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TORTS - Predictions of future peformance did not amount to fraud unless incorporates falsified info: Flegles, Inc. v. Truserv Corporation (SC 2/19/2009)

By Michael Stevens

Flegles, Inc. v. Truserv Corporation
2006-SC-000471-DG 2/19/2009
2007-SC-000155-DG 2/19/2009
Opinion by Justice Abramson; all sitting. Affirmed.

Flegles Inc., which operated a family-owned True Value hardware store, sued its wholesale cooperative, Truserv claiming that Truserv made fraudulent misrepresentations which induced Flegles to build a new expanded store?which did not perform up to expectations. The jury found for Flegles and awarded $1.3 million in damages. The Court of Appeals reversed and ordered dismissal of Flegles? complaint. The Supreme Court affirmed the Court of Appeals, holding that Truserv?s predictions of future performance did not support a claim of fraud. Generally, misrepresentation must relate to past or present material fact. Opinion or prediction may not be the basis for a misrepresentation action, unless the opinion either incorporates falsified past or present facts or the declarant falsely represents his true opinion of a future happening. In his dissent, Justice Scott (joined by Justice Schroder and Justice Venters) wrote that Truserv?s concealment of business projections that were less optimistic than the one actually presented to Flegles amounted to a false representation of a future happening, sufficient to take the issue to the jury

Full post as published by Kentucky Cases on September 27, 2009 (boomark / email).