Elements of Common Law Fraud

 Mitchell, Robert.  "What are the Elements of Common Law Fraud?" Article, General Legal, n.d.,  www.robertdmitchell.com/article/common-law-fraud

Comments for each element by Donna L Zeller-Knouse (DLZK)

"In the United States, Common Law generally identifies nine elements needed to establish fraud.....To successfully allege a claim for common law fraud, a plaintiff must plead each element with specifity and particularity." (Mitchell, Robert.  "What are the Elements of Common Law Fraud?" Article, General Legal, n.d.,  www.robertdmitchell.com/article/common-law-fraud).

1.  A representation of fact

"To successfully plead this element, a plaintiff must 'must allege, with specificity and particularity...what misrepresentations were made, when they were made, who made the representations and to whom they were made.'" Connick v. Suzuki Motor Co, 174 Ill, 2d 482,  496-97, 675 N.E.2d 584, 597 (1996) (citing Board of Educ. v. A. C. & S., Inc, 131 Ill, 2d 428, 457, 546 N.E. 2d 480, 594 (1989).  (Mitchell, Robert.  "What are the Elements of Common Law Fraud?" Article, General Legal, n.d.,  www.robertdmitchell.com/article/common-law-fraud).

DLZK:  Promises by First Choice Home Buyers (FCHB) representative Jimmy Jordan to Donna L. Zeller-Knouse to have the FCHB legal team have the Dyck O'Neal lien cleared; to advance $11,000 as soon as the Dyck O'Neal lien was cleared; and  to pay for moving and to assist with locating  a home in the Linglestown / Grantville area.   Email / Text messages on file.  

2.  It's falsity

"A false representation is the cornerstone to an action in fraud." (Sharp v. Idaho Inv. Corp.,  95 Idaho 113, 122, 504 P.2d386,395 (1972).  (Mitchell, Robert.  "What are the Elements of Common Law Fraud?" Article, General Legal, n.d.,  www.robertdmitchell.com/article/common-law-fraud)

DLZK: After several weeks, there was no action on the part of FCHB re the Dyck O'Neal lien.   Any request for communication thereof was set aside.  At one point, comment from Jimmy Jordan, representative FCHB, was that someone should have been working on this.  Hence, without the assistance of or informing FCHB, Donna Zeller-Knouse submitted a form through the  Consumer Financial Protection Bureau (CFPB) Web site requesting assistance.  On June 3rd, the Dyck O'Neal lien was cleared through the (CFPB).  FCHB was not notified.  Furthermore, the $11,000 advance was never paid and any discussion thereof had been put on hold due to the Dyck O'Neal lien.  The promises to pay for moving was later modified to state that the cost would be deducted at settlement.  Email i Text messages on file.

3.  It's materiality

"A representation or concealment of a fact is material if it operates as an inducement to the [other party] to enter into the contract, where, except for such inducement, it could not have done so." Prudential Ins. Co. v Anaya, 78 N.M. 101, 105, 428 P. 2d 640, 644 (1967) (quoting Madisette v. Found, Reserve Ins. Co. 77 N.M. 661, 667-68, 427 P.2d 21, 26 (1967).  (Mitchell, Robert.  "What are the Elements of Common Law Fraud?" Article, General Legal, n.d.,  www.robertdmitchell.com/article/common-law-fraud)

DLZK:  We had higher offers for the 558 N. Spring St Middletown, Pa property.  During our discussions with FCHB, they became well-aware of  financial positions that required immediate funding.  Furthermore, FCHB assured us that using our Real Estate Agent would cost us commissions.  OVerall, we were induced  to sign the contract through the promises made by FCHB.   Later, we were told that liens or any outstanding utilities, etc.  would be deducted at settlement.  Essentially, the proceeds from the sale, including the lien and the deduction of moving expenses that had originally been promised as being paid for, would have been negligible, at best.  Email / text messages on file.

