Summary
In Fox Metals Industries Inc., a sub-subcontractor overstated work it had done on progress reports submitted to the principal sub-contractor and was consequently paid for more work than had been completed prior to the sub-contractor's bankruptcy.
Summary of this case from Institute for Professional Dev. v. Regis CollegeOpinion
No. 72-087.
April 10, 1973, Rehearing Denied May 1, 1973. Certiorari Denied July 2, 1973. Not Selected for Official Publication.
1. Fraud 29
A representation to be basis of fraud and deceit action need not, in all cases, be made to party seeking recovery; it is necessary only that plaintiff be in class of persons that defendant intended to influence.
2. Fraud 30
Where sub-subcontractor knew subcontractor, after receiving progress reports upon which sub-subcontractor's application for installment payments were based, would submit them to contractor and that contractor, not subcontractor, was ultimately responsible for paying sub-subcontractor, trial court could properly conclude that sub-subcontractor, in submitting progress reports which overstated work done, intended to practice fraud and deceit upon contractor and fact that sub-subcontractor dealt exclusively with the subcontractor did not preclude liability of sub-subcontractor to contractor.
3. Appeal and Error 1010.1 (13) Fraud 58(2)
In action brought by contractor seeking damages for fraud and deceit against sub-subcontractor for overpayment occasioned by sub-subcontractor's submission to subcontractor of progress reports overstating work actually done on job, findings that sub-subcontractor knew that subcontractor, after receiving progress reports, would submit them to contractor and that contractor, not subcontractor, was ultimately responsible for paying sub-subcontractor were supported by evidence and would not be disturbed on appeal.
Contractor brought action seeking damages for fraud and deceit against subsubcontractor based on overpayment occasioned by sub-subcontractor's progress report submitted to subcontractor overstating work actually done on the job. The District Court, City and County of Denver, Edward J. Byrne, J., entered a judgment for contractor, and the sub-subcontractor appealed. The Court of Appeals, Pierce, J., held that where sub-subcontractor knew subcontractor, after receiving progress reports upon which application for installment payments were based, would submit them to contractor and that contractor, not subcontractor, was ultimately responsible for paying sub-subcontractor, trial court could properly conclude that sub-subcontractor intended to practice fraud and deceit upon contractor.
Affirmed.
Doyle Biesterfeld, James D. Doyle, M. D. Biesterfeld, Denver, for plaintiff-appellee.
Harry M. Williams, Denver, for defendant-appellant.
Mead Mount Construction Company brought this action against Fox Metal Industries, seeking damages for fraud and deceit. The basis of Mead Mount's claim was that Fox, a subcontractor to one of Mead Mount's principal subcontractors, E. K. Jenkins, Inc., had submitted applications for installment payments, which, pursuant to its contract with Jenkins, were to be based upon the progress of the work at the time submitted, and which overstated the actual work done on the job. Thereafter, the principal subcontractor was forced to leave the job due to bankruptcy, which, in turn, induced Fox to leave the job for fear it was not going to be paid. Since its progress reports were overstated when it left the job, Fox had been paid for considerably more of the job as a percent of its total contract price than it had completed. It is this alleged overpayment that is the basis of this action.
Applying the principles of Morrison v. Goodspeed, 100 Colo. 470, 68 P.2d 458, the trial court concluded that Fox had knowingly misrepresented a material fact, intending that Mead Mount rely and act thereon, and that Mead Mount had relied on the misrepresentation to its detriment. The Court then entered judgment against Fox. Fox brings this appeal alleging several points of error. We affirm. Initially, Fox contends that it cannot be sued by Mead Mount for fraud and deceit since it dealt exclusively with Jenkins. Essentially, Fox argues that Mead Mount had no knowledge of either the contract or the billing method between Fox and Jenkins, and that, therefore, it could not have been relying upon any misrepresentation to it by Fox when it paid Fox. We find no merit in this argument.
A representation, to be the basis of a fraud and deceit action, need not, in all cases, be made to the party seeking recovery. Harold v. Pugh, 174 Cal.App.2d 603, 345 P.2d 112; Wice v. Schilling, 124 Cal. App.2d 735, 269 P.2d 231. It is necessary only that the plaintiff be in the class of persons that the defendant intended to influence. W. Prosser, Torts, § 107, (4th ed.)
Here, the trial court found, based upon the evidence, that Fox knew that Jenkins, after receiving the progress report upon which the application for installment payments were based, submitted them to Mead Mount, and that Mead Mount, not Jenkins, was ultimately responsible for paying Fox. Thus, the trial court could properly conclude that "fraud and deceit" was intended to be practiced upon Mead Mount.
All of the other alleged errors raised by Fox are addressed to the question of whether the trial court's findings were supported by the evidence. A review of the record has convinced us that they were, and therefore, they will not be disturbed on appeal. Bell Press, Inc. v. Phillips, 147 Colo. 461, 364 P.2d 398.
Judgment affirmed.
DWYER and SMITH, JJ., concur.