The Indiana Court of Appeals recently shed more light on what constitutes a “special relationship” necessary for a plaintiff to establish constructive fraud without proving the five traditional elements of constructive fraud. American Heritage Banco, Inc. v. Cranston, 928 N.E.2d 239 (Ind. Ct. App. 2010).
Indiana case law on constructive fraud is, quite frankly, a mess. There are at least two types of constructive fraud. One form of constructive fraud requires five elements. The five elements include:
(i) a duty owing by the party to be charged to the complaining party due to their relationship; (ii) violation of that duty by the making of deceptive material misrepresentations of past or existing facts or remaining silent when a duty to speak exists; (iii) reliance thereon by the complaining party; (iv) injury to the complaining party as a proximate result thereof; and (v) the gaining of an advantage by the party to be charged at the expense of the complaining party.