Chap010Cases

The Legal and Regulatory Environment of Business

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Case 10-1 (Chapter 10, p. 289) WELLS FARGO BANK v. ARIZONA LABORERS, TEAMSTERS, AND CEMENT MASONS 38 P.3d 12 (2002) FACTS: Wells Fargo Bank agreed to offer temporary financing to a borrower (Symington) if the borrower could secure permanent financing from another source. The borrower arranged a loan from various unions (the Funds), and when the borrower defaulted in repaying the Funds, the Funds sued Wells Fargo, alleging that the bank knew of financial misrepresentations by Symington to the Funds and had actually concealed them from the Funds. ISSUE: Can Wells Fargo be held liable for fraud even when it has no duty to disclose anything to the Funds? DECISION: Yes. REASONS: 1. Fraud alleging failure to disclose material facts requires that the defendant owe the plaintiff a duty based on an adequate relationship, but fraud in the concealment does not. 2. When Wells Fargo actively concealed material facts from the Funds, it assisted the borrower in committing fraud and is liable. Case 10-1
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Chap010Cases - Case 10 Case 10-1 (Chapter 10, p. 289) WELLS...

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