Opinion ID: 2604223
Heading Depth: 1
Heading Rank: 2

Heading: plaintiffs established their negligent misrepresentation claim

Text: Plaintiffs obtained a jury verdict on their negligent misrepresentation claim. The facts, therefore, are construed in the light most favorable to plaintiffs. Brown v. J.C. Penney Co., 297 Or. 695, 705, 688 P.2d 811 (1984). The majority's statement of the factual background concerning plaintiffs' negligent misrepresentation claim is in accord with that principle. Additional facts are summarized in the Court of Appeals opinion. Onita Pacific Corp. v. Trustees of Bronson, 104 Or.App. 696, 803 P.2d 756 (1990). I wish to emphasize certain facts which are central to plaintiffs' negligent misrepresentation claim and which demonstrate that in this case plaintiffs did establish enough for a jury to conclude that their negligent misrepresentation claim was valid. Those facts are: Warde Erwin represented that deeds could be released on the payment into escrow of a specified sum. Lawrence Erwin, defendants' attorney, represented that deeds could be released and that $200,000 payment would result in the release to plaintiffs of lots worth $200,000. Lawrence Erwin represented that if escrow were moved, the escrow instructions would remain the same and that if the $200,000 were processed through his (Lawrence Erwin's) trust account, deeds would be released on the same terms as if the $200,000 had been processed through the title company escrow. However, once the $200,000 was paid and processed through Lawrence Erwin's trust account, defendants refused to release any deeds. Defendants insisted that the deeds could be released only on the sale of a lot to a third party. Defendants also issued new instructions that prevented plaintiffs from obtaining the release of the lots from the new title company escrow based on the payment that plaintiffs had made. As a result of defendants' refusal to release the deeds, plaintiffs were unable to obtain financing to develop the lots for resale, and they defaulted on their obligation to Compton. Compton then foreclosed on the security that plaintiffs had pledged, viz, plaintiffs' interests as assignees of the Hatch contract, as well as certain other property. In the language of  552(1), liability is limited to situations in which reliance is justified. In this case the jury found that plaintiffs' reliance on defendants' misrepresentation was justified. Plaintiffs were foreseen, intended recipients of defendants' conduct. We should not disturb that finding by conclusory references to the extraneous concept of arm's-length negotiating even if it is true that in some circumstances an adversarial negotiating relationship would make reliance unjustified. There is ample evidence in the record of this case to support a finding that plaintiffs have established their negligent misrepresentation claim against defendants.