Fraud and Misrepresentation Interrogatories

This chapter presents interrogatories for use in litigation where plaintiff claims to have suffered pecuniary loss as a result of defendant’s fraudulent misrepresentation. These claims, often referred to generically as “fraud” claims, are predicated upon a variety of distinct legal theories that must be carefully distinguished in practice. Given the nature and breadth of commercial transactions within our economy, claims for “fraud” or “misrepresentation” have become increasingly prevalent in modern society.

§1801 Intentional Misrepresentation

A claim for intentional misrepresentation is usually predicated on the assertion that the defendant induced the plaintiff to enter into some transaction or relationship by misrepresenting material facts pertaining to the relationship or transaction. In this context, the elements of intentional misrepresentation include: 1) the misrepresentation of a material fact; 2) knowledge of falsity (scienter); 3) intent to induce reliance; 4) actual and justifiable reliance on the misrepresentation; and 5) resulting damage. When the elements of intentional misrepresentation are present, the complaint will frequently also seek punitive damages. This is because the existence of “fraud” is one of the bases upon which exemplary damages may be predicated. See Cal. Civ. Code §3294.

§1802 Fraudulent Concealment or Non-Disclosure

A special species of fraudulent misrepresentation exists when a defendant, under an affirmative duty to disclose all material facts, conceals facts in order that the plaintiff may be induced to enter into a transaction or relationship. These claims differ from claims predicated on intentional misrepresentation in that notwithstanding the absence of any affirmative misrepresentation, the law provides for recovery when plaintiff is damaged as a result of concealment. A primary issue to be determined in these cases is whether the defendant stood in such a relation to the plaintiff as to give rise to an affirmative duty of disclosure under the circumstances. Once that duty is established, the remaining elements of actionable fraud, including intent to induce reliance, justifiable reliance, and resulting damage, are established as in cases involving affirmative misrepresentations.

§1803 Negligent Misrepresentation

Negligent misrepresentation involves many of the elements of intentional misrepresentation, although this cause of action is characterized by a less culpable mental state. Thus, the plaintiff in a negligent misrepresentation case must prove: 1) a misrepresentation of material fact; 2) intent to induce reliance; 3) justifiable reliance on the misrepresentation; and 4) resulting damage. The scienter element differs, however; negligent misrepresentation occurs when a defendant’s false statement is made without a reasonable ground for a belief in the truth of the misrepresented fact. The liability in these cases is essentially negligence liability, although the application of negligence defenses is subject to some controversy. See §1861.3.

§1804 Constructive Fraud

When there is a fiduciary or confidential relationship between the plaintiff and the defendant, the law recognizes a fourth species of fraud, i.e., constructive fraud. In general, constructive fraud consists of any breach of duty by a person who, without an actual fraudulent intent, gains an advantage by misleading another to his prejudice or to the prejudice of anyone claiming under him. See Cal.Civ.Code §1573. In this respect, constructive fraud resembles fraudulent concealment (or non-disclosure), but it is not identical. As with fraudulent concealment, constructive fraud requires some relation between the parties giving rise to an affirmative duty to disclose. However, unlike fraudulent concealment, a finding of constructive fraud is not subject to the requirement that the failure to disclose material facts be intentional. Byrum v. Brand, 219 Cal. App. 3d 926 (1990). Despite the absence of an “intent” requirement, many of the interrogatories set forth in this section on fraudulent concealment may be adapted for use in constructive fraud cases.

§1805 A Note on Election of Remedies

Fraud claims pose difficult questions relating to the requirement that a plaintiff elect between potentially inconsistent remedies. When a plaintiff has been induced by a defendant’s fraud to enter into a contractual relationship, the plaintiff must elect between affirming the contract (and seeking damages), or rescinding the contract (and seeking restitution). The distinctions between restitution and damage remedies, together with an in depth analysis of the requirement that plaintiff elect his remedies, is set forth in 3 Witkin, Cal. Procedure (4th ed. 1997) §175 et seq.

§1810 Definitions

The “INCIDENT” refers to the statement, representation, or concealment which is the subject of the plaintiff’s complaint .

For other definitions that are utilized throughout this book, see §102.

§1820 Identification of Defendant

As in other tort cases, it is important that you specifically identify the opposing party, whether a party is a natural person, corporation, partnership, or sole proprietorship. When the opposing party operates under any of these business forms, these questions will elicit additional information that may necessitate further inquiry relating to venue and joinder issues. Moreover, specific information regarding the identity of the opposing party will avoid the delay that occurs when it is subsequently necessary for you to amend your pleadings. Interrogatories designed to elicit information regarding the opposing party, including specific identifying information such as date of birth, address, etc., as well as additional information relating to defendant’s business status, are set forth in §211.

§1830 Agency

As in other tort cases, it is important to determine whether there are other individuals or entities that may be vicariously responsible for the damages caused by the fraudulent misrepresentation or concealment. The questions set forth in §213 explore specific agency relationships, and include several general questions regarding imputed negligence. The responses to these interrogatories may provide useful information to ensure that all legally responsible parties are included within the litigation.

§1840 Basic Transaction Information

As suggested in the discussion setting forth the elements of plaintiff’s cause of action, fraud claims usually involve a contention that the plaintiff was caused to enter into some transaction or relationship with the defendant as a result of the defendant’s fraudulent misrepresentation or concealment. The interrogatories set forth in this section seek to obtain basic information about the nature of the parties’ relationship and/or the transaction which gives rise to the claim. The answers to these interrogatories will disclose the existence of any fundamental disagreement between parties regarding the nature and extent of the transaction that gives rise to the claim.

Please state whether, on or about [here insert date] YOU entered into a contract with plaintiff whereby plaintiff agreed to [here insert details of transaction, i.e. purchase a certain parcel of real property].
If your answer to interrogatory number 1 was yes, please IDENTIFY each party to that contract.
If your answer to interrogatory number 1 was yes, please set forth the date that YOU entered into [here insert details of transaction].
If your answer to interrogatory number 1 was yes, please IDENTIFY each WRITING relating to [the transaction].
Please IDENTIFY the present custodian of any WRITING identified in your answer to interrogatory number 4.

§1850 Intentional Misrepresentation of Fact

§1851 Plaintiff to Defendant

As set forth at the beginning of this chapter, many fraud claims are based upon the claim that the defendant induced the plaintiff to take action or enter into a relationship by affirmatively misrepresenting material facts. This section sets forth interrogatories designed for use in such cases, organized according to the required elements of the plaintiff’s claim for affirmative misrepresentation.

§1851.1 Misrepresentation of Material Fact

As set forth above, actionable misrepresentation ordinarily requires the affirmative misrepresentation of material fact. The interrogatories set forth in this section address this element and are designed to elicit the defendant’s position regarding the nature and extent of the alleged misrepresentation.

Please state whether, prior to the time that plaintiff agreed to [here describe relationship or transaction], YOU represented to plaintiff that [here describe alleged misrepresentation].
If your answer to interrogatory number 1 was yes, please set forth the date that representation was made.
If your answer to interrogatory number 1 was yes, please IDENTIFY each PERSON who was present when that representation was made.
If your answer to interrogatory number 1 was yes, please IDENTIFY each WRITING relating to the representation.
Please IDENTIFY the present custodian of any WRITING identified in your answer to interrogatory number 4.

§1851.1.1 Statement of Opinion

Under the majority rule, the representation must be one of fact. Accordingly, it has frequently been held that representations of opinion are not actionable. See, e.g., Pacesetter Homes, Inc. v. Brodkin, 5 Cal. App. 3d 206 (1970). The interrogatories set forth in this section will disclose whether the defendant contends that the misrepresentation constituted protected opinion.

