innocent misrepresentation claim in Michigan

2019As explained by the Michigan Supreme Court, “the innocent misrepresentation rule differs [from actionable fraud] in eliminating the scienter and proof of the intention that the misrepresentation be acted upon;” however, “ ‘the innocent misrepresentation rule adds the requirements that the misrepresentation be made in connection with making a contract and the injury suffered by the victim must inure to the benefit of the misrepresenter.’ ” Titan, 491 Mich at 556 n 5, quoting US Fidelity & Guaranty Co v Black, 412 Mich 99, 118-119 ; 313 NW2d 77 (1981).

2019As explained by the Michigan Supreme Court, “the innocent misrepresentation rule differs [from actionable fraud] in eliminating the scienter and proof of the intention that the misrepresentation be acted upon;” however, “ ‘the innocent misrepresentation rule adds the requirements that the misrepresentation be made in connection with making a contract and the injury suffered by the victim must inure to the benefit of the misrepresenter.’ ” Titan, 491 Mich at 556 n 5, quoting US Fidelity & Guaranty Co v Black, 412 Mich 99, 118-119 ; 313 NW2d 77 (1981).

2025Therefore, the innocent misrepresentation rule eliminates the scienter requirement of fraud, but it adds “the requirements that the misrepresentation be made in connection with making a contract -13- and the injury suffered by the victim must inure to the benefit of the misrepresenter.” Titan Ins Co, 491 Mich at 556 n 5 (quotation marks, citation, and alterations omitted).

2019As explained by the Michigan Supreme Court, “the innocent misrepresentation rule differs [from actionable fraud] in eliminating the scienter and proof of the intention that the misrepresentation be acted upon;” however, “ ‘the innocent misrepresentation rule adds the requirements that the misrepresentation be made in connection with making a contract and the injury suffered by the victim must inure to the benefit of the misrepresenter.’ ” Titan, 491 Mich at 556 n 5, quoting US Fidelity & Guaranty Co v Black, 412 Mich 99, 118-119 ; 313 NW2d 77 (1981).

2017We disagree. “ ‘[A] false statement of fact, made without knowledge of its falsity or intent to deceive, is actionable [under Michigan’s doctrine of innocent misrepresentation] if relied upon by the other party to the contract to their detriment and the party that made the false statement is unjustly enriched.’ ” Derderian v Genesys Health Care Sys, 263 Mich App 364, 380-381 ; 689 NW2d 145 (2004) (citation omitted; alterations in original).

2017We disagree. “ ‘[A] false statement of fact, made without knowledge of its falsity or intent to deceive, is actionable [under Michigan’s doctrine of innocent misrepresentation] if relied upon by the other party to the contract to their detriment and the party that made the false statement is unjustly enriched.’ ” Derderian v Genesys Health Care Sys, 263 Mich App 364, 380-381 ; 689 NW2d 145 (2004) (citation omitted; alterations in original).

2017An innocent misrepresentation claim requires proof that (1) the defendant made a material representation, (2) the representation was false, (3) the defendant made it with the intention of inducing reliance by the plaintiff, (4) the plaintiff -3- acted in reliance on the representation, and (5) the plaintiff thereby suffered an injury that benefited the defendant. [Zeremba Equip, Inc v Harco Nat’l Ins Co, 280 Mich App 16, 39 ; 761 NW2d 151 (2008).] Plaintiff did not present evidence establishing that ACE represented that plaintiff would receive the 20-year pension benefits.

2017An innocent misrepresentation claim requires proof that (1) the defendant made a material representation, (2) the representation was false, (3) the defendant made it with the intention of inducing reliance by the plaintiff, (4) the plaintiff -3- acted in reliance on the representation, and (5) the plaintiff thereby suffered an injury that benefited the defendant. [Zeremba Equip, Inc v Harco Nat’l Ins Co, 280 Mich App 16, 39 ; 761 NW2d 151 (2008).] Plaintiff did not present evidence establishing that ACE represented that plaintiff would receive the 20-year pension benefits.

2014More confounding is that “the record suggests that the trial court instructed the jury on those elements, notwithstanding the fact that the remaining innocent misrepresentation claim did not require them to be proven.” Id. 5 appellate court.” Thorin v Bloomfield Hills Bd of Ed, 203 Mich App 692, 697 ; 513 NW2d 230 (1994). [Id. at 7.] The panel explained that [i]n Roberts II, this Court found defendants to be the prevailing party and held that the contractual attorney fee provision applied.

2014More confounding is that “the record suggests that the trial court instructed the jury on those elements, notwithstanding the fact that the remaining innocent misrepresentation claim did not require them to be proven.” Id. 5 appellate court.” Thorin v Bloomfield Hills Bd of Ed, 203 Mich App 692, 697 ; 513 NW2d 230 (1994). [Id. at 7.] The panel explained that [i]n Roberts II, this Court found defendants to be the prevailing party and held that the contractual attorney fee provision applied.

