What Are the Elements of Common Law Fraud?

This article lists and analyzes the nine elements of common law fraud. Common law fraud liability is used to reach a wide range of tortfeasors. From securities purchases to real estate and commercial acquisitions, common law fraud can impact nearly any transaction. See Maturo v. Gerard, 196 Conn. 584, 587, 494 A.2d 1199, 1201 (1985) (“Fraud . . . cannot be easily defined because [it] can be accomplished in so many different ways.” (quoting Hathaway v. Bornmann, 137 Conn. 322, 324, 77 A.2d 91, 93 (1950))).

In the United States, common law generally identifies nine elements needed to establish fraud: (1) a representation of fact; (2) its falsity; (3) its materiality; (4) the representer’s knowledge of its falsity or ignorance of its truth; (5) the representer’s intent that it should be acted upon by the person in the manner reasonably contemplated; (6) the injured party’s ignorance of its falsity; (7) the injured party’s reliance on its truth; (8) the injured party’s right to rely thereon; and (9) the injured party’s consequent and proximate injury. See, e.g., Strategic Diversity, Inc. v. Alchemix Corp., 666 F.3d 1197, 1210 n.3, 2012 U.S. App. LEXIS 1175, at *25 n.3 (9th Cir. 2012) (quoting Staheli v. Kauffman, 122 Ariz. 380, 383, 595 P.2d 172, 175 (1979)); Rice v. McAlister, 268 Ore. 125, 128, 519 P.2d 1263, 1265 (1975); Heitman v. Brown Grp., Inc., 638 S.W.2d 316, 319, 1982 Mo. App. LEXIS 3159, at *4 (Mo. Ct. App. 1982); Prince v. Bear River Mut. Ins. Co., 2002 UT 68, ¶ 41, 56 P.3d 524, 536-37 (Utah 2002).

To successfully allege a claim for common law fraud, a plaintiff must plead each element with specificity and particularity. See, e.g., Baron v. Pfizer, Inc., 820 N.Y.S.2d 841, 12 Misc. 3d 1169(A) (N.Y. App. Div. 2006) (holding that New York law requires a cause of action for fraud be pled with greater specificity than other causes of action (citing Small v. Lorillard Tobacco Co., 94 N.Y.2d 43, 57, 720 N.E.2d 892, 898 (N.Y. 1999))); Enyart v. Transamerica Ins. Co., 195 Ariz. 71, 77, 985 P.2d 556, 562 (Ariz. Ct. App. 1998) (“Each element [of fraud] must be supported by sufficient evidence. ‘Fraud may never be established by doubtful, vague, speculative, or inconclusive evidence.’” (quoting Echols v. Beauty Built Homes, Inc., 132 Ariz. 498, 500, 647 P.2d 629, 631 (1982))); Liniger v. Sonenblick, 532 P.2d 538, 539-40, 23 Ariz. App. 266, 267-68 (Ariz. Ct. App. 1975) (“Actionable fraud cannot exist without a concurrence of all essential elements.” (citing Nielson v. Flashberg, 101 Ariz. 335, 339, 419 P.2d 514, 518 (1966))); but see Zimmerman v. Loose, 162 Colo. 80, 87-88, 425 P.2d 803, 807 (1967) (concluding that “fraud may be inferred from circumstantial evidence” and that direct proof of reliance is unnecessary to prevail on a common law fraud claim); but see Denbo v. Badger, 503 P.2d 384, 386, 18 Ariz. App. 426, 428 (Ariz. Ct. App. 1972) (reasoning that a party need not allege with particularity whether the party “had a right to rely on representations,” because this element is “determined from the very facts alleged” (citing Jamison v. S. States Life Ins. Co., 412 P.2d 306, 3 Ariz. App. 131 (1966))). Notably, “conclusory language” will not satisfy the specificity requirement of a common law fraud claim. Small v. Fritz Cos., Inc., 30 Cal. 4th 167, 184, 65 P.3d 1255, 1265 (Cal. 2003); see Armed Forces Ins. Exch. v. Harrison, 2003 UT 14, 16, 70 P.3d 35, 40 (Utah 2003) (stressing that “mere conclusory allegations in a pleading, unsupported by a recitation of relevant surrounding facts, are insufficient to preclude summary judgment”).

