court turned to 26 C.J.S. Fraud § 1 (1921), p. 1059, for the following comment on the general nature of fraud:

" 'Fraud in its generic sense, especially as the word is used in courts of equity, comprises all acts, omissions, and concealments involving a breach of legal or equitable duty and resulting in damage to another. Fraud has also been defined as any cunning or artifice used to cheat or deceive another. However, the wisdom of an exact legal definition of fraud has been questioned, and it has been stated that fraud is better left undefined, and some courts have said that the common law not only fails to define fraud but perhaps asserts as a principle that there shall be no definition. Further it is frequently stated that owing to the multiform character of fraud and the great variety of attendant circumstances no definition which is all inclusive can be framed, but each case must be determined on its particular facts.' " (Emphasis added.)

Notwithstanding the lack of an exact legal definition, the elements of a cause of action in fraud are well established: To sustain an action for fraud it must be proven by a preponderance of the evidence that a material representation of a past or existing fact was made which was untrue and known to be untrue by the party making it, or else recklessly made, and that another party did in fact rely on the representation and was induced thereby to act to his detriment. Fleetwood Corporation v. Mirich, (1980) Ind.App., 404 N.E.2d 38; Gonderman v. State Exchange Bank, Roann, (1975) 166 Ind.App. 181, 334 N.E.2d 724; Plumley v. Stanelle, (1974) 160 Ind.App. 271, 311 N.E.2d 626; Soft Water Utilities, Inc. v. Le Fevre, (1974) 159 Ind.App. 529, 308 N.E.2d 395; Grissom v. Moran, (1972) 154 Ind.App. 419, 290 N.E.2d 119; Middelkamp v. Hanewich, (1970) 147 Ind.App. 561, 263 N.E.2d 189. Fraud need not be proven by direct or positive evidence; it may be proven by circumstantial evidence, provided there are facts from which the existence of all the elements can be reasonably inferred. Gonderman, supra; Grissom, supra; Middelkamp, supra.

In the case at bar the defendants moved for a judgment on the evidence at the close of all the evidence. T.R. 50. The motion was denied and the cause was submitted to the jury. A motion for judgment on the evidence at the conclusion of all the evidence may be granted only if there is no substantial evidence or reasonable inference to be adduced therefrom to support an essential element of the claim. If there is or if reasonable persons might differ, judgment on the evidence is improper. Keck v. Kerbs, (1979) Ind.App., 395 N.E.2d 845. ¹

On appeal the defendants argue the plaintiffs failed to allege or show the defendants made a material misrepresentation of fact upon which they justifiably relied to their detriment. In the second paragraph of their complaint the plaintiffs alleged:

"2. That Defendants offered to sell their property ... and know or reasonably should have known said offer to be false and that in truth and fact Defendants would not complete the sale of said property to Plaintiffs; ..."

The complaint indeed fails to state a cause of action in fraud for the reason the representation upon which the fraud is predicated is not a representation of existing facts, but at most a promise to be performed in the future. Middelkamp, supra. At trial, however, the parties presented a great deal of conflicting evidence concerning statements Patti Taylor made during the course of the negotiations. The plaintiffs based their cause of action upon Taylor's misrepresentation that they owned the property and could begin construction. ²

Whether certain statements were made as asserted is on conflicting evidence a question of fact for the jury. Whether the plaintiffs acted in reliance upon the defendants' representation and whether the plaintiffs were justified in so doing are also on conflicting evidence questions of fact for the jury. 37 C.J.S. Fraud § 129. However, when the form of the statements and the subject matter regarding which, or the circumstances in which they were made are Reliance

such that the...