Opinion ID: 2595449
Heading Depth: 3
Heading Rank: 3

Heading: Did the Superior Court Err in Granting Partial Summary Judgment to DFYS on Immunity Under AS 09.50.250(3)?

Text: We must separately consider whether the Greens' claim for negligent failure to disclose was subject to dismissal under AS 09.50.250(3). Section .250 generally waives the state's sovereign immunity from suit, but subsection .250(3) provides that an action may not be brought [against the state] under this section if the claim ... arises out of misrepresentation.... In interpreting this provision, we rely heavily on federal cases interpreting the Federal Tort Claims Act, which also contains a misrepresentation clause. [36] The United States Supreme Court held in United States v. Neustadt that under this analogous provision of the federal act the federal government is immune from liability for misrepresentation arising from a negligent home appraisal by the Federal Housing Authority. [37] The Court noted, however, that its holding did not immunize the government from liability in general negligence cases: [M]any familiar forms of negligent conduct may be said to involve an element of misrepresentation, in the generic sense of that word, but [s]o far as misrepresentation has been treated as giving rise in and of itself to a distinct cause of action in tort, it has been identified with the common law action of deceit, and has been confined very largely to the invasion of interests of a financial or commercial character, in the course of business dealings.[ [38] ] Here, while the Greens do allege that DFYS misrepresented facts regarding Billy's personal history and character, their allegations do not arise from the invasion of any commercial or financial interests. They serve only to support the Greens' general theory that DFYS negligently failed to gather and disclose relevant information, and thereby caused personal injury to their children. The Greens do not purport to advance a separate claim for the tort of misrepresentation. In Johnson v. State, the California Supreme Court noted that misrepresentation potentially lends itself to extremely expansive and elusive interpretations. A driver of an automobile who makes a misleading turn signal, for example, literally has misrepresented his intentions and subsequent course of conduct. Yet it would be senseless to hold the state liable if its employee failed to make any signal, arguably a nonrepresentation, but reach the opposite result if he affirmatively misrepresented his intentions.[ [39] ] Similarly, it would be senseless here to hold the state liable for failing to gather and disclose relevant information to potential foster parents, while providing immunity for affirmatively misrepresenting Billy's suitability for foster placement. We thus agree with the California Supreme Court's view that a `misrepresentation,' as a tort distinct from the general milieu of negligent and intentional wrongs, applies to interferences with financial and commercial interests. [40] We conclude that AS 09.50.250(3) only exempts the state from this type of misrepresentation claim. Because the Greens' claim against DFYS does not arise from an invasion of financial or commercial interests, AS 09.50.250(3) does not apply. We reverse the superior court's grant of summary judgment based on this provision.