Court Opinion

ID: 9844631
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:05:47.45868+00
Date Added: 2024-06-11T09:15:39.281018
License: Public Domain

BISTLINE, Justice,
dissenting:
I.
With all due respect to Justice Huntley and to Justice McDevitt for the light which they were able to shed upon the facts and circumstances of this case,3 it was a highly experienced and extremely able practicing attorney who shed the most helpful illumination on the most troublesome aspect of the case. When I became first embroiled, which was only after Justice Huntley had resigned and Justice Shepard had died, and after two of the surviving justices awarded a rehearing, my approach was to first read the exhaustive history of the case furnished in the district court’s memorandum decision which, inter alia, granted the Cobbs/Kennevick motion for judgment n.o.v. On more than just one close reading of that opinion, it appeared to me that the jury should not have been instructed at all on negligent misrepresentation. Moreover, the instructions on actual fraud were inappropriate in that the facts and circumstances, as well-protrayed by the district court, did not even tend to demonstrate a case of actual fraud, i.e., fraud in the inducement, but rather were demonstrably indicative of constructive fraud.4 I say this as to the actions of Cobbs, Kennevick, and Bazeghi in the dealings with Wayne Hudson, which is not to say that the bank was not the primary and initial intended recipient of the deceptive scheme, because it was. However, the harm the bank might suffer would be only in giving long-term financing. It would not be in danger of losing its security, and could foreclose at will, which it did. Hudson, on the other hand, was apparently trying to acquire a long-term investment, and was putting up front what may have been a lifetime savings.
Returning to the illumination shed by Peter Boyd, Esq., on the trial court’s rather unusual (but certainly permissible where appropriate) action in reversing itself on the earlier denial of the Cobbs/Kennevick motion for a directed verdict, he pointed to eleven specific errors in law occurring at trial, the first of which needs exploring. This I say because, from my reading of the district court’s comprehensive memorandum decision, nothing therein showed me that the court properly instructed on negligent misrepresentation. The court was under a duty to instruct on the plaintiff’s proffered theory of failure to make disclosure and resultant constructive fraud. Everton v. Blair, 99 Idaho 14, 576 P.2d 585 (1978). Here the plaintiff showed kindness in not alleging intentional nondisclosure, but only that the failure to disclose was negligence.
Recently, in August 1989, in Powell v. Nietmann, 116 Idaho 590, 778 P.2d 340 (1989), my separate writing emphasized the application to that case of precedent previously established in Blinzler v. Andrews, 94 Idaho 215, 485 P.2d 957 (1971); Bethlahmy v. Bechtel, 91 Idaho 55, 415 P.2d 698 (1966); Tusch Enterprises v. Coffin, 113 Idaho 37, 740 P.2d 1022 (1987); and the Restatement (Second) of Torts § 551. The Restatement was being advanced by Jus*480tice Taylor for a unanimous Court in Bethlahmy, and thereafter reaffirmed by Justice Donaldson in Tusch, all having to do with the duty or obligation to disclose, and consequent liability in constructive fraud for failure to do so. Portions of my opinion in Powell are marked Appendix A, and attached hereto.
The first error designated by Mr. Boyd is concise, but very well taken, and is apparently what may have in part brought about the district court’s reversing itself. Mr. Boyd very straightforwardly asserted: “1. The trial court erred in submitting the case to the jury on the theory of negligent misrepresentation which was neither pleaded nor tried with the consent of either party.” R. 1674 (emphasis added).5 Mr. Boyd expanded on that assignment of error in a memorandum brief filed with the district court, and it, too, is instructive:
This case was tried to the court and jury on plaintiff’s third amended complaint which pled liability against defendants on theories of fraud, breach of contract, and simple negligence. At the close of evidence, the court directed a verdict on plaintiff’s simple negligence claims. With that exception, the court submitted the case to the jury on all plaintiff’s theories of liability, but on its own motion, also instructed on the separate tort of negligent misrepresentation.6
The parties did not try that claim by implied consent and, in fact, all objected to submitting the negligent misrepresentation issue to the jury. In opposing the instruction, plaintiff’s counsel advised the court that it had been their intent to plead simple negligence only, based on the failure to give notice to Wayne Hudson and based on alleged negligence in conferring apparent authority on Mark Bazeghi.7 Plaintiff also urged professional malpractice against Lyle Cobbs in connection with the lease to The Professionals, Inc.
R. 1678-79 (emphasis added).
Significantly, Mr. Boyd’s motion was entitled:
MOTION FOR JUDGMENT NOTWITHSTANDING THE VERDICT, OR IN THE ALTERNATIVE FOR A NEW TRIAL.
R. 1669. In the body of the motion, he explained to the district court, “[i]n the alternative, defendants move the court to enter its order granting them a new trial. This Motion is based upon I.R.C.P. 59(a)(6) and I.R.C.P. 59(a)(7) for the reasons there is insufficient evidence to support the verdict, it is contrary to law and because errors in law occurred at trial, as more particularly set forth below.” R. 1670. There followed specification of error No. 1, hereinabove set out, and ten other assignments of trial court error, all of which were discussed in the supporting brief. Mr. Boyd’s brief discussed all eleven of the specifications of error, but concerned here is only specification of error No. 1, and his elaboration thereon found in the supporting brief.8
*481Exactly what the district court made of Mr. Boyd’s motion is not readily discernible. It is seen that after having declared the error in submitting the issue of negligent misrepresentation to the jury, instead of just dropping that theory as a dead issue, the court resorted to application of the “pecuniary interest” mentioned in the Restatement (Second) of Torts § 552, concluding that “the proof did not establish the type of relationship which justifies the imposition of the duty not to make a negligent misrepresentation.” R. 1866.
When one knows, as any reader now does, that both parties objected to the court’s instructing on negligent misrepresentation, it is difficult to readily accept as a valid premise for granting judgment n.o.v. that the district court, acting in retrospect, and without the slightest mention that both parties objected as aforesaid, insisted on making a ruling that the proof was insufficient to prove a negligent misrepresentation. It was a needless and futile exercise. When the court received Mr. Boyd’s motion, supporting brief, and affidavit, the court in good grace should have acknowledged that the objections to instructing on negligent misrepresentation had been made, and the court had erred. Nevertheless, having determined sua sponte that the theory of negligent misrepresentation should be given to the jury, the district court’s erroneous (and obdurate) reaction was to reexamine the evidence for sufficiency to prove negligent misrepresentation, the theory the court preferred.
An expression of judicial regret would not have been out of order. Respect can be a two-way street in trial skirmishes between court and counsel. What is seen here appears to be a district court rather stubbornly insisting on so instructing the jury, and then, on later being directly but temperately confronted with the error, ignoring the challenge in favor of what appears to be a face-saving grant of the motion for judgment n.o.v. on the basis that negligent misrepresentation was not proven. That grant was also premised on the slender, slender reed that the only duty owed by Cobbs and Kennevick was to pay rent. Better that the court would have simply admitted error in so instructing over the objections of both parties. The court should have declared that the court’s error required the grant of a new trial as the only manner in which both parties could be treated fairly and evenly. There was, of course, other paramount error inflicted on the plaintiff in not instructing on failure to disclose as per its definition in Idaho case law.
Looking again at the trial court’s memorandum decision, which was first read at the outset of my involvement, it is noted that the district court strangely made the statement that “[a]t the time of the discussion of the jury instructions, the defendants Cobbs and Kennevick objected to instructing the jury on negligent misrepresentation.” R. 1861. This concession was not further pursued by the court, although it bears out to a 50 percent extent what Mr. Boyd had urged in his post-judgment alternate motions. But, having gone that one small step, no reason appears why the court would not divulge that i'„ so instructed over objections of both parties.9 This became all the more interesting when the court stated, in the sentence following the statement that the defendants did not want the jury to be instructed on negligent misrepresentation, that “[n]o Idaho appellate decision recognizes the tort of negligent misrepresentation.” R. 1861. Why this court responded negatively to Mr. Eismann’s cautionary remark [see Appendix C] is not understood. Why this case was selected to be the guinea pig for making new law is not understood. The case was already rife with complexities of parties, the-*482ones, and cross actions among the defendants.
Incomprehensibly, on the very next page, after the balance of page 1861 was consumed in a nonproductive discussion of Stewart Title of Idaho v. Nampa Land Title, 110 Idaho 330, 715 P.2d 1000 (1986), and a display of the contents of the Restatement (Second) of Torts § 552, the court stated that before discussing “the issues revolving around the tort of negligent misrepresentation, it must first consider whether it is even permissible in this case. Certainly it is not, at present, a recognized cause of action in Idaho.” R. 1861-62. Again one wonders, why force that issue in this case? And why belabor it after the jury is in?
Pages 1862 and 1863 of the memorandum decision discuss the factual circumstances, one of which was that Cobbs and Kennevick “could not have escaped liability for the rental obligations under the leases had Mr. Hudson chosen to pursue them under a breach of contract theory.” R. 1863.10 Pursuing Cobbs and Kennevick for rentals, which pursuit they might be pecuniarily able to resist ad infinitum, and otherwise deny, might be a futile and costly venture.
Obviously the court had to be of the mind that Cobbs/Kennevick were being nice guys, who at Bazeghi’s request would sign admittedly bogus leases, knowing that those documents would influence a bank to make a long-term financing loan. Those documents could also influence a potential buyer of the office building, the larger area of which was ostensibly rented to three bona fide lessees, but the court saw no fault in the failure of Cobbs/Kennevick to put either the bank or Hudson on notice (failure to disclose) that the leases were bogus — a fact known only to Cobbs, Kennevick, and Bazeghi. The jury saw it otherwise.
