                  United States Court of Appeals,

                          Fifth Circuit.

                           No. 93-8024.

   Joe W. ROBERTS and Donald D. Roberts, Plaintiffs-Appellees,

                                  v.

UNITED NEW MEXICO BANK AT ROSWELL, f/k/a First Interstate Bank of
Roswell, Defendant-Appellant.

                          Feb. 28, 1994.

Appeal from the United States District Court for the Western
District of Texas.

Before DUHÉ and EMILIO M. GARZA, Circuit Judges, and BLACK*,
District Judge.

     EMILIO M. GARZA, Circuit Judge:

     This is an appeal from a jury verdict for the plaintiffs,

Donald and Joe Roberts ("the Roberts"), in an action for fraud and

negligent   misrepresentations.        The   jury   awarded   the   Roberts

$69,154.40 in damages, finding that employees of the United New

Mexico Bank ("the Bank") had made both fraudulent and negligent

misrepresentations to the Roberts.       The Bank now appeals, and we

affirm.

                                  I

     Donald Roberts owns an Oregon-based plant research company

that researches, develops, and produces coriander and other spices.

In 1987, Roberts, who had been commercially cultivating coriander

in Oregon since 1982, began examining the possibility of growing

coriander in West Texas because of the relatively longer growing

     *
      Chief Judge of the Northern District of Texas, sitting by
designation.

                                  1
season there.      Roberts, along with Joe Roberts, his brother,

successfully cultivated two test plots of coriander near El Paso

and Van Horn, Texas.      Based on their success, the Roberts began

searching    for   farmland    that   could   accommodate    a   large-scale

production of coriander.

     Joe Roberts, after learning that the Bank owned property in

the Dell City area, contacted the Bank and inquired about the

land's availability.          Roberts subsequently met with two Bank

employees—Melvin Adams, whom the Bank hired to liquidate its real

estate holdings, and J. Wesley Willis, a senior vice-president—to

discuss leasing the land.1       Roberts testified that Adams told him

that the farm consisted of "very good land [with] very good water."

Adams also provided Roberts with a written appraisal of the farm

prepared for the Bank;        the appraisal described the farm as being

"highly productive" with "good" quality well-water.              The Roberts

eventually decided to lease part of the west farm in March 1989.

     The     Roberts   attempted      to   grow   three   coriander   crops.

Unfortunately, however, the coriander plants died before maturity

each time.     After the last crop died, the Roberts sued the Bank,

alleging that the salt content of the soil and the well-water

caused the crops to fail.        Evidence adduced at trial established

that the three wells on the leased land contained between 3,000 and

4,000 parts per million ("ppm") of salt, "good" wells in the Dell

     1
      The land at issue was referred to at trial as "the Estes
farm." The farm, which the Bank obtained in July 1987, actually
consisted of two separate farms—the east farm and the west farm.
The Roberts actually leased tracts 13, 14, and 15, which were
located on the west farm.

                                       2
City area average only 1,700 ppm of salt, and "average" wells

contain between 2,500 and 2,700 ppm.           Based on that evidence, the

jury found that the statements made by the Bank as to the land's

productivity and the quality of the water supply constituted both

fraudulent and negligent misrepresentations and awarded the Roberts

their out-of-pocket costs.          The Bank, which had moved for judgment

as a matter of law at the close of the evidence, moved for judgment

notwithstanding the verdict.         The district court denied the Bank's

motion, and the Bank appeals, arguing that the Roberts failed to

carry their burden on several key issues at trial.

                                       II

           Under Texas law, a plaintiff may recover for fraud upon

establishing that:

       (1) a material representation was made; (2) it was false when
       made;    (3) the speaker knew it was false, or made it
       recklessly without knowledge of its truth and as a positive
       assertion; (4) the speaker made it with the intent that it
       should be acted upon; and (5) the party acted in reliance and
       suffered injury as a result.

Beijing Metals & Minerals Import/Export Corp. v. American Business

Ctr., Inc., 993 F.2d 1178, 1185 (5th Cir.1993);              Boggan v. Data

Sys.       Network   Corp.,   969   F.2d    149,   151-52   (5th   Cir.1992).

