Author Question: Fraudulent Misrepresentation. In 1987, United Parcel Service Co and United Parcel Service of ... (Read 139 times)

faduma · **on:** Jun 24, 2018

Fraudulent Misrepresentation. In 1987, United Parcel Service Co and United Parcel Service of America, Inc (together known as UPS), decided to change the parcel delivery business from relying on contract carriers to establishing its own airline. During the transition, which took sixteen months, UPS hired 811 pilots. At the time, UPS expressed a desire to hire pilots who remained throughout that period with its contract carriers, which included Orion Air. A UPS representative met with more than fifty Orion pilots and made promises of future employment. John Rickert, a captain with Orion, was one of the pilots. Orion ceased operation after the UPS transition, and UPS did not hire Rickert, who obtained employment about six months later as a second officer with American Airlines, but at a lower salary. Rickert filed a suit in a Kentucky state court against UPS, claiming, in part, fraud based on the promises made by the UPS representative. UPS filed a motion for a directed verdict. What are the elements for a cause of action based on fraudulent misrepresentation? In whose favor should the court rule in this case, and why?

Question 2

Which of the following is part of the principal's duty to cooperate:
a. providing a safe working environment
b. warning the agent of any unreasonable risk associated with the agency c. not furnishing goods of inferior quality to the agent
d. all of the other specific choices are correct e. none of the other choices are correct

annierak · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

Fraudulent misrepresentation
A jury awarded more than 740,000 in damages to Rickert on his claim of fraud, and UPS appealed to a state intermediate appellate court, which affirmed the award. UPS appealed to the Kentucky Supreme Court, which also affirmed the award. The state supreme court explained that UPS admits that it never intended to hire all carrier flight crew members but claims that it never made a representation to the contrary. Fraud may be committed either by intentionally asserting false information or by willfully failing to disclose the truth. In this case, UPS knew that the Orion pilots were extremely concerned about their future after Orion lost its UPS contract. The employees were making career decisions and had the right to and should have been told the complete strategy of the employment situation. UPS defrauded Rickert by intentionally failing to tell him all the material facts of its hiring plan. As for reliance, the court noted that Rickert's reliance on the representation by UPS caused him not to look for employment with other airlines . . . , and consequently, he lost seniority and benefits because of his failure to obtain other employment sooner.

Answer to Question 2

d