II.
After the district court concluded that the bogus leases rendered Cobbs and Kennevick liable to pay the rent, and only that, and specifically were not liable in an action for tort based on a breached contractual duty, it then digressed into a discussion of the tort of negligent misrepresentation. A discussion of the applicability, or better stated, the nonapplicability of the Restatement Second of Torts, § 552, was apparently intended as substantiation for what was being written, but strangely this discussion did not pay even lip service to the Restatement Second of Torts, § 551, which this Court relied upon in Bethlahmy v. Bechtel, 91 Idaho 55, 415 P.2d 698 (1966), and again in Tusch Enterprises v. Coffin, 113 Idaho 37, 740 P.2d 1022 (1987), the latter being a case eleven years more recent than Bethlahmy. Justice Donaldson in writing Tusch wholly approved of Bethlahmy, and quoted extensively from it. As to the misrepresentation there involved, he wrote:

It must also be considered whether the facts here fall within the category of cases finding a misrepresentation on the basis of nondisclosure.

Tusch Enterprises v. Coffin, 113 Idaho 37, 41-2, 740 P.2d 1022, 1026-27 (1987) (emphasis added). The balance of a section of the Tusch opinion is applicable to our review, and as Appendix D, is attached hereto.
The district court did commit error in seizing upon the “negligent misrepresentation” theory as a proper instruction for the jury, but it may have been readily correct*483able error, as will be discussed, infra. As to the self-claimed error, there could not have been another set of facts which would have presented a better candidate for instructing the jury in accordance with the provisions of the Restatement Second of Torts, § 551, which is well-established in Idaho jurisprudence. The discussion by the trial court of § 552 was not germane, because no instruction should have been given on negligent misrepresentation.
Negligent misrepresentation was not plaintiffs theory of liability. The plaintiff’s theory of liability was predicated on Idaho’s viable and well-recognized theory of nondisclosure, and whether it be intentional or negligent is of no consequence as to liability, other than that where it is intentional the perpetrator subjects himself to the assessment of punitive damages. What matters here is that the defendants, Bazeghi, Cobbs, and Kennevick, involving also the Cobbs/Kennevick partnership, contrived and connived to put into existence two leases which outwardly presented a “facial” validity (as the district court so observed, R. 1835), in order to obtain the bank’s long-term financing. A finding by the district court is convincingly clear on that point: “The agreement between Mark Bazeghi and the Cobbs/Kennevick partnership was that Cobbs/Kennevick would sign leases which appeared to be valid leases so that the bank would approve the financing because it would appear that the pre-leasing requirement had been met.” R. 1836. Equally clear, and cementing the particeps criminis intent and attitude of the three conspirators is the district court’s finding which followed directly in line with the above: “Contemporaneously, Mark Bazeghi entered into hold-harmless agreements between himself and Cobbs/Kennevick to hold them harmless from any claims arising from the leases and to be liable for the rent if Cobbs/Kennevick did not occupy the premises or sublet them by July 1, 1981. Exh. 30, 31.” R. 1836. Then followed the finding which displayed the determination of those three gentlemen to not disclose, either to the bank, or to Hudson: “The hold-harmless agreements were not attached to the leases, they were not provided to either the bank or to the plaintiff, nor were either advised of their existence____” R. 1836 (emphasis added). A further finding of the district court established that the three men were aware that the “facially valid” leases would also help along the Bazeghi scheme to sell the office building to Hudson:
Lyle Cobbs testified that at the time he entered into the lease he thought that an earnest money agreement was on the property and that there was a buyer or potential buyer. He knew, as did Jack Kennevick, that if enough square footage were leased that long-term financing had been approved and guaranteed by the Bank. He testified that Mark Bazeghi told him that there was a purchaser who desired to buy the building and that he was trying to get the building leased so that long-term financing could be consummated.
R. 1837 (emphasis added).
With those facts and circumstances outlined by the trial court being also self-evident from independently reviewing the record, at a glance it appears that Wayne Hudson had a prima facie case of fraudulent non-disclosure against Bazeghi, Cobbs, and Kennevick. (But in his pleadings Hudson graciously called it negligent nondisclosure.) Such a prima facie case could be based on the reckless or careless indifference displayed by Cobbs and Kennevick that the spurious leases would be used to beguile the bank into granting long-term financing, and also could be used to encourage Hudson into purchasing the office building from Webster # 3 Partnership and/or Wildwood Associates, as the case might be. Even were there manifested no objective intent to defraud Hudson, or the bank, the course of conduct would in the eyes of the law amount to constructive fraud, provided only that the bank and/or Hudson, or both, were deceived into consummating the transaction.11
*484Compounding the court’s error in choosing to instruct on negligent misrepresentation is the wording of the instructions given to the jury on the special verdict form. First the court explained that some questions dealt with the issue of fraud, and others did not:
In this case you will return a special verdict, consisting of a series of questions which you should answer. There are individual questions concerning the contentions of the various parties in this case, the conduct of the parties and other specific questions about the amount of damages which may be awarded to the Plaintiff. Except for those questions dealing specifically with the alleged acts of fraud on the part of certain named Defendants, in answering each question, you must be persuaded, considering all the evidence in the case, that your choice of answers is more probably true than not true. With respect to those questions dealing specifically with the alleged acts of fraud on the part of certain named defendants, in order to answer each such question in the affirmative, you must find that the allegations of fraud, as hereinafter defined, have been established by clear and convincing evidence.
R. 1506. But as is seen in examining the questions on the fraud in the inducement issue, some instructions required clear and convincing evidence, but others did not:
QUESTION NO. 1(a): Did defendants Lyle R. Cobbs, Jack Kennevick and Mark Bazeghi enter into a common plan or scheme to fraudulently induce Plaintiff into entering into the June 24, 1981 agreement? (By clear and convincing evidence)
QUESTION NO. 2: Did Defendant Mark Bazeghi fraudulently induce Plaintiff into entering into the June 24, 1981 agreement?
QUESTION NO. 3: Did Defendant Cobbs/Kennevick Partnership fraudulently induce Plaintiff into entering into the June 24, 1981 agreement? (By clear and convincing evidence)
QUESTION NO. 4(a): Did Defendant Lyle R. Cobbs fraudulently induce Plaintiff into entering into the June 24, 1981 agreement?
QUESTION NO. 4(b): Did Defendant Jack Kennevick fraudulently induce Plaintiff into entering into the June 24, 1981 agreement? (By clear and convincing evidence)
QUESTION 5: If you have found that Plaintiff was fraudulently induced into entering into the June 24, 1981 agreement and that Plaintiff suffered damage, was such conduct on the part of the above-named Defendants a proximate cause of damage to the Plaintiff? (By clear and convincing evidence)
QUESTION 6: Did Defendant Webster Investments #3 Partnership, acting by and through its managing partner, Mark Bazeghi, fraudulently induce Plaintiff into entering into the June 24, 1981 agreement? (By clear and convincing evidence)
QUESTION NO. 7: If you have found that Plaintiff was fraudulently induced into entering into the June 24, 1981 agreement and that Plaintiff suffered damage, was such conduct on the part of Defendant Webster Investments # 3 Partnership a proximate cause of damage to the Plaintiff? (By clear and convincing evidence)
QUESTION NO. 10: Was there negligence on the part of Wayne Hudson which was a proximate cause of the damages sustained by him?
QUESTION NO. 11: Was there negligent misrepresentation on the part of the defendant Mark Bazeghi which was a proximate cause of the damage claimed by Wayne Hudson?
*485QUESTION NO. 12: Was there negligent misrepresentation on the part of the defendants Lyle Cobbs and Jack Kennevick and the Cobbs/Kennevick partnership which was a proximate cause of the damages claimed by Wayne Hudson?
R. 1506-13.
All of the first eight questions are couched in terms of fraud in the inducement. Fraud in the inducement is not readily proven, and it is no great wonderment that the jury did not pause long on the issue of fraud. First of all, it has to be remembered that the jury did find for Hudson on the issue of negligent misrepresentation. Where the jury very well may have thought itself achieving justice with that verdict, it would naturally have a lessened interest in other theories of liability, especially when it had found the same monetary liability, $513,909, on the rescission issue. But a more likely probability is that there was not any evidence that Hudson was ever directly exposed to Cobbs and Kennevick. Cobbs and Kennevick were never positioned to induce him, and there was no evidence to suggest that either of them was in the habit of fraudulently inducing, or that either even knew what the term meant prior to finding themselves as named defendants in a sizeable lawsuit.
A problem with the questions asked on the special verdict, relative to actual fraud, i.e., fraud in the inducement, was the failure to define it, or to give the jury some understanding of what is meant by “induce.” Black’s Law Dictionary suggests seeing “seduce,” which is helpful. The words as to what may accomplish the purpose are practically the same, and only the objectives differ. Generally one induces or seduces by persuasion or influence, according to Webster, while according to Black’s the meaning is expressed in terms of bringing on or about, causing, leading by persuasion or reasoning. Presently it seems that no inducing of fraud could be attributed to Cobbs or Kennevick. Rather, perhaps they were as much the inducees as was Wayne Hudson, but perhaps culpably all too willing to aid Bazeghi. In that respect, the evidence strongly illustrates that their culpability was in negligence, the very case theory which counsel for Hudson pleaded — only to have the district court discount and discard it in favor of the law clerk’s research showing that negligent misrepresentation would better suit Hudson’s case than the simple negligence that his much-esteemed, experienced and capable counsel had elected. As to questions 10, 11, and 12 of the special verdict, the jury absolved Wayne Hudson of negligence, but not so with regard to Bazeghi, Cobbs, and Kennevick, the latter-named two both individually and as a partnership. A valid assignment of error is that the court was remiss in not finding all three co-conspirators jointly and severally liable. Had they not all participated in the execution of the leases, there would have been no deception practiced on the bank or on Wayne Hudson.
