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Cruze v. Hudler

Oregon Court of Appeals
267 P. 3d 176 (2011)


Facts

Tyrone Cruze and his wife (plaintiffs) owned property that they wished to sell to a developer. Martin Hudler, a real-estate developer, and Charles Markley, an attorney (defendants), were partners in a number of interconnected real-estate-development companies. Hudler began negotiations with Cruze to purchase the property Cruze owned. Throughout the negotiations, Hudler, with Markley’s knowledge, represented that he and Markley’s businesses were very successful, that they had invested substantially in the businesses, and that they had high net worths. Hudler eventually convinced Cruze to form a joint venture, and Cruze subsequently paid or loaned money totaling over $3,500,000 to three of Hudler and Markley’s companies. Cruze later discovered that many of Hudler’s representations about the success of the companies, and his and Markley’s investments in those companies, were false and that Hudler was in fact attempting to operate a Ponzi-type scheme to raise investments to repay earlier investors and hide losses. Cruze sued Hudler and Markley for fraud and other violations. Hudler and Markley both filed motions for summary judgment. The trial court denied Hudler’s motion but granted Markley’s motion for summary judgement because there was no evidence that Markley had personally made any misrepresentations to Cruze. Cruze appealed.

Rule of Law

Issue

Holding and Reasoning (Schuman, J.)

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