Rozen v. Greenberg - 165 Md. App. 665, 886 A.2d 924 (2005)

Rule:

The tort of fraudulent inducement means that one has been led by another's guile, surreptitiousness or other form of deceit to enter into an agreement to his detriment.

Facts:

Appellee Michal Greenberg had a business preparing U.S. tax returns for Israelis. She had been an accountant for nearly twenty years, and she had nearly 700 clients. Appellant Arie Rozen, who had only been an accountant for five weeks, sent appellee an email stating that he had a business that had a team of accountants, and sought to go into business with her. They met, and the appellant said, "let me show you my business." He took her to an office where he was employed to prepare tax returns for a company's clients. The appellee was impressed by the facilities, which she mistook for the accountant's business. Appellee agreed to sell her client list to the appellant. Subsequently, appellee sued appellant for fraudulent inducement. Judgment was entered for appellee, and she was awarded $368,760 in damages as well as rescission of the contract to sell her business. Appellant challenged the decision. 

Issue:

Under the circumstances, could the appellant be held liable for fraudulent inducement? 

Answer:

Yes.

Conclusion:

On appeal, the court found that the appellant had made material misrepresentations to the appellee, notably that he had "years" of experience as a CPA and he was heading a team of professionals at his business, and led the appellee to believe that his employer was his business. These "facts" were critical to the appellee's decision; thus, the judgment in favor of appellee on her fraud claim was affirmed. However, because the trial court did not deduct the appellant's expenses in calculating the damage award, the court remanded for a new calculation.