Do YOU contend that your statement to plaintiff that [here described alleged misrepresentation] in fact constituted a statement of opinion?*

§1851.1.2 Opinion Implying Supporting Facts

Although statements relating to future events ordinarily constitute non-actionable opinions, they may constitute actionable misrepresentation if they imply the existence of facts supporting the opinion. Perhaps the most frequent example is the employer’s representations regarding a potential employee’s future earnings. These statements may be cast as opinion, but under some circumstances imply knowledge of supporting facts. See, e.g., 16 A.L.R.3d 1311. Additional examples are collected in 5 Witkin, Summary of California Law, Torts (9th ed. 1987) §§681 and 782-784. In these cases, the plaintiff should seek to discover the factual basis of the alleged misrepresentation, since a response setting forth purported supportive facts may negate a subsequent claim that the statement constituted non-actionable opinion.

Please state whether, prior to the time that plaintiff agreed to [here describe relationship or transaction], YOU represented to plaintiff that [here describe alleged misrepresentation].
If your answer interrogatory number 1 was yes, please set forth each fact that supported your statement that [here describe alleged misrepresentation].
As to each fact identified in your answer to interrogatory number 2, please IDENTIFY each PERSON who has knowledge relating to such fact.
As to each fact identified in your answer to interrogatory number 2, please IDENTIFY each WRITING relating to such fact.
Please IDENTIFY the present CUSTODIAN of each WRITING identified in your answer to interrogatory number 4.
If your answer to interrogatory number 1 was yes, please state whether YOU conducted any investigation to determine whether your statement that [here describe alleged misrepresentation] was a true statement.
If your answer to interrogatory number 6 was yes, please IDENTIFY each PERSON who participated in that investigation.
If your answer to interrogatory number 6 was yes, please IDENTIFY each WRITING relating to the investigation.
Please IDENTIFY the present CUSTODIAN of each WRITING identified in your answer to interrogatory number 8.
If your answer to interrogatory number 6 was no, please state each reason that YOU did not conduct an investigation.

§1851.1.3 Misrepresentation of Intention

The ordinary failure to perform a promise may constitute a breach of contract, but normally does not establish actionable misrepresentation. Nevertheless, the cases do recognize that when it can be proven that the promise was made without any intention to perform, the making of the promise can constitute actionable fraud. The operative theory is that a person’s statement of intention relates to an existing state of mind, which in turn constitutes an existing fact. See, e.g., Restatement of Law (Second), Torts, §§530, 544. The effort to recover for breach of promise under a misrepresentation theory thus presents difficult questions of proof, since evidence of the promisor’s intention will always be circumstantial. For this reason, the subsequent conduct of the promisor must be subjected to careful scrutiny and the interrogatories set forth in this section are designed for that purpose.

Please state whether, at the time that YOU represented to [plaintiff] that YOU would [here identify the undertaking in question] YOU intended to perform [the undertaking].
Please state whether, subsequent to your representation to plaintiff that YOU would [here specify undertaking] YOU [here specify the act or conduct from which the absence of an intention to perform may be inferred].

§1851.2 Knowledge of Falsity (Scienter)

As noted above, a plaintiff seeking to recover for intentional affirmative misrepresentation must establish not only that the misrepresentation was made, but that the defendant had knowledge that the misrepresentation was false. This element describes the required mental “scienter” and poses difficult questions of proof. The fraud defendant will frequently contend that misrepresentation was merely negligent or even innocent, if only to avoid the potential for punitive damages. Conversely, the plaintiff will frequently seek to prove the required scienter element by presenting facts which give rise to an inference that the defendant must have known that the misrepresentation was false when made. The interrogatories set forth in this section explore these issues.

Please state whether, at the time that YOU represented to plaintiff that [here describe alleged misrepresentation], that statement was true.
If your answer to interrogatory number 1 was yes, please set forth each fact which demonstrates that [the alleged statement] was true.
As to each fact set forth in your answer to interrogatory number 2, please IDENTIFY each PERSON who has knowledge relating to any such fact.
As to each fact set forth in your answer to interrogatory number 2, please IDENTIFY each WRITING relating to such fact.
Please IDENTIFY the present CUSTODIAN of each WRITING identified in your answer to interrogatory number 4.
Do YOU contend that, at the time YOU represented to plaintiff that [here describe the alleged misrepresentation] YOU did not know that [the stated facts] were false?*
Do YOU contend that at the time YOU represented to plaintiff that [here describe the alleged misrepresentation] YOU believed [such facts] were true?*

§1851.3 Intention to Induce Reliance

The third element of intentional misrepresentation requires that in making the false representation, the defendant intended to induce the plaintiff to rely thereon. The defendant must have intended to induce reliance by the plaintiff or a class of which the plaintiff is a member; there is ordinarily no liability when a third person acts upon a misrepresentation that was not directed to that person. See Cal.Civ.Code §1709; Cohen v. Citizens National Trust & Savings Bank, 143 Cal. App. 2d 480 (1956). Moreover, this element is not satisfied unless the defendant intended to induce the plaintiff’s specific action in response to the misrepresentation. The interrogatories set forth in this section explore these issues.

Do YOU contend that your statement that [here describe the alleged misrepresentation] was directed to anyone other than the plaintiff?*
Do YOU contend that your statement that [here describe the alleged misrepresentation] was not directed to the plaintiff?*
Please set forth each reason that YOU represented to plaintiff that [here describe the alleged misrepresentation].
Do YOU contend that, at the time YOU stated to plaintiff that [here describe the alleged misrepresentation] YOU did not intend that plaintiff [here specify actions undertaken by plaintiff in reliance upon the alleged misrepresentation]?*

§1851.4 Actual and Justifiable Reliance

The misrepresentation plaintiff must prove that he or she actually and justifiably relied upon the misrepresentation. If the plaintiff does not actually rely on the misrepresentation, or if reliance is not justifiable because plaintiff was aware of additional facts that would put a reasonable person on inquiry, no cause of action is stated. See, e.g., Wilhelm v. Pray, Price, Williams & Russell, 186 Cal. App. 3d 1324 (1986). The interrogatories set forth in the following sections are directed to these issues.

§1851.4.1 Actual Reliance

The actual reliance element requires the plaintiff to demonstrate that in reliance upon the alleged misrepresentation, plaintiff undertook a given course of conduct or entered into the challenged transaction. Conversely, if the plaintiff undertook a course of action or entered into the transaction based upon events other than the misrepresentation, or without respect to the misrepresentation, no cause of action can be stated. The interrogatories that follow explore the defendant’s contentions regarding the actual reliance element.

Do YOU contend that when plaintiff [here describe the course of action or transaction] the plaintiff did not do so in reliance upon your representation that [here describe the alleged misrepresentation]?*
Do YOU contend that plaintiff [here describe the course of action or transaction undertaken] for any reason other than your representation that [here describe the alleged misrepresentation]?*
Do YOU contend that, at the time that plaintiff [here describe the course of action or transaction undertaken] was not aware of your representation that [here describe the alleged misrepresentation]?*
Do YOU contend that, at the time that plaintiff [here describe the course of action or transaction undertaken] plaintiff had access to any information that would have demonstrated that [here describe the alleged misrepresentation] was false?*
Do YOU contend that, at the time that plaintiff [here describe the course of action or transaction undertaken] plaintiff had actual knowledge of any fact that demonstrated that your representation that [here describe the alleged misrepresentation] was false?*
Do YOU contend that plaintiff should have [here describe the course of action or the transaction undertaken] whether or not YOU [here describe the alleged misrepresentation]?*
Do YOU contend that, prior to the time that plaintiff [here describe the course of action or the transaction undertaken] plaintiff undertook any independent investigation of the facts?*

§1851.4.2 Justifiable Reliance

Plaintiff must not only actually rely upon the alleged misrepresentation; such reliance must also be justifiable under the circumstances. See Wilhelm v. Pray, Price, Williams & Russell, 186 Cal. App. 3d 1234 (1986). For this reason, it has been said that the circumstances must be such as to make it reasonable for the plaintiff to accept the defendant’s statements without an independent inquiry or investigation. See 5 Witkin, Summary of California Law, Torts (9th ed. 1987) §714 at 812. Accordingly, the misrepresentation defendant will often seek to establish that the plaintiff was in possession of sufficient contradictory facts that any actual reliance was nevertheless not justifiable. The interrogatories set forth in this section explore defendant’s contentions on the “justifiable reliance” issue.