Additionally, "to establish fraud, [the plaintiff] must show that

its reliance on [the defendant's] representations was justifiable

as well as actual."2          Beijing Metals, 993 F.2d at 1186.           "To

       2
      "Justifiable reliance is also an element of negligent
representation." Haralson v. E.F. Hutton Group, Inc., 919 F.2d
1014, 1025 n. 5 (5th Cir.1990). Courts, however, tend to "equate
unjustifiable reliance in a negligent misrepresentation context
with contributory negligence," a stricter standard than that
applicable in an action for common law fraud. Id. (citing, inter

                                        3
determine    justifiability,       courts    inquire    whether—given      [the]

plaintiff's individual characteristics, abilities, and appreciation

of facts and circumstances at or before the time of the alleged

fraud—it is extremely unlikely that there is actual reliance on the

plaintiff's part."      Haralson v. E.F. Hutton Group, Inc., 919 F.2d

1014, 1026 (5th Cir.1990).         The Bank argues that the evidence is

insufficient to sustain the jury's finding of fraud because the

Roberts     failed    to   prove     both    that      the   Bank   made     any

misrepresentations      and   that    they    justifiably     relied    on   any

statements made by Bank employees alleged to be misrepresentations.

     On appeal, we employ the same standard used by the district

court in reviewing the Bank's motion: we "must review the evidence

in the light and with all reasonable inferences most favorable to

the party opposing the directed verdict or judgment notwithstanding

the verdict." Fruge v. Penrod Drilling Co., 918 F.2d 1163, 1165-66

(5th Cir.1990);      see also Boeing Co. v. Shipman, 411 F.2d 365, 374-

75 (5th Cir.1969) (en banc).         This standard of review

     is exacting. The verdict must be upheld unless the facts and
     inferences point so strongly and so overwhelmingly in favor of
     one party that reasonable [persons] could not arrive at any
     verdict to the contrary. If there is evidence of such quality
     and weight that reasonable and fair minded [persons] in the
     exercise of impartial judgment might reach different
     conclusions, the jury function must not be invaded.

Western Co. of North Am. v. United States, 699 F.2d 264, 276 (5th



alia, Blue Bell, Inc. v. Peat, Marwick, Mitchell & Co., 715
S.W.2d 408, 415 (Tex.App.—Dallas 1986, writ ref'd n.r.e.)).
Because we uphold the jury's finding that the Bank made
fraudulent misrepresentations to the Roberts, see infra, we need
not address the issue whether the Bank also made any negligent
misrepresentations.

                                       4
Cir.), cert. denied, 464 U.S. 892, 104 S.Ct. 237, 78 L.Ed.2d 228

(1983).     We review questions of law, however, de novo.    Nealy v.

Hamilton, 837 F.2d 210, 211 (5th Cir.1988).

                                    A

                                    1

         The Bank initially contends that the statements regarding the

farm's productivity and the quality of the water were opinions,

which cannot constitute actionable misrepresentations under Texas

law. However, "[r]epresentations as to matters not equally open to

parties are legally statements of fact and not opinions."       Wright

v. Carpenter, 579 S.W.2d 575, 580 (Tex.Civ.App.—Corpus Christi

1979, writ ref'd n.r.e.);       see also Haralson, 919 F.2d at 1029

(finding that representations as to the value of a financial

institution were not statements of opinion "given [the defendant's]

superior     access   to   information").    The   record   adequately

demonstrates that the facts concerning the quality of the water

were not equally available to the Bank and the Roberts.           For

example, the Bank had owned the property for approximately twenty

months before the Roberts sought to lease it, and Adams had been

told by Bank employee Larry Brewton3 that the water on the leased

land was "really bad" and that the Bank should sell that land at

any price because of the water problem.     The Roberts, on the other

hand, presented evidence demonstrating that they could not have

discovered the water problems without paying over $7,000.          See

     3
      The farm's previous owners had hired Brewton to manage the
farm in 1980. The Bank retained Brewton in that capacity when it
obtained the farm in 1987.

                                    5
Wright,    579    S.W.2d   at    580    (noting     that   the   plaintiff     home

purchasers "could not have easily discovered the rotten roof

because of the foliage hanging over it at the time of contract").

