[¶ 1.] North American Truck & Trailer, Inc. (NATT) appeals from an order of judgment dismissing its claim for fraud and deceit against M.C.I. Communication,
FACTS AND PROCEDURAL HISTORY
[¶ 2.] NATT is a South Dakota corporation with its principal place of business in Sioux Falls, South Dakota. MCI is a Delaware corporation with its principal place of business in New York, New York. MCI provided telecommunication services to NATT for several years, including 2003 and 2004.
[¶ 3.] On April 27, 2007, NATT filed this lawsuit against MCI. NATT’s complaint contained only one count, which was entitled “Fraud & Deceit.” NATT alleged that in 2003 and 2004 MCI engaged in a pattern of overcharging it for various telecommunications services and that MCI did so intentionally or with reckless disregard. NATT further alleged that it was unaware of the overcharging and to its detriment paid the amounts due. NATT attached to its complaint an eight-page spreadsheet that was intended to explain or summarize the alleged overcharges.
[¶4.] MCI filed a motion to dismiss pursuant to SDCL 15 — 6—12(b)(5) on the basis that NATT’s complaint did not plead fraud and deceit with sufficient particularity as required by SDCL 15 — 6—9(b). The parties briefed the issue, and a hearing was held on August 27, 2007, before the trial court. The trial court took the matter under advisement and issued a letter opinion dated August 28, 2007, granting MCI’s motion. NATT objected to the order of judgment proposed by MCI, and also moved the court to reconsider its decision. The court declined both requests and entered an order of judgment dismissing the complaint on September 6, 2007.
[¶ 5.] NATT raises two issues on appeal:
Whether NATT’s complaint stated a claim of fraud and deceit with sufficient particularity as required by SDCL 15-6 — 9(b).
Whether the trial court erred in denying NATT’s objection to the order of judgment.
STANDARD OF REVIEW
[¶ 6.] “A motion to dismiss under SDCL 15 — 6—12(b) tests the legal sufficiency of the pleading, not the facts which support it. For purposes of the pleading, the court must treat as true all facts properly pled in the complaint and resolve all doubts in favor of the pleader.”
Nygaard v. Sioux Valley Hosp. & Health Sys.,
ANALYSIS AND DECISION
[¶ 7.] Whether NATT’s complaint stated a claim of fraud and deceit
[¶ 8.] SDCL 15 — 6—9(b)
1
requires that “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally.” Additionally, “[t]his Court has required that a pleading based on fraud as a basis of recovery of damages must allege all the essential elements of actionable fraud to be sufficient.”
Holy Cross Parish v. Huether,
[T]hat a representation was made as a statement of fact, which was untrue and known to be untrue by the party making it, or else recklessly made; that it was made with intent to deceive and for the purpose of inducing the other party to act upon it; and that he did in fact rely on it and was induced thereby to act to his injury or damage.
Northwest Realty Co. v. Colling,
[¶ 9.] In this case, the trial court held that NATT “overlooked the essential element of adequately stating a claim for fraud and deceit — the requirement that the claim be stated with sufficient particularity.” The trial court found that “[NATT] provides no
factual allegations
in support of these contentions ... [NATT] merely makes bald, conclusory allegations pertaining to the allegedly fraudulent conduct of Verizon. Again, without supporting such a claim with
particular facts,
the claim cannot lie.” (Emphasis added). However, in applying Rule 9(b), “focusing exclusively on its ‘particularity’ language ‘is too narrow an approach and fails to take account of the general simplicity and flexibility contemplated by the rules.’ ”
Christidis v. First Pennsylvania Mortg. Trust,
Since fraud embraces a wide variety of potential misconduct, Rule 9(b) requires slightly more notice than would be forthcoming under Rule 8. But the requirement of Rule 9(b) is met when there is sufficient identification of the circumstances constituting fraud so that the defendant can prepare an adequate answer to the allegations.
Denny,
[¶ 10.] In South Dakota, a civil pleading based on fraud is sufficiently particular if it alleges “all of the essential elements of actionable fraud.”
Holy Cross
A representation made as a statement of fact, which is untrue and intentionally or recklessly made
1. With intent to deceive for the purpose of inducing the other party to act upon it;
2. Reliance upon the untrue statement of fact;
3. Resulting in injury or damage.
Id.
¶ 12 (citing
Grynberg v. Citation Oil and Gas Corp.,
1. That the appraisals submitted by the defendants were overvalued;
2. That the appraisals were given to the plaintiffs with knowledge that the plaintiff would rely on them; and,
3. That the plaintiffs reliance would be to his financial detriment;
4. That the appraisals were given with a reckless disregard for whether the appraisals were fair or not;
5. That the plaintiff believes that the representation that the appraisals were independent were false.
Based on this pleading, the Court held that “the allegations in Count 1, considering the pleader’s description of what happened along with any conclusions reasonably drawn therefrom, were adequate to survive a motion to dismiss.”
Id.
¶ 13;
see also Holy Cross Parish,
[¶ 11.] Similarly, a review of the complaint in this case demonstrates that NATT adequately addressed each element of fraud:
A. Representation made as a statement of fact.
Defendant sent bills to NATT which purported to contain the proper charges to be paid by NATT for telecommunication service.
B. Untrue and known to be untrue by the party making it, or else recklessly made.
The billing statements were erroneous and inflated. 3
C. With intent to deceive and for the purpose of inducing the other party to act upon it.
Defendant acted recklessly or intentionally in compiling and preparing these billing statements and the erroneous figures.
D. Reliance.
NATT paid the total amount allegedly due, relying on these billing statements as if they were true.
E. Damages.
NATT overpaid for telecommunication services because the amounts due were greater than the amounts which NATT had agreed to pay.
NATT estimates it was financially damaged in the year 2003 by beingovercharged at least $18,945.76 ... and in 2004 by overpaying at least the same amount, $18,945.76.
In addition, NATT incurred expenses of at least $12,000 to hire consultants to try and reconcile the amounts billed with the amounts that should have been billed.
[¶ 12.] Applying the standard by which we review the sufficiency of the pleadings, we hold that NATT’s complaint satisfies the “elements test” and the requirement of SDCL 15 — 6—9(b). NATT adequately delineated the acts and transactions constituting the alleged fraud to fairly apprise MCI of NATT’s claim. Accordingly, we reverse the order of judgment dismissing the cause of action for fraud and deceit against MCI and remand for further proceedings. In light of this disposition, we need not reach the second issue.
[¶ 18.] Reversed and remanded.
Notes
. South Dakota Codified Law 15-6-9(b) is identical to Federal Rule of Civil Procedure 9(b).
. While South Dakota uses the "elements test” to determine the sufficient particularity of a pleading, we recognize that many federal courts, including the courts of the Eighth Circuit, use the “newspaper test” under the same circumstances.
See e.g. United States ex rel. Joshi v. St. Luke's Hosp., Inc.,
. In addition, Exhibit A attached to the complaint, an eight page spreadsheet which summarized the charges and alleged overcharges NATT incurred from MCI, provided particularity regarding the "representations” made and the alleged "untrue” or "reckless” nature of those representations.