Michael v. Greene

WEBB, Judge. The first question raised by this appeal is whether the rights of plaintiff are governed by the law of North. Carolina or the law of Texas. The evidence indicates that the relationship between the parties was created and is centered in Texas. The discussions between the parties concerning the possibility of plaintiffs entry into the jewelry business took place in Texas. The alleged misrepresentations which are the basis for the plaintiffs fraud action were made by Greene while in Texas. Plaintiff decided to go into the jewelry business and placed his first order with defendant while in that state. All the orders were filled in Texas with the jewelry being delivered from Texas to North Carolina. We believe that Texas is the state with the most significant relationship to the transaction between the parties. We hold the transaction is governed by Texas law. See Lowe’s North Wilkesboro Hardware v. Fidelity Life Ins. Co., 319 F. 2d 469 (4th Cir. 1963) and Santana, Inc. v. Levi Strauss & Co., 674 F. 2d 269 (4th Cir. 1982). Chapter 75 of the General Statutes has no application to Texas transactions and the claim brought pursuant to this chapter was properly dismissed. *716 The only aspect of plaintiffs action which we need to discuss is his fraud claim. The elements of actionable fraud in Texas are as follows: “(1) that a material representation was made; (2) that it was false; (3) that when the speaker made it, he knew it was false, or made it recklessly without any knowledge of its truth, and as a positive assertion; (4) that he made it with the intention that it should be acted upon by the party; (5) that the party acted in reliance upon it; and (6) that the party thereby suffered injury.” Wilson v. Jones, 45 S.W. 2d 572, 574 (Tex. Comm. App. 1932); Trenholm v. Ratcliff, 646 S.W. 2d 927 (Texas 1983). Plaintiff argues that all of the required elements for fraud are present in this action. We disagree. Plaintiff contends the statements made by defendant Greene at their meeting in Texas in November 1979 were material misrepresentations. We believe Greene’s statements were either statements of his opinion, or puffing. It is a well-settled rule that a representation which is expressed and understood as nothing more than a statement of opinion, or which cannot be reasonably understood to be anything else, cannot constitute fraud and form a basis for recovery. See Wilson, 45 S.W. 2d at 574; 37 Am. Jur. 2d Fraud and Deceit § 45 (1968). The Texas courts have stated: “It is sometimes difficult to determine whether a given statement is one of opinion or one of fact but as a general rule distinction between fact and an opinion is broadly indicated by the statement that what was susceptible of exact knowledge when the statement was made is usually considered as a matter of fact and representations in regard to matters not susceptible of personal knowledge are generally to be regarded as mere expressions of opinion.” Ramsey v. Polk County, 256 S.W. 2d 425, 428 (Tex. Civ. App. 1953). Clearly, Greene’s statements that he had “unbelievable” connections, and that he would sell to plaintiff at a “very, very low percentage” over his costs were merely statements of opinion. *717 Greene’s statement that plaintiff could not buy gold jewelry from anyone else in the country for less than Greene would sell it to him is also an opinion or mere puffing. Applying the test set out in Ramsey, we find that it was probably impossible for Greene to have had personal, exact knowledge of the prices at which everyone else in the country would sell jewelry to buyers in plaintiff’s position. If plaintiff did interpret Greene’s statements as misrepresentations rather than as opinions or puffing, he was unreasonable in doing so. Furthermore, plaintiff was in no way prevented from taking the precautionary step of comparing prices before deciding to buy from defendants. It has been held that “[a party complaining of fraud] . . . must not have failed to exercise reasonable care to protect himself — in other words, in a ‘caveat emptor’ situation he must not have shut his eyes and ears to matters equally open and available to him upon reasonable inquiry and investigation.” Moore & Moore Drilling Co. v. White, 345 S.W. 2d 550, 555 (Tex. Civ. App. 1961). Because plaintiff failed to present evidence of all the necessary elements for fraud, a directed verdict for defendants was proper. As a verdict in plaintiff’s favor has not been rendered, plaintiff does not have a right to a set-off of any amount against the partial summary judgment entered for Semor Creations, Inc. The judgment of the trial court is Affirmed. Judges Arnold and Braswell concur.