String Along or Ongoing Fraud

Tenant–Base has also asserted a separate string-along fraud claim. Landlord–Center has first argued that “string along fraud” does not exist under Texas law. This does not appear to be accurate. In fact, string-along fraud has been held to be an ongoing course of fraud that may begin before a contract is executed or can start after the contract is entered into and continues during the course of the contract’s performance. For example, in Southwell–Gray v. Jones, No. Civ. 300CV1539–H, 2001 WL 493165, at *3–5 (N.D.Tex. May 4, 2001), the district court granted summary judgment for plaintiff on fraud claims based on defendants’ continuing misrepresentations—both before and after the parties entered into a loan agreement—that defendants would repay a loan, even though they had no intent to do so. The court recognized that the fraud claim for inducing continued performance was distinct from other types of claims, explaining that “[t]his is not merely a case of failure to perform the contract, but one in which the evidence indicates Defendants had no intention of doing so” based on “pre-Agreement representations and … repeated representations made during and after the term of the Agreement, regarding the status of Plaintiff’s loan principal and Defendants’ intention to return it.” Southwell–Gray v. Jones, No. Civ. 300CV1539–H, 2001 WL 493165, at *5 (N.D.Tex. May 4, 2001).

Similarly, in Kajima Int’l, Inc. v. Formosa Plastics Corp., USA, 15 S.W.3d 289, 293 (Tex.App.-Corpus Christi 2000, pet. denied), a defendant plant owner was liable for fraudulently inducing a contractor’s continued performance under a construction contract. In Kajima, the court rejected defendant’s argument that “by allowing recovery for fraud after execution of the contracts, every case in which breach of contract is alleged and a contracting party has asked another party for continued performance will require a fraud submission.” Id. Rather, the court expressly recognized fraud induced after a contract is executed, stating, “[w]e can find no opinion precluding recovery for fraud because the fraud occurred after execution of a contract, and we decline to do so here.” Id.

Other Texas federal and state courts, including the Fifth Circuit, have seemingly recognized string-along or ongoing fraud to induce continued contractual performance as a valid cause of action that is separate and distinct from a breach of contract claim.¹⁸ All of the cases cited *757 recognize that such fraud claims are separate and apart from other types of claims, including claims for breach of contract. That is because the legal duty not to fraudulently procure performance under a contract “is separate and independent from the duties established by the contract itself.” Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 46–47 (Tex.1998).

15 Despite the foregoing, here, the court does not find, based on the summary judgment evidence, that there is any genuine issue of material fact suggesting Landlord–Center perpetrated any type of string along fraud against Tenant–Base. In addition to the same misrepresentations that Tenant–Base argues for its other fraud claims, Tenant–Base also cites to statements that Landlord–Center made after the Lease was signed in which Landlord–Center (through either Courson or Skenderian) assured and promised Tenant–Base that the Parking Agreement would be signed. As stated above, the summary judgment evidence was utterly lacking of any hint that Landlord–Center fraudulently misrepresented or fraudulently failed to disclose, either before or after the Lease, the status of the Parking Agreement. Moreover, the court cannot find that there is a genuine issue of fact regarding whether Tenant–Base has suffered any direct or consequential damages as a result of Landlord–Center’s alleged string along fraud. Accordingly, Tenant–Base’s claim for string along fraud fails as a matter of law.