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Fraud Claims Asserted By Homeowner Against Engineer Dismissed For Lack Of Specificity

In Hinman v. ValleyCrest Landscape, Inc. and Aquatic Design & Engineering, Inc., No. 3:19-cv-551, 2020 WL 434161 (M.D. Tenn. Jan. 28, 2020), the United States District Court for the Middle District of Tennessee granted Defendants’ Motion to Dismiss the fraud claims alleged against the engineer for lack of specificity in the pleading.  

Plaintiff, the homeowner, filed suit against ValleyCrest Landscape Development, Inc. (“ValleyCrest”), BrightView Landscape Development, Inc. (“BrightView”), and Aquatic Design & Engineering, Inc. (“Aquatic”) for claims related to a $1 million pool and landscaping project (“the Project”). The Complaint asserted various claims, including fraudulent inducement and fraudulent concealment. ValleyCrest, BrightView and Aquatic all filed Motions to Dismiss, arguing the pleading standard for fraud had not been satisfied because the alleged fraud was not pled with particularity. The Court granted the Motions, agreeing the Complaint did not state with particularity the elements for fraud.

The Court found the Complaint failed to allege the engineer was a party to the contract with Plaintiff or had any involvement in negotiating the terms of the contract. The Court found the Complaint failed to state with particularity a false statement of fact made by Defendants, nor any statements upon which Plaintiff relied. The Court explained the claim failed to plead a false statement material to the Plaintiff’s decision to contract with the design-builder.

The Court emphasized that claims based on fraud pose “a high risk of abusive litigation” and thus, the allegations must be stated with the utmost specificity. This case continues the federal court’s trend to dismiss vague and broad fraud allegations asserted against design professionals.