## Facts

- A residential subdivision in West Plano, Texas, was being developed and marketed to homebuilders for lot purchases.
- At a November 1975 meeting soliciting builders, the developer represented that a nearby mobile home park would be removed and replaced by a future shopping center.
- A builder directly asked what would be done with the mobile home park property before buying any lots.
- The developer responded with definite assurances implying present facts and commitments (including that the property had been sold and tenants had been notified to vacate).
- Relying on these assurances, the builder and his company purchased lots and built homes in the subdivision.
- The mobile home park was not sold, tenants were not told to move, and the park was not converted to commercial use.
- The subdivision’s performance suffered, and the builder incurred substantial financial losses.

## Issues

1. Whether the developer’s statements about removal of the mobile home park and construction of a shopping center were actionable misrepresentations for common-law fraud, rather than non-actionable predictions or opinions about future events.
2. Whether a jury finding that the developer made representations recklessly as positive assertions, without knowledge of their truth, satisfied the scienter element of Texas common-law fraud without a separate finding of actual knowledge of falsity.
3. Whether evidence of the builder’s reliance was sufficient to support the jury’s finding, or instead conclusively showed no reliance as a matter of law.
4. Whether the evidence supported the jury’s awards of actual and exemplary damages and whether judgment notwithstanding the verdict was proper.

## Decision

- The Texas Supreme Court reversed the court of appeals and set aside the take-nothing judgment entered after the second trial.
- The court held the representations were actionable because, in context, they were presented as definite assertions by a developer in a position to know or control the relevant facts, not mere speculation about future events.
- The court held that reckless representations made as positive assertions without knowledge of their truth satisfy the scienter requirement for common-law fraud.
- The court held there was evidence supporting the jury’s finding of reliance, and reliance was not negated as a matter of law merely because further investigation might have revealed the truth.
- The court rendered judgment for the builder in accordance with the jury’s verdict, including actual and exemplary damages.

## Legal Principles

- A statement framed as a future event may be actionable as fraud when the speaker purports to have special knowledge, control, or exclusive access to facts, or when the statement is made recklessly as a positive assertion without adequate basis.
- Texas common-law fraud scienter is met when a defendant makes a material representation recklessly as a positive assertion without knowledge of its truth and with intent that it be acted upon.
- Reliance is ordinarily a jury question; an appellate court may not set aside a reliance finding as a matter of law when the record contains evidence supporting it.
- A plaintiff is not automatically barred from proving reliance because the truth could have been discovered by investigation, particularly when the defendant gives confident, specific assurances in response to a direct inquiry.
- Actual and exemplary damages for fraud may be upheld when there is legally sufficient evidence of causation and loss and the fraud finding supports punitive relief.

## Conclusion

The court restored the jury’s fraud verdict, holding that a developer’s definite, reckless assurances about the status and imminent removal of a nearby mobile home park were actionable misrepresentations, that the builder’s reliance remained a fact question supported by evidence, and that the damages awards were supported by legally sufficient proof.


Trenholm v. Ratcliff, 646 S.W.2d 927 (Tex. 1983)