By Jerry Carter. The Washoe County Business Court entered an Order Dated July 2, 2012 dismissing claims for fraud and conspiracy to commit fraud. The plaintiff alleged that she was named as sole Director, Secretary, and Treasurer of a non-profit foundation. The plaintiff alleged that, after the founder of the foundation died, certain defendants “wrongfully and fraudulently filed an incorrect list of officers and directors” for the foundation, in which they named themselves as officers and directors of the foundation. The plaintiff sued the defendants for fraud and conspiracy to defraud as well as other claims.
The Business Court dismissed the claim for fraud because the plaintiff failed to allege that she relied on any misrepresentation. A claim for fraud requires the following elements: (1) the defendant made a misrepresentation; (2) the defendant knew or believed the representation was false; (3) the defendant intended to induce the plaintiff to act or to refrain from acting in reliance on the misrepresentation; (4) the plaintiff justifiably relied upon the misrepresentation; and (5) the plaintiff suffered damages from such reliance. Here, the Court held that, even if the Secretary of State filing was treated as a misrepresentation, there was no reliance by the plaintiff upon the filing. Rather than accept the truthfulness of the filing, the plaintiff immediately challenged the filing. Moreover, it was not enough for the plaintiff to allege that the Secretary of State or some other non-party relied on the filing.
In addition, the Business court dismissed the claim for conspiracy to defraud because the plaintiff failed to allege concerted action by the defendants. A claim for conspiracy to defraud requires the following elements: (1) a combination of two or more persons who, by some concerted action, intended to accomplish an unlawful objective for the purpose of harming another; (2) an overt act of fraud in furtherance of the conspiracy; and (3) damages resulting to the plaintiff. The Court stated that to survive a motion to dismiss, a plaintiff claiming fraud must do more than file suit against certain individuals and flatly assert they acted in concert without alleging which defendant did what, or hoe the defendants acted in concert. Here, the plaintiff failed to meet this burden because she only generally alleged that the defendants acted in concert.