Actual fraud constructive fraud

Procedural Posture

Plaintiff developer challenged the judgment of the Superior Court of Los Angeles County (California) which granted summary judgment dismissal to defendants, competing developer and landowner, in an action arising out of the refusal of defendant landowner to sell a parcel of land to plaintiff and the subsequent sale of such land to defendant competing developer.

Overview: actual fraud vs constructive fraud

Plaintiff developer entered into an option agreement with defendant competing developer, whereby it was agreed that defendant competing developer would not compete and not interfere with plaintiff developer's redevelopment plans for a parcel for a period of five years. Over five years after the agreement was signed, defendant landowner sold the parcel to defendant competing developer. Plaintiff then filed suit against defendants alleging breach of contract, tortious interference with business, and sought specific performance from defendant landowner. The trial court granted defendants' motions for summary judgment and plaintiff challenged the judgment. The court affirmed the summary judgment dismissal of plaintiff's claims and stated that plaintiff failed to provide competent evidence necessary to raise a triable issue of fact. The court held that the option agreement had expired and did not include the parcel. The court also held that the doctrine of promissory estoppel should not have been invoked because there was no contract or option between plaintiff buyer and defendants, and no evidence of detrimental reliance. The court awarded defendants attorneys fees and costs.

Outcome

The court affirmed the grant of summary judgment dismissal to defendants, competing developers and landowner. The court held that the option agreement between defendant competing developers and plaintiff developer had expired, did not pertain to the land sold, and that there was no contract between plaintiff and defendant landowner. The court remanded the matter for the trial court to award defendants attorneys fees and costs against plaintiff.