What is the test for proving reliance on a misrepresentation?

MultiRegion, United States of America

The following excerpt is from In re First Am. Home Buyers Prot. Corp., Lead Case No. 13-cv-01585-BAS(JLB) (S.D. Cal. 2016):

"Actual reliance occurs when the defendant's misrepresentation is an immediate cause of the plaintiff's conduct, altering his legal relations, and when, absent such representation, the plaintiff would not, in all reasonable probability, have entered into the transaction." Cadlo, 125 Cal. App. 4th at 519. In order to prove reliance on an omission, "[o]ne need only prove that, had the omitted information been disclosed one would have been aware of it and behaved differently." Mirkin v. Wasserman, 5 Cal. 4th 1082, 1093 (1993).

Defendant argues individual issues of law and fact will predominate as to Plaintiffs' fraud claims because no inference of reliance arises as to the entire class, and Plaintiffs have failed to provide a viable damages model. (Opp. at pp. 39, n. 33, 40.) To demonstrate that the element of reliance is a common question that can be resolved for all members of the Class in a single adjudication, Plaintiffs rely on the following statement of the law set forth in Vasquez v. Super. Ct., 4 Cal. 3d 800 (1971):

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