Opinion ID: 2212126
Heading Depth: 1
Heading Rank: 5

Heading: Negligent Concealment.

Text: We turn next to the second cause of action predicated on the theory of negligent failure to disclose. Although South Dakota recognizes actions for negligent misrepresentation, there is no cause of action for negligent nondisclosure. See Littau v. Midwest Commodities, Inc., 316 N.W.2d 639 (S.D.1982). Taggarts have based their claim on our decision in Moore v. Kluthe & Lane Insurance Agency, Inc., 89 S.D. 419, 234 N.W.2d 260 (1975). That decision is clearly distinguishable from the facts presented in this case. Moore involved misrepresentations by an insurance agent as to what the policy covered. We approved only a cause of action for negligent misrepresentation, not negligent nondisclosure, and then only if `the other giving the information owes a duty to give it with care.' 89 S.D. at 426, 234 N.W.2d at 264 (citation omitted). As was discussed above, there was no duty to disclose information. The case of Merrill Lynch, Etc. v. Boeck, 127 Wis.2d 127, 377 N.W.2d 605 (1985), cited by Taggarts does not persuade us to abandon our settled law. Boeck stands only for the proposition that if a broker volunteers information, i.e., makes a partial disclosure, then the information disclosed must be accurate and complete. The Wisconsin court pointed out that there was no a priori duty of a broker to disclose. For the purpose of clarification at the new trial, we note that a broker does not have an a priori duty to disclose known and relevant information about investments contemplated by a customer. The broker may simply transact the customer's purchase or sell orders without making any representations. The broker's duty may change, however, if he volunteers information that he was not otherwise obligated to provide. He may not give such information negligently. If such initial information is given, the broker then has a duty to disclose subsequently acquired information that he knows will make a previous representation erroneous or misleading. Id. 377 N.W.2d at 612 (emphasis added). Consequently, Boeck does not support Taggarts' claim for a new cause of action for negligent nondisclosure.