The thrust of Hudson’s action was not the piddling one of seeking a judgment for accrued rent on the basis of a lease which possibly created a contractual obligation to pay rent. When the news was out that the “purported” lease was indeed spurious, and had for its purpose to deceive the bank into approving long-term financing, there was no reason for Hudson to risk ratifying the fraud by suing on a lease which was bogus. On learning that the leases were spurious, there would have been little reason for Hudson to do other than what he did do, namely, timely rescind and commence legal action. Under the law as it has existed for many, many years, Hudson could not do otherwise, and specifically would have been inconsistent in attempting to gather in the fruits of the two spurious leases, and at the same time in the eyes of the bank appearing to be particeps criminis with Bazeghi, Kennevick, and Cobbs.
Early on in the memorandum decision, R. 1841, the district court found that “[bjased on the lease package submitted by Mark Bazeghi, the bank approved the long-term financing in June, 1981.” In no way could Mr. Hudson, in an exercise of ordinary respect for other persons, including banks, sit idly by without blowing the whistle, once he found out that up until then he had been used as an unwitting pawn in the *486Bazeghi coup aimed at securing the all-important long-term financing, the absence of which would have left Bazeghi, et al., in serious circumstances. Obviously Bazeghi was intent on accomplishing two objectives: (1) obtaining long-term financing not matter what else, and (2) passing the property off to Hudson in return for his money. Cobbs and Kennevick were alleged to have been negligent in affixing their signatures at Bazeghi’s request.
The district court was very definite concerning the stance the bank would take should it be made aware of the deception being practiced on it by Bazeghi, Kennevick, and Cobbs:
I conclude, based on the testimony of William Cunningham and Richard Brown, that the Bank was never advised of the nature of the arrangement between the Cobbs/Kennevick partnership and Mark and Kathy Bazeghi and that, had the Bank been aware of the nature of the agreement, it would not have approved the long-term financing because the pre-leasing condition would not be met by leases which the Bank was to treat as invalid.
R. 1836 (emphasis added). The court continued on and made four very significant findings, which although not numbered, are readily discernible as such:
The agreement between Mark Bazeghi and the Cobbs/Kennevick partnership was that Cobbs/Kennevick would sign leases which appeared to be valid leases so that the Bank would approve the financing because it would appear that the pre-leasing requirement had been made. Contemporaneously, Mark Bazeghi entered into hold-harmless agreements between himself and Cobbs/Kennevick to hold them harmless from any claims arising from the leases and to be liable for the rent if Cobbs/Kennevick did not occupy the premises or sublet them by July 1, 1981. Exh. 30, 31. The hold-harmless agreements were not attached to the leases, they were not provided to either the Bank or to the plaintiff, nor were either advised of their existence____ At no point did Cobbs/Kennevick ever testify that they believed that the hold-harmless agreements were entered into on behalf of Webster # 3 nor that they even knew of Webster 3.
The leases were executed March 17, 1981. Mr. Cobbs never discussed the Cobbs/Kennevick lease arrangements with Mr. Hudson. Mr. Cobbs testified that he was aware that banks sometimes required leases to insure that there would be an adequate cash flow to meet the loan payments. He also testified that Mark Bazeghi did tell him that the leases would be used to secure a buyer.
By a letter dated March 7, 1981, Mr. Hudson was advised by Mark Bazeghi that Lyle Cobbs and Jack Kennevick would lease space in the building. At that point, the space to be leased comprised 54% of the pre-leasing requirement. Mr. Bazeghi also told Mr. Hudson that Mr. Cobbs and Mr. Kennevick would lease space and that Mr. Cobbs would be active in helping lease the building.
R. 1836-38 (emphasis added).
Returning to special verdict questions 10, 11, and 12, supra, although the district court would post-trial concede that it had erred in giving such a theory to the jury, the fact remains that the jury in answering those three questions found that the defendants were negligent, which was the gist of the main theory Hudson sought to present against Cobbs and Kennevick. The jury also found in answering special verdict questions 15 and 16 that the negligent conduct of Cobbs and Kennevick was an extreme deviation from reasonable standards of conduct and was performed with an understanding or disregard of the likely consequences. R. 1516-17.
Under these circumstances, while it is readily perceived why the jury chose to assess no punitive damages against Cobbs and Kennevick, and in turn assessed $50,-000 against Bazeghi, it is also readily perceived that the court erred in requiring the jury to comparatively assess the culpable negligence of Cobbs, Kennevick, and Bazeghi. Obviously the latter was the far more culpable, but this was not a situation lend*487ing itself to comparative negligence. The three named individuals all participated in a common scheme, i.e., to produce two bogus leases, but “facially valid” as the district court so remarked, and those leases also played a part in causing Hudson to enter into the purchase of the office building. Presently I am not aware that such negligent conduct as was charged to Cobbs and Kennevick, combined with the fraudulent scheming conduct of Bazeghi by the court properly attributed to his principal, Webster #3, can be anything but joint and several. If there is some Idaho case law precedent which apportions fault for participating in conspiracy of this sort, I should be pleased to have it brought forth.
The record is rife with error. Earlier it was suggested that the district court’s error in refusing to instruct on plaintiff’s requested theory of negligence was correctable. Here, where the district court instructed the jury as to multiple theories of liability, on two of which damages were awarded by the jury (rescission and negligent misrepresentation), and the jury’s various answers to questions propounded by the court would have also been the same on simple negligence — the theory which the district court precluded the jury from utilizing, one remedy which this Court could consider would be to remand to the district court with directions to apply those answers to the proper theory which plaintiff alleged, and determine if doing so established the liability of the Cobbs/Kennevick partnership, and Bazeghi, Cobbs, and Kennevick, individually, and Webster # 3. If not, all the issues should be retried to another jury, or better still, this Court should give directions.
In conclusion, it would be remiss of me to not acknowledge the tremendous amount of time and effort expended by the district court in portraying the evidence which developed at trial. Only thereby gaining some understanding of the voluminous appeal record could I have delved deeper.
Both Justice Huntley and Justice McDevitt in authoring their respective opinions for the Court in this case would naturally turn to the district court’s opinion. There they would learn, as I did, that the district court declared error in submitting to the jury the issue of negligent misrepresentation as a viable theory which would render the defendants Cobbs, Kennevick, Bazeghi, and the Cobbs/Kennevick partnership liable to the plaintiff, Wayne Hudson. Where there appeared in the district court’s memorandum decision at R. 1860-61, the statement that defendants prior to trial had submitted and then at the instructions conference objected to instructing the jury on negligent misrepresentation, Justices Huntley and McDevitt would naturally take for granted that negligent misrepresentation was a theory of the case advanced by the plaintiff, and upon which the plaintiff had requested that the jury be instructed. Inadvertently, that forty-five page monumental opinion of the district court failed to intimate or suggest that the court had turned down the plaintiff’s theory of simple negligence in favor of the theory which the court sua sponte advanced, that of negligent misrepresentation. Mr. Boyd’s objection seemingly served no particular purpose whatever. It is not impossible that clerical mistake or inadvertence upon the part of the court was responsible for the district court's omission in not noting that both parties had objected. Only on examining the moving papers for the defendants’ alternative motions was it discovered that plaintiff also objected, futilely, to instructing on the theory of negligent misrepresentation, and also resisted, futilely, the court’s refusal to instruct as the plaintiff requested on his simple negligence theory. Attached hereto as Appendix F are plaintiff’s requested instructions on the theory he preferred over negligent misrepresentation, and, indeed, a viable theory based on counsel’s knowledge of the case.
With the district court’s memorandum decision drafted as it was, and with 31 volumes of clerk’s record and reporter’s transcript, it is no wonder that both Justice Huntley and Justice McDevitt did not become aware that a negligent misrepresentation theory of defendant’s liability was given to the jury solely on the court’s determination to do so. As has been dis*488cussed, where the district court conceded it was error to instruct at all on negligent misrepresentation, there was absolutely no valid reason to indulge in the exercise of assuming that there was such a viable theory in Idaho, and then declaring, absent any reasons, reasoning, or ratio decidendi of any sort, that the plaintiffs evidence came up short in the proof, thus paving the way for the entry of judgment n.o.v. as to a theory which neither of the parties though proper.
Where the court committed error in giving the theory of negligent misrepresentation to the jury, that error belonged 100 percent to the court and the court alone. None of that error was attributable to Mr. Boyd’s clients; none of that error was attributable to the clients of Mr. Eismann and Mr. Kennedy. Under those circumstances a court does not do anything else but confess its own error and set the case for retrial.
It is true that Mr. Boyd alternatively moved for judgment n.o.v., which under the rule of Dinneen v. Finch, 100 Idaho 620, 603 P.2d 575 (1979), and Quick v. Crane, 111 Idaho 759, 727 P.2d 1187 (1986), requires the court to reconsider12 whether the evidence, viewed most favorably to the part at whom the motion is aimed, is sufficient to sustain the verdict. Had the court concluded that the evidence was not sufficient, and assuming that the court had not committed the primary error of instructing on a theory not wanted, but objected to, by both parties, a judgment n.o.v. could have been a likely possibility.
