August 27th, 2020

US Court of Appeals for the Fifth Circuit Opinions
Colonial Oaks Assisted Living Lafayette, LLC v. Hannie Development, Inc.

Docket: 19-30995
Opinion Date: August 26, 2020
Judge: Don R. Willett
Areas of Law: Arbitration & Mediation, Business Law, Civil Procedure, Contracts

After Buyers purchased two care facilities from Sellers, Buyers filed suit alleging that Sellers made fraudulent or, at best, negligent misrepresentations in the parties' sale agreements. Buyers also brought claims against Sellers' representatives in their individual capacities. The Fifth Circuit affirmed the district court's dismissal of Buyers' claims with prejudice for failure to state a claim. The court held that the district court properly dismissed Buyers' non-fraud claims for negligent misrepresentation and breach of contractual representations and warranties because these claims were subject to arbitration. In regard to the remaining claims, the court held that Buyers have not adequately pleaded a misrepresentation with respect to both facilities and thus they failed to meet the particularity requirements of Federal Rule of Civil Procedure 9(b). Therefore, because there was no misrepresentation, there was no fraud.

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