Accordingly, we find that the statements made about the water

quality constitute actionable statements of fact about the present

condition of the land.          See Commonwealth Mortgage Corp. v. First

Nationwide Bank, 873 F.2d 859, 865 (5th Cir.1989) (finding a

statement that certain property was "an excellent location" to be

"an assertion about the present condition of the land"); Gibraltar

Sav. v. LDBrinkman Corp., 860 F.2d 1275, 1301 (5th Cir.1988)

(finding   a     representation        that    a   business   was   "ongoing    and

successful" to be "unambiguous declarations of positive fact"),

cert. denied, 490 U.S. 1091, 109 S.Ct. 2432, 104 L.Ed.2d 988

(1989).

                                          2

      The Bank further argues that even if it did make any

representations as to the farm's soil and water quality, those

representations were true statements as to the farm's average water

and soil quality.      To bolster its argument, the Bank points out

that any statements made about the farm pertained to the farm as a

whole and not to the tracts of land leased by the Roberts and that

the average water quality of the Estes farm's eleven wells was

"good."

     As an initial matter, we note the Bank represented that the

"West Farm [was] highly productive" and that the Estes farm's

"[w]ater quality [was] good."                 Neither the appraisal nor Adams


                                          6
indicated to the Roberts that these representations were true only

as to the average productivity and water quality of the farm.

Moreover, "[a] representation literally true is actionable if

designed to create an impression substantially false." State Nat'l

Bank v. Farah Mfg. Co., 678 S.W.2d 661, 681 (Tex.App.—El Paso 1984,

writ dism'd by agreement of the parties);       see also Commonwealth

Mortgage, 873 F.2d at 865;     Blanton v. Sherman Compress Co., 256

S.W.2d 884, 887 (Tex.Civ.App.—Dallas 1953, no writ).              In the

context of this case, it was within the province of the jury to

find that the Bank's representations were designed to create a

substantially false impression.        Accordingly, regardless of the

literal truth of the statements, the jury could reasonably conclude

that the Bank's description of the property was designed to mislead

and,   hence,   constituted   fraudulent    misrepresentations.      See

Commonwealth Mortgage, 873 F.2d at 865.

                                   B

                                   1

       The Bank, without citing any authority, next contends that

because Donald Roberts was a coriander expert and the Bank's

employees were not, the Roberts "could not justifiably rely on any

representations [made] by the Bank."       However, the mere fact that

Roberts was an expert regarding coriander does not preclude a

recovery for fraudulent misrepresentations as to the nature of the

farm and its water supply.       Cf. Kolb v. Texas Employers' Ins.

Ass'n, 585 S.W.2d 870, 872 (Tex.Civ.App.—Texarkana 1979, writ ref'd

n.r.e.) (where the plaintiff in a fraudulent representation action


                                   7
defeated the defendant's motion for summary judgment because the

reason why the plaintiff consulted an expert did not relate to the

defendant's misrepresentations).               Moreover, even if the Roberts

contended only that the Bank fraudulently misrepresented some fact

about coriander production, an action for fraud would not be barred

as a matter of law.4          Cf. Haralson, 919 F.2d at 1026 (noting that

the   plaintiff's       individual    characteristics      and    abilities    are

factors relevant to determining whether the plaintiff actually and

justifiably relied).          Thus, here—where the misrepresentation went

to the nature of the land and its water and not to any matter

specifically related to coriander—reliance is not barred as a

matter    of    law    simply    because     Donald   Roberts    had   substantial

experience      with    the     production     of   coriander.     Instead,    the

      4
      In Lutheran Brotherhood v. Kidder Peabody & Co., 829 S.W.2d
300 (Tex.App.—Texarkana), judgment set aside and cause remanded
for rendition of agreed judgment, 840 S.W.2d 384 (1992), the
plaintiffs alleged that the defendant sold worthless corporate
bonds to the plaintiffs by negligently and fraudulently making
misrepresentations of material facts. The court rejected the
defendant's argument that the plaintiffs were barred from
claiming reliance on the misrepresentation because they were
sophisticated investors:

               [T]he fact that investors are sophisticated and
               experienced ... does not preclude, as a matter of law,
               their recovery for fraudulent misrepresentations.
               Rather, the investors' sophistication and experience
               are material evidence on the issue of reliance. If an
               investor is sufficiently sophisticated and experienced,
               that may be evidence that he did not rely on the
               seller's representations but on his own expertise. The
               degree of sophistication is evidence for the trier of
               fact to consider in deciding the issue of reasonable or
               justifiable reliance.

