Lender Liability - 4th Edition - Hardcover
Lender Liability - 4th Edition - Electronic
Fraud - Chapter 15 - Preview Page
§ 15.01 Overview
The tort of fraud embraces many concepts in lender liability. Fraud
can be actual or constructive, and based on common law or on a statute.
It can be used defensively; it can ground an affirmative claim for both
compensatory and punitive damages; it can serve as a basis for
rescission; and it can be the basis for other claims, such as a fraudulent
conveyance, bankruptcy fraud, or a RICO violation.
The variety of fraud in lender liability cases is equally large. Lenders
may lie to borrowers about what they will or will not do, or they may fail
to disclose information they have a duty to reveal. What may have
passed for innocent hyperbole or puffing a decade ago may now be
There is wide disparity among the states concerning what conduct
gives rise to fraud and what elements must be proven for each type of
fraud. For example, a misrepresentation carelessly made without
knowing whether it is true or not may be considered fraud in one
jurisdiction and negligence in another.
There is also a divergence between the states on the ramifications of
fraud as a defense versus fraud as an affirmative cause of action.1
However titled, a fraud cause of action is also subject to special rules
of pleading. As a general rule, the circumstances constituting a fraud claim
must be pled with particularity, even in "notice" pleading jurisdictions.2
Fraud claims comprise a major component of predatory lending
complaints.3 As the hundreds of pending predatory lending complaints
make their way through the system, judicial expansion of fraud liability
§ 15.01 Overview
§ 15.02 Types of Fraud
§ 15.03 --Intentional Misrepresentation
§ 15.04 -- --Statement of Fact
§ 15.05 -- --Justifiable Reliance
§ 15.06 -- --Examples
§ 15.07 --Negligent Misrepresentation
§ 15.08 --Nondisclosure and Concealment
§ 15.09 --False Promises
§ 15.10 Common Fraudulent Practices
§ 15.11 --Promises to Induce Benefits
§ 15.12 --False or Groundless Threats
§ 15.13 --Misrepresenting the Effect of Documents
§ 15.14 -- Improper Advice
§ 15.15 --Other Practices
§ 15.16 Remedies for Fraud
§ 15.17 --Recovery of Damages
§ 15.18 --Rescission
§ 15.19 Fraudulent Conveyances
§ 15.20 Bankruptcy Fraud
A. Barry Cappello, Managing Partner, of the Santa Barbara law firm of Cappello & Noël, LLP. Mr. Cappello, who founded the firm in 1977, is recognized as one of the nation's leading trial lawyers and authorities on complex commercial litigation specializing in lender liability. He has represented both large and small businesses against most of the nation's major banks in litigation nationwide. His practice also involves class actions against lenders and other large corporations, bad faith insurance litigation and other complex business and tort litigation matters.
A fierce advocate for his clients, Mr. Cappello has been described by California Lawyer magazine as "Santa Barbara's Resident Barracuda," a reputation Cappello does not dispute. He has successfully tried jury trials with total verdicts in excess of $300 million and negotiated more than $1 billion in settlements and workouts for his clients.
Mr. Cappello has contributed numerous articles on complex business litigation, lender liability andadvanced trial techniques to business, legal, accounting and trade publications. Publications include Trial, The Daily Journal, The National Law Journal, Small Business Advisor and The Commercial Real Estate Journal. Mr. Cappello speaks to legal and business audiences around the country.
Before entering private practice, Mr. Cappello served a seven-year tenure as City Attorney of Santa Barbara. He was the chief litigator against the oil companies that caused the massive 1969 Santa Barbara Channel oil spill. The disaster and the ensuing litigation awakened the nation's conscious to the dangers to our environment and the tragic consequences if not protected. The case was settled in 1974 shortly before trial for $9.45 million, considered a huge sum at the time.
Prior to being appointed City Attorney of Santa Barbara, he was Assistant District Attorney and Chief Trial Deputy in the Santa Barbara County District Attorney's Office. Mr. Cappello also served as a Deputy Attorney General for the State of California assigned to the Special Trials and Investigations Division. Mr. Cappello prosecuted numerous murder, business crime and major felony cases.
Mr. Cappello has been listed in Best Lawyers in America since 1992 and in Who's Who in America. He was named a "Super Lawyer" in 2007 - 2009, and he was selected as one of the Top 100 Trial Attorneys in California for 2007 by the American Trial Lawyers Association.