Do YOU contend that plaintiff’s reliance upon your statement that [here describe the alleged misrepresentation] was not justified?*
Do YOU contend that, at the time that YOU represented to plaintiff that [here describe the alleged misrepresentation] the plaintiff was aware of any fact that [the statement] was untrue?*
Do YOU contend that any aspect of your representation that [here describe the alleged misrepresentation] was such that plaintiff could not justifiably rely thereon?*

§1851.5 Damages

As discussed above, the vast majority of cases alleging actionable fraud are based upon the plaintiff’s claim that the defendant’s misrepresentation induced the plaintiff to enter into a disadvantageous relationship or transaction. For this reason, most fraud actions seek recovery for pecuniary loss, subject only to the requirement that plaintiff elect between affirming the transaction and seeking damages or rescinding the transaction and seeking restitution. See, e.g., Restatement of Law (Second), Torts, Chapter 22. Because these cases seek only the recovery of pecuniary losses, emotional distress damages are ordinarily not recoverable. See, e.g., Merenda v. Superior Court, 3 Cal. App. 4th 1 (1992), overruled on other grounds in Ferguson v. Lieff, Cabraser, Heimann and Bernstein, 30 Cal 4th 1037 (2003).

An exception to the ordinary rule precluding emotional distress damages exists when the defendant’s misrepresentation has induced the plaintiff to enter into a relationship or transaction that results in personal injury. This point is illustrated in O’Hara v. Western Seven Trees Corp., 75 Cal. App. 3d 798 (1977), in which a plaintiff rented an apartment following defendant’s representation that the apartments were safe and were protected by security patrols. Plaintiff sued after being assaulted on the premises, and the trial court sustained a general demurrer in favor of the defendant. In reversing, the appellate court held that although recovery in fraud actions is usually limited pecuniary losses, plaintiff’s complaint stated a cause of action when the representation induced plaintiff to enter into a transaction causing personal injury. See also, Hauter v. Zogarts, 14 Cal.3d 104 (1975) (representation of product safety); Kathleen K. v. Robert B., 150 Cal. App. 3d 922 (1984) (representation of freedom from venereal disease). In these cases, the plaintiff may seek and recover the full realm of tort damages as in other personal injury cases.

Finally, a finding of affirmative fraud standing alone may provide the requisite factual basis for an award of punitive damages. See, e.g., Cal. Civ. Proc. §3294; Chodos v. Insurance Co. of North America, 126 Cal. App. 3d 86 (1981).

The interrogatories set forth in this section address the foregoing issues, and constitute a point of reference on the damages elements for the other forms of actionable misrepresentation set forth in this chapter. This section includes interrogatories for use in the most frequent types of fraud cases, where plaintiff seeks recovery for pecuniary loss as a result of entering into a disadvantageous relationship or transaction. Separate interrogatory sections are included for use in actions for damages as opposed to actions for rescission and restitution. This section also contains appropriate references to Chapter 3, which contains damage interrogatories for use where the defendant’s fraud has caused personal injury. Finally, this chapter contains interrogatories and cross-references for use when punitive damages are claimed.

§1851.5.1 Pecuniary Loss – Action for Damages

Most fraud actions involve claims that the plaintiff suffered pecuniary loss as a result of entering into a relationship or transaction based upon defendant’s misrepresentation. The interrogatories set forth in this section are for use in those cases.

Do YOU contend that, on or about [here specify date] plaintiff did not pay the sum of [here specify amount] in order to [here describe the relationship or transaction undertaken]?*
Do YOU contend that, on or about [here specify date] the plaintiff did not purchase [here identify real or personal property acquired, etc.] from YOU in return for the sum of [here specify amount]?*
Do YOU contend that plaintiff has not been damaged as a result of plaintiff’s purchase of [here identify real or personal property acquired, etc.]?*
Do YOU contend that [here identify real or personal property acquired] was worth the sum of at least [here specify amount] as of the date of [here describe the relationship or transaction undertaken]?*

§1851.5.2 Pecuniary Losses – Action for Rescission and Restitution

As noted above, when actionable fraud exists plaintiff may elect to rescind the transaction and seek restitution. Following successful rescission, the plaintiff is entitled to recover the consideration paid, together with any other compensation necessary to restore the plaintiff to the status quo ante. See, Utemark v. Samuel, 118 Cal. App. 2d 313 (1953). Thus, the plaintiff may be entitled to recover not only the purchase price paid, but also the value of any improvements erected, etc., prior to rescission. Id. The interrogatories set forth in this section are for use where plaintiff elects to seek rescission and restitution.

Do YOU contend that the plaintiff has not rescinded the contract entered into on or about [here specify date]?*
Do YOU contend that, on or about [here specify date] plaintiff did not pay the sum of [here specify amount] in order to [here describe the relationship or transaction undertaken]?*
Do YOU contend that, on or about [here specify date] the plaintiff did not purchase [here identify real or personal property acquired, etc.] from YOU in return for the sum of [here specify amount]?*
Do YOU contend that plaintiff has not been damaged as a result of plaintiff’s purchase of [here describe real or personal property acquired]?*
Do YOU contend that [here describe real or personal property acquired] was worth the sum of at least [here specify amount] as of the date of [here describe the relationship or transaction undertaken]?*
Do YOU contend that, following [here specify the date of the subject transaction] plaintiff did not expend the additional sum of [here specify amount] in order to [here describe purpose for which additional sums were paid, i.e., erect improvements, etc.]?*

§1851.5.2.1 Restitution – Restoration of Consideration

A plaintiff seeking rescission must return to the defaulting party the consideration that plaintiff received. Thus, a plaintiff who seeks to rescind a land sale contract must return to the defaulting party the reasonable rental value of the property during the period of plaintiff’s occupancy. See, e.g., McCoy v. West, 70 Cal. App. 3d 295 (1977). The interrogatories set forth in this section explore defendant’s contentions regarding any claim for restoration of the consideration plaintiff received.

Do YOU contend that plaintiff has in any manner failed to tender the return of any consideration received by plaintiff in connection with plaintiff’s action to rescind the [subject transaction]?*

§1851.5.2.2 Waiver of Right to Rescind

The plaintiff may waive his right to rescind by conduct indicating an election to affirm the contract. See, 1 Witkin, Summary of California Law, (9th ed. 1987) Contracts §886 at 794-795. The interrogatories set forth in this section explore defendant’s contention with respect to a claim of waiver.

Do YOU contend that plaintiff has expressly affirmed [the subject transaction]?*
Do YOU contend that plaintiff has impliedly affirmed [the subject transaction]?*

§1851.5.3 Action for Damages – Personal Injuries Resulting from Fraudulent Misrepresentation

As noted above, in certain cases the fraudulent misrepresentation is the proximate cause of personal injury to the plaintiff. When these facts can be established, the plaintiff is entitled to the full range of damages otherwise available in personal injury actions. In these cases, the interrogatories set forth in §311 (General Interrogatories), §312 (Emotional Distress Damages), §314 (Loss of Consortium), and §§321 and 322 (Special Damages) are fully applicable in fraud cases.

