Opinion ID: 1657171
Heading Depth: 2
Heading Rank: 2

Heading: Was Consolidation of Jensen's Common Law and Statutory Claims Proper?

Text: Because the district court held a buyer must prove fraud on the part of the seller to recover under the Act, it consolidated Jensen's common law and statutory claims into one claim for fraudulent nondisclosure. This was also error. The causes of action are distinct and not subject to consolidation. Iowa Code section 558A.6 only requires the plaintiff to show actual knowledge of a problem that was required to be disclosed, not the elements of fraud. To the extent Sedgwick holds to the contrary, we overrule it. The causes of action have different elements. Compare Iowa Code § 558A.6(1) (requiring proof of actual knowledge or failure to exercise ordinary care in obtaining the information), with Robinson v. Perpetual Servs. Corp., 412 N.W.2d 562, 565 (Iowa 1987) (setting forth the seven elements for recovery in a fraud action). The plaintiff also carries a greater burden of proof on a fraud claim. See Robinson, 412 N.W.2d at 565 (pointing out proof by a mere preponderance of the evidence not sufficient in fraud action). In addition, the Act explicitly states it shall not limit or abridge any ... liability for disclosure created by another provision of law. Iowa Code § 558A.7. For all these reasons, we implicitly recognized the independent nature of chapter 558A and common law claims in a prior case. See Peterson v. Bottomley, 582 N.W.2d 187, 189 (Iowa 1998) (holding district court erred when it ruled on chapter 558A claim when plaintiff only pled a common law theory). In sum, the district court should have permitted Jensen to independently pursue his common law and statutory claims, and it erred when it ruled otherwise. A jury could have found Jensen established a violation of the statute, even if he did not prove his common law fraud claim. We reverse and remand for a new trial on both the actual knowledge and the failure to exercise ordinary care prongs of Jensen's statutory claim. Because Jensen does not contend the district court's instruction erroneously characterized his common law fraud claims, however, to that extent we let the jury's decision stand. We also affirm the district court's dismissal of Jensen's common law negligent misrepresentation claim, albeit apparently for a different reason than the district court. See DeVoss v. State, 648 N.W.2d 56, 62 (Iowa 2002) (holding supreme court may affirm on an alternate ground so long as it was urged in the district court). In the district court, the Sattlers argued Jensen's negligent misrepresentation claim should be dismissed because he had made no showing the Sattlers owed him a duty of care. We agree. The Sattlers were not in the business or profession of supplying information to Jensen; this was an arms-length and adversarial transaction. Absent a special relationship giving rise to a duty of care, a plaintiff cannot establish negligent misrepresentation. See, e.g., Sain v. Cedar Rapids Cmty. Sch. Dist., 626 N.W.2d 115, 124 (Iowa 2001); Molo Oil Co. v. River City Ford Truck Sales, Inc., 578 N.W.2d 222, 227 (Iowa 1998); Fry v. Mount, 554 N.W.2d 263, 265-66 (Iowa 1996); cf. Madren v. Super Valu, Inc., 183 F.Supp.2d 1138, 1143-44 (S.D.Iowa 2002) (applying Iowa law).