Energy Law

Court of Appeal Rejects Plaintiff's Fraud Claim

In Martin v. JKD Investmens, LLC, the Court of Appeal of Louisiana, Second Circuit, rejected a plaintiff's fraud claim because the plaintiff had failed to read the contract that he signed which transferred the mineral rights on his property to JKD Investments, LLC ("JKD"). 

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In Martin, the plaintiff inherited five and a half acres from his mother.  The plaintiff went to the Jonesboro State Bank to obtain a loan to begin construction of a home on his property.  The plaintiff met with Donald Joseph Allen, and employee and officer of the bank, about the loan.   The plaintiff's sister also made an inter vivos donation to the plaintiff.  On the day that he received his sister's property, the plaintiff conveyed the mineral rights to the entire property to JKD.  Later, the plaintiff learned that Allen owned JKD and thus the mineral rights to the property.  The plaintiff then sued Allen, Jonesboro State Bank, and JKD for fraud.

The plaintiff argued that the trial court erred when it granted the defendants' motion for summary judgment.  He first argued that a genuine issue of fact existed as to whether he signed the conveyance of the mineral rights in the presence of a notary and any witnesses.  The court rejected this claim because a transfer of immovable property is valid by an act under private signature, and the plaintiff admitted that he signed the conveyance.  The court also rejected plaintiff's fraud claim because, under Louisiana Civil Code article 1954, a fraud claim must fail if the plaintiff could have ascertained the truth without any difficulty, inconvenience, or special skill.  The court ultimately held that had the plaintiff read the conveyance, he could have ascertained the truth.

To read the full opinion, click here.

Full post as published by The Energy Law Blog on October 15, 2007 (boomark / email).