Jonathan Arnold v. Leticia Villarreal
853 F.3d 384
7th Cir.2017Background
- Arnold and Villarreal held a 2004 ceremony in California; the officiant signed but failed to complete and file the marriage license as required by California law. The license expired unfiled.
- The county recorder sent a December 27 letter informing them the license had not been returned and would expire, warning that filing was essential to protect marital/property rights; the couple took no action.
- In mid-2005 Villarreal expressed concern they were not legally married; the parties obtained a new marriage license in August 2005 but again never completed/returned it.
- They lived together, had a child (Aug. 2005), bought a condo in both names (Arnold later transferred his interest to Villarreal), and ultimately separated ~2007.
- They filed separate divorce petitions but stipulated they were never legally married; Arnold then sued Villarreal in federal court for fraud, claiming she induced him to give gifts (including the condo) by misrepresenting that they were married.
- The district court granted summary judgment for Villarreal, finding Arnold’s reliance unjustified; the Seventh Circuit affirmed and awarded Rule 38 sanctions for a frivolous appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Arnold can recover for fraud based on Villarreal’s alleged misrepresentations that they were legally married | Arnold: He relied on Villarreal’s assurances that the marriage was valid and gave gifts because of that reliance | Villarreal: Any representations concerned the legal status of the marriage; Arnold knew the license was unfiled and thus could not justifiably rely | Held: No. Reliance was manifestly unreasonable as a matter of law given Arnold’s knowledge the license was never filed; summary judgment affirmed |
| Whether Arnold was entitled to additional discovery under Fed. R. Civ. P. 56(d) to oppose summary judgment | Arnold: Further discovery could reveal facts supporting justifiable reliance | Villarreal: No discovery could cure the dispositive fact that Arnold knew the license was unfiled | Held: Denied. Additional discovery would not change the undisputed facts showing unreasonable reliance |
| Whether California’s rule barring reliance on legal misrepresentations might bar recovery here | Arnold: Implicitly argues reliance on representations about marital status | Villarreal: Misrepresentations were legal in nature and generally nonactionable; the fiduciary/confidential-relationship exception is inapplicable | Held: Court noted the rule could apply but did not decide; resolved case on unreasonable reliance instead |
| Whether appellate sanctions are warranted for a frivolous appeal | Villarreal: Appeal is frivolous after two judges found suit meritless; seek Rule 38 sanctions | Arnold: Continued to press same merits-based claims | Held: Sanctions granted. Appeal was frivolous; Villarreal may submit affidavit of damages for the appeal |
Key Cases Cited
- Conroy v. Regents of Univ. of Cal., 203 P.3d 1127 (Cal. 2009) (fraud requires justifiable reliance)
- Chicago Title Ins. Co. v. Superior Court, 220 Cal. Rptr. 507 (Cal. Ct. App.) (actual and constructive fraud require reliance)
- Cicone v. URS Corp., 227 Cal. Rptr. 887 (Cal. Ct. App.) (one generally cannot justifiably rely on representations of law; fiduciary/confidential-relationship exception discussed)
- All. Mortg. Co. v. Rothwell, 900 P.2d 601 (Cal. 1995) (reliance may be found unreasonable as a matter of law where facts permit only one conclusion)
- Harris N.A. v. Hershey, 711 F.3d 794 (7th Cir. 2013) (standard for appellate sanctions under Rule 38; frivolousness defined)