Thursday, July 24, 2008

Misrepresentation claim fails - No evidence of detrimental reliance offered

In this suit by a student alleging the school misrepresented graduation requirements for a chiropractor degree, the Fourteenth Court of Appeals affirms summary judgment for the private college because the plaintiff, who brought DTPA, fraud, and misrepresentation claims after she was denied her degree, failed to show that she relied on the school's alleged mis-representations in her response to defendant's no-evidence motion for summary judgment.

Wood v. Texas Chiropractic College
(Tex.App.- Houston [1st Dist.] July 24, 2008) (Jennings) (suit by student against private educational institution, DTPA claim, misrepresentation, equitable estoppel) (no-evidence summary judgment for defendant affirmed for failure to marshal evidence to support element of reliance)


Under section 17.50(a) of the DTPA, a consumer may maintain an action where any of the following constitute a producing cause of economic damages or damages for mental anguish: (1) the use or employment by any person of a false, misleading, or deceptive act or practice that is specifically enumerated under section 17.46(b) of the DTPA and is relied on by a consumer to her detriment, (2) breach of an express or implied warranty, (3) any unconscionable action or course of action by any person, or (4) the use or employment by any person of an act or practice in violation of chapter 541 of the Texas Insurance Code. See Tex. Bus. & Com. Code Ann. § 17.50(a) (Vernon Supp. 2007).

In order to prove fraud, a plaintiff must show that (1) the defendant made a material representation that was false, (2) the defendant knew the representation was false or made it recklessly as a positive assertion without any knowledge of its truth, (3) the defendant intended to induce the plaintiff to act upon the representation, and (4) the plaintiff actually and justifiably relied on the representation, which caused the injury. Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex. 2001).

In order to prove negligent misrepresentation, a plaintiff must show that (1) the defendant made a representation in the course of her business, or in a transaction in which she has a pecuniary interest, (2) the defendant supplied "false information" for the guidance of others in their business, (3) the defendant did not exercise reasonable care or competence in obtaining or communicating the information, and (4) the plaintiff suffered a pecuniary loss by justifiably relying on the representation. Henry Schein, Inc. v. Stromboe, 102 S.W.3d 675, 686 n.24 (Tex. 2002).

The doctrine of equitable estoppel requires (1) a false representation or concealment of material facts, (2) made with knowledge, actual or constructive, of those facts, (3) with the intention that it should be acted on, (4) to a party without knowledge or means of obtaining knowledge of the facts, and (5) who detrimentally relied on the representations. Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 515-16 (Tex. 1998).

The common element of all of Wood's causes of action is reliance. TCC moved for summary judgment, asserting that there was no evidence of reliance. Neither in the trial court below nor in her briefing to this Court has Wood shown how she relied on any of TCC's alleged misrepresentations that she did not have to take and pass the CSCE as a requirement for graduation. Dr. Conklin's purported statement to her, before she took the CSCE, simply noted that students who had failed the CSCE did eventually graduate. Also, the fact that TCC had approved her application for graduation does not show that Wood did not have to take and pass the CSCE as a requirement for graduation. Moreover, the clinic director's certification that Wood satisfied the internship requirements and the transcript do not show that the CSCE was not a requirement for graduation.

Accordingly, we hold that the trial court did not err in granting TCC's no-evidence summary judgment motion because Wood did not show how she relied on any alleged misrepresentation by TCC.

AFFIRM TC JUDGMENT: Opinion by Justice Terry Jennings
Panel: Before Justices Taft and Jennings, The Honorable Hudson
Appellate case no.: 01-07-00952-CV
Full case style: Kelly Wood v. Texas Chiropractic College
Appeal from 190th District Court of Harris County
Trial Court Judge: Hon. Jennifer Walker Elrod
Disposition: Summary judgment for defendant affirmed

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