Opinion ID: 888211
Heading Depth: 1
Heading Rank: 5

Heading: Count Two Negligent Misrepresentation

Text: ¶ 21 The Town argues that AK's claim for negligent misrepresentation relies on a claimed misstatement and improper conduct by the Mayor and that the claim is a tort. In support of this proposition, the Town relies on a previous statement of this Court that negligent misrepresentation requires the intent to induce reliance on a representation without any reasonable ground to believe that it is true. In other words, it requires negligence not intent.  Tripp v. Jeld-Wen, Inc., 2005 MT 121, ¶ 30, 327 Mont. 146, ¶ 30, 112 P.3d 1018, ¶ 30 (emphasis in original). ¶ 22 Moreover, the Town alleges that this claim falls under the public official's errors and omissions coverage under its policy with MMIA. Public official's errors or omissions is defined in Section V.R. of Form A as follows: Public Officials Errors and Omissions  means any act, omission, neglect, or breach of duty, including nonfeasance, misfeasance, and malfeasance by the COVERED PARTY in the discharge of their duties with the Entity, but shall not mean or include Bodily Injury, Personal Injury, or Property Damage. The Town contends that AK's Complaint is replete with allegations of the Mayor's alleged improper actions, misconduct and failure to act when a duty to act is alleged to have existed. ¶ 23 According to the Town, this count in AK's Complaint alleges that the Mayor represented that the Town would pay for the work performed when the Town had no intention of paying, and that the Mayor made this representation when she knew or should have known that it was not true. However, no such allegation appears in AK's Complaint. Instead, Count Two was based upon the Mayor's request for work to be done and her offer that the Town would pay for it, a claim that is factually based in contract. Count Two of the Complaint is nothing more than allegations that the contract was modified by the Mayor's request for the work to be done and an actual or implied promise to pay for that work. ¶ 24 We have repeatedly held that it is the acts giving rise to the complaint which form the basis for coverage, not the complaint's legal theories or conclusory language. Travelers Cas. v. Ribi Immunochem Research, 2005 MT 50, ¶ 40, 326 Mont. 174, ¶ 40, 108 P.3d 469, ¶ 40; Trustees, Missoula Cty. Sch. v. P.E.I.C., 263 Mont. 121, 128, 866 P.2d 1118, 1122 (1993); New Hampshire Ins. Group v. Strecker, 244 Mont. 478, 482, 798 P.2d 130, 132 (1990). ¶ 25 The alleged negligent misrepresentations in Count Two of AK's Complaint are the same request for work and offer to pay which created the Town's contract with AK. Thus, the factual basis for Count Two is the Town's contract with AK, and, as such, defense of this claim is excluded under the Town's policy with MMIA.