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Green v. H & R Block, Inc. - 355 Md. 488, 735 A.2d 1039 (1999)


The essential elements of a claim for fraudulent concealment include: (1) the defendant owed a duty to the plaintiff to disclose a material fact; (2) the defendant failed to disclose that fact; (3) the defendant intended to defraud or deceive the plaintiff; (4) the plaintiff took action in justifiable reliance on the concealment; and (5) the plaintiff suffered damages as a result of the defendant's concealment. 


H&R Block offered tax preparation and refund services to thousands of Maryland residents. H&R Block's tax filing services allowed customers to obtain faster tax refunds than would otherwise occur by simply mailing the return to the Internal Revenue Service (IRS). H&R Block offered two such services. A customer can pay $25 for H&R Block to file the return electronically, enabling the customer to obtain the refund in 2 weeks. For customers who want to obtain an even faster refund, H&R Block arranged bank loans in the amount of the customer's refund through its RAL program. Through its RAL program, H&R Block facilitated loans between its customers and a third-party bank that are secured by the taxpayer's anticipated refund. For each RAL that it arranged between the taxpayer and the bank, H&R Block benefited financially through a licensing fee, among other financial benefits, that was not disclosed to the H&R Block taxpayer/customer. Upon learning of these arrangements, a class action was filed against H&R Block alleging three claims: (1) breach of fiduciary duty based on an alleged agency relationship between plaintiff and defendant; (2) violation of the Maryland Consumer Protection Act (CPA); and (3) fraudulent concealment. The trial court granted H&R Block's motion to dismiss, finding, that H&R Block had no duty to disclose the benefits it receives from lending institutions because no fiduciary obligation exists between H&R Block and its customers. The case was appealed.


Did H&R Block have a duty to disclose to its customers the benefits it receives from lending institutions when it refers customers who are seeking a bank loan in the amount of their anticipated tax refund?




The court reversed, finding that sufficient facts had been alleged to warrant a factual determination regarding the existence of a principal-agent relationship that gives rise to a fiduciary duty to disclose any conflict of interest. The court also found that the CPA claim should not have been dismissed for lack of a fiduciary duty to disclose. The court remanded all three claims, including the claim for fraudulent concealment, to the trial court, as dismissal had been made based on want of duty to disclose.

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