Camp v. Ruffin ( 1994 )

United States Court of Appeals,
Fifth Circuit.
No. 93-9151
Summary Calendar.
Robert CAMP, Plaintiff-Appellant,
v.
Phillip G. RUFFIN, d/b/a Harper Trucks, Inc., d/b/a Harper Hand
Trucks, Inc. and Harper Trucks, Inc., Defendants-Appellees.
Aug. 25, 1994.
Appeal from the United States District Court for the Northern
District of Texas.
Before DAVIS, JONES and DUHÉ, Circuit Judges.
PER CURIAM:
Plaintiff appeals summary dismissal of his claims for fraud,
misrepresentation, and breach of contract. We affirm.
I. Background
Plaintiff Robert Camp sued his employer, Harper Trucks, and
its president, Philip Ruffin. The complaint asserted that certain
promises concerning commissions and salary made to him before he
accepted employment were not fulfilled; it specified two counts of
recovery, fraud and negligent misrepresentation.
On Defendant's motion for summary judgment, the district court
found that plaintiff's evidence failed to suggest detrimental
reliance or actual loss of money and that the common law fraud
claim therefore failed. As for misrepresentation, the court found
that plaintiff failed to present evidence of pecuniary loss. The
district court also found that plaintiff had not stated any other
1
claims such as breach of contract.
II. Fraud and Misrepresentation
Plaintiff argues that to show the damage element of his fraud
and misrepresentation claims, he need not offer evidence that he
passed over more lucrative opportunities in accepting employment
with Harper; he need only show that, acting in reliance on the
promises, he was damaged either by out-of-pocket losses or his loss
of the benefit of his bargain. He complains that evidence of lost
commissions and the promised pay raise show benefit-of-the-bargain
losses, which he contends suffice to raise a fact issue regarding
damages so as to defeat summary judgment.
Camp must provide evidence that he suffered injury as the
result of his reliance upon a promise or representation in order to
support his fraud or misrepresentation claim. See Beijing Metals
& Minerals Import/Export Corp. v. American Business Ctr., Inc., 993
F.2d 1178, 1185 (5th Cir.1993) (common law fraud); Crenshaw v.
General Dynamics Corp., 940 F.2d 125, 128 (5th Cir.1991) (fraud or
misrepresentation). The summary judgment evidence of financial
injury consisting solely of the denial of expected commissions and
a pay raise is insufficient as a matter of law. To support an
action for fraud or misrepresentation, a plaintiff must show what
he has actually lost—i.e., out-of-pocket damages or pecuniary
loss—not loss of what he was promised or loss of the benefit of the
contract. See Collins v. McCombs, 511 S.W.2d 745, 747
(Tex.Civ.App.—San Antonio 1974, writ ref'd n.r.e.) (fraud);
Federal Land Bank Ass'n of Tyler v. Sloane, 825 S.W.2d 439, 442
2
(Tex.1991) (misrepresentation).
Such damages are measured not by what the plaintiff might
have gained, had the promise been performed, but by what he has
lost. Collins, 511 S.W.2d at 747 (citing George v. Hesse, 100 Tex.
44, 93 S.W. 107, 107 (Tex.1906)); Morriss-Buick Co. v. Pondrom,
131 Tex. 98, 113 S.W.2d 889, 890 (1938). With certain exceptions
not applicable here, benefit-of-the-bargain damages are not
compensable. See Frey v. Martin, 469 S.W.2d 316, 317
(Tex.Civ.App.—Dallas 1971, writ ref'd n.r.e.) (explaining 1919
legislation supplementing damages for stock and real estate
transactions); see also Sloane, 825 S.W.2d at 443 n. 5 (confining
prohibition against benefit-of-the bargain damages to common-law
actions, expressly reserving opinion on damages recoverable in an
action based on statute).1 The lack of damages cognizable under
1
We think Sanchez v. Johnson & Johnson Medical, Inc., 860
S.W.2d 503 (Tex.App.—El Paso, writ filed, Sept. 13, 1993), goes
against the current of Texas law in this regard. Sanchez allowed
benefit-of-the bargain damages for fraud occurring in the
employment relationship. Noting that Sloane and Texas law would
appear to deny benefit-of-the bargain damages in
misrepresentation actions, Sanchez nevertheless allowed such
damages because lost wages "would appear to be the only
appropriate remedy." 860 S.W.2d at 514.
As late as 1991 the Texas Supreme Court "decline[d] to
extend damages beyond those limits provided in Restatement
section 552B." Sloane, 825 S.W.2d at 443. The Restatement
restricts damages for negligent misrepresentation to
"pecuniary loss"; damages recoverable for negligent
misrepresentation "do not include the benefit of the
plaintiff's contract with the defendant. Restatement
(Second) of Torts § 552B (1976) (emphasis added). In view
of the continued viability of Sloane, George v. Hesse and
Morriss-Buick Co. v. Pondrom, we do not believe the Texas
Supreme Court will depart from the general rule denying
benefit-of-the-bargain damages absent one of the recognized
exceptions.
3
Texas law defeats plaintiff's tort claims, because he has not shown
that a question of fact regarding injury remains for trial.
III. Contract
We also affirm the court's determination that plaintiff
failed to state a claim in contract. The summary judgment evidence
established that there was no written employment contract between
Camp and Harper. Accordingly, the employment agreement was
terminable at will. See Collins, 511 S.W.2d at 747 (rejecting
plaintiff's claim cast in language sounding in tort as an indirect
attempt to recover for the breach of an unenforceable promise);
Beijing Metals, 993 F.2d at 128 (oral promise of employment is
terminable at will).
For the foregoing reasons, the district court's judgment is
AFFIRMED.
4