BLANCHARD VS. BLANCHARD (DIVORCE PROPERTY & ALIMONY)

Key holdings

Practitioner summary

Reviewing a dismissal under NRCP 12(b)(5), the court accepts the complaint's allegations as true, construes the pleadings liberally, and draws every fair intendment in the plaintiff's favor; dismissal is improper unless it appears beyond doubt the plaintiff could prove no set of facts that would entitle her to relief. Northern Nev. Ass'n Injured Workers v. SIIS, 107 Nev. 108, 807 P.2d 728 (1991); Capital Mortgage Holding v. Hahn, 101 Nev. 314, 705 P.2d 126 (1985); Edgar v. Wagner, 101 Nev. 226, 699 P.2d 110 (1985). The elements of intentional misrepresentation are a false representation made with knowledge or belief of its falsity or without a sufficient basis, an intent to induce reliance, justifiable reliance, and damages. Epperson v. Roloff, 102 Nev. 206, 210-11, 719 P.2d 799, 802 (1986). Justifiable reliance requires that the false representation played a material and substantial part in leading the plaintiff to adopt her course of conduct. Lubbe v. Barba, 91 Nev. 596, 600, 540 P.2d 115, 118 (1975). A representation that partially suppresses or conceals information may be actionable even without an express falsehood. Integration and waiver clauses do not bar a misrepresentation claim. Epperson. A plaintiff who makes an independent investigation is generally charged with knowledge reasonable diligence would disclose, but an independent investigation does not preclude reliance where the falsity is not apparent, the plaintiff is not competent to judge the facts without expert assistance, or the defendant has superior knowledge; whether an independent investigation was made is a question of fact. A party has no duty to investigate absent information serving as a "danger signal and a red light." Collins v. Burns, 103 Nev. 394, 397, 741 P.2d 819, 821 (1987). The misrepresentation of the Florida property's existence alone supported the claim, and the record suggested Rene prepared the documents and had superior knowledge and control of the assets. Reversed with direction that respondent assert his defenses by responsive pleading.

In plain language

When Lee Blanchard and Rene Blanchard divorced, they divided their property under a written settlement agreement based on a financial statement that Rene prepared. Lee later filed a separate lawsuit to undo (rescind) that agreement, claiming Rene had intentionally misrepresented several community assets. She alleged: a one-acre Florida lot the agreement gave her "free and clear" had actually been forfeited to the state for unpaid taxes years earlier, so it did not exist; her share of a pension was represented as about $44,100 but was really only about $29,000; stocks she received were worthless; and an investment Rene kept, which he supposedly called worthless, was actually worth a great deal and he sold it at a profit. The trial court dismissed Lee's lawsuit without a trial, ruling she could not show justifiable reliance. The Nevada Supreme Court reversed. On a motion to dismiss, the court must assume the complaint's allegations are true and may dismiss only if there is no possible set of facts that would entitle the plaintiff to relief. Lee's complaint set out the elements of intentional misrepresentation. The court rejected Rene's defense that the agreement's fine print said Lee did not rely on his valuations. Such "integration" and "waiver" clauses cannot bar a misrepresentation claim. The court also explained that whether Lee justifiably relied, and whether she conducted an independent investigation, are questions of fact for trial, not something to resolve on a motion to dismiss. An independent investigation does not defeat reliance where the falsity is not obvious, the plaintiff cannot judge the facts without expert help, or the defendant has superior knowledge. Because the misrepresentation about the Florida property's existence alone supported a claim, the court reversed and sent the case back so Rene could assert his defenses by a responsive pleading.