Each of the nine elements of common law fraud is examined in turn below.

The first common law fraud element is the representation of a fact. “A representation within the meaning of the law of fraud is anything short of a warranty, which proceeds from the action or conduct of the party charged, and which is sufficient to create upon the mind a distinct impression of fact conducive to action.” St. Louis & S. F. R. Co. v. Reed, 37 Okla. 350, 355, 132 P. 355, 357 (1913); see BLACK’S LAW DICTIONARY (9th ed. 2009) (defining “representation” as “[a] presentation of fact – either by words or by conduct – made to induce someone to act”); see Nielson, 101 Ariz. at 339, 419 P.2d at 518 (reasoning that a defendant’s issuance of a certificate purporting to state laden and unladen weight of scrap metal in plaintiff’s truck constituted a representation). To successfully plead this element, a plaintiff “must allege, with specificity and particularity . . . what misrepresentations were made, when they were made, who made the representations and to whom they were made.” Connick v. Suzuki Motor Co., 174 Ill. 2d 482, 496-97, 675 N.E.2d 584, 591 (1996) (citing Board of Educ. v. A,C & S, Inc., 131 Ill. 2d 428, 457, 546 N.E. 2d 580, 594 (1989); see DiVittorio v. Equidyne Extractive Indus., Inc., 822 F.2d 1242, 1247, 1987 U.S. App. LEXIS 8319, at *15 (2d Cir. 1987) (noting that allegations of fraud “ought to specify the time, place, speaker, and content of the alleged misrepresentations” (citing Luce v. Edelstein, 802 F.2d 49, 54, 1986 U.S. App. LEXIS 31424, at *12 (2d Cir. 1986))).

For example, if a plaintiff baldly alleges that a company “made fraudulent representations in magazine advertisements, sales brochures, new car manuals, and publicity,” a court will hold the complaint to be “inadequate” and dismiss the claim because it did not “state, which, if any, of the plaintiffs heard these representations and relied on them.” Connick, supra.

A representation also includes a party’s failure to disclose certain facts. See Sharp v. Idaho Inv. Corp., 95 Idaho 113, 122, 504 P.2d 386, 395 (1972) (reasoning that “oral representations, written false statements, and material omissions” could all sufficiently constitute a representation”); see (Schmeusser v. Schmeusser, 559 A.2d 1294, 1297, 1989 Del. LEXIS 165, at *7 (Del. Supr. 1989) (“Fraud may also occur through deliberate concealment of material facts, or by silence in the face of a duty to speak.”). Facts must be disclosed when they are “so vital and material to a transaction that, if known by one party and not the other, the agreement would be voidable.” Turner v. Enders, 15 Wn. App. 875, 879, 552 P.2d 694, 697 (Wash. Ct. App. 1976).

However, as a general rule, “speculation and expressions of hope for the future do not constitute actionable representations of fact.” Albert Apt. Corp v. Corbo Co., 582 N.Y.S.2d 409, 410, 182 A.D.2d 500 (N.Y. App. Div. 1992) (citing Quasha v. Am. Natural Beverage Corp., 171 A.D.2d 537, 567 N.Y.S.2d 257 (N.Y. App. Div. 1991). Thus, “a party does not make an actionable representation of fact when predicting a future event with no knowledge of whether or not the event may occur.” Id. (citing Lloyd I. Isler, P.C. v. Sutter, 160 A.D.2d 609, 610, 554 N.Y.S.2d 253, 255 (N.Y. App. Div. 1990); see Sharp, supra (citing Pocatello Security Trust Co. v. Henry, 35 Idaho 321, 206 P. 175 (1922)) (“[T]here is a general rule in [the] law of deceit that a representation consisting of [a] promise or a statement as to a future event will not serve as basis for fraud, even though it was made under circumstances as to knowledge and belief which would give rise to an action for fraud had it related to an existing or past fact.”).

