What You Need to Know About Fraudulent Misrepresentation in Ohio
Fraudulent misrepresentation is an intentional tort mainly arising out of contract law. Here’s everything you need to know about fraudulent misrepresentation under Ohio law.
Plaintiffs may bring a fraudulent misrepresentation claim under fraud laws in Ohio. Fraud typically applies when someone makes a false statement, which induces the other party to act or refrain from acting, causing them loss or injury. Plaintiffs may recover compensatory damages, as well as punitive damages. However, fraudulent misrepresentation claims cannot cover promises of future action.
What is Fraudulent Misrepresentation Under Ohio Law?
Under common law, fraudulent misrepresentation occurs when Person/Entity A makes a misleading statement to induce Person/Entity B to act or refrain from acting, causing injury or loss to Person/Entity B. Fraudulent misrepresentation claims mostly concern contract law, for instance, when a real estate broker makes a false statement about a house that buyers subsequently purchase.
Ohio law doesn’t codify fraudulent misrepresentation per se. Victims typically bring claims under fraud, which encompasses fraudulent misrepresentation (also called intentional misrepresentation).
Elements of Fraud in Ohio
In Cohen v. Lamko, Inc, the Ohio Supreme Court defined fraud—and by extension, fraudulent misrepresentation—by outlining its six elements:
- Person/Entity A makes a representation of a fact;
- The representation is material to the transaction at hand;
- The representation is false, and one of the following situations applies:
- Person/Entity A knows the representation is false;
- Person/Entity A is reckless in not knowing the representation is false;
- Person A intended to mislead Person B into relying upon the representation;
- Person B relied upon the representation;
- Person B suffered injury or loss due to relying upon the representation.
An Ohio court will consider a representation material to a transaction if it influences any reasonable person’s decision to act or refrain from acting.
Related: How to Sue a Car Dealer for Misrepresentation
In Ohio, fraud also covers another tort called fraudulent concealment, which occurs if an individual intentionally hides a fact in violation of a duty to disclose. Fraudulent misrepresentation differs from concealment in that Person A didn’t hide a fact but misrepresented it.
Remedies for Fraudulent Misrepresentation in Ohio
Under the Ohio Revised Code (O.R.C.) Sec. 2315.21, victims of fraudulent misrepresentation may recover compensatory damages from the defendant. These damages compensate for the defendants’ injury and may include monetary losses such as lost wages and incurring expenses, as well as intangible losses such as emotional distress and negative impact on reputation.
An Ohio court may discretionarily award the plaintiff punitive damages, which act as punishment for the defendant in certain circumstances. In fraud cases, including fraudulent misrepresentation, plaintiffs must prove the defendant acted with “malice” to obtain punitive damages. According to the Ohio Supreme Court in Malone v. Courtyard by Marriott L.P., an Ohio court cannot award punitive damages if the plaintiff recovers no compensatory damages.
Does Fraudulent Misrepresentation Apply to Promises of Future Action in Ohio?
In fraudulent misrepresentation claims, Ohio law requires the representation to relate to a past or present fact. As such, an Ohio court will likely dismiss any fraudulent misrepresentation claim based on a promise of future action, for instance, if Person A promises to sell their car to Person B next year.
Related: Are Verbal Work Agreements Binding in California?
However, in Deitrick v. Am. Mtge. Solutions, Inc., an Ohio Court of Appeals established an exception to this rule: claims based on a promise of future actions only qualify as fraud if Person A had no intention to fulfill their promise at the moment they made it.
FAQs About Fraudulent Misrepresentation in Ohio
Besides civil lawsuits, can I face criminal charges if I commit fraudulent misrepresentation in Ohio?
Yes, you may face criminal charges for fraudulent misrepresentation under certain circumstances. These situations include making false statements on your tax returns, stealing someone’s identity, submitting false information on a loan, or forging someone else’s signature. In these cases, you may face a fraudulent misrepresentation civil lawsuit as well as criminal fraud charges.
What is the difference between civil fraudulent misrepresentation and criminal fraud in Ohio?
The difference between civil fraudulent misrepresentation claims and criminal fraud charges is the person who brings the claim or the charges. Individuals who suffered the injury typically file a civil lawsuit, while the prosecutor brings criminal charges.
What is the statute of limitations for fraudulent misrepresentation in Ohio?
Under O.R.C. Sec. 2305.09, plaintiffs have four years to sue someone for fraudulent misrepresentation under fraud. However, the law extends the deadline to five years in case of identity fraud.
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