      Id. at 308 (citing Bykowicz v. Pulte Home Corp., 950 F.2d
      1046 (5th Cir.1992); Laird v. Integrated Resources, Inc.,
      897 F.2d 826 (5th Cir.1990)).

                                           8
existence of any expertise or sophistication was a circumstance

considered      by   the    jury      when    it    determined     that    the     Roberts

justifiably relied upon the Bank's misrepresentations.

                                              2

      The Bank further argues that the Roberts are barred from

asserting reliance on the Bank's misrepresentations because the

Roberts    "were     aware      of    facts       that   should    have    put    them    on

reasonable inquiry as to the condition of the property and its

groundwater." The Bank asserts that the Roberts received notice of

possible problems with the farm and its water supply from:                         (1) the

appraisal supplied by the Bank, (2) the inspection of the farm

undertaken by the Roberts, and (3) comments made by Bank employee

Larry Brewton.       The Roberts, not surprisingly, contend that they

were not aware of any facts suggesting that soil or water problems

existed.

     In Texas, a plaintiff's "failure to inspect or to investigate

will not defeat an action in fraud [because t]he defrauded party is

entitled   to    rely      on   the    fraudulent        party's    representations."

Kerrville HRH, Inc. v. City of Kerrville, 803 S.W.2d 377, 385

(Tex.App.—San Antonio 1990, writ denied).                    However, "knowledge of

facts that would lead a reasonably prudent person to conduct

further    inquiry         to   clarify       a     misimpression         or     reveal   a

misrepresentation can be deemed equivalent to knowledge of the

truth."      Gibraltar, 860 F.2d at 1303.                    This duty of inquiry

"extends only to those matters that are fairly suggested by facts

that are actually known, rather than circumstances that merely


                                              9
arouse suspicion in the mind of a reasonably prudent person."

Holmes   v.     P.K.   Pipe   &   Tubing,   Inc.,   856   S.W.2d   530,   543

(Tex.App.—Houston [1st Dist.] 1993);           see also Lang v. Lee, 777

S.W.2d 158, 163 (Tex.App.—Dallas 1989, no writ).

     Viewing the evidence in the light and with all reasonable

inferences most favorable to the Roberts, the record evidence

indicates that the Roberts did not possess knowledge of facts

sufficient to lead a reasonably prudent person to conduct further

inquiry.       For example, while the appraisal warned of several

problems associated with the location of the farm and the farm

itself, it failed to retreat in any way from its conclusion that

the farm was highly productive and the water supply was of good

quality.      The Roberts, through their inspection of the farm, also

did not learn of any facts suggesting that further inquiry into the

salt content of the land or wells was necessary. Finally, although

Brewton told Joe Roberts that two of the wells on the leased land

were "relatively salty" and intended that statement to be a warning

not to lease that land, the jury was entitled to infer, based on

the Bank's prior misrepresentations, that Brewton's statement would

not lead a reasonably prudent person to conduct further inquiry. 5

Moreover, the evidence adequately demonstrates that the Roberts

could not have reasonably discovered the high salt content of the

water.   See part II.A.1 supra;       see also Wright, 579 S.W.2d at 580

(noting that the plaintiff home purchasers "could not have easily


     5
      Brewton also testified that it was possible that Joe
Roberts would not have perceived his comments to be a warning.

                                      10
discovered the rotten roof because of the foliage hanging over it

at the time of contract").             Although the issue of justifiable

reliance is close, we cannot say that " "the facts and inferences

point so strongly and overwhelmingly in favor of [the Bank] that

[we believe] that reasonable [persons] could not arrive at any

verdict to the contrary.' "         Granberry v. O'Barr, 866 F.2d 112, 113

(5th       Cir.1988)    (quoting    Western     Co.,   699    F.2d     at     276).

Accordingly,       we   uphold   the   jury's   finding      that    the    Roberts

justifiably relied on the Bank's representations.

