United States Fidelity And Guaranty

This case, involving suit on an indemnity contract and a defense of innocent misrepresentation, is confusing for four reasons. First, the Court of Appeals in its decision confused the elements in the traditional fraudulent misrepresentation rule and the elements in the Michigan innocent misrepresentation rule. Both the Court of Appeals and the trial court erred in trying to decide an innocent misrepresentation case on the basis of the failure to prove an element required in the traditional fraudulent misrepresentation rule but not required under the innocent misrepresentation rule. Second, the trial court, although purporting to recognize the legal rule that it was sufficient that the "misrepresentation exerted a material influence", inconsistently and erroneously acted as though the influence had to be total and exclusive. Third, the trial court erroneously failed to permit the defendants to attempt to prove the affirmative defense of silent fraud, saying the plaintiff had no duty of disclosure. However, the record indicates that there was indeed evidence which could substantiate such a duty. And fourth, in determining whether a misrepresentation had actually been made the trial court made contradictory statements so that it is impossible to conclude for certain whether or not a misrepresentation was made that the victims, in this case the defendants, relied on.