St. Joseph Hospital v. Corbetta Construction Co.
Illinois Appellate Court
316 N.E.2d 51 (1974)
St. Joseph Hospital hired Corbetta Construction to build a new hospital, which subcontracted with GE (defendant) to install wall paneling; a third-party lab tested the paneling's flame spread at roughly 17 times the maximum allowed under Chicago's building code, and considered it too flammable to even receive an official rating. GE told Corbetta only that the paneling "did not have a flame-spread rating," without disclosing why. After construction was substantially complete, the city denied the hospital's operating license due to the paneling's flammability, and the hospital sued GE for fraud; a jury found for the hospital, and GE appealed.
Whether, in a products-liability action for fraud, a statement that is technically true may nevertheless be fraudulent if the statement misleads by not stating matters that materially qualify the statement as made.