South-Western Legal Studies in Business

Fraud Includes Knowledge That Other’s Behavior Will Be Influenced
Description

Alaska high court held it to be fraudulent misrepresentation for a real estate agent to tell a client that a house was available when in fact there was an existing offer on it that had been accepted by the sellers. The new offer would only be a backup offer.

Topic Torts
Key Words

Fraudulent Misrepresentation; Real Estate; Agent

C A S E   S U M M A R Y
Facts

Seeley made an offer to buy a home. The real estate agent, Lightle, had told her, through her realtor, that the home was available. The parties negotiated a sale price through the agents. In fact, there was an existing offer on the home awaiting approval for financing. After the negotiations occurred, it was learned that Seeley’s offer would only be a backup offer. She filed a claim against Lightle through the Alaska Real Estate Commission’s real estate surety fund. She claimed Lightle had engaged in fraudulent misrepresentation and caused her to suffer losses as she had cancelled her existing lease and began preparations to move. The Commission agreed with Seeley, finding the misrepresentation was intentional and material. It recommended an award of damages. Lightle appealed to the superior court, but it affirmed the Commission decision. Lightle appealed to the supreme court.

Decision

Affirmed. A misrepresentation is fraudulent if the maker knows or believes that the matter is not as he represents it to be, does not have the confidence in the accuracy of his representation that he states or implies, or knows that he does not have the basis for his representation that he states or implies. The law does not require that the maker of a false statement act with the specific intent to deceive, but rather requires the maker to have reason to expect that the other’s conduct will be influenced. That was the case here.

Citation

Lightle v. Real Estate Commission, 146 P.3d 980 (Sup. Ct., Alaska, 2006)

Back to Torts Listings

©1997-2007  SW Legal Studies in Business. All Rights Reserved.