The mere fact that a promisor has not performed is insufficient to demonstrate that he or she lacked the intent to perform at the time the promise was made. Power Tel. Supply, 447 F.3d at 931 (citing Oakridge Precision Indus., Inc. v. First Tenn. Bank Nat'l Ass'n, 835 S.W.2d 25, 29 n. 2 (Tenn.Ct.App. 1992)); Noblin, 2007 Tenn. App. LEXIS 354, at *28 (citing Fowler v. Happy Goodman Family, 575 S.W.2d 496, 499 n. 3 (Tenn. 1978)). Additionally, the plaintiff's "subjective impression" will not establish a lack of present intent to perform.
Neither the failure to in fact keep the promise, nor the plaintiff's subjective impression will demonstrate that there was no present intention to carry out the promise. Oak Ridge Precision Indus., Inc. v. First Tenn. Bank Nat'l Ass'n, 835 S.W.2d 25, 29 n. 2 (Tenn.Ct.App. 1992). P T did not allege that defendants promised to act as a financial advisor without the present intention to do so if they were to secure P T's corporate finance business.
Power & Tel. Supply , 447 F.3d at 931 (emphasis added) (citing McElroy v. Boise Cascade Corp. , 632 S.W.2d 127, 130 (Tenn.Ct.App.1982) ). Tennessee's courts, however, have recognized an exception in cases "where justice demands," Steed Realty v. Oveisi , 823 S.W.2d 195, 199 (Tenn.Ct.App.1991) (quotation omitted), an exception that they describe as the doctrine of promissory fraud, seeOak Ridge Precision Indus., Inc. v. First Tenn. Bank Nat'l Ass'n , 835 S.W.2d 25, 29 n. 1 (Tenn.Ct.App.1992) (stating that the Tennessee Supreme Court "has indicated a willingness to apply this doctrine for over a decade"); Steed Realty , 823 S.W.2d at 200 (affirming a trial court's application of the doctrine of promissory fraud); Brungard v. Caprice Records, Inc. , 608 S.W.2d 585, 590 (Tenn.Ct.App.1980) (noting a "trend towards" the doctrine of promissory fraud). Under this doctrine, a future promise can support a claim for intentional misrepresentation if it "was made with the intent not to perform."
In support of its argument, Quantum cites two cases, Oak Ridge Precision Industries, Inc. v. First Tennessee Bank National Association, 835 S.W.2d 25, 30 (Tenn. Ct. App. 1992), and Beal Bank, SSB v. Prince (In re Prince), 414 B.R. 285 (Bankr. M.D. Tenn. 2009). In Oak Ridge, the plaintiff manufacturing company took out a revolving loan with the defendant bank, and the loan agreement provided that the bank had the right to all of the plaintiff's accounts receivable.
(Docket Entry No. 45-5, Operating Agreement at ¶ 7.5.) Defendants contend Johnson's proper remedy for alleged improper performance or failure to perform under an existing contract remains in contract, regardless of whether the alleged breach of contract was intentionally or unintentionally caused by negligence in attempting performance, citing Oak Ridge Precision Indus., Inc. v. First Tennessee Bank Nat'l Assoc., 835 S.W.2d 25, 30 (Tenn.Ct.App. 1992), and Harvest Corp. v. Ernst Whinney, 610 S.W.2d 727, 728 (Tenn.Ct.App. 1980). The two cases cited by Defendants do not preclude Johnson from proceeding on a negligence theory under the facts of this case.
Id. at 593.Oak Ridge Precision Industries, Inc. v. First Tennessee Bank Nat'l Ass'n, 835 S.W.2d 25, 29 (Tenn.Ct.App. 1992). As is noted previously, the record shows that USXP made an offer of employment to plaintiff as a Senior Programmer in its Information Technology department. [Court File No. 14, Exhibit A.]. Plaintiff signed the bottom of USXP's January 8, 2001 letter on January 9, 2001, indicating that he agreed to accept USXP's offer of employment.
Tennessee courts also recognize the tort of promissory fraud when the misrepresentation is not of existing facts. Oak Ridge Precision Indus., Inc. v. First Tennessee Bank Nat'l Ass'n., 835 S.W.2d 25, 29 n. 1 (Tenn.Ct.App. 1992); Steed Realty v. Oveisi, 823 S.W.2d 195, 199 (Tenn.Ct.App. 1991). Under promissory fraud, the misrepresentation need not relate solely to existing facts to be fraudulent, but may include future promises. Steed Realty, 823 S.W.2d at 199.
It insists that, because of the designation of Copper Cellar as remitter, and the fact that Miller was aware that Taylor was in the investment business, Miller either knew or should have known that Copper Cellar had furnished the cashier's check to Taylor for investment purposes only. Copper Cellar argues that this "uncontroverted evidence" establishes that Miller knowingly participated in Taylor's fraudulent activity. The elements of fraud are: 1) an intentional misrepresentation as to a material fact; 2) knowledge of the representation's falsity; 3) that the plaintiff reasonably relied on the misrepresentation and suffered damage; and 4) that the misrepresentation relates to an existing or past fact. Oak Ridge Precision Indus. v. First Tennessee Bank, 835 S.W.2d 25, 29 (Tenn.App. 1992); Stacks v. Saunders, 812 S.W.2d 587, 592 (Tenn.App. 1990). A conspiracy by two or more persons to defraud
Under the theory of promissory fraud, the plaintiff must establish that the defendant made a promise of future conduct without present intention to carry out the promise. Oak Ridge Precision Industries, Inc., v. First Tennessee National Bank, Tenn. App. 1992, 835 S.W.2d 25, 29. A representation amounting to a mere expression of intention, though false, is not fraud at law, but a representation amounting to an engagement binds the party making it to make it good. German-American Monogram Manufacturers v. Johnson, 133 Tenn. 571, 182 S.W. 595, 596. (1916).
The fourth element requires that the misrepresentation involve a past or existing fact or, in the case of promissory fraud, that it involve a promise of future action with no present intent to perform. Axline, 863 S.W.2d at 423; Oak Ridge Precision Indus., Inc. v. First Tenn. Bank, 835 S.W.2d 25, 28 (Tenn.App. 1992); Steed Realty v. Oveisi, 823 S.W.2d 195, 200 (Tenn.App. 1991); Stacks v. Saunders, 812 S.W.2d 587, 592 (Tenn.App. 1990). In commercial transactions, Tennessee courts have recognized a less stringent standard of liability for fraudulent misrepresentations than the common law action for deceit.