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Russell/Packard Development9/18/2003
White v. Texas Co., 59 Utah 180, 202 P. 826, 830 (1921)). In light of these prior holdings, the Mayer court could find "no good reason why an action for the recovery of money secured by fraud is not likewise assignable." Id. The Mayer court held that " hile a mere naked right to recover for fraud is not assignable, . . . the weight of authority and . . . sound legal principles [persuade us that] an assignment is upheld when it carries with it a subsisting substantial right to property independent of the right to sue for fraud." Id. at 616-17. The supreme court reversed the district court's dismissal and remanded the case with instructions to reinstate the plaintiff's fraud claim. See id. at 618.
We find Mayer indistinguishable from the present appeal. Just as in Mayer, Russell alleges that the Appellees' fraudulent misrepresentations induced PRP to execute a real estate purchase contract in which PRP agreed to pay a higher price for the property than that for which it was presently selling. Like the defendant in Mayer, the Appellees pocketed the ill-gotten profit at the plaintiff's expense. In both cases, the property that the plaintiffs seek to recover through their fraud claims is the money "had [by the plaintiffs] and received [fraudulently by the defendants]." Id. at 616. And like the plaintiff in Mayer, Russell brought its fraud claim in the capacity of an assignee. Thus, applying Mayer, we reverse the dismissal on the fraud claim and allow Russell to pursue its claims against the Appellees.
III. Fiduciary Duty as to Bustos
Russell contends the district court erred in dismissing Russell's claims against Bustos. Bustos argues that he could not have defrauded Russell because he never made any kind of representation to PRP or Russell. Also, Bustos insists he owed PRP and Russell no duty as a fiduciary, and that he therefore had no duty to reveal his knowledge of the fraudulent scheme.
Generally, "silence . . . in the absence of a duty to speak . . . does not of itself constitute fraud." 37 C.J.S. Fraud § 18 (1997) (footnotes and citations omitted); cf. Jenson v. IHC Hosps., Inc., 944 P.2d 327, 333 (Utah 1997) ("The party's silence must amount to fraud."). However, " n exception to the [general] rule . . . exists where the circumstances impose on a person a duty to speak and he or she deliberately remains silent." 37 C.J.S. Fraud § 19 (footnote and citation omitted); see Jenson, 944 P.2d at 333. Furthermore, " arties who knowingly join a fiduciary in fraudulent acts, whereby the fiduciary breaches his or her fiduciary duties, are jointly and severally liable with that fiduciary." 37 Am. Jur. 2d Fraud and Deceit, § 306 (2001) (citing Future Group, II v. Nationsbank, 478 S.E.2d 45 (S.C. 1996) (stating " he gravamen of the claim [of aiding and abetting a breach of fiduciary duty] is the defendant's knowing participation in the fiduciary's breach.")); see also United Park City Mines Co. v. Greater Park City Co., 870 P.2d 880, 884-885 (Utah 1993) (reviewing a grant of summary judgment involving a cause of action for aiding and abetting a fraud by breach of fiduciary duty).
Russell alleges in its complaint that: (1) Bustos schemed with Thomas and Carson to purchase the lots and fraudulently resell them to PRP; (2) Bustos made overt acts and representations to induce Saratoga to sell the lots to CMT in the belief that CMT was affiliated with PRP; (3) Bustos, along with Carson and Thomas, made an offer to purchase the lots from Saratoga through CMT for $25,000 per lot; (4) Bustos converted and used Russell's proprietary development plans to further disguise CMT's illegitimacy; (5) Bustos was a member of Poe, the company that sent a $10,000 earnest money wi
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