Unfortunately, with the stage so set by the district court’s failure to advise in its memorandum decision that giving of the negligent misrepresentation theory of liability was of its own doing, and at the same time mentioning in the abstract that the defendants had objected to so instructing the jury, Justice Huntley, and now in turn Justice McDevitt, were misdirected into believing that it was a plaintiff’s theory, on which he would either stand or fall, and the district court had already ruled the evidence insufficient. The truth otherwise is now out, as is also the fact that the trial court did not instruct on the plaintiff’s theory of negligence. All that remains to be seen is whether any member of the Court has profited by the illumination now shed on the trial court’s unusual and wholly unprecedented conduct in: (1) instructing the jury on a theory of defendants’ liability which both parties opposed; (2) conceding post-trial that it was error to instruct on negligent misrepresentation, but not granting a new trial;13 (3) weighing the evidence produced at trial, without any reference that it was doing so under the guidelines of Quick v. Crane, 111 Idaho 759, 727 P.2d 1187 (1986), and Dinneen v. Finch, 100 Idaho 620, 603 P.2d 575 (1979), and concluding that the evidence did not substantiate the jury’s verdict in favor of plaintiff on a theory of negligent misrepresentation, which the court initially conceded had been erroneously given; but (4) without conceding or even suggesting that the theory was solely the product of only the mind of the court.
III. ADDENDUM
Only after the above was written did I learn that the author of the Court’s opinion, with the backing of his majority, intended to withdraw the court’s 1989 opinion, No. 120, issued August 11, 1989.14 *489That opinion was authored by Justice Huntley, joined by Justice Johnson and Justice McFadden, Pro Tem, and joined in part by Chief Justice Bakes, who also dissented in part. Almost every statement made by Chief Justice Bakes in his concurring and dissenting opinion was not only well thought out, but well stated, and also serves the purpose of fully supporting what I have written. Accordingly, because today’s majority has withdrawn the 1989 Justice Huntley majority opinion and likewise the 1989 Chief Justice Bakes opinion which analyzed and criticized the Huntley opinion, both are, in pertinent part, attached hereto as Appendix G.15
Chief Justice Bakes first concurred in part in Justice Huntley’s opinion: “I concur in that part of the Court’s opinion which concludes that ‘the trial court was correct in ruling that the elements for establishing negligent misrepresentations were not proved and, therefore, the jury verdict for plaintiff cannot stand and must be vacated.’ ” 1989 Slip Op. at 21. Thus we have Chief Justice Bakes agreeing with Justice Huntley, who in turn agreed with the trial court who had ruled “that the elements for establishing negligent misrepresentation were not proved and, therefore, the jury verdict [for plaintiff] cannot stand and must be vacated.” Id. at 21. Justice Huntley had also noted earlier in his opinion at page 9, that: “The court ruled that it had erred in allowing the negligent misrepresentation claim to proceed to the jury.” That the trial court did so admit and concede its own error is made abundantly clear in my opinion which precedes this addendum.
What Justice Huntley could not know, but what was discovered in many readings of the trial court’s forty-five page memorandum decision, is that the trial court’s error was far, far greater than envisioned. Nothing in that memorandum decision served to inform anyone that it was not the plaintiff who selected such a theory of defendants’ liability, but it was the trial court sua sponte insisting on such a theory in preference to the plaintiff’s pleaded theory of negligence in failing to disclose that the Cobbs/Kennevick leases were bogus. The court itself chose its own theory of defendants’ liability. More than just that, Justice Huntley could not have known from the trial court’s memorandum decision that the trial court had forced the jury to consider the theory of negligent misrepresentation over the objections of plaintiff Hudson and defendants Cobbs, Kennevick, and their partnership. Once the trial court was faced with attorney Boyd’s alternate motions for judgment n.o.v., and/or a new trial, and after the trial court ruled that negligent misrepresentation was not a theory of remedy available in Idaho, it was indeed an exercise in futility to go through the motions of determining whether the proof was sufficient to sustain the verdict *490for plaintiff Hudson on that theory. That theory should not have been presented. The court erred in doing so, and Chief Justice Bakes was not unjustified in saying of Justice Huntley’s opinion that:
Having thus concluded ‘that the plaintiff did not present substantial competent evidence bringing this case within that doctrine the balance of the Court’s discussion in the opinion regarding the elements of a cause of negligent misrepresentation under the Restatement (Second) of Torts, § 552, is unnecessary dicta, and will only tend to confuse the law of this state____
1989 Slip Op. at 21. What Chief Justice Bakes failed to observe, however, was that Justice Huntley was simply following the course mapped out by the trial court. It was the trial court who first beat the dead horse to death in the discussion of the application of the Restatement (Second) of Torts, § 552, after having ruled that there was error committed in allowing the jury to consider liability for negligent misrepresentation. Worse, however, neither the district court in the first instance, nor Justice Huntley in the second, pointed out any frailties in the plaintiff’s proof.
Chief Justice Bakes’ dissent is the backbone and substantiation for that which I had written before delving into his dissenting views. On page 22 of the 1989 Opinion No. 120, Chief Justice Bakes attacked Justice Huntley for stating a new trial was required for allowing the jury to ponder over a theory influenced by instructions given on a theory which is not legally sound and thereby “prevented Hudson from having a fair trial. Ante at 20.” Chief Justice Bakes was as much in the dark as Justice Huntley relative to not knowing that neither plaintiff nor defendants wanted the case submitted to the jury with instructions on the theory of negligent misrepresentation, and, in fact, objected thereto. Nevertheless, he critically says of Justice Huntley’s opinion that “the parties [each party] chose the theory upon which they tried the case, and ... ‘are bound by the theory on which they try it’ [citing two cases].” Chief Justice Bakes, in writing the foregoing, was not without justification. He could not do otherwise but assume, as did Justice Huntley, that plaintiff Hudson had presented the theory of negligent misrepresentation.
Justice McDevitt’s opinion wholly ignores the Idaho case law precedent of Kuhn v. Dell, 89 Idaho 250, 404 P.2d 357 (1965) and Everton v. Blair, 99 Idaho 14, 576 P.2d 585 (1978). No authority is cited for the proposition that “the trial court’s judgment n.o.v. was proper.” The hypothesis, or rationale of the majority opinion is necessarily found somewhere in its final two paragraphs, comprising ten lines. There are but two possibilities. One is that judgment n.o.v. was proper because Hudson’s proper cause of action was in contract, not tort. The other is even less persuasive, stating that “... although negligent misrepresentation ... is a viable cause of action in Idaho, the trial court’s [entry] of judgment n.o.v. was proper.” Neither of the two purported underpinnings can withstand scrutiny.
Betwixt and between the two it is stated that “[i]t could be argued that the negligent misrepresentation cause of action should never have been submitted to the jury.” One should accept this as gospel, not argument. The district court itself pronounced that it was error to let the jury consider that theory of defendants’ liability. Moreover, as may now be belatedly ascertained from the record and the transcript — to which reference has been painstakingly made by page, it will be found that it was so argued — by none other than Peter Boyd, Esq., to the district court. And, lo! the district court agreed, and conceded the error. At that point, Mr. Boyd’s clients were entitled to a new trial. Likewise, Mr. Hudson was entitled to a new trial. Where the district court had gotten the bit between its teeth on a determination to instruct, and did instruct the jury sua sponte over the remonstrances of both parties on the theory of negligent misrepresentation, all of the parties involved were entitled to a new trial free of such error.
How can it be error to deny a directed verdict on an issue which the district court would concede should not have been given to the jury? The initial and primary error *491was in concluding to give that theory to the jury over the objections of both the plaintiff and the defendants. Here, the fact which the majority will have to live with is that the court absolutely ruled that it erred in submitting the theory. As to the ratio decidendi of the other basis, i.e., that judgment n.o.v. as to the negligent misrepresentation theory was proper because Hudson’s proper cause of action was not in tort, but in contract is totally without substance. Unless, that sheer repetition makes it so — first said by the district court, and repeated by the majority. Factually stated, Hudson simply declined to ratify a fraudulent “straw” lease by suing on it.
One would necessarily be correct in assuming from the tenor of the majority opinion that anyone desiring to sell a parcel of real property at an inflated value could go to two or three reputable and economically sound acquaintances, obtain facially valid irrevocable 180 day offers to purchase for, say one at $750,000, one at $625,000, and the other at $1,000,000, with the persons signing those offers knowing that it was an accommodating thing to do for the owner of a property actually appraised at only $450,000. The three confederates would be assured in writing that the person, named above as “one,” and all was done solely to produce a better price. It would be helpful to see how a distinction can be drawn between that set of facts and the facts in the instant case. In either scenario the confederates are grossly negligent in affixing their signatures to bogus paper, and are guilty of constructive fraud in not disclosing what they have done.
APPENDIX A
Portions of the separate opinion of Bistline, J., in Powell v. Nietmann, 116 Idaho 590, 778 P.2d 340 (1989):
Where the transaction is an executory contract, breach of the contract may also give rise to the right of rescission. The district court in the same district where this action arose allowed rescission upon the sellers’ unexplained four-year delay in furnishing the buyer with a policy of title insurance. Blinzler v. Andrews, 94 Idaho 215, 485 P.2d 957 (1971).