§1851.5.4 Punitive Damages

Punitive damages may be recovered not only when the defendant’s conduct constitutes oppression or indicates malice, but also when the conduct amounts to fraud. See, Cal.Civ.Code §3294(a). The interrogatories set forth in §323 (Punitive Damages) can be modified for use in these cases.

§1852 Defendant to Plaintiff

§1852.1 Misrepresentation of Material Fact

The interrogatories set forth in this section are designed to elicit the plaintiff’s contentions regarding the nature and extent of the alleged misrepresentation.

Please state whether, at the time that YOU [here describe relationship or transaction undertaken] defendant represented any fact to YOU?
If your answer to interrogatory number 1 was yes, please set forth the date upon which such representation was made.
If your answer to interrogatory number 1 was yes, please IDENTIFY each PERSON who was present when the representation was made.
If your answer to interrogatory number 1 was yes, please IDENTIFY each WRITING relating to the representation.
Please IDENTIFY the present CUSTODIAN of any WRITING identified in your answer to interrogatory number 4.
Do YOU contend defendant did not make full disclosure of all material facts at the time that YOU [here describe relationship or transaction undertaken]?*

§1852.1.1 Statement of Opinion

As noted above, there is ordinarily no liability unless the alleged misrepresentation is a misrepresentation of fact. See §1851.1.1. The interrogatories set forth in this section explore the plaintiff’s contentions regarding this element.

Do YOU contend that [defendant’s] statement to plaintiff that [here describe alleged misrepresentation] constituted a statement of fact?*

§1852.1.2 Opinion Implying Supporting Facts

Representations cast in the form of opinion may nevertheless constitute actual misrepresentation if they imply the existence of facts supporting the opinion. See §1851.1.2. The interrogatories set forth in this section explore the plaintiff’s contentions in these cases.

Do YOU contend that defendant’s statement that [here describe statement of opinion] in any manner implied the existence of [here describe alleged supportive fact]?
Do YOU contend that, at the time that [defendant] stated that [here describe statement of opinion] that defendant was in possession of no facts to support that opinion?*

§1852.1.3 Misrepresentation of Intention

A promise made without any intention to perform can constitute actionable fraud. See §1851.1.3. In such cases, the plaintiff will ordinarily contend that defendant’s subsequent conduct gives rise to an inference that defendant never intended to perform the promise in the first instance. The interrogatories set forth in this section are directed to plaintiff’s contentions in this regard.

Do YOU contend that, at the time [defendant] represented to [plaintiff] that [here describe alleged promise] [defendant] had no intention to perform?*
Do YOU contend that the action of [defendant] in [here describe action or conduct] demonstrates that at the time that defendant promised that [here identify promise or undertaking] [defendant] had no intention to perform?*

§1852.2 Knowledge of Falsity (Scienter)

The plaintiff seeking to recover for intentional misrepresentation must establish not only that the misrepresentation was made, but that the defendant had knowledge that the misrepresentation was false. See, §1851.2. The interrogatories set forth in this section are directed to plaintiff’s contentions on this issue.

Do YOU contend that defendant’s statement to YOU that [here describe alleged misrepresentation] was not true?*
Do YOU contend that at the time that [defendant] represented to YOU [here describe alleged misrepresentation] [defendant] knew that [the specified facts] were false?*

§1852.3 Intention to Induce Reliance

The fraud plaintiff must prove that the defendant intended to induce reliance by the plaintiff. See §1851.3. The interrogatories set forth in this section explore plaintiff’s contentions regarding these issues.

Do YOU contend that [defendant’s] statement that [here describe alleged misrepresentation] was directed to YOU?*
Do YOU contend that [defendant’s] statement that [here describe alleged misrepresentation] was intended to induce any particular action by YOU?*

§1852.3.1 Actual and Justifiable Reliance

As noted above, the misrepresentation plaintiff must prove that he or she actually and justifiably relied upon the alleged misrepresentation. See §1851.4. The interrogatories set forth in the following sections explore plaintiff’s contentions regarding these issues.

§1852.3.1.1 Actual Reliance

Do YOU contend that YOU [here describe the course of action or transaction undertaken] in reliance upon [defendant’s] statement that [here describe the alleged misrepresentation]?*
Do YOU contend that, at the time that YOU [here describe the course of action or transaction undertaken] YOU were aware of [defendant’s] statement that [here describe alleged misrepresentation]?*
Please state whether, after [defendant’s] statement that [here describe alleged misrepresentation] YOU undertook any independent investigation of [these facts].
If your answer to interrogatory number 3 was yes, please describe each action YOU took to investigate [these facts].
If your answer to interrogatory number 3 was yes, please IDENTIFY each PERSON who has knowledge of any fact relating to such investigation.
If your answer to interrogatory number 3 was yes, please IDENTIFY each WRITING relating to the investigation.
Please IDENTIFY the present CUSTODIAN of each WRITING identified in your answer to interrogatory number 6.

§1852.3.1.2 Justifiable Reliance

A plaintiff must not only actually rely upon the alleged misrepresentation; such actual reliance must also be justifiable under the circumstances. See §1851.4.2. The interrogatories set forth in this section explore plaintiff’s contentions on the “justifiable reliance” issue.

Do YOU contend that [defendant’s] statement that [here describe alleged misrepresentation] was false?*
Do YOU contend that, at the time of [defendant’s] statement that [here describe alleged misrepresentation] YOU believed [such statement] was true?*
Please state whether, at the time that [defendant] stated that [here describe alleged misrepresentation] YOU undertook any investigation regarding [such facts].
If your answer to interrogatory number 3 was yes, please IDENTIFY each PERSON with knowledge relating to that investigation.
If your answer to interrogatory number 3 was yes, please IDENTIFY each WRITING relating to the investigation.
Please IDENTIFY the present custodian of any WRITING identified in your answer to interrogatory number 5.

§1852.4 Damages

The law pertaining to recoverable damages in fraud cases is set forth in § 1851.5. That section describes the range of remedies available to the plaintiff, including the requirement that plaintiff elect between available remedies. In addition, that section discusses the recoverability of personal injury damages as well as punitive damages. The interrogatories set forth in the following sections address these issues from the defendant’s perspective.

§1852.4.1 Pecuniary Losses – Action for Damages

Do YOU contend that YOU paid the sum of $____ as a result of [defendant’s] statement that [here describe alleged misrepresentation]?*
Do YOU contend that YOU paid the sum of $___ in order to purchase [here describe real or personal property, etc.,] as a result of [defendant’s] statement that [here describe alleged misrepresentation]?*
Do YOU contend that YOU have been damaged as a result of [defendant’s] statement that [here describe alleged misrepresentation]?*
Do YOU contend that the value of [here describe real or personal property purchased, etc.,] was less than the sum of $____ at the time that YOU acquired [here describe real or personal property, etc.]?*

§1852.4.2 Pecuniary Losses – Action for Rescission and Restitution

Do YOU contend that YOU rescinded the contract entered into on or about [here specify date]?*
Do YOU contend that, on or about [here specify date] YOU paid the sum of [here specify amount] in order to [here describe the relationship or transaction undertaken]?*
Do YOU contend that, on or about [here specify date] YOU purchased [here identify real or personal property acquired, etc.] in return for the sum of [here specify amount]?*
Do YOU contend that YOU have been damaged as a result of your purchase of [here describe real or personal property acquired]?*
Do YOU contend that [here describe real or personal property acquired] was not worth the sum of at least [here specify amount] as of the date of [here describe the relationship or transaction undertaken]?*
Do YOU contend that, following [here specify the date of the subject transaction] YOU expended additional sums in order to [here describe purpose for which additional sums were paid, i.e., erect improvements, etc.]?*

§1852.4.2.1 Restoration of Consideration

As noted in §1851.5.2.1, a plaintiff seeking rescission must return to the defaulting party the consideration received by the plaintiff. The interrogatories set forth in this section explore plaintiff’s contentions regarding the requirement that plaintiff restore the consideration received.

