BA 644

Case 10-4 Fraudulent Misrepresentation

Dr. Speronis
2/25/2015
Annie Ashton
Esprit Log and Timber Frame Homes v. Wilcox
691 S.E.2d 344 (2010)
Facts
Ricky and Sherry Wilcox entered into a contract with Esprit Log and
Timber Frame Homes (Fireside Log Homes), where Fireside agreed to
manufacture and supply the Wilcoxes with the logs to build a manufactured
home which could be assembled in seven to ten days (Esprit Log and Timber
Frame Homes v. Wilcox, 2010). The Wilcoxes agreed to pay $128,600 for the
material and services and tendered $65,000 as a deposit. The Wilcoxes
ultimately paid Fireside $125,260. When the materials were delivered, they
were not build-ready, and the project took an additional ten months and the
Wilcoxes paid an additional $100,000 in materials, labor and expenses, as
well as investment interest totaling $166,915.The Wilcoxes were able to sell
the home after completion for $1,620,000. Fireside Log Homes sued Ricky
Wilcox and Sherry Wilcox seeking damages for breach of contract. The
Wilcoxes answered and asserted a counterclaim against Esprit Log and Don
Mahaffy, d/b/a Fireside Log Homes (collectively, "Fireside") for breach of
contract, negligent construction, conversion, fraud, and attorney fees.
Fireside appealed.
Issue

The issue in this case is whether the courts erred in overruling

Firesides motion for a new trial. Firesides claim is that the verdict on
Wilcoxes counterclaim was excessive and unsupported by evidence, the
punitive damages were not supported by evidence, and the Wilcoxes
received a double recovery.
Rule of Law
The rule of law pertaining to this case involves fraudulent
misrepresentation and breach of contract. Under contract law, a plaintiff can
recover against a defendant on the grounds of fraudulent misrepresentation
if (1) a representation was made; (2) that was false; (3) that when made, the
representation was known to be false or made recklessly without knowledge
of its truth; (4) that it was made with the intention that the plaintiff rely on it;
(5) that the plaintiff did rely on it; and (6) that the plaintiff suffered damages
as a result (Legal Information Institute, n.d.). It is the right of the defendant
to appeal the verdict passed down by the court if it believes the decision was
incorrect or faulty.
Application
The application of law in this case is that when deciding if there was a
breach of contract, the jury needed to decide if there was non-performance
of a contractual duty. The original suit against the Wilcoxes is irrelevant, as
per contract details, they did in fact pay $125,260 of the $128,600 agreed
upon, including a $65,000 deposit. The countersuit filed by the Wilcoxes for
breach of contract, negligent construction, conversion, fraud, and attorney

fees is valid. By entering into a contract for specific goods, knowing that they
were incapable of rendering a specific product, Fireside was committing
fraudulent misrepresentation of services. The contract also stated an amount
of time for completion, which was seven to ten days. This was grossly
inaccurate, as Fireside did not have the equipment to do the work necessary,
and was unable to secure a third party who was able to finish the project.
Ultimately, the Wilcoxes needed to take control of the project themselves,
repairing any damages and completing the home. This financial burden cost
the Wilcoxes an additional $100,000 in labor and supplies, as well as needing
to pay 5/8 to of $335,000 in interest expenses on the loan taken for the
home.
Conclusion
In conclusion, the jury disagreed with Fireside that the Wilcoxes
breached their contract and received a double recovery. The jury also
decided in favor of the Wilcoxes, and found Fireside guilty, awarding them
$200,000 on their counterclaim, $450,000 in punitive damages, and $20,000
in attorney fees.
Opinion
I agree with the verdict in this case. Fireside knowingly entered into a
contract in which they were fully aware they were unable to produce goods
which the client was specifically looking for. The Wilcoxes had to take the
project upon themselves to look for alternatives to finish the house, and they
still paid Fireside a sizeable amount of money for materials and labor. This

case clearly shows that the Wilcoxes did not do their homework when looking
for a house manufacturer for the type of project they wanted completed. The
questions regarding materials and the work that needed to get done should
have been asked before signing a contract and paying a deposit.

Works Cited
Esprit Log and Timber Frame Homes v. Wilcox, 691 S.E.2d 344 (Court of
Appeals of Georgia March 1, 2010).
Legal Information Institute. (n.d.). Retrieved from Cornell University Law
School: https://www.law.cornell.edu/wex/fraudulent_misrepresentation