This is the third article of a three-part series discussing the Michigan Court of Appeals decision in Young v Vandermeer, Docket No. 349093. In this case, Plaintiff submitted nine claims against Defendants after their business partnership soured. This article will discuss the Court’s ruling on the fraud and misrepresentation claim.
Plaintiff and Defendant previously were business partners. Plaintiff alleged that the Defendant made fraudulent statements and representations to a third party, the company’s accountant, knowing that the accountant would relay those statements to Plaintiff, and that the Plaintiff would then rely on those statements. The trial court dismissed the claim stating that any statements made could not be attributed to the defendant.
The Court of Appeals found otherwise, citing the Second Restatement of Torts which states that a claim of fraudulent misrepresentation may be maintained where the defendant made misrepresentations to the third party with the intention or reasonable expectation that the information would be relayed to plaintiff in order to influence the plaintiff’s conduct. In this case, the Court found that the defendant misrepresented facts to the company’s accountant, knowing that he would relay that misrepresentation to the plaintiff, and that this would influence the plaintiff’s conduct.
The key takeaway from the Court’s ruling on this claim is that a misrepresentation made to an intermediary can be the basis for a claim of fraudulent misrepresentation. As long as the offending party made the misrepresentation to the third party knowing that the misrepresentation would be relayed to the victim of the misrepresentation, the claim may proceed.
The full text of the opinion can be found at: https://casetext.com/case/young-v-vandermeer
