WHAT IS FRAUD?

Colorado fraud claims – also known as “deceit based on fraud” or “false misrepresentation” – are civil causes of action that appear fairly often in Colorado courts.

WHAT ARE THE ELEMENTS OF FRAUD IN COLORADO?

There are two categories of fraud: (1) false representation and (2) nondisclosure or concealment. These categories encompass both acts and non-acts that may lead one to incur damages.

In order to recover on a claim of deceit based on fraud by false representation, the following elements must be met:

1. The defendant made a false representation of a past or present fact;
2. The fact was material;
3. At the time the representation was made, the defendant knew the representation was false; or was aware that he/she did not know whether the representation was true or false;
4. The defendant made the representation with the intent that the plaintiff would rely on the representation;
5. The plaintiff relied on the representation;
6. The plaintiff’s reliance was justified; and
7. This reliance caused injuries and/or damages and/or losses to the plaintiff.[1]

In order to recover on a claim of deceit based on fraud by nondisclosure or concealment, the following elements must be met:

1. The defendant either (a) concealed a past or present fact, or (b) failed to disclose a past or present fact which she/he had a duty to disclose;
2. The fact was material;
3. The defendant either (a) concealed it, or (b) failed to disclose it, with the intent of creating a false impression of the actual facts in the mind of the plaintiff;
4. The defendant either (a) concealed, or (b) failed to disclose, the fact with the intent that the plaintiff take a course of action he/she might take if he/she knew the actual facts;
5. The plaintiff took such action or decided not to act relying on the assumption that the either (a) concealed, or (b) undisclosed, fact did not exist or was different from what it actually was;
6. The plaintiff’s reliance was justified; and
7. This reliance caused injuries and/or damages and/or losses to the plaintiff.[2]

WHAT ARE THE REMEDIES FOR FRAUD IN COLORADO?

The remedies for fraud in Colorado include damages under the “benefit of the bargain” rule as well as any other consequential damages. In other words, a plaintiff may be able to recover the value of whatever performance was done due to reliance on the alleged fraudulent representation/omission/concealment, along with damages that might be tangential to that reliance.

For example, a plaintiff who bought a houseboat falsely represented as waterproof could recover the difference in value between a waterproof and non-waterproof houseboat, and if, in reliance, the plaintiff also stored personal belongings and other items within that boat that subsequently sunk, destroying the goods, the plaintiff could also recover their value as fraud damages.

WHAT ARE THE DEFENSES TO FRAUD CLAIMS IN COLORADO?

Waiver by Plaintiff: the defendant will not be liable for deceit based on fraud if the affirmative defense of waiver is proved. Waiver occurs when the plaintiff learns the actual relied-upon facts after beginning a course of action but before the course of action has been completed, and continues with the course of action with full knowledge of the actual facts when a reasonable person under the same or similar circumstances would not have done so.[4]

CONTACT A LAWYER TODAY

Whether you are being sued for fraud – or looking to bring a fraud lawsuit against another – the need for swift and efficient resolution is of utmost importance. At Volpe Law, our fraud lawyers prioritize our client’s interests and work diligently to resolve any and all situations where fraud is at issue. Contact us today at 720-770-3457 or complete a Consultation Request Form to request a Free Consultation.

[1] CO Civ. Jur. Inst. 19:1.

[2] CO Civ. Jur. Inst. 19:2.

[3] Hamon Contractors, Inc. v. Carter & Burgess, Inc., 229 P.3d 282 (Colo. App. 2009); see also Top Rail Ranch Estates, LLC v. Walker, 2014 COA 9, ¶ 39, 327 P.3d 321.

[4] Holland Furnace Co. v. Robson, 157 Colo. 347, 402 P.2d 628 (1965); Elk River Assocs. v. Huskin, 691 P.2d 1148 (Colo. App. 1984); Adams v. Paine, Webber, Jackson & Curtis, Inc., 686 P.2d 797 (Colo. App. 1983), aff’d on other grounds, 718 P.2d 508 (Colo. 1986).

DISCLAIMER

The information contained on this website is provided for informational purposes only. It is not legal advice and should not be construed as providing legal advice on any subject matter.  Laws frequently change and therefore this content is not necessarily up to date, nor comprehensive. Contact us or another attorney with any legal questions specific to your matter. You may request a consultation by completing our consultation request form