Table of Contents

Back to OverviewRecovery of Damages for Fraud 3rd edition

By Robert L. Dunn

(supplemented January 2018)

Back to Overview

Chapter 1:
Legal Principles

A. Proximate Cause Rule
B. Transaction Causation and Loss Causation Required
C. Transaction Causation Sufficient
D. Foreseeability
E. Reasonable Certainty
F. Economic Loss Rule

1. Economic Loss Rule Bars Recovery
2. Economic Loss Rule Does Not Bar Recovery        

 

Chapter 2:
Measures of Damages in Sales of Property

A. In General
B. Benefit-of-the-Bargain Rule

1. Application as General Rule
2. Application as Exception / California Law

C. Out-of-Pocket-Loss Rule

1. Application as General Rule
2. Application as Exception / Negligent Misrepresentation
3. Application as Exception / Other Circumstances
4. Application at PlaintiffÌs Option

D. Flexible Rule
E. No Rule
F. Restatement of Torts Rule
G. Uniform Commercial Code Rule
H. SellerÌs Recovery
I. Benefit-of-the-Bargain Rule and Out-of-Pocket-Loss Rule Compared
J. Rescission or Restitution

1. Rescission as an Option
2. Settlement Agreements
3. Tender of Property Received
4. Income-Producing Property

K. Return of Price Paid
L. Repair Costs

1 . Repair Costs Recoverable / In General
2. Repair Costs Recoverable / As Benefit-of-the-Bargain
3. Repair Costs Not Recoverable
4. Repair Costs as a Ceiling        

 

Chapter 3:
Measures of Damages in Other Circumstances

A. In General
B. Construction
C. Financing and Lending

1. Recovery by Borrower
2. Recovery by Lender

D. Professional Services
E. Personal Injury
F. Leases
G. Employment

1. Employee Benefit Plans
2. Acceptance of Employment
3. Termination of Employment
4. Other Employment Circumstances

H. Insurance

1. Recovery by Insured — Misrepresentation of Policy Provisions
2. Recovery by Insured — Failure to Provide Coverage
3. Recovery by Insured — Against Insurance Broker or Agent
4. Recovery by Insured — Claims Adjusting
5. Recovery by Insurer

I. Domestic Relations
J. Franchises and Distributorships
K. Kickbacks
L. Inducement to Enter Contract        

 

Chapter 4:
Consequential Damages

A. Relation of Benefit-of-the-Bargain Rule and Out-of-Pocket-Loss Rule
B. Lost Earnings
C. Lost Profits

1. Benefit-of-the-Bargain Rule
2. Out-of-Pocket-Loss Rule

D. Operating Losses and Expenses
E. Emotional Distress

1. Recovery Allowed
2. Recovery Denied
3. Restatement of Torts Position

F. Expenses of Investigation
G. Attorneys’ Fees and Litigation Expenses

1. Recovery of Attorneys’ Fees and Litigation Expenses Allowed — “Tort of Another” Exception
2. Recovery of Attorneys’ Fees and Litigation Expenses Allowed — Other Grounds
3. Recovery of Attorneys’ Fees and Litigation Expenses Denied
4. Recovery of Costs of Settlement
5. Recovery of Attorneys’ Fees Incurred without Litigation

H. Interest and Financing Costs
I. Damage to Reputation        

 

Chapter 5:
Computation of Damages

A. Offsets
B. Date Damages Measured

1. Valuation at Date of Sale
2. Valuation Near Date of Sale
3. Valuation at Date of Discovery of Fraud

C. Offset of Tax Benefits
D. Recovery of Lost Tax Benefits as Damages
E. Tax Treatment of Fraud Damage Recovery
F. Against Whom Awarded
G. Admissible Evidence

1. Expert Testimony as Evidence of Value
2. Price Paid as Evidence of Value
3. Owner’s Testimony as Evidence of Value

H. Cutoff Date
I. No Double Recovery        

 

Chapter 6:
Nominal Damages

A. In General
B. Recovery Allowed
C. Recovery Denied        

 

Chapter 7:
Punitive Damages

A. In General
B. Level of Culpability Required

1. Same Standard as Fraud
2. Lesser Standard than Fraud
3. Higher Standard than Fraud

C. Recovery Based on Actual Damages
D. Recovery Based on Nominal Damages
E. Recovery Based on Equitable Relief
F. Recovery Based on Equitable Relief Denied
G. Necessity of Reasonable Relation

1. Relation Required
2. No Relation Required
3. Reduction in Compensatory Damage Award

H. Moral Culpability
I. Defendant’s Wealth — Evidence Admissible

1. Defendant’s Wealth — Evidence Required
2. Defendant’s Wealth — Evidence Not Required

J. Against Whom Awarded
K. Constitutional Limitations