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Dallas Appeals Ct Overturns BBVA Commercial Borrower Fraud Finding


Monday, December 21, 2020
Last week, the Dallas Court of Appeals overturned a $98 million trial court judgment, which was based on a jury finding that BBVA had defrauded one of its commercial borrowers.
[1]  
See BBVA Compass, et al. v. Bagwell, et al., Dallas App. Ct., No. 05-18-00860, December 14, 2020).  The appellate court concluded the jury’s verdict had to be reversed because, as a matter of law, BBVA’s borrower could not have justifiably relied on allegedly false statements that had been made to the borrower by a representative of the bank.  The Court’s holding and its focus on the element of “justifiable reliance” as a contractual defense to a fraud claim provides valuable guidance for private company majority owners in regard to their relationship with their minority business partners. ....

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