Sewak v. Lockhart - 699 A.2d 755 (Pa. Super. Ct. 1997)

Rule:

One party to a transaction who by concealment or other action intentionally prevents the other from acquiring material information is subject to the same liability to the other, for pecuniary loss as though he had stated the nonexistence of the matter that the other was thus prevented from discovering. Fraud may arise by: 1) the making of a knowingly false representation of fact; 2) an intentional concealment of true facts which is calculated to deceive the other party; or 3) a nonprivileged failure to disclose certain facts to the other party. The concealment must be intentional and must relate to material in formation. A misrepresentation or concealment will be considered material if it is of such character that had it not been made, the transaction would not have been consummated. Liability for fraudulent concealment exists if a defendant prevents a plaintiff from making an investigation he would have otherwise made.

Facts:

Plaintiff homebuyers brought suit for fraud, breach of contract, and unfair trade practices against defendant sellers after they discovered that defendants had caused a steel column that was the main structural support of the house to be removed and had not disclosed it to plaintiffs. An arbitrator found in favor of plaintiffs. The trial court affirmed and awarded treble damages under the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa. Cons. Stat. § 201-1 et seq. the defendants appealed, arguing that the trial court erred in failing to grant its motion for judgment notwithstanding the verdict or, in the alternative, motion for a new trial, since the plaintiff buyers clearly failed to sustain the burden of proof. 

Issue:

Did the plaintiffs sufficiently prove the element of fraud by clear and convincing evidence, thereby warranting the grant of damages in favor of plaintiffs? 

Answer:

Yes.

Conclusion:

On appeal, the court affirmed, holding that the trial court did not err in denying defendants' motion for judgment notwithstanding the verdict because plaintiffs proved each element of fraud by clear and convincing evidence. The court found that defendants verbally misrepresented the work that had been done on the house and took steps to conceal the lack of structural support, and that plaintiffs would not have bought the house had they been aware of the alteration of the structural support. The court found that treble damages were proper because plaintiffs proved the elements of fraud.