FRAUD LAWSUIT

The Sterling Firm is recognized as one of the top law firms in California and represents clients who have been victims of fraud. 

The Sterling Firm fights for the rights of victims.  We are here to help. If you have been harmed or a victim of wrongdoing, we will fight to get you justice and monetary compensation.  Call now!

The Sterling Firm has a wide network of the most experienced Los Angeles lawyers.

The Sterling Firm represents clients in many circumstances involving fraud, intentional misrepresentation, negligent misrepresentation, deceit, or concealment.  The Sterling Firm will fight to recover the maximum compensation if you have been a victim of wrongdoing.

Every state has applicable laws when dealing with fraud. In California, there are laws to help victims that have been defrauded to recover damages for any type of intentional fraud or negligent representation.  Certain legal elements and specific facts must be alleged with particularity in a civil complaint. Each specific element must be proven by a preponderance of the evidence in order to recover damages suffered as a result of fraud. 

WHAT IS FRAUD?

You are entitled to monetary compensation if you are a victim of fraud.  Fraud deals with concealment of a material fact known to the defendant, who is the party being sued.  The defendant must have acted with the specific intention to deprive the victim of money, property, or acted in a way to cause harm to the victim. Fraud may involve one party making a false statement or misrepresenting information to another which then causes damage or harm. The victim can then file a lawsuit as the plaintiff against the defendant.  The Sterling Firm is experienced in all aspects of California proceedings from investigating a possible case, filing a lawsuit, pursuing litigation, and presenting the case to the jury in a civil trial.

Fraudulent conduct is everywhere in society. Fraud can occur when you buy a used-car when the odometer is rolled back.  Fraud can also occur when a huge business submits false invoices to their clients. Fraud can be committed by huge corporate CEOs leading to the subprime lending crisis. Fraudulent conduct is being perpetuated every day.  Our civil justice system provides the necessary venue to obtain compensation for those who have been victims of fraud.  

Fraud cases include a range of wrongdoings consisting of four major causes of actions: (1) intentional misrepresentation, (2) negligent misrepresentation, (3) concealment and (4) false promise.

FRAUD MUST BE PLED WITH PARTICULARITY

Fraud is a very unique allegation in that it must be plead with “particularity”.  There must be very specific facts alleged in a complaint. Fraud must be stated with particularity for two reasons.  First, the particularity requirement provides notice to the defendant of their wrongdoing. Second, the facts must be stated with particularity in order to provide the court with a foundation.  That is, the court must decide if there is a “prima facie case” to allow the lawsuit to go forward. Prima facie means “on its face”. The particularity requirement serves to limit the cases filed based on fraud.  There are many vexatious claims alleging fraud. In order to legitimately bring a lawsuit based on fraud, the victim must provide very specific facts as to how they were wronged – including who, what, where, when, and how.  The complaint must establish a legitimate case for fraud based “on the face” of the complaint – based on the specific factual allegations written into the complaint. 

Moreover, the facts supporting that the plaintiff reasonably relied on the defendant’s conduct, behavior, false statements, or false promises are always in dispute.  The plaintiff must have acted reasonably under the circumstances in order to recover on a fraud claim. The plaintiff must not have “unclean hands” as well.     

MISREPRESENTATION

Misrepresentation, in general, refers to false representations of material fact made by one party to another with an intent to deceive. It must be a statement of fact and not an opinion or puffery.  The most common form of fraudulent misrepresentations are: intentional misrepresentation, negligent misrepresentation, and concealment.

INTENTIONAL MISREPRESENTATION

Intentional Misrepresentation is a statement with the intent to deceive, made by the defendant, that is known to be false or made recklessly without regard to whether it is true or not. 

Intentional misrepresentation involves the defendant making a false representation that results in harm. To establish this claim, plaintiff must prove all of the following elements: 

(1) That defendant represented to plaintiff that a fact was true; 

(2) That defendant ’s representation was false; 

(3) That defendant knew that the representation was false when he made it, or that he made the representation recklessly and without regard for its truth; 

(4) That defendant intended that plaintiff rely on the representation; 

(5) That plaintiff reasonably relied on defendant’s representation; 

(6) That plaintiff was harmed; and 

(7) That plaintiff’s reliance on the defendant’s representation was a substantial factor in causing his harm.

NEGLIGENT MISREPRESENTATION

Negligent misrepresentation includes deceitful conduct. Under California Civil Code Section 1710, deceit involves: 

(1) suggestion made as a fact that is not true, 

(2) assertion made as a fact that is not true, 

(3) suppression of a fact by party bound to disclose it, or 

(4) promise made without any intention of performing. 

Negligent Misrepresentation is when the plaintiff claims harm because the defendant negligently misrepresented a fact. A defendant may be liable for negligent misrepresentation, when false statements made are believed to be true, but without any reasonable grounds for such belief. 

Pursuant to California Civil Jury Instruction CACI 1903, to establish this claim, the plaintiff must prove all of the following: 

(1) That defendant represented to plaintiff that a fact was true; 

(2) That defendant’s representation was not true; 

(3) That although defendant may have honestly believed that the representation was true, defendant had no reasonable grounds for believing the representation was true when made; 

(4) That defendant intended that plaintiff rely on this representation; 

(5) That plaintiff reasonably relied on defendant’s representation; 

(6) That plaintiff was harmed; and 

(7) That plaintiff’s reliance on defendant’s representation was a substantial factor in causing harm.