There can be exceptions to the general rule. For example, Idaho recognizes the following two exceptions when analyzing representations in futuro: “(1) fraud may be predicated upon the nonperformance of a promise in certain cases where the promise is the device to accomplish the fraud; and (2) in cases where promises are blended or associated with misrepresentations of fact, there is fraud if a promise is accompanied with statements of existing facts showing the ability of the promisor to perform the promise without which it would not have been accepted or acted upon.” Sharp, supra (citations omitted).

The second common law fraud element is the falsity of the representation. “A false representation is the cornerstone to an action in fraud.” Sharp, supra. A representer’s “state of mind or intent” can demonstrate the falsity of the representation. Heitman, 638 S.W.2d at 319, 1982 Mo. App. LEXIS 3159 at *5 (reasoning that a representation was true at the time it was made after the speaker acted in conformity with the representation for over eight years); see Nielson, supra (reasoning that “uncontradicted evidence” showing plaintiff’s truck was not weighed on some occasions after unloading demonstrated that defendant’s representations to the contrary were “false”).

For example, if an employee of a bank represents he will modify an individual’s mortgage payment schedule and not report any late payments made pursuant to the modified plan to credit reporting agencies but then neglects to modify the schedule, the representation was false. Blau v. Am.’s Servicing Co., No. CV-08-773-PHX-MHM, 2009 U.S. Dist. LEXIS 90632 (D. Ariz. Sept. 28, 2009).

The third common law fraud element is the materiality of the representation. “A representation or concealment of a fact is material if it operates as an inducement to the [other party] to enter into the contract, where, except for such inducement, it would not have done so.” Prudential Ins. Co. v. Anaya, 78 N.M. 101, 105, 428 P.2d 640, 644 (1967) (quoting Modisette v. Found. Reserve Ins. Co., 77 N.M. 661, 667-68, 427 P.2d 21, 26 (1967); see Colaizzi v. Beck, 2006 Pa. Super 41, ¶ 9, 895 A.2d 36, 40 (Pa. Super. Ct. 2006) (“A misrepresentation is material if it is of such character that if it had not been misrepresented, the transaction would not have been consummated.” (citing Sevin v. Kelshaw, 417 Pa. Super. 1, 10, 611 A.2d 1232, 1237 (Pa. Super. Ct. 1992))). The materiality of a representation cannot be inferred from the pleadings, rather, it must be plead with specificity. Benson v. Geller, 619 S.W.2d 947, 949, 1981 Mo. App. LEXIS 2954, at *5-6 (Mo. Ct. App. 1981).

For example, “[t]o be material, the false statement does not have to actually contribute to a loss under the [contract],” instead, it just needs to induce the other party to act. Prudential Ins. Co., 78 N.M. at 104-05, 428 P.2d at 643-44. Accordingly, the proper test for materiality is “whether the plaintiff, as a reasonably prudent [person] would have rejected the [contract] if it had known the true facts concerning the [false representation].” Id. ; see BLACK’S LAW DICTIONARY (9th ed. 2009) (defining “material representation” as “[a] representation to which a reasonable person would attach importance in deciding his or her course of action in a transaction”).

For example, if an employee of a bank represents he will modify an individual’s mortgage payment schedule and not report any late payments made pursuant to the modified plan to credit reporting agencies but then neglects to modify the schedule, the representation was false. Blau v. Am.’s Servicing Co., No. CV-08-773-PHX-MHM, 2009 U.S. Dist. LEXIS 90632 (D. Ariz. Sept. 28, 2009).

