Larson V. Randalls

Memorandum

To: Attorney

From : Paralegal

Date: [Today’s date]

Re: Julie Larson; Real Estate Fraud; File No. 04-567

Issue

Does Larson have a claim for fraud against the Randalls when she purchased a house from the

Randalls unaware that there was a graveyard in the backyard, the Randalls deny that they knew

about the graveyard, and the graveyard decreases the value of the house?

Brief Answer

No, Larson probably does not have a claim for fraud against the Randalls. A fraud claim

requires a false representation or concealment of a material fact. A defendant must know a

representation is false, or that a material fact is being concealed, and have intent to deceive.

Also, it must be shown that a buyer reasonably relied upon the representation or concealment and suffered damages.

Here, while Larson may have reasonably relied on the Randalls’ representations and suffered damages, it does not appear that the Randalls made any false representations or concealed any material facts or that they intended to deceive Larson. The Randalls did not make any representations about the graveyard to Larson. Further, the fact that the graveyard was in their backyard does not support the conclusion that the Randalls knew of its existence and intended to conceal that fact and deceive Larson. Thus, an action for fraud will likely fail.

Facts

Julie Larson purchased a house from the Randalls. After moving in, she discovered a graveyard

in her backyard located thirty feet from the house. An appraiser and a realtor both found that the graveyard decreased the value of the house at least $27,000 below the purchase price. Larson wants to know whether she can recover for fraud against the Randalls.

Prior to buying the house, Larson visited the property but saw no indication of the graveyard.

The house has a long, narrow backyard that extends approximately fifty yards behind the house. When she visited the property, the first twenty feet of yard had a small patio,...