Opinion ID: 1235020
Heading Depth: 2
Heading Rank: 1

Heading: The Elements of Each Tort

Text: 1. Fraudulent Misrepresentation. Plaintiffs' fraudulent misrepresentation claims required proof that an agent of the Bank knowingly or recklessly made a false representation of material fact with the intent that plaintiff rely on it, and that plaintiff did reasonably rely resulting in damage. See Four R Cattle Co. v. Mullins, 253 Neb. 133, 570 N.W.2d 813, 816 (1997); Henderson v. Forman, 231 Neb. 440, 436 N.W.2d 526, 532 (1989). The Supreme Court of Nebraska looks to § 531 of the Restatement (Second) of Torts (1977) in analyzing fraudulent misrepresentation claims. Bank of Valley v. Mattson, 215 Neb. 596, 339 N.W.2d 923, 927 (1983). Section 531 provides that liability is limited to a plaintiff's pecuniary loss suffered . . . through . . . justifiable reliance in the type of transaction in which [defendant] intends or has reason to expect [plaintiff's] conduct to be influenced. Comment g explains that the reference to the type of transaction expected means that the transaction that in fact causes pecuniary loss may differ in matters of detail or in extent, unless these differences are so great as to amount to a change in the essential character of the transaction. 2. Fraudulent Concealment. Under Nebraska law, the Bank is liable for fraudulent concealment if it had a duty to disclose a known material fact, concealed that fact with the intent that plaintiff act in response to the concealment, and plaintiff reasonably relied and was injured by the concealment. See Streeks, Inc. v. Diamond Hill Farms, Inc., 258 Neb. 581, 605 N.W.2d 110, 118 (2000). The Court in Streeks held that whether a legal duty exists is a question of law and that § 551 of the Restatement (Second) of Torts properly sets out when a duty to disclose may arise. Id. at 119, 121. [7] Section 551(2) provides in relevant part: (2) One party to a business transaction is under a duty to exercise reasonable care to disclose to the other before the transaction is consummated . . . (b) matters known to him that he knows to be necessary to prevent his partial or ambiguous statement of the facts from being misleading; and (c) subsequently acquired information that he knows will make untrue or misleading a previous representation that when made was true or believed to be so; and . . . (e) facts basic to the transaction, if he knows that the other is about to enter into it under a mistake as to them, and that the other, because of the relationship between them, the customs of the trade, or other objective circumstances, would reasonably expect a disclosure of those facts. 3. Negligent Misrepresentation. The Supreme Court of Nebraska has adopted the definition of the negligent misrepresentation cause of action found in § 552 of the Restatement (Second) of Torts. Gibb v. Citicorp Mortgage, Inc., 246 Neb. 355, 518 N.W.2d 910, 922 (1994). Section 552 provides in relevant part: (1) One who, in the course of his business. . . or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information. (2) . . . the liability stated in Subsection (1) is limited to loss suffered (a) by the person . . . for whose benefit and guidance he intends to supply the information or knows that the recipient intends to supply it; and (b) through reliance upon it in a transaction that he intends the information to influence or knows that the recipient so intends or in a substantially similar transaction. Liability for negligent misrepresentation is more restricted than for fraudulent misrepresentation because of the difference between the obligations of honesty and of care. Gibb, 518 N.W.2d at 921.