The fourth common law fraud element requires the representer to either have knowledge of the representation’s falsity or else be reckless in his ignorance of its truth. “False representations made recklessly and without regard for their truth in order to induce action by another are the equivalent of misrepresentations knowingly and intentionally uttered.” Engalla v. Permanente Med. Grp., Inc., 15 Cal. 4th 951, 974, 938 P.2d 903, 917 (1997) (quoting Yellow Creek Logging Corp. v. Dare, 216 Cal. App. 2d 50, 55, 30 Cal. Rptr. 629, 632 (Cal. Ct. App. 1963); see Anderson v. Knox, 297 F.2d 702, 720-21, 1961 U.S. App. LEXIS 3058, at *55-56 (9th Cir. 1961) (reasoning that the “knowledge” requirement is satisfied if it is shown that the representations were made with reckless disregard for their truth or falsity); see Nielson, supra (reasoning that a representation purporting to show laden and unladen weight of plaintiff’s truck was fraudulent when defendant knew the truck had not been weighed).

“Knowledge of falsity can be adequately pleaded by alleging facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness which lead to an inference that the defendants knew of the falsity.” Adelphia Recovery Trust v. Bank of Am., 624 F. Supp. 2d 292, 329, 2009 U.S. Dist. LEXIS 3834, at *109 (S.D.N.Y. 2009) (citing Lerner v. Fleet Bank, F.3d 273, 293, 2006 U.S. App. LEXIS 20326, at *47 (2d Cir. 2006)).

For example, “a definite statement of a material fact made by a party who does not know the statement to be true, and has no reasonable grounds for believing it to be true, will, if false, have the same legal effect as a statement of what the party positively knows to be untrue.” State ex. Rel. Redden v. Disc. Fabrics, Inc., 289 Or. 375, 385, 615 P.2d 1034, 1039 (1980) (quoting Amort v. Tupper, 204 Or. 279, 287, 282 P.2d 660, 663-64 (1955).

The fifth common law fraud element is the representer’s intent to induce the other party to act in accordance with the representation. “[T]he fundamental character of fraud is the communication of a misimpression to induce another to rely on it.” Estate of Schwarz v. Philip Morris, Inc., 206 Or. App. 20, 39, 135 P.3d 409, 422 (Or. Ct. App. 2006). “An unperformed promise does not give rise to a presumption that the promisor intended not to perform when the promise was made.” Bash v. Bell Tel. Co., 411 Pa. Super. 347, 361, 601 A.2d 825, 832 (Pa. Super. Ct. 1992) (quoting Fidurski v. Hammill, 328 Pa. 1, 3, 195 A. 3, 4 (1937)). However, “[a] defendant who acts with knowledge that a result will follow is considered to intend the result.” Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 578, 2001 Tex. LEXIS 61, at *16 (2001); Elizaga v. Kaiser Found. Hospitals, 259 Ore. 542, 548, 487 P.2d 870, 874 (1971).

This element of fraud does not require a direct relationship between the alleged fraudfeasor and a specific known person; it is sufficient if the fraudfeasor has “reason to expect” the person to act or to refrain from action in reliance upon the misrepresentation, “in the type of transaction in which he intends or has reason to expect the person’s conduct to be influenced.” Ernst & Young, L.L.P., supra. Thus, to prove reason to expect reliance, “the maker of the misrepresentation must have information that would lead a reasonable man to conclude that there is an especial likelihood that it will reach those persons and will influence their conduct. There must be something in the situation known to the maker that would lead a reasonable man to govern his conduct on the assumption that this will occur.” Id. at 581, 2001 Tex. LEXIS 61 at *21 (citing RESTATEMENT (SECOND) OF TORTS § 531 (1977)).

For example, if a third-party to the representation alleges fraud, her “reliance must be especially likely and justifiable” in order for the false representation to become actionable. Id. Accordingly, “if the false representations be made with a view of reaching the third person to whom it is repeated, and for the purpose of influencing him,” a cause of action for common law fraud exists. Id. at 578, 2001 Tex. LEXIS 61 at *5.