There is an Idaho case which is startlingly similar to the one before us. In Bethlahmy v. Bechtel, 91 Idaho 55, 415 P.2d 698 (1966), this Court recognized ‘the doctrine of implied warranty of fitness insofar as construction of a house was concerned. Major defects which render the house unfit for habitation, and which are not readily remediable, entitle the buyer to rescission and restitution.’ 91 Idaho at 68, 415 P.2d at 111. Here, as has been noted, Powell’s testimony was that without the property qualifying for a septic system of sewage disposal, the property was ‘unbuildable.’ It was on that basis that he was clearly entitled to rescission. Just as in Bethlahmy the evidence did not mount to the level of fraud, so here it falls even shorter. But in this case, as in that, there is a major defect, namely that the lot is not adaptable to a septic system; in this case as in that, the problem is not readily remediable; in this case as in that, there is a breach of the implied warranty of fitness, and, ipso facto, there was no basis for defending an action claiming the right to rescind.
The Bethlahmy opinion was unanimous. Authored by Justice Taylor it was also thorough and comprehensive. In addition to giving recognition to the doctrine of implied warranty, the opinion also dwelt at some length on the duty to disclose, which as has been pointed out herein, was not fulfilled when Nietmann listed the property with Reynolds and, as Judge Prather found, Nietmann told Reynolds nothing concerning the sewage problem. Justice Taylor wrote:
In the tentative draft of the Restatement of the Law Second, Torts, considered by The American Law Institute at its annual meeting in May, 1966, § 551(1) is presented as follows:
(1) One who fails to disclose to another a thing which he knows may justifiably induce the other to act or refrain from acting in a business transaction is subject to the same liability to the other as though he had *492represented the nonexistence of the matter which he has failed to disclose, if, but only if, he is under a duty to the other to exercise reasonable care to disclose the matter in question.
and (so far as applicable here) subsection (2):
(2) One party to a business transaction is under a duty to disclose to the other before the transaction is consummated
(a) Such matters known to him as the other is entitled to know because of a fiduciary or other similar relation of trust and confidence between them; and
(b) Such additional matters known to him as he knows to be necessary to prevent his partial statement of the facts from being misleading; and
(e) Facts basic to the transaction, if he knows that the other is about to enter into the transaction under a mistake as to such facts, and that the other, because of the relationship between them, the customs in the trade, or other objective circumstances, would reasonably expect a disclosure of such facts.
Bethlahmy, 91 Idaho at 59, 415 P.2d at 702.
Bethlahmy has not only been often cited by this Court, but also by the courts in other jurisdictions. Justice Donaldson wrote the most recent Idaho opinion citing to and almost wholly relying on Bethlahmy. While in this case Nietmanns initially pleaded alternatively for rescission or damages, in the case referred to, Tusch Enterprises v. Coffin, 113 Idaho 37, 740 P.2d 1022 (1987), the plaintiffs sought only the relief of damages on grounds which included, as here, misrepresentation, but also, as strangely omitted here, on other grounds which included implied warranty of habitability. Tusch stated that this Court did not believe that the misrepresentation claim should be analyzed only with reference to the usual elements, but then ‘[i]t must also be considered whether the facts here fall within the category of cases finding a misrepresentation on the basis of nondisclosure’ meaning silence as a form of misrepresentation. 113 Idaho at 42, 742 P.2d 1027. This Court [in Tusch] also noted therein, in its discussion of Bethlahmy, at footnote 2, that the then tentative draft provision relied upon in Bethlahmy was adopted after only minor cosmetic changes. Those changes were indeed minor, and are not worth mentioning.
Bethlahmy and Tusch are strong medicine to cure ills suffered by buyers who have purchased real property with a defective building thereon, or the same ills suffered by buyers who have purchased real property which they find cannot even have a residence built upon.
Although Justice Johnson correctly understands that active misrepresentation of material fact may serve as grounds for rescission, Idaho case law in addition thereto has accepted the proposition that ‘The act of “representing” may take many forms.’ Sorenson v. Adams, 98 Idaho 708, 715, 571 P.2d 769, 776 (1977). Nietmann in requesting Reynolds to sell Nietmann’s lots was impliedly representing that the lots were marketable merchandise. While it is true that his testimony discloses a confused state of mind, it is clear enough that he had been cautioned by Bob Camp that he could not qualify his lots for a septic system. This important information should have been disclosed to Reynolds or any other broker to whom he happened to turn. ‘Even silence, in circumstances where a prospective purchaser might be led to harmful conclusions, is a form of “representation. ” ’ Sorenson, 98 Idaho at 715, 571 P.2d at 776. ‘In short, each party to a transaction must take care not to say or do anything tending to impose upon the other, and the mode of falsely representing a matter of fact is immaterial.’ 37 Am.Jur.2d 66, § 42 Manner of Making; Implied Representations. Those principles are equally appli*493cable here. Even accepting that Nietmann and Reynolds had no conversation whatever about sewage disposal, as Nietmann testified and the trial court found, Nietmann’s silence in not telling Reynolds of his problems with Panhandle Health, led to the exact ‘harmful conclusions’ which were observed in the Brooks [v. Jensen, 75 Idaho 201, 270 P.2d 425 (1954)] [case] as being a form of representation.
Powell v. Nietmann, 116 Idaho 590, 604-606, 778 P.2d 340, 354-56 (1989) (Bistline, J. concurring and dissenting) (emphasis added and in original).
All of the cases above-cited are strong medicine to cure the ills suffered by office building buyers who find themselves misled. Three individuals acting in concert contrived to present facially valid lease agreements, the purpose of which initially was to deceive a bank. However, the purchaser was also being misled. Hudson, under the bank’s mortgage on the office building, was required to make substantial monthly payments, but two of three of the tenants he acquired with his purchase are possessed of hold-harmless agreements, all of which means litigation will ensue, and may outlast Hudson’s ability to make the mortgage payments out of his own funds, if he still has any. The litigation here is still under review, and may, and should be, returned to district court for a new trial.
APPENDIX B
Pertinent portions of Hudson’s third amended complaint, upon which the case went to trial:
1-1. Under the sales contract, Wildwood Office Center was to be completed and delivered by March 1, 1981, pre-leased to the extent of approximately 12,213 square feet.
1-2. As of March 1, 1981, the Wildwood Office Center was nearly complete but the pre-leasing requirements of the loan commitment had not been fulfilled.
1-3. Without the pre-leasing requirements having been met, the long term loan would not have been made by the Bank.
1-4. Without the long term loan the sale of the Wildwood Office Center to Plaintiff Hudson would not have been completed.
1-6. Sometime before March 7, 1981, Defendant Mark Bazeghi explained to Defendant Cobbs and Defendant Kennevick that additional lease commitments were needed to meet the pre-leasing requirement for the long term loan and that the long term loan was essential for the completion of a pending sale of the Wildwood Office Center.
1-7. Defendant Mark Bazeghi stated to Defendant Cobbs and Defendant Kennevick that he was in desperate need of their help to meet the pre-leasing requirements.
1-8. Defendant Cobbs, Defendant Kennevick and Defendant Mark Bazeghi then undertook to devise and they did devise a scheme to defraud both the Bank and Plaintiff Hudson by means of artifice in the conduct of the affairs of Defendant Webster #3, combining and conspiring so to do.
1-9. Plaintiff Hudson received the letter Exhibit H on or about March 7, 1981, listing Defendant Cobbs and Defendant Kennevick as having separately committed to lease separate suites aggregating 6,556 square feet of space at Wildwood Office Center.
1-10. Defendant Mark Bazeghi showed to Plaintiff Hudson a financial statement of Defendant Mark Bazeghi showing a personal net worth of approximately $1,400,000.00, and listing many properties in which he had an equity.
I — 11. Defendant Mark Bazeghi stated to Plaintiff Hudson that all of Defendant Mark Bazeghi’s real estate business had been promised to the Defendant Cobbs who was the owner of Idaho Properties, a real estate brokerage firm, and that Defendant Cobbs would open a branch sales office at Wildwood Office Center. 1-12. Defendant Mark Bazeghi stated to Plaintiff Hudson that Defendant Jack *494Kennevick had the insurance business for all of Mark Bazeghi’s investment partnerships, which Plaintiff Hudson theretofore had reason to believe.
1-13. Defendant Cobbs, subsequent to March 7, 1981, acknowledged to Plaintiff Hudson his commitment to lease space in the Wildwood Office Center and to act as agent in leasing space to others.
1-14. On March 17, 1981, Defendant Cobbs/Kennevick Partnership, both partners signing, executed a lease of Suite 101 of Wildwood Office Center.
1-15. Concurrently, on March 17, 1981, Defendant Cobbs and Defendant Kennevick and Defendant Mark Bazeghi signed a secret agreement (herein called Suite 101 hold harmless agreement) reciting that in consideration for the signing of the lease of Suite 101, Defendant Mark Bazeghi would hold Defendant Cobbs and Defendant Kennevick harmless ‘from any claims arising out of his execution of said Lease Agreement____’
1-17. On March 17, 1981, Defendant Cobbs/Kennevick Partnership, both partners signing, executed a lease of Suite 103 of Wildwood Office Center.
1-18. Concurrently, on March 17, 1981, Defendant Cobbs and Defendant Kennevick and Defendant Mark Bazeghi signed another and separate secret agreement (herein called Suite 103 hold harmless agreement) reciting that in consideration for the signing of the lease of Suite 103, Defendant Mark Bazeghi would hold Defendant Cobbs and Defendant Kennevick harmless ‘from any claims arising out of his execution of said Lease Agreement____’
1-22. Between June 9 and June 17, inclusive, Defendant Mark Bazeghi represented to Plaintiff Hudson that the lease commitments for Suite 101 and 103 were sound, long term obligations of two individuals of extensive financial net worth adding substantial security for Plaintiff Hudson in completing the purchase of the Wildwood Office Center.
