13.4.2 False Representation.

• Jurisdiction: Arizona

13.4.2 False Representation. The second of the nine elements is falsity. That is, a plaintiff must prove that a defendant’s representation was false at the time that it was made or else it will not be entitled to relief.³⁵ One of the earliest Arizona Supreme Court cases to address the issue of falsity in detail is Koen v. Cavanagh.³⁶

In Koen, the plaintiffs contracted to purchase a piece of real property from the defendants, who, during negotiations, represented that the location of the property was outside the city limits.³⁷ Unbeknownst to defendants, a petition had been filed by other property owners requesting that the land be annexed so as to fall within the city boundary.³⁸ The city commission discussed the petition and an ordinance annexing the property was passed a couple days after plaintiffs signed the contract to purchase defendants’ property.³⁹ When plaintiffs learned of the ordinance, they refused to carry out the contract, forfeited their earnest money and sued for fraudulent misrepresentation.⁴⁰ During trial, defendants moved for directed verdict on the grounds that the evidence showed that the property was located outside the city limits at the time the contract was signed and, thus, no actionable fraudulent representation was made.⁴¹ The trial court granted defendants motion and entered judgment in their favor.⁴²

On appeal, the Arizona Supreme Court rejected plaintiffs’ argument that the defendants had concealed material facts that it was obligated to...