Civil fraud is sometimes called “fraud” or “intentional misrepresentation.” Whatever it’s called, fraud is a serious legal issue that can have significant consequences for both individuals and businesses. Fraud can be either civil or criminal. While criminal fraud involves criminal charges and possible incarceration, civil fraud is a type of fraud that involves damages stemming from misrepresentations that are resolved through a civil lawsuit. In this blog post, I will discuss the basic elements necessary to prove civil fraud in Minnesota.
The Five Elements of Civil Fraud in Minnesota
To establish civil fraud in Minnesota, there are five elements[1] that must be proven. These elements are:
- Misrepresentation or omission of a material fact: The defendant must have made a false statement or concealed a material fact from the plaintiff. Furthermore, it must be a current or past fact. A representation regarding the future is not fraud.
- Knowledge of or indifference to the representation being false: “Intent” to deceive is not required in the sense that a person committing fraud must know the representation was false. It is enough if the representation is presented as true and the person making the representation does not know whether it is true or false. This is one of the key differences between civil and criminal fraud.
- Intent to cause reliance on the representation: Intent is required with respect to causing reliance. This is often inferred from the circumstances of the transaction.
- Reliance: The plaintiff must have relied on the false statement or omission.
- Damages: The plaintiff must have suffered actual damages because of the misrepresentation.
Plaintiff has the burden of proving all five elements of civil fraud by a preponderance of the evidence, which means proving it is more likely than not that the defendant committed fraud.
Conclusion
You have civil fraud in Minnesota if you establish five elements by a preponderance of the evidence. These five elements can best be summarized as: (1) misrepresentation, (2) knowledge or indifference to misrepresentation, (3) intent to cause reliance, (4) reliance, and (5) damages.
[1] “To establish common law fraud, the [Plaintiffs] must prove: (1) a false representation of a past or existing material fact susceptible of knowledge; (2) made with knowledge of the falsity of the representation or made without knowing whether it was true or false; (3) with the intention to induce action in reliance thereon; (4) that the representation caused action in reliance thereon; and (5) pecuniary damages as a result of the reliance. Martens, 616 N.W.2d at 747. Fraud may also be established by concealment of the truth.” U.S. Bank N.A. v. Cold Spring Granite Co., 802 N.W.2d 363, 373 (Minn. 2011), citing Estate of Jones v. Kvamme, 449 N.W.2d 428, 431 (Minn.1989).