4.  The representer's knowledge of its falsity or ignorance of its truth

"False representations made recklessly and without regard for their truth in order to induce action by another are the equivalent of misrepresentations knowingly and intentionally uttered."  Engalis v. Permanente Med. Grp, Inc, 15 Cal. 4th 951, 974, 938, P.2d 903, 917 (1997) (quoting Yellow Creek Logging Corp. v. Dare, 216 Cal. App. 2d 50, 55, 30 Cal. Rptr. 629, 632 (Cal. Ct. App. 1963)).  (Mitchell, Robert.  "What are the Elements of Common Law Fraud?" Article, General Legal, n.d.,  www.robertdmitchell.com/article/common-law-fraud)

DLZK:  FCHB was well aware of the importance of the promises that were made to clear the Dyck O'Neal lien, receive a cash advance for a legal issue, and for asistance with locating a new permanent or at least a temporary home.   The fact that the Dyck O'Neal lien had increased from $4640 to $50000 was discussed on two points; one that payment of the lien would drastically decrease the proceeds of the sale; and two that the Dyck O'Neal lien would delay the sale of the property until the lien issue was resolved.  Furthermore, the necessity of the cash advance was discussed with regards to the legal fees required for an upcoming court trial.  FCHB called after the court date to inquire as to the status.  At that point, I told FCHB that a continuance had been granted.  Additionally, FCHB never followed-up on their offer to locate a home. Initially, FCHB went so far as to say that they had teams of people in place for looking for homes.  As promised, we did our share in searching for a home.  Our buying agent can attest to that.  Essentially, FCHB took this as a way-out; assuming that their services were not needed.  

5.  The representers intent to induce the Other Party to Act on the Representation.

 "An unperformed promise does not give rise to a presumption that the promisor intended not to perform when the promise was made." Bach v. Bell Tell.Co., 411 Pa. Super. 347, 361, 6 01 A.2d 825, 832 (Pa. Super. Ct. 1992) (quoting Fidurski v. Hammill,  328 Pa. 1,3, 195 A. 3, 4 (1937)). "However, '(a) defendant who acts with knowledge that a result will follow is considered to intend the result.'" Ernst & Young, L.L.P. & Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 578, 2001 Tex. LEXIS 61, at *16 (2001), Elizaga v. Kaiser Found. Hospitals, 259 Ore. 542, 548, 487 P.2d 870, 874 (1971).  (Mitchell, Robert.  "What are the Elements of Common Law Fraud?" Article, General Legal, n.d.,  www.robertdmitchell.com/article/common-law-fraud)

DLZK:  FCHB was persisent with follow-up phone calls, text messages, and email messages, persuading Donna L Zeller-Knouse to sign the contract.  The key issues for Donna L Zeller-Knouse were getting the Dyck O'Neal Lien cleared, obtaining the Cash Advance for pending legal issues, and the assistance with moving.  At this point, FCHB also emphasized that money would be saved by not having to pay the commissions for a licensed Real Estate Agent.  Hence, we were persuaded to sign a contract.

6.  The injured party's ignorance of its falsity

"The sixth common law fraud element is the injured party's ignorance of the representation's falsity."   "If a plaintiff knows a representation is false, a cause of action for common law fraud will not exist. Lettunich v. Key Bank Nat'l Ass'n,  141 Idaho 362, 368 109 P3d 1104, 1110 (2005)."  (Mitchell, Robert.  "What are the Elements of Common Law Fraud?" Article, General Legal, n.d.,  www.robertdmitchell.com/article/common-law-fraud)

DLZK:  Donna L Zeller-Knouse did not know that FCHB did not intend to work on the promises.  For example, clearing the title was something that FCHB had promised to do.  However, FCHB did not inquire about the Dyck O'Neal Lien until after the lien was satisfied on June 3rd with the assistance of the CFPB.  During that time, inquiries concerning the lien and the offer of cash advance were continually set aside.  FCHB enforced that the title would have to be cleared of all liens before the offer of a cash advance could be made.  And, even then, upper management would have to approve of any cash advance (additional management approval was not mentioned during the initial offers).   Later, the moving assistance was further qualified to needing to be referred to another department that handles relocation and moving (this was also not mentioned during the initial offers; we were never contacted by 'another department').   Essentially, Donna L Zeller-Knouse did not have the background and knowledge to determine falsity of information.

