Elements of Nevada's Theories of Liability

Fraudulent Concealment

Fraudulent Concealment

Elements

To establish a prima facie case of fraudulent concealment, a plaintiff must offer proof that satisfies five elements:

  1. the defendant concealed or suppressed a material fact;
  2. the defendant was under a duty to disclose the fact to the plaintiff;
  3. the defendant intentionally concealed or suppressed the fact with the intent to defraud the plaintiff; that is, the defendant concealed or suppressed the fact for the purpose of inducing the plaintiff to act differently than she would have if she had known the fact;
  4. the plaintiff was unaware of the fact and would have acted differently if she had known of the concealed or suppressed fact;
  5. and, as a result of the concealment or suppression of the fact, the plaintiff sustained damages.

Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 1483-84, 970 P.2d 98, 110 (1998) (citing Nevada Power Co. v. Monsanto Co., 891 F.Supp. 1406, 1415 (D.Nev.1995)).

Example Cases

Proof

Generally, an action in deceit will not lie for nondisclosure. Epperson v. Roloff, 102 Nev. 206, 213, 719 P.2d 799, 803 (1986). For a mere omission to constitute actionable fraud, a plaintiff must first demonstrate that the defendant had a duty to disclose the fact at issue. See Monsanto, 891 F.Supp. at 1417.
Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 1483-84, 970 P.2d 98, 110 (1998).

Damages

Defenses

Misc

Duty to Disclose

With respect to fraudulent concealment, a duty to disclose arises from the relationship of the parties. A fiduciary relationship, for instance, gives rise to a duty of disclosure. See, e.g., Foley v. Morse & Mowbray, 109 Nev. 116, 125-26, 848 P.2d 519, 525 (1993). A duty to disclose may also arise where the parties enjoy a “special relationship,” that is, where a party reasonably imparts special confidence in the defendant and the defendant would reasonably know of this confidence. SeeMackintosh v. Jack Matthews & Co., 109 Nev. 628, 634-35, 855 P.2d 549, 553 (1993) (citing Mancini v. Gorick, 41 Ohio App.3d 373, 536 N.E.2d 8, 10 (Ohio Ct.App.1987)). A party’s superior knowledge thus imposes a duty to speak in certain transactions, depending on the parties’ relationship. “Nondisclosure will become the equivalent of fraudulent concealment when it becomes the duty of a person to speak in order that the party with whom he is dealing may be placed on an equal footing with him.” Mackintosh, 109 Nev. at 634-35, 855 P.2d at 553 (quoting Mancini, 536 N.E.2d at 9-10). Even when the parties are dealing at arm’s length, a duty to disclose may arise from “the existence of material facts peculiarly within the knowledge of the party sought to be charged and not within the fair and reasonable reach of the other party.” Villalon v. Bowen, 70 Nev. 456, 467-68, 273 P.2d 409, 415 (1954) (failure of purported widow to tell the executor of her purported husband’s estate that her prior marriage had not been terminated).
Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 1483-84, 970 P.2d 98, 110 (1998).

The duty to disclose requires, at a minimum, some form of relationship between the parties. SeeMackintosh, 109 Nev. at 634-35, 855 P.2d at 553 (disclosure mandated in context of dealings between parties); Viltalon, 70 Nev. at 467-68, 273 P.2d at 415 (same); see alsoIn re Temporomandibular Joint (TMJ) Implants Prods. Liab. Litig., 113 F.3d 1484, 1497 (8th Cir.1997) [hereinafter TMJ Implants] (without some kind of relationship, there can be no duty to disclose). Absent such a relationship, no duty to disclose arises, and as a result, no liability for fraudulent concealment attaches to the nondisclosing party.
Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 1483-84, 970 P.2d 98, 110-11 (1998).