1-23. By the deception aforesaid, Defendant Mark Bazeghi was enabled to and did procure Plaintiff Hudson’s signature on the lease of Suite 101 and on the lease of Suite 103.
1-24. On or about June 17, 1981, Plaintiff Hudson, as Lessor, executed the lease agreement with Defendant Cobbs/Kennevick Partnership, as Lessee, providing for the lease of Suite 101 of Wildwood Office Center.
1-28. In bringing about the leasing of Suite 101, Defendants Cobbs, Kennevick and Mark Bazeghi acted in concert.
1-33. In bringing about the leasing of Suite 103, Defendants Cobbs, Kennevick and Mark Bazeghi acted in concert.
1-34. The signatures of Defendant Cobbs and of Defendant Kennevick on such lease agreements constituted separate representations by them that they intended to pay rent in accordance with the terms of such lease agreement.
1-35. Neither Defendant Cobbs nor Defendant Kennevick intended to perform or be bound by the lease of Suite 101 or the lease of Suite 103, it having been agreed among Defendants Cobbs, Kennevick and Mark Bazeghi that the express and implied representations contained in such lease agreements were false.
1-36. None of the Defendants prior to nor on July 1, 1981, notified the Bank of Defendant Cobbs’ and Defendant Kennevick’s intention not to be bound by or to perform the leases of Suite 101 and Suite 103.
1-37. None of the Defendants notified Plaintiff Hudson of the Defendant Cobbs and Defendant Kennevick intention not to be bound by or to perform the leases of Suite 101 and Suite 103.
1-38. Plaintiff Hudson did not know that Defendants Cobbs and Defendant Kennevick intended not to be bound by *495and not to perform the leases of Suite 101 and Suite 103.
R. 790-802 (emphasis added).
R-9. When the Defendant Cobbs and the Defendant Kennevick signed and delivered the subject leases to the Defendant Mark Bazeghi, they knew, or in the exercise of ordinary care should have known, that the Defendant Mark Bazeghi intended to represent to Plaintiff Hudson or some other prospective buyer of the Wildwood Office Center that such leases were valid and enforceable leases with the purpose of inducing Plaintiff Hudson or some other prospective buyer of the Wildwood Office Center to complete the purchase or to purchase the Wildwood Office Center.
R-12. While the Defendant Cobbs and the Defendant Kennevick knew, or in the exercise of reasonable care should have known, of the desperate financial situation of the Defendant Mark Bazeghi and the Defendant Webster No. 3, in. meeting the preleasing requirements of the contract of purchase, the Defendant Cobbs and the Defendant Kennevick signed and delivered the subject leases to the Defendant Mark Bazeghi in wanton disregard of what the Defendant Mark Bazeghi would do in terms of changing dates, signing initials and signatures, before presenting such leases to the Bank or to the Plaintiff Hudson or to others.
R-13. The Defendant Cobbs and the Defendant Kennevick negligently signed and negligently delivered the subject leases to the Defendant Mark Bazeghi in wanton disregard as to how or in what manner the Defendant Mark Bazeghi would use or present such leases to the Bank or to the Plaintiff Hudson or to others.
R-16. When the Plaintiff Hudson reviewed the subject leases as presented to the Plaintiff Hudson by the Defendant Mark Bazeghi, the Plaintiff Hudson would not have signed the subject leases and completed the purchase of the Wild-wood Office Center from Defendant Webster No. 3 had the Plaintiff Hudson known that Defendant Cobbs and Defendant Kennevick did not intend to be bound by the subject leases.
R. 826-27.
APPENDIX C
Pertinent portions from the trial court reporter’s transcript of the instructions conference are as follows:
[MR. EISMANN:] We have moved to Instruction No. 40, and in this instruction, as we view it, the instruction obviously relates to negligent misrepresentation. The Plaintiff’s requested Instruction Number 58 is simply a statement of negligence.
We think we are entitled to an instruction on negligence, and that a person who places in circulation a blank or incomplete document or even a completed document has some responsibility and duty to see that it doesn’t wreak havoc with those people who come across that document.
THE COURT: Okay, well, I will give you my reasoning for my decision on that now so that later if I am — well, this is how I see it. I read all the negligence cases, and my Clerk checked through this issue substantially.
When the sole loss is pecuniary loss, there’s no case that has found a duty owed in those circumstances except where it falls within negligent misrepresentation.
The generalized duty to avoid doing what might harm another exists with respect in all cases that you cited and in every case that we could find with respect to physical or property damage. The gist of what you are saying is they made a negligent misrepresentation.
Rather than dismiss the negligence count entirely, I view it as negligent misrepresentation, which is they negligently made a misrepresentation. That is, negligently placed these leases in action [sic, circulation], and I think that negligent misrepresentation more truly and accu*496rately states the true nature of the cause of action.
There’s no case that — that I have found that would impose a duty, the generalized duty that you have urged with respect to a negligence count and therefore, I have ruled that it can only proceed by way of negligent misrepresentation. It may not proceed by way of mere negligence.
It simply doesn’t apply based on all the cases that we researched where the sole damage is pecuniary loss, so that is my ruling on that.
I realize your position, and we have checked it, and we have looked at your cases, and they were all personal injury and property damage cases.
MR. EISMANN: You could be a pioneer, Your Honor.
THE COURT: Oh, [I] think we are doing enough of that in this case already.
Tr. 3229-31 (emphasis added).
APPENDIX D
Pertinent portions of applicable law selected from Tusch Enterprises v. Coffin, 113 Idaho 37, 740 P.2d 1022 (1987), are as follows:
We addressed the instances where nondisclosure may amount to misrepresentation in Bethlahmy v. Bechtel, 91 Idaho 55, 415 P.2d 698 (1966). In Bethlahmy, the defendant, Bechtel, was the builder and vendor of a residential home. Bechtel told the plaintiffs that the houses he built were the finest, and that the house at issue was of first quality construction. However, Bechtel did not disclose to the plaintiffs that a tiled water line ran underneath the garage and to within seven or nine feet of the north wall of the residence. We explained plaintiffs’ cause of action:
Plaintiffs commenced this action for rescission and restitution, mainly on the ground of defendants’ failure to disclose the defective condition of the house. The presence of the unsealed irrigation ditch through the lot and beneath the garage, coupled with the fact that the basement was not of waterproof construction, constituted major defects, known to defendants, and unknown to plaintiffs, and not discoverable upon reasonable inspection. Failure to disclose such defects would support a finding of fraud. Id., at 59, 415 P.2d at 702.
Relying upon § 551 of a tentative draft of the Restatement (Second) of Torts, the court found that the plaintiffs had presented facts entitling them to relief:
Defendant did not testify that he called attention to, or advised plaintiffs of, the ditch running under the lot and garage; nor that the ditch was constructed of drainage tile without sealed joints; nor that the basement was not of waterproof construction. These facts were known to defendant and unknown to plaintiffs. They were not discoverable by inspection. Defendant had superior knowledge. Plaintiffs were ignorant of the facts. The parties did not deal at arms length. Defendant dealt from a position of superi- or knowledge. A confidential relationship arise between the parties. Stearns v. Williams, 72 Idaho 276, 288, 240 P.2d 833 (1952). Plaintiffs relied, and were entitled to rely, upon defendant’s representation that the house would be a quality home. The facts essential to a finding of constructive fraud ... are not in dispute. Id., 91 Idaho at 62, 415 P.2d at 705.
The rationale for recognizing such a cause of action was explained in Bethlahmy with the following quotation from Kaze v. Compton, 283 S.W.2d 204, 207 (Ky.1955):
It cannot be controverted that actionable fraud or misrepresentation by a vendor may be by concealment or failure to disclose a hidden condition or a material fact, where under the circumstances there was an obligation to disclose it during the transaction. If deception is accomplished, the form of the deceit is immaterial. And the legal question is not affected by the absence of an intent to deceive, for the element of intent, whether good or *497bad, is only important as it may affect the moral character of the representation. Bethlahmy, supra, 91 Idaho at 60, 415 P.2d at 703.
Kaze v. Compton explained that actual intent to deceive need not be shown where the seller knew of facts which would have apprised a person of ordinary prudence of the truth: if a reasonable person would have been so apprised, and the seller was under a duty to inform the buyer of the concealed facts, then intent to deceive is not necessary to make a prima facie showing. Kaze, supra, at 208.
Tusch Enterprises v. Coffin, 113 Idaho at 42-43, 740 P.2d at 1027-28 (emphasis added).16
APPENDIX E
GENEEAL STATEMENT OF THE LAW
Actual or constructive fraud. Fraud is either actual or constructive. Actual fraud consists in deceit, artifice, trick, design, some direct and active operation of. the mind; it includes cases of the intentional and successful employment of any cunning, deception, or artifice used to circumvent or cheat another. It is something said, done, or omitted by a person with the design of perpetrating what he knows to be a cheat or deception. Constructive fraud consists in any act of commission or omission contrary to legal or equitable duty, trust, or confidence justly reposed, which is contrary to good conscience and operates to the injury of another. Or, as otherwise defined, it is an act, statement or omission which operates as a virtual fraud on an individual, or which, if generally permitted, would be prejudicial to the public welfare, and yet may have been unconnected with any selfish or evil design. Or, constructive frauds are such acts or contracts as, though not originating in any actual evil design or contrivance to perpetrate a positive fraud or injury upon other persons, are yet, by their tendency to deceive or mislead other persons, or to violate private or public confidence, or to impair or injure the public interests, deemed equally reprehensible with actual fraud. Constructive fraud consists in any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; or, in any such act or omission as the law specially declares to be fraudulent, without respect to actual fraud.