CONCEALMENT

Concealment under California Civil Code section 1710(3) is the “suppression of material fact, by one who is bound to disclose it, or who gives information of other facts likely to mislead for want of communication of that fact.” Generally, concealment cases occur in contracts where disclosure of material facts are suppressed by the defendant, plaintiff is misled, defrauded and deprived of legal rights.

Pursuant to California Civil Jury Instructions CACI 1901, the plaintiff claims that he or she was harmed because the defendant concealed certain information.  To establish this claim, the plaintiff must prove all of the following:

  1. (a) That defendant and plaintiff were in a fiduciary relationship, e.g., “business partners”; and

(b) That defendant intentionally failed to disclose certain facts to plaintiff; or

That defendant disclosed some facts to plaintiff but intentionally failed to disclose other/another fact[s], making the disclosure deceptive; or 

That defendant intentionally failed to disclose certain facts that were known only to him or her or it and that plaintiff could not have discovered; or

That defendant prevented plaintiff from discovering certain facts;

  1. That plaintiff did not know of the concealed facts;
  2. That defendant intended to deceive plaintiff by concealing the fact(s);
  3. That had the omitted information been disclosed, plaintiff reasonably would have behaved differently;
  4. That plaintiff was harmed; and
  5. That defendant’s concealment was a substantial factor in causing plaintiff’s harm. 

PROMISSORY FRAUD

Promissory fraud, also known as a false promise fraud, is a contract with a promise made by the defendant with no intention to fulfill. The plaintiff must have acted with reasonable reliance on the inducement by the defendant.  The plaintiff must have “clean hands” and must have acted reasonably under the circumstances.    

Pursuant to California Civil Jury Instruction CACI 1902, to establish this claim, the plaintiff must prove all of the following: 

(1) That defendant made a promise to plaintiff;

(2) That defendant did not intend to perform this promise when made;

(3) That defendant intended that plaintiff rely on this promise;

(4) That plaintiff reasonably relied on defendant’s promise;

(5) That defendant did not perform the promised act;

(6) That plaintiff was harmed; and

(7) That plaintiff’s reliance on the defendant’s promise was a substantial factor in causing harm.

CORPORATE FRAUD 

Corporate fraud involves complex financial transactions within large companies or firms engaging in activities that are done dishonestly or in an illegal manner to benefit an individual or company. Both State and Federal laws regulate the conduct of corporations to prevent fraud. These types of corporate fraud cases are considered to be white-collar crimes. 

For example, embezzlement includes fraud or deceit by misrepresenting services or products to a company to acquire money or assets as personal benefit resulting in financial loss to either the stockholder, employee or customer. In order for the tort of embezzlement to be successful, the defendant must have been in a fiduciary position within the business and have access to the corporate assets to misappropriate.  Misusing assets usually occur in corporate settings in California. For instance, the transfer of funds from a company to a personal account are treated seriously depending on the amount of money, and this act may also constitute either a misdemeanor or felony criminal offense.

In proving embezzlement, the following elements must be proved:

(1) A reliance, or fiduciary relationship, exists between both parties;

(2) Money or property was acquired through the fiduciary relationship, and by no other means;

(3) Ownership of the assets were controlled by the defendant, or must have been transferred to another; and 

(4) An intent and willful action made by the defendant. 

In a civil lawsuit, the cause of action relating to embezzlement would be conversion, which is theft of property or money.  

SECURITIES FRAUD

Securities fraud deals with corporations or their representatives misleading investors about the value of their securities. These cases are more complex. The public is generally misled to buy  securities, relying on the information provided by a company.

Corporate misconduct is illegal and violates Section 10(b) of the Securities Exchange Act of 1934. In addition, Securities Act of 1933 prohibits deceit, misrepresentations and other fraud in sales of securities and must be registered with Securities and Exchange Commission.

An example of a securities fraud case is the recent case with Apple. The Apple Securities Fraud lawsuit deals when Apple misled investors about sales and defects of iPhones. These California investors believed the iPhone was at its high, were unaware of decline in sales, causing them to act – bought Apple common stock, and as a result suffered economic loss.

CONSUMER FRAUD

Consumer fraud is the use of deceptive business practices, unfair, and misleading information against the person purchasing the product or services that result in financial losses.  California consumer fraud law protects the purchasing consumers against deceptive business practices such as “bait and switch,” pyramid schemes, and telemarketing schemes. Consumer laws also protect people from identity theft, phishing, and other wrongdoings that target consumers.

CONSUMER FRAUD CLASS ACTION

Many consumer fraud cases involve class actions.  In a class action, a complaint is brought by individuals similarly situated in that their situation involves similar facts, legal issues, harms, and losses. 

In order to file a class action in federal court, Federal Rule 23 must be satisfied.  Rule 23(a) is entitled “Numerosity, commonality, typicality and adequacy.” This rule provides that an action requires four conditions to qualify for class treatment: 

(i) the class must be so numerous that joinder of all members is impracticable, 

(ii) there must be questions or law or fact common to the class, 

(iii) the claims of the representative parties must be typical of the claims of the class, and 

(iv) the representative parties will fairly and adequately protect the interests of the class.

That is, there must be a large number of victims, that the harms to the victims are common, that the legal issues involved in each victim’s case is typical, and that the “class representative” of the group will adequately protect the interest of the group.  

FRAUD CASES

These are different types of fraud cases ranging from intentional misrepresentation, negligent misrepresentation, concealment, promissory fraud, corporate fraud, securities fraud, and consumer fraud class actions. If you have been a victim of fraud, it is important to consult with an experienced Los Angeles lawyer at The Sterling Firm to discuss your case.