Opinion ID: 2281968
Heading Depth: 1
Heading Rank: 14

Heading: Uhlmann's Negligent Misrepresentation Claim against Vermeer

Text: (1) First Representation For the representation that the T1055 could perform terrain leveling and surface mining, the analysis is the same as for Uhlmann's fraud claim. Because the plaintiffs undertook an independent investigation and no exceptions apply, Uhlmann cannot satisfy the element of reliance as a matter of law. (2) Second Representation Vermeer challenges three elements of the negligent misrepresentation claim based on its statement that the T1055 could be repaired or redesigned to perform terrain leveling: falsity, particular business transaction, and reliance. A claim for negligent misrepresentation, unlike one for fraud, does not involve a question of intent. Rather, such a claim is premised on the theory that the speaker believed the information supplied was correct but was negligent in so believing. Colgan v. Washington Realty Co., 879 S.W.2d 686, 689 (Mo.App.1994). To establish falsity, Uhlmann must show that the statement that the T1055 could be repaired or redesigned to perform terrain leveling was false because of Vermeer's failure to use reasonable care. [22] The fact that the terrain leveler was not successfully repaired or redesigned is amply documented by the work order invoices and warranty claim forms over the course of the warranty period. In addition, the plaintiffs' engineering expert testified that the machine was defective because it was subject to excessive vibration and permanent deformation when used to cut hard rock. He testified that 44 percent of all Vermeer terrain levelers were discontinued or scrapped out, while the norm for off-highway vehicles is 0.5 percent per year. The expert concluded that Vermeer failed to conduct adequate testing on the design of the T1055 prior to selling it. This evidence, if believed, is sufficient to show that the statement that the T1055 could be repaired or redesigned to perform terrain leveling was false because of Vermeer's negligence. As to the second challenged element, Vermeer argues that it did not provide information for plaintiffs' guidance because the only business transaction in which it was involved related to its sale of the T1055 to its distributor Great Plains and that this transaction was completed prior to any alleged misrepresentations. However, privity is not required to establish a negligent misrepresentation claim. Miller v. Big River Concrete, LLC, 14 S.W.3d 129, 134 (Mo.App.2000). Rather, the plaintiffs must establish that they were part of a limited group for whose guidance the information was provided. Id. Here, Crush and Uhlmann were part of the limited group considering whether to purchase the T1055. There is evidence that Uhlmann and members of Crush met not only with Great Plains salespeople but also with Vermeer representatives regarding the sale of the T1055, both before the sales contract was executed and before the final payment was made. The sale of the terrain leveler constitutes a particular business transaction. Moreover, there is evidence to support a finding that Vermeer knew Uhlmann and Crush were relying on their representations, including those made at Vermeer headquarters before the final payment for the T1055, and could foresee the harm to them if the statements were inaccurate. Privity is not necessary under these circumstances. The evidence is sufficient to show that Vermeer made representations to Uhlmann and Crush about the capabilities of the T1055 in the context of the particular business transaction of the machine's sale, even if the sales order was executed with Great Plains alone. Uhlmann also must establish his reliance on Vermeer's statement that the T1055 could be repaired or redesigned. Uhlmann's testimony that the final payment of $70,000 was conditioned on this statement shows a genuine issue of material fact for this element. Moreover, as a matter of law, Uhlmann and Crush did not waive their right to rely on Vermeer's second representation by observing the T1055 during the demonstration period. The first two exceptions to the inspection rule apply. First, there is sufficient evidence for a jury to conclude that the demonstration in the quarry was only a partial inspection because it failed to reveal conclusively whether the terrain leveler could be repaired or redesigned to perform terrain leveling. Second, there is sufficient evidence for a jury to conclude that Uhlmann and Crush lacked equal footing for learning the truth of whether the terrain leveler could be repaired or redesigned to perform terrain leveling because this fact was not easily ascertainable and was peculiarly within the knowledge of the machine's manufacturer, a company that specialized in heavy mining and rock-cutting equipment. A genuine dispute exists about whether Uhlmann relied on the truth of Vermeer's second representation. Uhlmann has provided sufficient evidence to establish each of the challenged elements for his negligent misrepresentation claim. Summary judgment for Vermeer on this claim was improper.