Procedural Posture

Plaintiff prospective dealers challenged an order of the Superior Court of Los Angeles County (California), which dismissed their action against defendant aircraft manufacturers for fraudulent misrepresentation and intentional inducement of breach of contract.

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Overview

Plaintiff prospective dealers alleged that defendant aircraft manufacturers knowingly misrepresented their aircraft to induce plaintiffs to enter a dealership agreement and then interfered with that contractual relationship by failing to manufacture the represented aircraft. The trial court sustained defendants’ general demurrer, and the appellate court reversed, holding that the complaint adequately pleaded allegations of fraudulent misrepresentation. The court reasoned that there was a triable issue of fact as to whether plaintiffs’ reliance on the misrepresentations was reasonable. The court held that, although the complaint showed that the claims of fraud were barred by the statute of limitations, plaintiffs should have been permitted an opportunity to amend. The court held that the complaint alleged facts of defendants’ interference with the contractual relationship, but justification was not apparent from the face of the complaint, and, thus, was a question of fact not appropriately dismissed on demurrer. The court found that failure to allege the dates of the claimed breaches of contract did not support the trial court’s action in sustaining a general demurrer.

Outcome

The court reversed the decision sustaining defendant aircraft manufacturers’ demurrer of plaintiff prospective dealers’ claims of fraudulent misrepresentation and interference with their contract. The court found that the reasonableness of plaintiffs’ reliance and defendants’ justification for interference were triable issues of fact, and that plaintiffs were entitled to amend their complaint to defeat the bar of the statute of limitations.