Do YOU contend that YOU have restored to [defendant] all consideration YOU received in connection with [the subject transaction]?*

§1852.4.2.2 Waiver of Right to Rescind

The plaintiff may waive his right to rescind by conduct indicating an election to affirm the contract. See, 1 Witkin, Summary of California Law, (9th ed. 1987) Contracts §886 at 794-795. The interrogatories set forth in this section explore plaintiff’s contentions with respect to a claim of waiver.

Do YOU contend that your action [here describe act of affirmance] did not affirm the [subject contract]?*

§1852.4.3 Action for Personal Injuries

As noted above, when the misrepresentation has allegedly exposed the plaintiff to personal injury, the plaintiff may seek to recover the full range of tort damages applicable in such cases. Accordingly, the interrogatories set forth in §311 (General Interrogatories), §312.2 (Emotional Distress Damages), §314.2 (Loss of Consortium), and §320 (Special Damages) can be adapted for use in these cases.

§1852.4.4 Punitive Damages

As noted above, actionable fraud is a basis for award of exemplary damages. The interrogatories set forth in §323.2 (Plaintiff’s Claim for Punitive Damages) can be modified for use in these cases.

§1860 Negligent Misrepresentation

§1861 Plaintiff to Defendant

As discussed in the introduction to this chapter, negligent misrepresentation involves many of the elements of intentional misrepresentation. As with intentional misrepresentation, the plaintiff in a negligent misrepresentation case must prove: 1) a misrepresentation of material fact; 2) intent to induce reliance; 3) actual and justifiable reliance on the misrepresentation; and 4) resulting damage. For this reason, the interrogatories set forth in §§1851-1852 pertaining to these issues are fully applicable in negligent misrepresentation cases and are not repeated here. Rather, the interrogatories set forth in this section pertain to those elements unique to negligent misrepresentation cases, including: 1) the less culpable scienter requirements in negligent misrepresentation cases; 2) the special limitations on recovery in negligent misrepresentation cases; and 3) potential defenses unique to negligent misrepresentation claims.

§1861.1 Absence of Reasonable Ground to Support Represented Facts (Scienter)

Although the defendant may honestly believe that the represented facts are true, if there is no reasonable ground for such a belief, the defendant may be liable for negligent misrepresentation. See Cal.Civ.Code §1710(b); Gagne v. Bertran, 43 Cal.2d 481 (1954). These claims raise difficult questions of proof, because if defendant’s honest belief in the truth of the stated facts is also reasonable, the result is an honest misrepresentation as to which there is ordinarily no liability. See cases cited at 5 Witkin, Summary of California Law, Torts (9th ed. 1987) §720 at 819. Thus, the crucial inquiry relates to the existence of facts upon which a belief in the truth of the misrepresented fact might be based. The interrogatories set forth in this section address these issues.

Please state whether, at the time that YOU represented to plaintiff that [here describe alleged misrepresentation] YOU believed such statement was true.
If your answer to interrogatory number 1 was yes, please set forth each fact known to YOU upon which YOU based such belief.
If your answer to interrogatory number 1 was yes, please IDENTIFY each DOCUMENT upon which YOU based such belief.
Please state whether, at the time that YOU represented to plaintiff that [here describe alleged misrepresentation] YOU relied upon the statement of any third party that [such facts] were true.
If your answer to interrogatory number 4 was yes, please IDENTIFY each third party upon whom YOU relied.
If your answer to interrogatory number 4 was yes, please set forth the content of any information transmitted by [such third party] to YOU.
If your answer to interrogatory number 4 was yes, please set forth the date upon which [such third party] transmitted [such information] to YOU.
Do YOU contend that your belief in the truth of [here describe misrepresented fact] was reasonable?*

§1861.1.1 Limitation – Class of Persons Entitled to Rely Upon Representation

One limitation upon recovery applicable to negligent misrepresentation cases is that the plaintiff must be a member of the class to whom the misrepresentations were made. See, e.g., Christiansen v. Roddy, 186 Cal. App. 3d 780 (1986). Stated otherwise, the defendant is not liable to third parties even though it was foreseeable that the misrepresented fact might be perceived and acted upon by them. The interrogatories set forth in this section explore defendant’s contentions regarding plaintiff’s membership in the protected class.

Do YOU contend that your statement that [here describe alleged misrepresentation] was not directed to plaintiff?*
Do YOU contend that your statement that [here describe alleged misrepresentation] was not directed to a class of which plaintiff was a member?*
Do YOU contend that at the time that YOU stated that [here describe alleged misrepresentation] YOU did not intend for plaintiff to rely upon [such representation]?*

§1861.1.2 Limitation – Business Purpose for Representation

The Restatement takes the position that within the context of negligent misrepresentation, liability is imposed only for misrepresentations made in the course of a business or professional undertaking; liability is ordinarily not imposed for misrepresentations made in social settings or otherwise outside the business context. See Restatement of Law (Second), Torts §552. The rationale for this limitation can be attributed to the requirement for justifiable reliance; reliance upon casual or off-the-cuff statements outside of the business setting can be characterized as unjustified. In all events, the interrogatories set forth in this section explore defendant’s contentions in this regard.

Do YOU contend that, at the time YOU stated to plaintiff that [here describe alleged misrepresentation] YOU did not intend for plaintiff to [here describe act or conduct in response to representation]?*
Do YOU contend that, at the time YOU stated to plaintiff that [here describe alleged misrepresentation] plaintiff was engaged in no business relationship with YOU?*
Do YOU contend that, at the time YOU represented to plaintiff that [here describe alleged misrepresentation] it was not foreseeable that plaintiff would act in reliance upon such representation?*

§1861.2 Damages

As noted above, the damages recoverable in negligent misrepresentation cases generally mirror those recoverable in intentional misrepresentation cases. The obvious exception is that punitive damages may not be recovered for negligence. Accordingly, the interrogatories set forth in §§1851.5.1 and 1851.5.2 (pecuniary losses, including damages, rescission and restitution) and §1851.5.3 (personal injury damages where misrepresentation causes personal injury) are fully applicable in negligent misrepresentation cases.

§1861.2.1 Limitation on Scope of Recoverable Damages

Liability for negligent misrepresentation extends only to damage for the particular action which defendant intended to induce at the time of the misrepresentation. See Restatement of Law (Second), Torts, §552. Accordingly, although damage to the plaintiff may have been foreseen, unless the damage results from the specific action that the defendant intended to induce, no liability can be imposed. The interrogatories set forth in this section explore defendant’s contentions in this regard.

Do YOU contend that, at the time YOU represented to plaintiff that [here describe alleged misrepresentation] YOU did not intend to induce plaintiff to [here describe alleged action taken in reliance upon alleged misrepresentation]?*
Do YOU contend that plaintiff did not [here describe act taken in reliance upon alleged misrepresentation] in reliance upon your statement that [here describe alleged misrepresentation]?*

§1861.3 Defenses – Plaintiff’s Comparative Negligence

The question of whether comparative negligence acts as a defense to a claim of negligent misrepresentation is the subject of controversy. The ordinary approach characterizes negligent misrepresentation as a form of ordinary negligence, as to which plaintiff’s comparative negligence may constitute a defense. See Restatement of Law (Second), Torts, §552(A). California apparently departs from the majority rule, denying the comparative negligence defense upon the rationale that negligent misrepresentation is a form of deceit. Van Meter v. Bent Construction Co., 46 Cal.2d 588 (1956). In jurisdictions following the Restatement approach, the interrogatories set forth in §343 (Contributory and Comparative Negligence) may be adapted for use in negligent misrepresentation cases.