The sixth common law fraud element is the injured party’s ignorance of the representation’s falsity. If a plaintiff knows a representation is false, a cause of action for common law fraud will not exist. Lettunich v. Key Bank Nat’l Ass’n, 141 Idaho 362, 368, 109 P.3d 1104, 1110 (2005) (holding that a plaintiff was not ignorant of the falsity of oral representations because he signed documents outlining state laws in direct contrast to the representations on the same day).

If a plaintiff only knows the falsity of some of the elements of a representation, that knowledge will not prevent a finding of fraud based on the concealment of other elements. See Burris v. Burris, 904 S.W.2d 564, 568, 1995 Mo. App. LEXIS 1398, at *9-10 (Mo. Ct. App. 1995) (reasoning that a plaintiff’s knowledge of some of the concealed items would not prevent a finding of fraud based on the concealment of others).

However, if, under the circumstances, the injured party should have reasonably researched more into the representation, a court will not consider the party to be ignorant. See Fields v. Mitch Crawford’s Holiday Motors Co., 947 S.W.2d 818, 821, 1997 Mo. App. LEXIS 1125, at *7-8 (Mo. Ct. App. 1997) (reasoning that a common law fraud claim based on a material representation about a car’s mileage odometer was not fraudulent because the plaintiff’s “background and knowledge, sufficiently placed [the plaintiff] on notice of the odometer discrepancy” because the plaintiff “was forty years-old at the time of trial,” “an experienced car buyer,” “[held] a paralegal degree,” “knew the odometer had been replaced,” and “noticed that the odometer discrepancy box had been checked on the retail buyers order”).

The seventh common law fraud element is the injured party’s actual reliance on the truth of the representation. “Actual reliance occurs when a misrepresentation is ‘an immediate cause of a plaintiff’s conduct, which alters his legal relations,’ and when, absent such representation, ‘he would not, in all reasonable probability, have entered into the contract or other transaction.’” Engalla, 15 Cal. 4th at 976, 938 P.2d at 919 (quoting Spinks v. Clark, 147 Cal. 439, 444, 82 P. 45, 47 (1905). Markedly, “it is not logically impossible to prove reliance on an omission.” Mirkin v. Wasserman, 5 Cal. 4th 1082, 1093, 858 P.2d 568, 574 (1993). Indeed, a plaintiff “need only prove that, had the omitted information been disclosed, one would have been aware of it and behaved differently.” Id.

An injured party’s actual reliance on a representation is often the most difficult element of common law fraud to prove. Indeed, many states have rejected the “fraud on the market” doctrine which made it unnecessary for buyers or sellers of stock to prove they relied on a defendant’s misrepresentations. Id. Instead, “the plaintiff must allege, with specificity, actions, as distinguished from unspoken and unrecorded thoughts and decisions, that indicate the plaintiff actually relied on the misrepresentations.” Fritz Cos., Inc., 30 Cal. 4th at 184, 65 P.3d at 1266; but see Zimmerman, supra (holding that direct proof of reliance is unnecessary to prevail on a common law fraud claim because “fraud may be inferred from circumstantial evidence”).

For example, if a plaintiff never “actually read[s] or hear[s] the alleged misrepresentations,” but instead “relies on the integrity of the securities market and the securities offering process, and the fidelity, integrity and superior knowledge of defendants,” the plaintiff did not allege “actual reliance.” Mirkin, 5 Cal. 4th at 1089, 858 P.2d at 571; see Sharp, 95 Idaho at 124, 504 P.2d at 397 (“To be actionable the representation must have been relied on at the time of the transaction.”).

