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Zanakis-Pico v. Cutter Dodge6/14/2002
ge"). Thus, as the juxtaposition of "substantial actual damage" with "nominal" or "speculative" damages indicates, plaintiffs suing in fraud are required to show both that they suffered actual pecuniary loss and that such damages are definite and ascertainable, rather than speculative. There is no threshold amount required in order for the pecuniary loss to be deemed "substantial." Cf. Turner v. General Adjustment Bureau, Inc., 832 P.2d 62, 63 n.1 (Utah Ct. App. 1992) (rejecting argument that damages must be "substantial" in order to be recoverable for fraud), overruled on other grounds by Campbell v. State Farm Mut. Auto Ins. Co., No. 981564, 2001 WL 1246676 (Utah Oct. 19, 2001) (holding that damages for emotional distress are recoverable for fraud).
Cutter urges us, nevertheless, to affirm the circuit court because " he only damages recoverable under a fraud claim are confined to either 'out of pocket' or 'benefit of the bargain' damages." This court has never specifically addressed whether the kind of damages alleged by the Picos constitute "out-of-pocket" losses and are sufficient to support a claim for relief grounded in fraud, but we have no doubt that they do. The loss alleged by the Picos is the money that they spent as a consequence of their reliance on Cutter's advertisement. Such consequential damages, if proven, constitute "out of pocket" losses. See Ostano Commerzanstalt v. Telewide Systems, Inc., 880 F.2d 642, 648 (2d Cir. 1989) ("Damages for fraud include the costs incurred in preparing for, performing, or passing up other business opportunity, . . . as well as costs incurred in making reasonable efforts to mitigate damages[.]") (citing Fort Howard Paper Co. v. William D. Witter, Inc., 787 F.2d 784, 793 n.6 (2d Cir. 1986), and Lanite Sales Co. v. Klevens Corp., 128 N.Y.S.2d 182, 188 (Sup. Ct. 1954)); Walker v. Signal Companies, Inc., 149 Cal. Rptr. 119, 125 (Cal. Ct. App. 1978) ("A party may recover consequential damages resulting from his acts in reliance on the other party's misrepresentations."); Castle & Cooke, Inc. v. Lincoln Merchandise Corp., 477 N.Y.S.2d 390, 390 (N.Y. App. Div. 1984) (" he prime standard for measuring the actual pecuniary loss sustained as a direct result of fraud is the 'out of pocket rule' . . . . Recovery of profits which would have been realized in the absence of fraud is not possible under the 'out of pocket' theory . . . because the defrauded party is entitled solely to recovery of the sum necessary for restoration to the position occupied before the commission of the fraud . . . . 'Out of Pocket' considerations do not, however, prevent recovery of other consequential damages proximately caused by reliance upon the misrepresentation[.]" (citations omitted) (some emphases added and some in the original)).
Accordingly, we hold that the money that the Picos expended in responding to Cutter's advertisement, if proved, satisfies the requirement of "substantial pecuniary loss" necessary to support a claim for relief grounded in fraud.
Furthermore, assuming that it was not abandoned, see supra note 20, we hold that the Picos' damages were also adequate to maintain a negligent misrepresentation claim. This court has held that a plaintiff claiming negligent misrepresentation must show that: "(1) false information supplied as a result of the failure to exercise reasonable care or competence in communicating the information; (2) the person for whose benefit the information is supplied suffered the loss; and (3) the recipient relies upon the misrepresentation." Blair v. Ing, 95 Hawaii 247, 269, 21 P.3d 452, 474 (2001) (citing Kohala Agriculture v. Deloitte & Touche, 86 Hawaii 301, 323, 949 P.2d 141, 163 (App. 1997), and Restatement (Second)
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