Fraud and Misrepresentation

Fraud and Punitive Damages

A fraud or misrepresentation matter is typically much more serious than a breach of contract case because fraud carries with it the possibility of punitive damages. Fraud is typically more offensive to a judge or jury (hence the punitive damages) because it is an act that was done intentionally to deceive and misrepresent some important fact which the other party relied upon. Punitive damages are meant to not only reimburse the plaintiff for his loss, but also punish those committing the fraud which can lead to a substantial judgment amount.

The astronomical jury awards we hear about in the news are almost always the result of punitive damages. If you have a matter that involves fraud, whether someone has intentionally deceived you or you are being accused of misleading others, it is critical you speak to a fraud and misrepresentation attorney immediately. The experienced fraud attorneys at McFarlin LLP have prosecuted and defended many such actions and will protect your rights.

Negligent Misrepresentation Distinguished

Another common cause of action is negligent misrepresentation, which is different than fraud, in that the party making the representations did not have the prior intent to deceive. They were just negligent in not knowing their representations were false. Negligent misrepresentation is easier to prove than fraud because it does not require proof of the offending party’s subjective intent or mindset at the time of the representation, it requires merely a showing that what they said was false, and they should have known it (to paraphrase the code).

Oftentimes, a plaintiff will sue for fraud and negligent misrepresentation together. The idea being if fraud comes off the table (unable to prove intent), negligent misrepresentation will be the fall back position. Even if proven, negligent misrepresentation does not give rise to the possibility of punitive damages in California, however, damages can still be substantial.

Definition of Fraud

Fraud can take many forms in different situations and is therefore somewhat hard to define. Generally, civil fraud involves a contract that was entered into based on false representations. More specifically (to paraphrase the code):

  • A false representation was made;
  • The party making the false representation knew it to be false;
  • The false representation was material and relied upon by the other party; and
  • Harm or monetary loss resulted.

The difficult aspect to proving fraud relates to proving the intent to mislead the other party. It is always difficult to prove someone’s subjective intent. A fraud attorney will seek to use circumstantial evidence of intent to prove the “misrepresentor” knew definitively their representation was false at the time it was made. Alternatively, a good fraud defense attorney will seek to disprove intent to deceive, by way of the circumstances surrounding the contract negotiations. In either event, with such a critical issue at hand, it is important to have the best possible representation in any fraud or misrepresentation matter.

Civil Fraud vs. Criminal Fraud

One common question relating to fraud and misrepresentation claims is whether a fraud rises to the level of criminal fraud, or remains merely a civil fraud. Ultimately, whether fraud is criminal is up to the discretion of the District Attorney or California State Attorney (Department of Justice). A private citizen cannot prosecute a criminal matter, only “the People of the State of California” or another public entity.

Some matters which may rise to the level of criminal fraud prosecution include: Theft, embezzlement, forgery, insurance fraud, securities fraud, social security fraud or bank fraud, to name a few. Generally, if the fraudulent activity is on a large enough scale, just about any fraud offense can be prosecuted as criminal fraud by the District Attorney or Department of Justice.

Need a Business Litigation Lawyer?

Whether you have been the victim of fraud or misrepresentation or you have been accused of committing fraud, you need the assistance of a skilled fraud attorney. The experienced and knowledgeable fraud attorneys at McFarlin LLP will analyze your situation at no initial charge and provide you with an honest assessment of the matter in our free consultation. When you work with our office, you’ll see that premier legal services can be affordable. Our first rate legal services are provided at a billing rate substantially lower than most other high quality firms in Southern California.

Call our fraud and misrepresentation attorneys at (949) 570-5025 for a free case evaluation today.

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