13.4.1 Representation.

• Jurisdiction: Arizona

13.4.1 Representation. The first step in analyzing a claim for fraud is to verify that a representation has been made²² and to consider the character of the representation on which the action is based.²³ “The general rule is that in order to constitute actionable fraud, the false representation must be of a matter or fact which exists in the present, or has existed in the past[,] and cannot be predicated upon the mere expression of an opinion or upon representations in regard to matters of estimate or judgment.”²⁴ The rationale underlying this rule is that the listener has no right to rely upon the latter statements and does so at his peril, nor can such statements be supposed to influence his judgment.²⁵

There are, however, limited exceptions to the general rule. When a party holds a confidential relationship with another, e.g., attorney-client, statements of opinion “tainted with an intent to gain some advantage over the client either for himself or for another” are actionable.²⁶ “The relationship creates the exception because a person has a right to rely upon the opinion of a fiduciary who possesses superior knowledge on the subject concerning which he expresses an opinion.”²⁷ Likewise, statements as to the value of something, which are generally considered to be opinions, are actionable if the party making the false representations as to the value “has, or assumes to have, special knowledge as to its value, and knows that the other party is ignorant of its value, and is relying upon his representations on the subject ...”²⁸ In such a case, “the false representations will be regarded as the statement of an existing fact and not mere opinion.”²⁹

“While a statement of a matter to occur in the future, if affirmed as a fact, may amount to a false or fraudulent representation, it must be an actual assertion of a fact and not merely an agreement to do something in the future. It is the general rule that statements or representations as to the future value or profitableness or prospects of a business are mere expressions of opinion, and a representation that something will be done in the future or a promise to do it is at most a contract and not a fraudulent representation” sufficient to sustain an action for fraud.³⁰ Like opinions, the main reason for not permitting fraud claims based “on promises which are not subsequently kept is that a promise to perform in the future is not a representation which can be shown to be true or false at the time it was made...