In most states, the injured party’s reliance must have been reasonable or justifiable. See, e.g., Meader v. Francis Ford, Inc., 286 Ore. 451, 456, 595 P.2d 480, 482 (1979) (to prove fraud, “[t]he representation must be justifiably relied upon by plaintiff in taking action or in refraining from it to his damage”); Kaufman v. I-Stat. Corp., 165 N.J. 94, 109, 754 A.2d 1188, 1195 (2000) (reasoning that plaintiff must have “justifiably relied” on defendant’s representation); Smith v. Brutger Cos., 569 N.W.2d 408, 413, 1997 Minn. LEXIS 781, at *15 (Minn. 1997) (reasoning that one element of fraud is plaintiff’s “reasonable reliance on the misrepresentation”). The Oregon Supreme Court applied the following subjective and objective standard when determining reasonable reliance:

Cocchiara v. Lithia Motors, Inc., 353 Ore. 282, 298, 297 P.3d 1277 (2013) (quoting Keeton, Prosser and Keeton on the Law of Torts § 108 at 750-51 (5th ed. 1984); see Martin v. Miller, 24 Wash. App. 306, 309-10, 600 P.2d 698, 701 (Wash. Ct. App. 1979) (reasoning that reliance is “reasonable and justifiable” if the plaintiffs have no prior knowledge or experience in a field, but instead rely upon the representations of plaintiff’s superior knowledge and experience).

Accordingly, “[r]eliance is ‘justifiable’ only when ‘circumstances [are] such to make it reasonable for plaintiff to accept defendant’s statements without an independent inquiry or investigation.’” Philipson & Simon v. Gulsvig, 154 Cal. App. 4th 347, 364, 64 Cal. Rptr. 3d 504, 517 (Cal. Ct. App. 2007) (quoting Wilhelm v. Pray, 186 Cal. App. 3d 1324, 1332, 231 Cal. Rptr. 355, 358 (1986)); see Mother Earth, Ltd. v. Strawberry Camel, Ltd., 72 Ill. App. 3d 37, 51-52, 390 N.E.2d 393, 405 (Ill. App. Ct. 1979) (reasoning that reliance after limited inquiry may also be justifiable if a defendant’s actions have lulled the plaintiff into a “false sense of security”).

The eighth common law fraud element is the injured party’s right to rely on the representation. A party does not have a right to rely on a representation if she is aware the representation is false, not enforceable, or not made to her. See Lininger, 23 Ariz. App. at 268, 532 P.2d at 540 (holding that a party did not have the right to rely on a representation because he “was aware that the instrument had to be approved by counsel for one of the parties, reduced to writing to comply with the Statute of Frauds and signed by the parties”).

For example, “[a] person making a representation is only accountable for its truth or honesty to the very person or persons whom he seeks to influence; no one else has a right to rely on the representation and to allege its falsity as a wrong to him under a claim of fraud.” Hall v. Douglas, 380 S.W.3d 860, 869, 2012 Tex. App. LEXIS 7281, at *14 (Tx. App. 2012) (citing Westcliff Co. Inc. v. Wall, 153 Tex. 271, 267 S.W.2d 544, 546 (1954); see Nielson, supra (reasoning that a scrap metal buyer who paid fees for defendant’s services of weighing seller’s truck when laden and unladen had the right to rely on defendant’s representation that he performed the weighing).

Essentially, “[a] party is not justified in relying on representations when he or she had ample opportunity to ascertain the truth of the representations before acting.” Capiccioni v. Brennan Naperville, Inc., 339 Ill. App. 3d 927, 939, 791 N.E.2d 553, 563 (Ill. App. Ct. 2003) (citing Salisbury v. Chapman Realty, 124 Ill. App. 3d 1057, 1063, 465 N.E.2d 127, 132 (Ill. App. Ct. 1984)). Therefore, the question of whether a party had a right to rely on a defendant’s representation “must be answered in light of all of the facts of which the plaintiff[] had actual knowledge as well as those which [she] might have discovered by the exercise of ordinary prudence.” Salisbury, supra (citing Soules v. General Motors Corp., 79 Ill. 2d 282, 286-87, 402 N.E.2d 599, 601 (1980)).

