California Civil Jury Instructions (CACI) (2017)

1908. Reasonable Reliance

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1908.Reasonable Reliance
In determining whether [name of plaintiff]’s reliance on the
[misrepresentation/concealment/false promise] was reasonable, [he/she/it]
must first prove that the matter was material. A matter is material if a
reasonable person would find it important in determining his or her
choice of action.
If you decide that the matter is material, you must then decide whether
it was reasonable for [name of plaintiff] to rely on the
[misrepresentation/concealment/false promise]. In making this decision,
take into consideration [name of plaintiff]’s intelligence, knowledge,
education, and experience.
However, it is not reasonable for anyone to rely on a [misrepresentation/
concealment/false promise] that is preposterous. It also is not reasonable
for anyone to rely on a [misrepresentation/concealment/false promise] if
facts that are within [his/her] observation show that it is obviously false.
New September 2003; Revised October 2004, December 2013
Directions for Use
There would appear to be three considerations in determining reasonable reliance.
First, the representation or promise must be material, as judged by a reasonable-
person standard. (Charpentier v. Los Angeles Rams (1999) 75 Cal.App.4th 301,
312–313 [89 Cal.Rptr.2d 115].) Second, if the matter is material, reasonableness
must take into account the plaintiff’s own knowledge, education, and experience;
the objective reasonable person is irrelevant at this step. Third, some matters are
simply too preposterous to be believed by anyone, notwithstanding limited
knowledge, education, and experience. (Blankenheim v. E. F. Hutton, Co., Inc.
(1990) 217 Cal.App.3d 1463, 1474 [266 Cal.Rptr. 593].)
See also CACI No. 1907, Reliance.
Sources and Authority
• “After establishing actual reliance, the plaintiff must show that the reliance was
reasonable by showing that (1) the matter was material in the sense that a
reasonable person would find it important in determining how he or she would
act, and (2) it was reasonable for the plaintiff to have relied on the
misrepresentation.” (Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th
1178, 1194 [175 Cal.Rptr.3d 820], internal citations omitted.)
• “According to the Restatement of Torts, ‘[r]eliance upon a fraudulent
misrepresentation is not justifiable unless the matter misrepresented is
material. . . . The matter is material if . . . a reasonable [person] would attach
importance to its existence or nonexistence in determining his choice of action
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in the transaction in question . . . .’ But materiality is a jury question, and a
‘court may [only] withdraw the case from the jury if the fact misrepresented is
so obviously unimportant that the jury could not reasonably find that a
reasonable man would have been influenced by it.’ ” (Charpentier, supra, 75
Cal.App.4th at pp. 312–313, internal citations omitted.)
• “[T]he issue is whether the person who claims reliance was justified in
believing the representation in the light of his own knowledge and experience.”
(Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 503 [198
Cal.Rptr. 551, 674 P.2d 253], internal citations omitted.)
• “[N]or is a plaintiff held to the standard of precaution or of minimum
knowledge of a hypothetical, reasonable man. Exceptionally gullible or ignorant
people have been permitted to recover from defendants who took advantage of
them in circumstances where persons of normal intelligence would not have
been misled. ‘No rogue should enjoy his ill-gotten plunder for the simple reason
that his victim is by chance a fool.’ ” (Blankenheim, supra, 217 Cal.App.3d at
p. 1474, internal citations omitted.)
• “[G]enerally speaking, ‘ “[a] plaintiff will be denied recovery only if his
conduct is manifestly unreasonable in the light of his own intelligence or
information. It must appear that he put faith in representations that were
‘preposterous’ or ‘shown by facts within his observation to be so patently and
obviously false that he must have closed his eyes to avoid discovery of the
truth.’ [Citation.] Even in case of a mere negligent misrepresentation, a plaintiff
is not barred unless his conduct, in the light of his own information and
intelligence, is preposterous and irrational. . . . The effectiveness of disclaimers
is assessed in light of these principles. [Citation.]” ’ ” (Public Employees’
Retirement System v. Moody’s Investors Service, Inc. (2014) 226 Cal.App.4th
643, 673 [172 Cal.Rptr.3d 238].)
• “[I]f the conduct of the plaintiff in the light of his own intelligence and
information was manifestly unreasonable, however, he will be denied a
recovery.” (Thrifty Payless, Inc. v. The Americana at Brand, LLC (2013) 218
Cal.App.4th 1230, 1239 [160 Cal.Rptr.3d 718].)
• “Except in the rare case where the undisputed facts leave no room for a
reasonable difference of opinion, the question of whether a plaintiff’s reliance is
reasonable is a question of fact.” (Beckwith v. Dahl (2012) 205 Cal.App.4th
1039, 1067 [141 Cal.Rptr.3d 142].)
• “ ‘What would constitute fraud in a given instance might not be fraudulent
when exercised toward another person. The test of the representation is its
actual effect on the particular mind . . . .’ ” (Blankenheim, supra, 217
Cal.App.3d at p. 1475, internal citation omitted.)
• “[Plaintiff]’s deposition testimony on which appellants rely also reveals that she
is a practicing attorney and uses releases in her practice. In essence, she is
asking this court to rule that a practicing attorney can rely on the advice of an
equestrian instructor as to the validity of a written release of liability that she
CACI No. 1908 FRAUD OR DECEIT
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executed without reading. In determining whether one can reasonably or
justifiably rely on an alleged misrepresentation, the knowledge, education and
experience of the person claiming reliance must be considered. Under these
circumstances, we conclude as a matter of law that any such reliance was not
reasonable.” (Guido v. Koopman (1991) 1 Cal.App.4th 837, 843–844 [2
Cal.Rptr.2d 437], internal citations omitted.)
• “[I]t is inherently unreasonable for any person to rely on a prediction of future
IRS enactment, enforcement, or non-enforcement of the law by someone
unaffiliated with the federal government. As such, the reasonable reliance
element of any fraud claim based on these predictions fails as a matter of law.”
(Brakke v. Economic Concepts, Inc. (2013) 213 Cal.App.4th 761, 769 [153
Cal.Rptr.3d 1].)
• “[A] presumption, or at least an inference, of reliance arises wherever there is a
showing that a misrepresentation was material. A misrepresentation is judged to
be ‘material’ if ‘a reasonable man would attach importance to its existence or
nonexistence in determining his choice of action in the transaction in question’
and as such, materiality is generally a question of fact unless the ‘fact
misrepresented is so obviously unimportant that the jury could not reasonably
find that a reasonable man would have been influenced by it.’ ” (Engalla v.
Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 977 [64 Cal.Rptr.2d
843, 938 P.2d 903], internal citations omitted.)
Secondary Sources
5 Witkin, Summary of California Law (10th ed. 2005) Torts, §§ 812–815
3Levy et al., California Torts, Ch. 40, Fraud and Deceit and Other Business Torts,
§ 40.06 (Matthew Bender)
23 California Forms of Pleading and Practice, Ch. 269, Fraud and Deceit, § 269.19
(Matthew Bender)
10 California Points and Authorities, Ch. 105, Fraud and Deceit, § 105.229
(Matthew Bender)
2 California Civil Practice: Torts, § 22:32 (Thomson Reuters)
1909. Reserved for Future Use
FRAUD OR DECEIT CACI No. 1908
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