Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am.

Brief Fact Summary.

Plaintiffs leased a property for their restaurant after being assured that the building was practically new and had no problems. Plaintiffs later learned that a severe odor plagued their restaurant’s site. They brought suit for misrepresentation.

Synopsis of Rule of Law.

Whether a a statement is an actionable statement of fact or purely an opinion depends on the circumstances, and special or one-sided knowledge may lead to the conclusion that a statement is one of fact.

Facts.

Jane and Francesco Secchi  (plaintiffs) owned and operated a restaurant, Italian Cowboy, that was located in a Dallas shopping center. During the lease negotiations, the property management director, Fran Powell, told the Secchis that the building was practically new and had no problems. The Secchis agreed to lease the property and began remodeling the property. The Secchis later learned that a severe odor had plagued the previous tenant. A few days later, they Secchis were again warned that there was “a very, very bad odor” on the restaurant’s site. They brought suit against Prudential Insurance Company of America and Prizm Partners (defendants).

Issue.

Whether defendants’ statements were actionable material misrepresentations as a matter of law?

Held.

Yes. As a matter of law, Powell’s representations were actionable. There was legally sufficient evidence to demonstrate that Powell knew the statements to be false when made to the Secchis. The judgment of the appellate court is reversed and a judgment is rendered in favor of plaintiffs on its claim for breach of implied warranty. The case is remanded to the appellate court for additional considerations consistent with this court’s opinion.

Discussion.

Pure expressions of opinion are not actionable. However, whether a statement is an actionable fact versus an opinion depends on the circumstances in which the statement was made. Here, the statements concealing the presence of the odor were statements of fact, not pure expressions of opinion. Powell was not only aware of the odor, but she also had personally experienced it and described it as “almost unbearable.”