Extrinsic fraud. Fraud which is collateral to the issues tried in the case where the judgment is rendered. Type of deceit which may form basis for setting aside a judgment as for example a divorce granted ex parte because the plaintiff-spouse falsely tells the court he or she is ignorant of the whereabouts of the defendant-spouse.
Fraud in the inducement. Fraud connected with underlying transaction and not with the nature of the contract or document signed.
Black’s Law Dictionary 595 (5th ed. 1979) (citations omitted) (emphasis added).
*498IDAHO STATEMENT OF THE LAW
From Rawson v. United Steelworkers of America, 111 Idaho 680, 726 P.2d 742 (1986):
The trial court also granted the Union’s motion for summary judgment of dismissal on the Miners’ negligence claim. The court concluded that the Miners had not established that the Union owed a duty to the deceased miners. The trial court’s memorandum opinion in support of its order granting the motion for summary judgment on the negligence claims reads:
Plaintiffs seek to hold the Union responsible on negligence theories. A fundamental component of a negligence claim is the .existence of a duty toward another. Hoffman v. Simplot Aviation, Inc., 97 Idaho 32, 539 P.2d 584 (1975). A duty is a standard of conduct to which the defendant is required to conform. Algeria v. Payonk, 101 Idaho 617, 619 P.2d 135 (1980). Plaintiffs rely on the collective bargaining agreement and RESTATEMENT (SECOND) OF TORTS, §§ 323 and 324A (1965), as the sources for the legal duty owed by defendant Steelworkers.
A breach of contract is not in and of itself a tort. A contract, may, however, create a situation which furnishes the occasion for a tort. When a person renders services to another pursuant to a contract or otherwise, the law imposes a duty of care in the performance of those services. ‘The duty of care arises ... irrespective of contract.’ ... Taylor v. Herbold, 94 Idaho 133, 484, [483] P.2d 664 (1971). Mere failure to carry out contractual obligations cannot support a tort action while misfeasance in the performance of contract obligations may support a tort action.
Rawson, 111 Idaho at 632-33, 726 P.2d at 744-45. In an action to prove actual fraud, the claimant must prove that the other party had an intent to deceive. In a case of constructive fraud, that element is not required. Bethlahmy v. Bechtel, 91 Idaho 55, 415 P.2d 698 (1966). Consider this discussion in Sorenson v. Adams, 98 Idaho 708, 571 P.2d 769 (1977):
The act of ‘representing’ may take many forms:
While false representations generally consist of verbal or written statements, a misrepresentation in words is not essential____ [A] misrepresentation need not be express, but may be implied or inferred from circumstances which are in fact equivalent to positive representation, or from acts or conduct, such as the exhibiting of fraudulent or misleading documents, or maps or plats____ (Emphasis supplied.) 37 Am.Jur.2d Fraud § 42 (168). Brooks v. Jensen, 75 Idaho 201, 215-216, 270 P.2d 425 (1954).
Even silence, in circumstances where a prospective purchaser might be led to harmful conclusions, is a form of ‘representation.’
Sorenson, 98 Idaho at 715, 571 P.2d at 776. Additionally:
The allegations set forth in respondent’s cross-complaint are sufficient to state a cause of action against appellant for constructive fraud. The distinction between actual fraud and constructive fraud is stated in 37 C.J.S. Fraud § 2, p. 211, as follows:
Constructive fraud is a breach of legal or equitable duty which, irrespective of the moral guilt of the fraud feasor, the law declares fraudulent because of its tendency to deceive others, to violate public or private confidence, or to injure public interests. Neither actual dishonesty of purpose nor intent to deceive is an essential element of constructive fraud.
McGhee v. McGhee, 82 Idaho 367, 371, 353 P.2d 760, 762 (1960) (citations omitted).
*499APPENDIX F
PLAINTIFF'S REQUESTED ^
JURY INSTRUCTION NO. 1
In brief summary. Plaintiff claims as follows:
In 1980 he contracted to purchase an office building that was under construction. The purchase was subject to the delivery by seller to plaintiff of a long term loan. The Idaho First National Bank, had committed to the long term loan but only if approximately eighty-four percent (84%) of the building was preleased.
It was Webster Investments #3's obligation to prelease, which it ultimately did by submitting two fictitious leases, each signed by Defendants Lyle R. Cobbs and Jack Kennevick, and by one lease to a sham corporation known to Defendants Cobbs, Kennevick and Mark Bazeghi to be without substance. Neither Mr. Cobbs nor Mr. Kennevick intended to be bound by the leases signed by them. It was, however, intended by them that the Bank would rely on such leases and fund the long term loan and that Plaintiff would also rely and accept the building and responsibility for the loan.
In an agreement of June 24, 1981, which is part of the sales contract, it was represented that the preleasing requirement had been met. Relying on the representation, the leases, and other representations. Plaintiff did accept the seller's performance and responsibility for the loan. The Bank's approval of the leasing arrangement was. also an element of Plaintiff's reliance.
The agreement of June 24, 1981, also committed the seller to a quaranty of leases covering more than 65% of the space in the building. The seller failed to live up to this guarantee.
The leases above mentioned and other representations were false as wore known to Uio makers. Dol'emlaiiUs Mark llazcglii, Jiick *500Kennevick and Lyle R. Cobbs acted together in the foregoing which constituted a conspiracy to defraud and an actual fraud on the Plaintiff. Each conspirator is liable for the acts of any other.
The seller of the building was Webster Investments #3, which is a general partnership. As such, each partner is liable for the acts of its managing partner, who is Mark Bazeghi.
Plaintiff seeks compensatory damages by each of several alternative claims. You will be making a determination on each . separate claim but, of coursej the Plaintiff may collect only once. The different causes of action are:
1. Breach of contract:
(a) Because of the fictitious leases Webster Investments #3 failed to meet its obligation to prelease.
(b) Webster Investments #3 failed to pay rent under the guaranty.
2. Fraud:
(a) Webster Investments #3 is responsible for the fraud of its managing partner, Mark Bazeghi and his co-conspirators.
3. Fraud — Conspiracy:
(a) Jack Kennevick, Lyle R. Cobbs and Mark Bazeghi acted in concert in a scheme to defraud and they did defraud the Plaintiff.
4.- Violation of the Idaho/Racket eer/ng Act.
(a) Plaintiff has susta/ned injur/ by a pattern of racketeering acti/ity as defined in the law.
5. Negligence: /
(a) Tn signing incomplete leases and delivering thorn to *501Mark Bazeghi, there was negligence on the part of Lyle R. Cobbs, Jack Kennevick and the Cobbs/Kennevick Partnership.
(b) In failing to disclose to Plaintiff and the Idaho First National Bank that Lyle R. Cobbs and Jack Kennevick and the Cobbs/Kennevick Partnership did not intend to be bound by the leases, there was negligence on the part of Lyle R. Cobbs,
Jack Kennevick and the Cobbs/Kennevick Partnership.
(c) In failing to tell Plaintiff and Idaho First National Bank of the lack of' substance of the corporate lessor mentioned, there was negligence on the part of Lyle R. Cobbs.
(d) The negligence was gross.
BISTLINE, J. comments. Every sentence in the first six paragraphs of tne plaintiff s requested Instruction No. 1 will be found almost identically stated in the district court's post-trial memorandum decision. • Moreover, it is not seen that setting forth theories and contended facts is argumentative ~~ -- — —:--— -
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*502PLAINTIFF'S REQUESTED
JURY INSTRUCTION NO. 57
The plaintiff also claims that defendants Lyle R. Cobbs Jack Kennevick and the Cobbs/Kennevick Partnership were negligent in signing the incomplete leases covering Suites 101 and 103 of the Wildwood Office Center and delivering the same to defendant Mark Bazeghi, knowing that Mark Bazeghi intended to present such leases to Idaho First National bank and plaintiff when they knew, or should have known, that said Bank and plaintiff would rely on said leases, that they were negligent in failing to notify Idaho First National Bank and plaintiff of their intention not to be bound by said leases, and that defendant Lyle R. Cobbs was negligent in the manner by which he failed to notify plaintiff and Idaho First National Bank of essential information in connection with the leasing of Suite 202 to The Professionals, Inc. Plaintiff also claims that such conduct on the part of defendants Lyle R. Cobbs, Jack Kennevick and the Cobbs/Kennevick Partnership was in wanton disregard of the rights of Idaho First National Bank and plaintiff and constituted gross negligence. Plaintiff alleges that he was damaged as a proximate result of such negligence on the part of said defendants.
BISTLINE, J. Comment: That the court initially (after submission to the court before trial) marked this instruction /X/ Given, yet did not give it, is in accord with the court's later statement at the instructions conference that the court and the court's law clerk were indeed researching the law with the thought in mind to instruct on negligent misrepresentation instead of plaintiff's theory of negligence nondisclosure.
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*503PLAINTIFF’S REQUESTED
JURY INSTRUCTION NO. 58
For the Plaintiff Hudson to establish that the Defendants Lyle R. Cobbs, Jack Kennevick or the Cobbs/Kennevick Partnership was negligent, the Plaintiff Hudson has the burden of proving each of the following propositions by a preponderance of the evidence:
1. That the defendants Lyle R. Cobbs, Jack Kennevick, and/or the Cobbs/Kennevick Partnership were negligent in connection with their participation, conduct or omissions in the leasing of office space in the Wildwood Office Center.
