Opinion ID: 2814736
Heading Depth: 2
Heading Rank: 1

Heading: District Court’s Dismissal of Mr. Hall

Text: Mr. Templeton argues the district court erred in dismissing his negligent misrepresentation claim against Mr. Hall. We conclude the district court properly dismissed this claim because it failed to allege Mr. Hall’s statements were made for Mr. Templeton’s guidance in a business transaction. Accordingly, we affirm.8

We review a district court’s dismissal of a claim under Rule 12(b)(6) de novo, Thomas v. Kaven, 765 F.3d 1183, 1190 (10th Cir. 2014), applying the same legal standard as the district court, Teigen v. Renfrow, 511 F.3d 1072, 1078 (10th Cir. 2007). We accept all well-pled allegations as true and construe them in the light most favorable to the non-moving party. Thomas, 765 F.3d at 1190. “To survive dismissal, ‘a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.’” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). b. Legal background on negligent misrepresentation To state a claim for negligent misrepresentation under Colorado law, a plaintiff must allege: (1) the defendant, in the course of his or her business, profession or 8 Because this issue was decided based on a motion to dismiss, we must review this issue based solely on the allegations made in Mr. Templeton’s amended complaint. -24- employment; (2) made a misrepresentation of material fact, without exercising reasonable care; (3) for the guidance of others in a business transaction; (4) with knowledge that the plaintiff would rely on his or her representation; and (5) the plaintiff justifiably relied on the misrepresentation to his or her detriment. Allen v. Steele, 252 P.3d 476, 482 (Colo. 2011). “[T]he requirement that the misrepresentation was made ‘for the guidance of others in their business transactions’ is an essential element of the tort of negligent misrepresentation.” Id. at 483. The Colorado Supreme Court has defined “business transaction” for purposes of a negligent misrepresentation claim to mean a business or commercial transaction. Id. at 483-84. Therefore, “to state a claim of negligent misrepresentation, the misrepresentation must be given for the plaintiff’s business or commercial purposes.” Id. at 484 (emphasis added). In Allen, an attorney provided the plaintiffs incorrect information regarding the statute of limitations for a personal injury claim during an initial consultation, which caused them to miss a filing deadline. Id. at 479. The court held that the plaintiffs failed to state a claim for negligent misrepresentation because “an initial consultation to discuss a potential civil lawsuit is not sufficient” to meet the “guidance of others in their business transactions” requirement. Id. at 484. The court explained that “[a]lthough a negligence lawsuit against another party has the potential to affect indirectly a non-client’s financial or economic interests, a civil lawsuit does not involve a business or commercial relationship or transaction.” Id. -25-
In his amended complaint, Mr. Templeton alleged that Mr. Hall negligently misrepresented that FF&S was representing Mr. Templeton in the Cordaro arbitration, the matter had settled, and Mr. Templeton did not need to attend the arbitration hearing. Mr. Hall made these statements concerning the Cordaros’ FINRA arbitration. Although Mr. Templeton appears to have made sufficient factual allegations to state a claim under four of the five elements of negligent misrepresentation, we do not see how the FINRA arbitration here is distinct from the civil lawsuit in Allen for purposes of the “business transaction” element of the claim. Mr. Templeton argues that the FINRA arbitration qualifies as a business transaction because Mr. Templeton’s financial and professional interests were affected the outcome of the proceeding. In Allen, the court acknowledged that a civil lawsuit could affect the parties’ financial interests but concluded that the nature of the proceeding fell outside the definition of a “business transaction.” Id. The same analysis applies here. We conclude Mr. Hall’s statements to Mr. Templeton about the Cordaro arbitration were insufficient to meet the “guidance of others in their business transactions” requirement of a negligent misrepresentation claim. 9 Accordingly, we 9 In his Reply Brief, Mr. Templeton argues for the first time that Mr. Hall assumed an agency role regarding the Cordaros’ claim and Mr. Hall was negligent in fulfilling his agency responsibilities to Mr. Templeton. We decline to address this argument because Mr. Templeton did not raise it until his reply brief. Stump v. Gates, 211 F.3d 527, 533 (10th Cir. 2000) (“This court does not ordinarily review issues raised for the first time in Continued . . . -26- affirm the district court’s dismissal of Mr. Hall.10