                                       III

           The Bank next asserts that because the Roberts undertook

their own investigation regarding the leased tracts, they are

barred as a matter of law from alleging any reliance upon the

Bank's representations.          This assertion, however, "is too broad a

statement of the rule.             The [actual] rule is that one cannot

recover      for   fraudulent      representations     when     he    knows     the

representation is false, or when he has relied solely on his own

investigation rather than on the representations of the other

party."      Lutheran Bhd., 829 S.W.2d at 308;         see also Bernstein v.

Portland Sav. & Loan Ass'n, 850 S.W.2d 694, 713 (Tex.App.—Corpus

Christi 1993, writ denied) (same).6           After reviewing the record, we

       6
      The Bank cites Chitsey v. National Lloyd's Ins. Co., 698
S.W.2d 766, 769 (Tex.App.—Austin 1985), aff'd on other grounds,
738 S.W.2d 641 (Tex.1987), and Lauglin v. FDIC, 657 S.W.2d 477,
483 (Tex.App.—Tyler 1983, no writ), as support for the principle
that "when a person makes his own investigation of the facts, he
cannot, as a matter of law, be said to have relied upon the
misrepresentations of others." Both of those cases, in turn,
relied on Kolb v. Texas Employers' Ins. Ass'n, 585 S.W.2d 870,
872 (Tex.Civ.App.—Texarkana 1979, writ ref'd n.r.e.), "a case

                                        11
find that the evidence presented at trial supports the jury's

verdict that the Roberts relied on the Bank's misrepresentations

and   not     solely   on   their   inspection   of   the   leased   land.7

Accordingly, we reject the Bank's contention that the Roberts are

barred as a matter of law from relying on the misrepresentations

made by the Bank's employees.

                                     IV

          The Bank's final contention is that the Roberts failed "to

present evidence that the coriander crop failed as a result of

salty soil or salty water." However, Donald Roberts, whom the Bank

concedes to be an expert regarding coriander, testified that the

crop did not fail because of disease, insects, or a lack of

watering;     instead, Roberts testified that the crop failed because


which did not state the proposition nearly so strongly."
Bernstein, 850 S.W.2d at 712. Moreover, both Bernstein, 850
S.W.2d at 712-13, and Lutheran Brotherhood, 829 S.W.2d at 308,
rejected the cases cited by the Bank as "too broad." We agree
and choose to follow the more persuasive reasoning of Bernstein
and Lutheran Brotherhood. See also Camden Mach. & Tool, Inc. v.
Cascade Co., --- S.W.2d ----, ----, 1993 WL 528425, *5
(Tex.App.—Ft. Worth Dec. 23, 1993) ("when a person makes his own
investigation of the facts, and knows the representations to be
false, he cannot, as a matter of law, be said to have relied upon
the misrepresentations of another") (emphasis added); cf. Koral
Indus. v. Security-Connecticut Life Ins. Co., 802 S.W.2d 650, 651
(Tex.1990) (noting that "only the [defendant's] actual knowledge
of the misrepresentations would have destroyed its defense of
fraud").
      7
      Moreover, we note that the inspection undertaken by the
Roberts and Lynn Gentry, whom the Roberts hired to perform the
actual farming duties, was not undertaken to determine the salt
content of the water or soil, but instead to determine which of
the farm's various tracts would be the easiest for Gentry to
farm. Cf. Kolb, 585 S.W.2d at 872 (where the plaintiff defeated
the defendant's motion for summary judgment because the reason
why the plaintiff consulted an expert did not relate to the
defendant's misrepresentations).

                                     12
the salt content of the soil and the well water was too high.

While the Bank appears to challenge Roberts's credibility, "such

credibility choices are the jury's, not ours." Gibraltar, 860 F.2d

at 1303;    see also Redditt v. Mississippi Extended Care Ctrs.,

Inc., 718 F.2d 1381, 1386 (5th Cir.1983) ("It is not the function

of this court to make credibility choices and findings of fact.").

Moreover, the jury's decision to credit Roberts is understandable

given the Bank's apparently strategic decision not to introduce

expert   testimony   refuting   the    conclusion   reached   by   Roberts.

Consequently, we will not disturb the jury's finding that the loss

suffered by the Roberts was proximately caused by the Bank's

misrepresentations of material fact.

                                      V

     For the foregoing reasons, we AFFIRM the judgment of the

district court.




                                      13