§1862 Defendant to Plaintiff

As discussed in §1861, negligent misrepresentation involves certain elements unique to negligent misrepresentation cases. The interrogatories set forth in the following sections address these elements, including: 1) the less culpable scienter requirements in negligent misrepresentation cases; 2) the special limitations on recovery in negligent misrepresentation cases; and 3) potential defenses unique to negligent misrepresentation claims.

§1862.1 Reasonable Ground for Belief in Truth (Scienter)

As discussed in §1861.1, a defendant may be liable notwithstanding an honest belief that the represented facts are true if there is no reasonable ground for such a belief. Thus, the crucial inquiry relates to the existence of facts upon which a belief in the truth of the misrepresented fact might be based. The interrogatories set forth in this section address these issues.

Do YOU contend that at the time that [defendant] stated that [here describe alleged misrepresentation] [defendant] had no reasonable ground to believe that [such statement] was true?*
Do YOU contend that at the time that [defendant] stated that [here describe alleged misrepresentation] [defendant] did not rely upon the statements of [here identify third party]?*
Do YOU contend that at the time that [defendant] stated that [here describe alleged misrepresentation] [defendant’s] belief in the truth of [here describe misrepresented fact] was not reasonable?*

§1862.1.1 Limitation – Class of Persons Entitled to Rely Upon Representation

In negligent misrepresentation cases plaintiff must demonstrate that the representation was made to the plaintiff or to a class of whom plaintiff was a member. See §1861.1.1. The interrogatories set forth in this section explore plaintiff’s contentions in this regard.

Do YOU contend that at the time that [defendant] stated that [here describe alleged misrepresentation] such statement was directed to YOU?*
Do YOU contend that at the time that [defendant] stated that [here describe alleged misrepresentation] such representation was made to a class of which YOU were a member?*
Do YOU contend that at the time that [defendant] stated that [here describe alleged misrepresentation] [defendant] intended to induce YOU to undertake any action in reliance upon such representation?*

§1862.1.2 Limitation – Representation Made in a Business Setting

As noted in §1861.1.2, the plaintiff in a negligent misrepresentation case must demonstrate that the representation was made in a business setting, i.e., representations made in casual or social settings are not actionable. The interrogatories set forth in this section explore plaintiff’s contentions in this regard.

Do YOU contend that at the time that [defendant] stated that [here describe alleged misrepresentation] [defendant] intended to induce any particular action by YOU?*
Do YOU contend that at the time that [defendant] stated that [here describe alleged misrepresentation] [defendant] was engaged in any business relationship with YOU?*
Do YOU contend that at the time that [defendant] stated that [here describe alleged misrepresentation], it was foreseeable to [defendant] that YOU would [here describe action allegedly taken in reliance upon misrepresentation]?*

§1862.2 Damages

As noted above, the successful plaintiff in negligent misrepresentation cases can recover the same elements of pecuniary losses (i.e., damages, rescission and restitution) as in intentional misrepresentation cases. Accordingly, the interrogatories set forth in §1851.5.1 and 1851.5.2 (Damages, Rescission and Restitution) may also be used in negligent misrepresentation cases. Moreover, when the negligent misrepresentation exposes a plaintiff to personal injury, the plaintiff may recover all damages otherwise recoverable in injury cases. See §1851.5.3.

§1862.2.1 Limitation – Damages Related to Induced Action

As set forth in §1861.2.1, one limitation on recoverable damages in negligent misrepresentation cases is that only those damages flowing from the actions defendant intended to induce are recoverable. The interrogatories set forth in this section explore plaintiff’s contentions in this regard.

Do YOU contend that at the time [defendant] stated that [here describe alleged misrepresentation] [defendant] intended to induce YOU to [here describe action taken in alleged reliance upon misrepresentation]?*
Do YOU contend that at the time YOU [here describe actions taken in alleged reliance upon misrepresentation] YOU in fact relied upon defendant’s statement that [here describe alleged misrepresentation]?*

§1870 Fraudulent Concealment and Nondisclosure

A special species of fraudulent misrepresentation exists when a defendant actively conceals material facts and/or fails to disclose all material facts under circumstances where a special relationship between the plaintiff and the defendant gives rise to an affirmative duty to do so. In these cases, liability is predicated upon: 1) the tortious nature and fact of concealment, even in the absence of a special relationship; or 2) even in the absence of affirmative concealment, the failure to disclose material facts where the nature of the relationship between the parties gives rise to an affirmative duty to do so. In such cases, once either the act of concealment or the failure to disclose is established, the remaining elements of actionable fraud, including intent to induce reliance, justifiable reliance, and resulting damage, are established as in other cases of intentional misrepresentation. For this reason, the interrogatories set forth in §1830 (Agency), §1840 (Basic Transaction Information), §1851.3 (Intention to Induce Reliance), §1851.4 (Actual and Justifiable Reliance), and §1851.5 (Damages) are fully applicable and are not reproduced here. Rather, the sections that follow address issues that are unique to fraud claims predicated upon acts of concealment or nondisclosure, including interrogatories directed to facts supporting a claim of active concealment. Additional interrogatories directed to the nature and extent of any fiduciary and/or confidential relationship are set forth in this section, and may be used when it is alleged that the existence of such a relationship gives rise to affirmative duties of disclosure.

§1871 Plaintiff to Defendant – Active Concealment

It is often said that the mere possession by one party to a transaction of material facts ordinarily gives rise to no affirmative duty of disclosure; the failure to disclose such facts is not actionable in the absence of some relationship giving rise to an affirmative duty of disclosure. See, e.g., Goodman v. Kennedy, 18 Cal.3d 355 (1976); Restatement of Law (Second), Torts, §551. Notwithstanding this general rule, it is now quite settled that when a defendant’s conduct goes beyond mere nondisclosure, and in fact constitutes active concealment, liability may attach. Stated otherwise, when active concealment is demonstrated, it has the same legal effect as affirmative misrepresentation. See Restatement of Law (Second), Torts, §550; OMC Corp. v. Superior Court, 52 Cal. App. 3d 30 (1975).

Please state whether, at the time that YOU entered into [here describe relationship or transaction undertaken] with [plaintiff], YOU were aware that [here describe material fact allegedly concealed].*
If your answer to interrogatory number 1 was yes, please state each reason that YOU did not disclose [such fact] to [plaintiff].
If your answer to interrogatory number 1 was no, please IDENTIFY each PERSON with knowledge that YOU were unaware of such fact.
If your answer to interrogatory number 1 was no, please IDENTIFY each DOCUMENT that supports your contention that YOU were unaware of such fact.
Please IDENTIFY the present CUSTODIAN of each WRITING identified in your answer to interrogatory number 4.
Please state whether, at the time that YOU entered into [here describe relationship or transaction undertaken here describe sale, purchase, or other transaction] with [plaintiff], YOU took any action to prevent [plaintiff] from discovering that [here describe facts allegedly withheld].*
If your answer to interrogatory number 6 was yes, please set forth each reason that YOU undertook such action.
If your answer to interrogatory number 6 was no, please IDENTIFY each PERSON with knowledge of any fact that supports such denial.
If your answer to interrogatory number 6 was no, please IDENTIFY each WRITING that supports such denial.
Please IDENTIFY the present CUSTODIAN of each WRITING identified in your answer to interrogatory number 9.
Please state whether, at the time that YOU entered into [here describe relationship or transaction undertaken] with [plaintiff], YOU instructed any other person to [here describe acts of alleged concealment].*
If your answer to interrogatory number 11 was yes, please set forth each reason YOU instructed [third person] to [here describe alleged acts of concealment].
If your answer to interrogatory number 11 was no, please IDENTIFY each PERSON with knowledge of any fact relating to such denial.
If your answer to interrogatory number 11 was yes, please IDENTIFY each WRITING relating to such denial.
Please IDENTIFY the present CUSTODIAN of any WRITING identified in your answer to interrogatory number 14.