2014More confounding is that “the record suggests that the trial court instructed the jury on those elements, notwithstanding the fact that the remaining innocent misrepresentation claim did not require them to be proven.” Id. 5 appellate court.” Thorin v Bloomfield Hills Bd of Ed, 203 Mich App 692, 697 ; 513 NW2d 230 (1994). [Id. at 7.] The panel explained that [i]n Roberts II, this Court found defendants to be the prevailing party and held that the contractual attorney fee provision applied.

2014More confounding is that “the record suggests that the trial court instructed the jury on those elements, notwithstanding the fact that the remaining innocent misrepresentation claim did not require them to be proven.” Id. 5 appellate court.” Thorin v Bloomfield Hills Bd of Ed, 203 Mich App 692, 697 ; 513 NW2d 230 (1994). [Id. at 7.] The panel explained that [i]n Roberts II, this Court found defendants to be the prevailing party and held that the contractual attorney fee provision applied.

2025“Because fraud must be pleaded with particularity, and is not to be lightly presumed, but must be clearly proved, by clear, satisfactory and convincing evidence, trial courts should ensure that these standards are clearly satisfied with regard to all of the elements of a fraud claim.” Cooper v Auto Club Ins Ass’n, 481 Mich 399, 414 ; 751 NW2d 443 (2008) (quotation marks and citations omitted).

2025“Because fraud must be pleaded with particularity, and is not to be lightly presumed, but must be clearly proved, by clear, satisfactory and convincing evidence, trial courts should ensure that these standards are clearly satisfied with regard to all of the elements of a fraud claim.” Cooper v Auto Club Ins Ass’n, 481 Mich 399, 414 ; 751 NW2d 443 (2008) (quotation marks and citations omitted).

2025Finally, in order to prevail on an innocent misrepresentation claim, a plaintiff must also show that the plaintiff and defendant were in privity of contract. [Id. at 27-28 (cleaned up).] As with fraudulent misrepresentation, “[a] promise regarding the future cannot form the basis of [an innocent] misrepresentation claim.” Forge v Smith, 458 Mich 198, 212 ; 580 NW2d 876 (1998).

2025Finally, in order to prevail on an innocent misrepresentation claim, a plaintiff must also show that the plaintiff and defendant were in privity of contract. [Id. at 27-28 (cleaned up).] As with fraudulent misrepresentation, “[a] promise regarding the future cannot form the basis of [an innocent] misrepresentation claim.” Forge v Smith, 458 Mich 198, 212 ; 580 NW2d 876 (1998).

2022“Finally, in order to prevail on an innocent misrepresentation claim, a plaintiff must also show that the plaintiff and defendant were in privity of contract.” Id. 16 Although the complaint alleged that these misrepresentations occurred before closing, because all well-pleaded factual allegations are to be construed in a light most favorable to the nonmovant, Mays v Governor, 323 Mich App 1, 56 ; 916 NW2d 221 (2018), aff’d 506 Mich 157 (2020), and because the time before the agreement was executed necessarily is a subpart of the time before closing, the allegations can be considered as allegin

2008MCL 565.960; Bergen, supra. Correspondingly, a transferor cannot be found liable for an innocent misrepresentation regarding a disclosure required by the act because an innocent misrepresentation claim would allow liability for erroneous information even if the transferor lacked personal knowledge that the information was false and was acting in good faith.

2008State-William Partnership v Gale, 169 Mich App 170, 178 ; 425 NW2d 756 (1988).

2008State-William Partnership v Gale, 169 Mich App 170, 178 ; 425 NW2d 756 (1988).

2004Plaintiffs’ claim of innocent misrepresentation also fails. “[A] false statement of fact, made without knowledge of its falsity or intent to deceive, is actionable [under Michigan’s doctrine of innocent misrepresentation] if relied upon by the other party to the contract to *381 their detriment and the party that made the false statement is unjustly enriched.” Alibri v Detroit/Wayne Co Stadium Auth, 254 Mich App 545, 563-564 ; 658 NW2d 167 (2002). “[T]he misrepresentation must relate to a past or existing fact and not be promissory in nature.” Id. at 564 .

2004Plaintiffs’ claim of innocent misrepresentation also fails. “[A] false statement of fact, made without knowledge of its falsity or intent to deceive, is actionable [under Michigan’s doctrine of innocent misrepresentation] if relied upon by the other party to the contract to *381 their detriment and the party that made the false statement is unjustly enriched.” Alibri v Detroit/Wayne Co Stadium Auth, 254 Mich App 545, 563-564 ; 658 NW2d 167 (2002). “[T]he misrepresentation must relate to a past or existing fact and not be promissory in nature.” Id. at 564 .

1981Phillips, supra, 20 .

1981Phillips, supra, 20 .