Day on Torts
Where defendants filed a counterclaim for intentional misrepresentation, but defendants’ allegations all centered around promises that plaintiffs had made to take certain actions in the future and defendants did not allege that plaintiffs had no present intention of performing when the promises were made, dismissal of the intentional misrepresentation claim was affirmed.
In Auxin, LLC v. DW Interests, LLC, No. M2022-01087-COA-R3-CV (Tenn. Ct. App. Jan. 25, 2023), plaintiffs sued defendants asserting various claims related to a real estate development contract. Defendants filed a counter-claim for breach of contract, but also included a claim for intentional misrepresentation. Among other rulings, the trial court dismissed defendants’ intentional misrepresentation claim, which was affirmed on appeal.
To successfully assert an intentional misrepresentation claim, a party must show that the tortfeasor “made a representation of an existing or past fact” that “was false when made.” (internal citation omitted). Here, defendants’ factual allegations all related to statements plaintiffs allegedly made about things they would do in the future. The Court wrote:
In the present case, Defendants alleged that Plaintiffs “knowingly made materially false and misleading promises and representations . . . that [Plaintiffs] would, pursuant to and under the terms of the Development Agreement,” fulfill the specific terms of the Agreement, as listed in the counter-complaint. …However, as specified by the first element, the misrepresentation must have been of an existing or past fact, not a representation of something that may occur in the future. Moreover, pursuant to the second element, the statement must have also been false when made. The substance of the Defendants’ fraud allegations stems from promises made by Plaintiffs throughout the Agreement about facts that “would” happen in the future. We recognize that a claim of fraud may be premised on a promise of future performance. But to state a claim for promissory fraud, the claimant must allege that the promisor had no present intention of performing when the promise was made. Defendants made no such allegation.
(internal citations omitted). Accordingly, dismissal of the intentional misrepresentation claim was affirmed.
This opinion was released seven months after oral arguments in this case.