§1872 Plaintiff to Defendant – Actionable Nondisclosure

Even when defendant does not engage in any conduct designed to actively conceal the material facts, liability may be predicated upon mere nondisclosure when the nature of the relationship between the parties gives rise to an affirmative duty to disclose. Thus, liability for mere nondisclosure may be imposed when defendant: 1) stands in a fiduciary relationship to plaintiff; 2) occupies a confidential relationship with respect to plaintiff; or 3) possesses exclusive knowledge of material facts which are inaccessible to the plaintiff. Interrogatories directed to each of these issues are set forth in the sections that follow.

§1872.1 Fact of Nondisclosure

Please state whether, at the time that YOU entered into the [here describe relationship or transaction undertaken] with [plaintiff], YOU were aware that [here set forth facts not disclosed].*
If your answer to interrogatory number 1 was yes, please state each reason that YOU did not disclose [such facts] to [plaintiff].
If your answer to interrogatory number 1 was no, please IDENTIFY each PERSON who has knowledge of any fact relating to such denial.
If your answer to interrogatory number 1 was no, please IDENTIFY each WRITING supporting such denial.
Please IDENTIFY the present CUSTODIAN of each WRITING identified in your answer to interrogatory number 4.
Please state whether, at the time YOU entered into [here describe relationship or transaction undertaken] YOU disclosed to [plaintiff] that [here set forth facts allegedly withheld].*
If your answer to interrogatory number 6 was no, please set forth each reason YOU did not disclose [such facts].
If your answer to interrogatory number 6 was yes, please IDENTIFY each PERSON with knowledge of any fact supporting such contention.
If your answer to interrogatory number 6 was yes, please IDENTIFY each WRITING supporting such contention.
Please IDENTIFY the present CUSTODIAN of any WRITING identified in your answer to interrogatory number 9.

§1872.2 Duty to Disclose – Fiduciary Relationship

As noted above, the ordinary rule precluding liability for mere nondisclosure has no application where the parties stand in a fiduciary relationship. Cal.Civ.Code §1710(3); Black v. Shearson, Hammill & Co., 266 Cal. App. 2d 362 (1968). The fiduciary relationship may be founded in any relationship ordinarily characterized as fiduciary, i.e., attorney/client, trustee/beneficiary, corporation/director, stockbroker/stock purchaser. The interrogatories set forth in this section explore defendant’s contentions regarding the existence of a fiduciary relationship.

Please set forth the legal nature of the relationship between YOU and the plaintiff at the time that YOU entered into [here describe relationship or transaction undertaken] with [plaintiff].
Do YOU contend that, at the time that YOU entered into [here describe relationship or transaction undertaken] with [plaintiff], YOU were not engaged in a fiduciary relationship with [plaintiff]?*

§1872.3 Duty to Disclose – Confidential Relationship

Although a relationship between the parties may not fall within the category of relationships traditionally denominated as “fiduciary,” they may still be characterized by trust and confidence reposed by one party in the other. See Vai v. Bank of America Nat’l Trust & Sav. Asso., 56 Cal.2d 329 (1961). The law treats such a confidential relationship as a functional equivalent of a “fiduciary” relationship in connection with fraud claims; the duty of affirmative disclosure applies with equal force to confidential relationships. See, e.g., Goodman v. Kennedy, 18 Cal.3d 335 (1976). The interrogatories set forth in this section explore defendant’s contentions on this issue.

Please set forth the legal nature of the relationship between YOU and the plaintiff at the time that YOU entered into [here describe sale, transaction, etc.] with [plaintiff].
Do YOU contend that, at the time that YOU entered into [here describe purchase, sale, or other relationship] with [plaintiff] YOU were not engaged in a confidential relationship with [plaintiff]?*

§1872.4 Duty to Disclose – Superior Knowledge

Even where no “fiduciary” or “confidential” relationship exists, the defendant may be under an affirmative duty to disclose material facts if the defendant occupies a position of exclusive knowledge of facts which are not accessible to the plaintiff. This theory is most frequently articulated in vendor/vendee fraud cases where superior knowledge regarding attributes, defects, or qualities of real property are within the exclusive knowledge of its possessor or owner. See, e.g., Curran v. Heslop, 115 Cal. App. 2d 476 (1953); see also, Cal. Civ. Code §1102 (required disclosures concerning the condition of property). The interrogatories set forth in this section explore defendant’s contentions regarding existence of superior knowledge and disclosure in these cases.

Do YOU contend that, at the time YOU sold the [subject property] to [plaintiff] YOU disclosed to [plaintiff] all material facts regarding such property?*
Do YOU contend that, at the time YOU sold the [subject property] to [plaintiff] the fact that [here describe facts allegedly withheld] could be discovered by reasonable inspection by [plaintiff]?*
Do YOU contend that, at the time YOU sold the [subject property] to [plaintiff] YOU did not know that [here specify facts allegedly withheld]?*

§1872.5 Partial Disclosure

Even when the defendant is under no affirmative duty to disclose, liability can attach when the defendant nevertheless does disclose material facts without making a full disclosure of any additional facts which qualify the facts stated. Cal. Civ. Code §1710(3); Restatement of Law (Second), Torts, §529. The interrogatories set forth in this section address defendant’s contentions regarding liability based upon partial disclosure.

Do YOU contend that, at the time YOU entered into [here describe relationship, sale or transaction] with [plaintiff] YOU disclosed all material facts to [plaintiff]?*
Do YOU contend that, at the time YOU entered into [here describe relationship, sale or transaction] with [plaintiff] YOU disclosed to the [plaintiff] that [here describe the material qualifying facts]?*
Do YOU contend that, at the time YOU entered into [here describe relationship, sale or transaction] with [plaintiff] YOU did not know that [here specify material qualifying facts]?*

§1873 Defendant to Plaintiff

§1873.1 Active Concealment

As noted in §1871, a defendant may incur liability when, notwithstanding the absence of any affirmative duty to disclose, the defendant takes steps to actively conceal material facts pertaining to the transaction. The interrogatories set forth in this section explore plaintiff’s contentions regarding active concealment claims.

Do YOU contend that, at the time that YOU entered into [here describe relationship or transaction undertaken] with [defendant], [defendant] was aware that [here specify facts allegedly concealed]?*
Do YOU contend that, at the time that YOU entered into [here describe relationship or transaction undertaken] with [defendant], [defendant] took any action to conceal [here specify facts allegedly concealed]?*
Do YOU contend that, at the time YOU entered into [here describe relationship or transaction undertaken], [defendant] instructed any third party to conceal [here specify facts allegedly concealed]?*

§1873.2 Nondisclosure – Defendant to Plaintiff

§1873.2.1 Fact of Nondisclosure

As noted above, under certain circumstances the law imposes upon the defendant the duty of complete disclosure of all material facts. See §1872.1. The interrogatories set forth in this section explore plaintiff’s contentions regarding the fact of nondisclosure.

Do YOU contend that, at the time YOU entered into [here describe relationship or transaction undertaken] with [defendant], [defendant] was aware of [here specify facts allegedly withheld?*
Do YOU contend that, at the time YOU entered into [here describe relationship, sale, or transaction] with [defendant], [defendant] did not disclose to YOU that [here specify facts allegedly withheld]?*

§1873.2.2 Nondisclosure – Fiduciary Relationship

As noted in §1872.2, an affirmative duty to disclose may be predicated upon the existence of any of the traditional fiduciary relationships. The interrogatories set forth in this section explore plaintiff’s contentions regarding the existence of a fiduciary relationship.