The ninth and final common law fraud element is proof of the injured party’s consequent and proximate injury. “It is of the very essence of an action of fraud and deceit that the same shall be accompanied by damage, and neither damnum absque injuria nor injuria absque damnum by themselves constitute a good cause of action.” George Hunt, Inc. v. Wash-Bowl, Inc., 348 So. 2d 910, 912, 1977 Fla. App. LEXIS 15920, at *5 (Fla. Dist. Ct. App. 1977) (quoting Stokes v. Victory Land Co., 99 Fla. 795, 802, 128 So. 408, 410 (1930)); Cocchiara, 353 Or. at 299 (“Most notably, a plaintiff will have to prove damages to bring a successful [fraud] claim.”); Larsen v. Pacesetter Sys., Inc., 74 Haw. 1, 29, 837 P.2d 1273, 1288 amended on reh’g in part, 74 Haw. 650, 843 P.2d 144 (1992) (“An action based on fraud will not lie where plaintiff has suffered no injury or damage.” (citing Hawaii’s Thousand Friends v. Anderson, 70 Haw. 276, 286, 768 P.2d 1293, 1301 (1989))). The plaintiff must have incurred the loss “in the type of transaction in which the maker of the representation intends or has reason to expect his or her conduct to be influenced.” Ernst & Young, L.L.P., 51 S.W.3d at 577, 2001 Tex. LEXIS 61 at *8-9 (citing RESTATEMENT (SECOND) OF TORTS § 531 (1977)). “It may differ in matters of detail or in extent, unless these differences are so great as to amount to a change in the essential character of the transaction.” Id.

In the common law fraud context, “to be actionable the alleged misrepresentation must not only have induced the recipient’s reliance, but must also have caused the recipient’s loss.” Clayton v. Heartland Res., Inc., 754 F. Supp. 2d 884, 899, 2010 U.S. Dist. LEXIS 143996, at *41 (W.D. Ky. 2010) (quoting Flegles, Inc. v. Truserv Corp., 289 S.W.3d 544, 553, 2009 Ky. LEXIS 23, at *18 (2009)). Importantly, the term “cause” means “legal or proximate cause, which consists of a finding of causation in fact.” Id. (quoting Flegles, Inc., supra); see also Glaser v. Enzo Biochem, Inc., 464 F.3d 474, 477, 2006 U.S. App. LEXIS 23968, at *5-6 (4th Cir. 2006) (affirming dismissal of a common law fraud claim due to insufficient pleading of loss causation); Lincoln Nat. Life Ins. Co. v. Snyder, 722 F.Supp.2d 546, 559-60, 2010 U.S. Dist. LEXIS 71127, at *31-33 (D. Del. 2010) (finding loss causation required for common law fraud claim under Delaware state law); Kosovich v. Metro Homes, LLC, 2009 U.S. Dist. LEXIS 121390, at *19-21 (S.D.N.Y. 2009) (finding the common law fraud claim deficient for failure to establish loss causation).

“Generally speaking, to be actionable, harm must constitute something more than ‘nominal damages, speculative harm, or the threat of future harm.’” Philipson & Simon, 154 Cal. App. 4th at 364, 64 Cal. Rptr. 3d at 517 (quoting Buttram v. Owens-Corning Fiberglas Corp., 16 Cal. 4th 520, 531 n. 4, 941 P.2d 71, 77 n. 4 (1997). Accordingly, “damage claims are not ripe or recoverable” until the plaintiff “is actually exposed to liability toward a third party.” Id.

For example, a plaintiff is not harmed if she is “in exactly the same situation” before and after the representation. Rice, 268 Ore. at 128-29, 519 P.2d at 1265. Thus, even if the “plaintiff[] ha[s] established all the other elements necessary to maintain an action for fraud,” she will not successfully plead common law fraud if she does not establish that a judgment will affect her current situation. Id.

In sum, a plaintiff bringing a common law fraud claim must plead with specificity and particularity that the opposing party intentionally or recklessly represented a material and false past or existing fact with the intent to cause the plaintiff to act in accordance with the representation and that the plaintiff ignorantly and reasonably relied upon the representation to her injury.