7.  The injured party's reliance on its truth

"Actual reliance occurs when a misrepresentation is 'an immediate cause of a plaintiff's conduct, which alters his legal relations,' and when absent such representation, 'he would not, in all reasonable probability, have entered into the contract or other transaction."  Engalla, 15 Cal. 4th at 976, 938 P.2d at 919 (quoting Spinks v. Clark, 147 Cal. 439, 444, 82 P. 45, 47 (1905). (Mitchell, Robert.  "What are the Elements of Common Law Fraud?" Article, General Legal, n.d.,  www.robertdmitchell.com/article/common-law-fraud)

DLZK:  Donna L Zeller-Knouse's financial position was the reason for signing the contract.  FCHB promised a speedy and easy settlement, with all FCHB promises being met.    Essentially, FCHB promised to have their best people work on getting the Dyck O'Neal lien for $50,000 issue resolved; advance $11,000; and to provide relocation / moving services.  However, over a period of months, FCHB did nothing.  In fact, had the settlement taken place prior to the Dyck O'Neal Lien being satisfied through the CFPB, Donna L. Zeller-Knouse would have lost $50,000.   Later, the representative from FCHB who made the promises, Jimmy Jordan, stated that he was not a licensed realtor; therefore, he was not in a position to know the settlement amount; however, any liens, past due utiities, property taxes, would have to be deducted.   Given the lack of prior knowledge and experience in real estate, Donna L. Zeller-Knouse relied on the knowledge of FCHB.  In entering into contract with FCHB, Donna L Zeller-Knouse relied on the truth of the representation to fulfill the promises made.  

8.  The injured party's right to rely on the Representation

"Essentially, '[a] party is not justified in relying on representaitons when he or she had ample opportunity to ascertain the truth of the representations before action.'" Capiccioni v. Brennan Naperville, Inc., 339 Ill. App. 3d 927, 939, 791 N.E.2d 53,583, 563 (ll. Ap. Ct. 2003) (citing Salisbury Vl Chapman Realty, 124 Ill. App. 3d 1057, 1063, 465 N.E.2d 127, 132 (ill. App. Ct. 1984)).  (Mitchell, Robert.  "What are the Elements of Common Law Fraud?" Article, General Legal, n.d.,  www.robertdmitchell.com/article/common-law-fraud)

DLZK:  FCHB has a Web site and has been approved by the Better Business Bureau.  There were several testimonials on the Web site supporting the professional conduct of FCHB.  However, had Donna L Zeller-Knouse checked the Prothonotary records in several counties, e.g.; York, Cumberland, and Dauphin;  several lawsuits entered by FCHB would have been discovered.  In fact, several of the lawsuits are entered against Estates.

9.  The injured party's consequent and proximate injury

"It is of the very essence of an action of fraud and deceit that the same shall be accompanied by damage, and neither damnum absque injuria nor injuria absque damnum (where a person suffers loss or damage without legal claim) by themselves constitutes a good cause of action." George Hunt, Inc. v. Wash-Bowl, Inc., 348 So. 2d 910, 912, 1977 Fla. App. LEXIS 15920 at *5 (Fla. Dist. Ct. App. 1977) (quoting Stokes V. Victory Land Co., 99 Fla. 75, 802, 128 So. 408, 410 (1930)). (Mitchell, Robert.  "What are the Elements of Common Law Fraud?" Article, General Legal, n.d.,  www.robertdmitchell.com/article/common-law-fraud)

DLZK:  Donna L Zeller-Knouse, with the help of the CFPB, had the Dyck O'Neal lien cleared on June 3rd. Note that FCHB did nothing to assist in the matter of clearing the Dyck O'Neal lien; nor was FCHB notified that the Dyck O'Neal lien had been cleared.  Nevertheless, immediately after the Dyck O'Neal lien was cleared, FCHB entered a Lis Pendens on the property.  We have applied to have the Lis Pendens expunged; however, to date the Lis Pendens remains in place.   

Furthermore, though we have received several higher offers, through licensed Real Estate agents, we are unable to sell.  Ultimately, in order to avoid a Tax Upset Sale, we have had to file Chapter 13 Bankruptcy.

Additional Note:  An email message to Donna L. Zeller-Knouse from Nicole Redden, Pat Black Abstract Co. stated that she (Nicole Redden) would advise all parties that the sale is cancelled. Email message on file.