Please describe the legal nature of the relationship between YOU and [defendant] at the time that YOU entered into [here describe relationship or transaction undertaken].
Do YOU contend that, at the time that YOU entered into [here describe relationship or transaction undertaken], [defendant] occupied a fiduciary relationship with respect to YOU?*

§1873.2.3 Nondisclosure – Confidential Relationship

As noted above, a duty to disclose may be predicated upon the existence of a confidential relationship, even if the relationship does not arise to the level of a traditional “fiduciary” relationship. See §1872.3. The interrogatories set forth in this section explore the plaintiff’s contentions regarding the nature of such relationships.

Please describe the legal nature of the relationship between YOU and [defendant] at the time that YOU entered into [here describe relationship or transaction undertaken].
Do YOU contend that, at the time that YOU entered into [here describe relationship or transaction undertaken], [defendant] occupied a confidential relationship with respect to YOU?*

§1873.3 Duty to Disclose – Superior Knowledge

As noted above, an affirmative duty of disclosure may be imposed when the material facts are inaccessible to the plaintiff. The interrogatories set forth in this section explore plaintiff’s contentions in such cases.

Do YOU contend that, at the time that YOU purchased the [subject property], [defendant] failed to disclose any material fact?*
Do YOU contend that, at the time that YOU purchased [the subject property] from [defendant], [here describe material fact allegedly withheld] would not have been disclosed pursuant to an inspection by YOU?*
Do YOU contend that, at the time that YOU purchased [the subject property] from [defendant], [defendant] was aware that [here describe facts allegedly withheld]?*

§1873.3.1 Duty to Disclose – Partial Disclosure

As noted above, a defendant who elects to disclose facts pertaining to a transaction must make full and complete disclosure. See §1872.5. The interrogatories in this section explore plaintiff’s contentions regarding this issue.

Do YOU contend that, at the time that YOU entered into [here describe relationship or transaction undertaken], [defendant] failed to disclose all material facts to YOU?*
Do YOU contend that, at the time YOU entered into [here describe relationship or transaction undertaken] [defendant] did not disclose [here describe the material qualifying facts] to YOU?*
Do YOU contend that, at the time YOU entered into [here describe relationship or transaction undertaken] [defendant] was aware that [here specify material qualifying facts]?*

§1880 Constructive Fraud

As indicated in the introduction to this chapter, the law recognizes a fourth species of fraud, generically referred to as “constructive fraud.” In essence, a finding of constructive fraud represents a generalization that a defendant, in breach of an established duty, has gained an advantage by misleading the other party to the relationship. Cal. Civ. Code §1573. In this respect, constructive fraud can consist either of affirmative misrepresentation or failure to disclose, and thus resembles fraudulent non-disclosure in that a fiduciary or confidential relationship is required. However, unlike fraudulent concealment, it is not required that the failure to disclose material facts must be intentional. See, e.g., Byrum v. Brand, 219 Cal. App. 3d 926 (1990). For this reason, many of the interrogatories in the foregoing sections of this chapter may be adapted for use in constructive fraud cases.

§1881 Constructive Fraud – Plaintiff to Defendant

§1881.1 Existence of Fiduciary Relationship

When a fiduciary relationship exists between the parties, the failure of the fiduciary in whom confidence is placed to disclose material facts may constitute constructive fraud. Restatement of Law (Second), Contracts, §161(d). The interrogatories set forth in this section explore defendant’s contentions regarding the existence of the fiduciary relationship.

Please set forth the legal nature of the relationship between YOU and the plaintiff at the time that YOU entered into [here describe relationship or transaction undertaken] with [plaintiff].
Do YOU contend that, at the time that YOU entered into [here describe relationship or transaction undertaken] with [plaintiff], YOU were not engaged in a fiduciary relationship with [plaintiff]?*

§1881.2 Existence of Confidential Relationship

As noted above, a duty to disclose may be predicated upon the existence of a confidential relationship, even if the relationship does not arise to the level of a traditional “fiduciary” relationship. The interrogatories set forth in this section explore the defendant’s contentions regarding the nature of such relationships.

Please set forth the legal nature of the relationship between YOU and the plaintiff at the time that YOU entered into [here describe relationship or transaction undertaken] with [plaintiff].
Do YOU contend that, at the time that YOU entered into [here describe relationship or transaction undertaken], YOU were not engaged in a confidential relationship with [plaintiff]?*

§1882 Constructive Fraud – Defendant to Plaintiff

§1882.1 Existence of Fiduciary Relationship

Please describe the legal nature of the relationship between YOU and [defendant] at the time that YOU entered into [here describe relationship or transaction undertaken].
Do YOU contend that, at the time that YOU entered into [here describe relationship, sale or transaction], [defendant] occupied a fiduciary relationship with YOU?*

§1882.2 Existence of Confidential Relationship

Please set forth the legal nature of the relationship between YOU and [defendant] at the time that YOU entered into [here describe relationship or transaction undertaken].
Do YOU contend that, at the time that YOU entered into [here describe relationship or transaction undertaken], [defendant] occupied a confidential relationship with respect to YOU?*

§1890 Investigatory Interrogatories

The interrogatories set forth in Chapter Two are directed to a more generalized investigation of the facts and circumstances surrounding litigated claims, and are equally applicable in fraud and deceit cases. They are designed to fill the gaps left open by the more specific inquiries set forth in the substantive chapters of this book. These interrogatories focus on the existence of additional witnesses, statements to other parties, surveillance, the preparation of written reports regarding the operative facts and similar issues. Accordingly, appropriate topical references are provided below.

§1891 Witnesses

The interrogatories set forth in §240 can be used to discover the identity of and knowledge possessed by witnesses to the events giving rise to the fraud claim. The responses to these interrogatories will be helpful in completing the discovery plan, particularly as it relates to depositions of percipient witnesses.

§1892 Expert Identification

In those few jurisdictions that allow expert identification through interrogatory discovery, the interrogatories set forth in §242 can be modified for use in fraud and deceit cases.

§1893 Surveillance

As in other types of litigation, the possibility exists that plaintiff or defendant has conducted surveillance of the opposing party. The interrogatories set forth in §232 are self-explanatory and should be included in any closing discovery.

§1894 Insurance

Coverage disputes can be anticipated in any case in which a fraudulent intent is alleged. Moreover, substantial questions can exist regarding whether the fraudulent statement can constitute an “occurrence” within the meaning of most liability policies.

As in other cases, the existence of a coverage dispute can be highly important in structuring the settlement posture of the case, because a coverage question can be resolved against the insured, which in turn might leave the claimant without resort to an existing policy. This is a particularly important consideration when plaintiff might otherwise elect to rescind and seek restitution. The interrogatories set forth in §251 are designed to explore the nature and extent of potentially applicable insurance as well as the existence of any coverage disputes.

§1895 Due Diligence in Preparation of Response

Interrogatory discovery should be closed with questions designed to insure that the answers reflect the sum total of the responding party’s knowledge. The interrogatories set forth in §255 should ordinarily be used in each interrogatory set.

Kevin R. Culhane is a partner with a law firm of Hansen, Boyd, Culhane & Watson in Sacramento, California. His practice consists primarily of professional liability and appellate law. He has been faculty member at Hastings Center for Trial and Appellate Advocacy in San Francisco, and frequently lectures on discovery and trial matters for California’s Continuing Education of the Bar. Following a one-year term as Vice-President of the State Bar of California, Mr. Culhane was appointed to two successive terms as a member of the Judicial Council of California. Mr. Culhane is the author of Model Interrogatories, from which this article is excerpted.