Hensley v. McSweeney

In Hensley v. McSweeney (2001) 90 Cal.App.4th 1081, the court awarded out-of-pocket damages in a case involving claims of fraud and intentional misrepresentation. (Id. at p. 1086.) \The Hensley court did not discuss the issue of separating fraud damages based on intentional misrepresentation from those based on negligent misrepresentation. Instead, the court adopted the reasoning of its earlier decision in Overgaard v. Johnson (1977) 68 Cal.App.3d 821, which found the measure of damages for fraud by a fiduciary is out-of-pocket damages, not the benefit-of-the-bargain damages normally applicable to contract causes of action. (Id. at pp. 826-828.) Hensley acknowledged a split of authority among appellate courts with respect to the measure of damages for intentional fraud by a fiduciary, but "in the absence of any contrary authority from the California Supreme Court, we decline to depart from our long-standing decision in Overgaard . . . ." (Hensley, supra, 90 Cal.App.4th at p. 1086.)