2. That the plaintiff Hudson was damaged.
3. That the negligence of the defendants Lyle R. Cobbs, Jack Kennevick and/or the Cobbs/Kennevick Partnership was a proximate cause of plaintiff Hudson's damages.
4. The nature and extent of plaintiff's damages, the elements of damage, and the amount thereof.
If you find from your consideration of all the evidence that each of the propositions has been proved by a preponderance of the evidence, then your verdict should be for the plaintiff; but, if you find from your consideration of all the evidence that any of these propositions has not been proved, then your verdict should be for the defendant.
IDJI 270-1, as modified
BISTLINE, J. Comment: See comment to Instruction No. 57.
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*504PLAINTIFF'S REQUESTED
JURY INSTRUCTION NO. 59
When I use the word "negligence" in these instructions, I mean the failure to use ordinary care in the management of one's person. The words "ordinary care" mean the care a reasonably careful person would use under circumstances similar to those shown by the evidence. Negligence may thus consist of the failure to do something which a reasonably careful person would do, or the doing of something a reasonably careful person would not do, under circumstances similar to those shown by the evidence. The law does not say how a reasonably careful person would act under those circumstances. That is for you to decide.
IDJI 210 As Modified
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*505PLAINTIFF'S REQUESTED
JURY INSTRUCTION NO. 60
The amount, of caution required of a person in the exercise of ordinary care depends upon the conditions apparent to • him or that should be apparent to a reasonably prudent person under circumstances similar to those shown by the evidence.
California Jury Instructions, Sixth Edition, No. 3.12
BISTLINE, J. comment: The instruction is sound. Presently I have not found that its content was covered elsewhere.
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*506PLAINTIFF'S REQUESTED
JURY INSTRUCTION NO. 61
One owes a duty to every person in our society to use reasonable care to avoid damage to the other person in any situation in which it could be reasonably anticipated or foreseen that a failure to use such care might result in damage. In determining whether such duty has been breached by the allegedly negligent party, his conduct is measured against that of an ordinarily prudent person acting under all the circumstances and conditions then existing.
85 ICAR 1285, Sept. 18, 1985 at p. 1289; Alegria v. Payonk, 101 Id. 617, 619 P.2d 135 (1980); Nogel v. Hammond, 90 Id. 96, 408 P.2d 468 (1965).
BISTLINE, J. comment: The instruction is sound.' The district court s comment is not understood. All damages, even, pain and suffering, are assessed a pecuniary (monetary) award.
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*507PLAINTIFF'S REQUESTED
JURY INSTRUCTION NO. 62
The law does not require that defendants Lyle R. Cobbs, Jack Kennevick. and the Cobbs/Kennevick partnership must have been able to foresee the- precise damage which in fact resulted from the alleged negligence, or the particular injurious result which might be inflicted upon a person as the result thereof by reason of his negligence. The law only requires that defendants Lyle R. Cobbs, Jack Kennevick and the Cobbs/Kennevick partnership should be able to understand and appreciate that results of some kind injurious in nature may be reasonably anticipated from the negligent act of omission or commission.
Burkland v. Oregon Shortline R.R. Co., 56 Idaho 703, 713 - 714
BISTLINE, J. comment: There appears to be no conceivable reason for not giving this instruction, other than that the district court would ultimately refuse to instruct on plaintiff's theory of negligence and failure to disclose.
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*508PLAINTIFF'S REQUESTED
JURY INSTRUCTION NO. 63
One test that is helpful in determining whether or not a person was negligent is to ask and answer whether or not, if a person of ordinary prudence had been in the same situation and possessed of the same knowledge, he would have foreseen or anticipated that someone might have been injured by or as a result of his action or inaction. If the answer to that question is "yes," and if the action or inaction could have been avoided, then not to avoid it would be negligence.
California Jury Instructions, Sixth Edition, No. 3.11
BISTLINE, J. comment: This instruction is proper, 'but apparently refused for the same reason as requested Instruction
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APPENDIX G
HUNTLEY, J.
This case presents the issue of whether, when a jury renders a verdict granting relief on one of two alternative theories of law submitted to it by the court, a new trial should be granted when the trial court determines on post-trial motions, that the theory should not have been presented to the jury. We answer the question in the affirmative and reverse and remand for a new trial.
FACTS
This case revolves around a series of agreements between: (1) Mark Bazeghi (the managing general partner acting on behalf of the Webster # 3 General Part*509nership); (2) the Idaho First National Bank; (3) Plaintiff Wayne D. Hudson; and (4) Defendants Cobbs, Kennevick, and the Cobbs/Kennevick partnership.
The Webster # 3 Partnership owned a tract of land in Boise called the Wild-wood Center. This tract of land included the Wildwood apartments and the Wild-wood office buildings. On August 1, 1980, Webster #3 obtained a $580,000 loan from Idaho First to finance construction of the office buildings on the Wildwood property. Interest was set at 13% payable on July 1, 1981. Under the terms of the loan agreement, the. loan was convertible to long-term financing if the office building was pre-leased to the extent of 12,210 feet prior to July 1, 1981.
Although the trial court had denied a motion for a directed verdict it granted the defendants’ motion for judgment notwithstanding the verdict approximately seven months after entering judgment against the defendants on the jury verdict. The court ruled that negligent misrepresentation was not at present a viable cause of action in Idaho, no appellate decision having recognized the tort. It further ruled that even if such a tort were recognized in Idaho, the evidence did not support a finding for Hudson on all the requisite elements of that tort. The court ruled that it had erred in allowing the negligent misrepresentation claim to proceed to the jury. Thereafter, the court denied Hudson’s motion for a new trial, and his motion to amend the j.n.o.v. It is the court’s j.n.o.v. ruling and refusal to grant new trial which gives rise to Hudson’s appeal herein.
I.
We first consider whether the trial court erred in its post-trial ruling that the cause of action in negligent misrepresentation should not have been submitted to the jury. We hold as a matter of law that the plaintiff did not present substantial competent evidence bringing this case within that doctrine and, therefore, affirm on this issue.
1989 Slip Op. 3-10. [At this point Justice Huntley set out the provisions of Restatement (Second) of Torts, § 552, after stating: “The appellate courts in every state in the Ninth Circuit area where the issue has been presented, have recognized the tort of negligent misrepresentation as elucidated in the Restatement, those states being: Washington, Alaska, New Mexico, Montana, Arizona, Utah, Wyoming, Nevada, Colorado, and Hawaii. Only Kansas, Oklahoma, Oregon, and Idaho have yet to speak to the issue.” 1989 Slip Op. at 10-11. Justice Huntley stated the holdings of these states over the ensuing pages of 11-16 of his opinion. His opinion continues]:
II.
In addition to citing the absence of Idaho case law on negligent misrepresentation, the trial court stated two other reasons for granting the motion for j.n. o.v. First, that Hudson’s action was properly in contract not tort and secondly, that the requisite elements of negligent misrepresentation were not fulfilled. Regarding the first reason, the court wrote:
The threshold issue before the court is whether Idaho would allow this claim to proceed in tort as a negligent misrepresentation claim rather than as a breach of contract claim. Generally, where a duty to perform arises from a contract, the cause of action lies in contract, not tort, when the duty is breached. As the Idaho Supreme Court noted in Carroll v. United Steelworkers of America, 107 Idaho 717, 692 P.2d 361 (1984), it is well settled that “an alleged failure to perform a contractual obligation is not actionable in tort ... found an action in tort, there must be a breach of duty apart from nonperformance of a contract” (quoting Taylor v. Herbold, 94 Idaho 133, 483 P.2d 664 (1971)) mere nonfeasance, even if it amounts to willful neglect to perform the contract is insufficient to establish a duty in tort. 107 Idaho at 719 [692 P.2d at 363]. *510See also, Steiner Corp. v. American District Tele., 106 Idaho 787, 683 P.2d 435 (1984).
The relationship created between the plaintiff and the defendants Cobbs and Kennevick by the lease agreement was a landlord/tenant relationship. The lease agreements created an obligation to pay rents which was breached. No-other relationship existed between the plaintiff and the defendants at the time the lease agreements were entered____ No positive duty outside the contract and imposed by law exists. A positive breach of duty imposed by law or negligence in performing a contractual act is necessary for liability in tort to exist. Taylor v. Herbold, supra. Lyle Cobbs and Jack Kennevick breached their obligations to pay rent under the two leases. No agreement was proven which would relieve them of the obligation to pay rent to the plaintiff Hudson even though the agreement entered into between them and Mark Bazeghi would entitled them to be reimbursed by him. Their position that they would not be obligated on the leases because they were either blank when signed or they did not notice Mr. Hudson’s name would not relieve them of their contractual obligation. Certainly, the position was unreasonable and caused the plaintiff additional costs. The remedy for their unreasonable refusal to perform a binding agreement is to award fees against them reflecting the plaintiff’s full cost in obtaining the promise performance of the leases. However, their unreasonable refusal to perform a contractual obligation would not give rise to a right of action in tort.
As is evident in the foregoing passage, the trial court erred when it ruled ‘No positive duty outside the contract and imposed by law exists.’ It is true that Cobbs and Kennevick had a contractual obligation and failed to fulfill it and they could have been sued for breach of contract. However, such is a matter separate and apart from the issue of whether Cobbs and Kennevick may be held liable for their written misrepresentations which induced Hudson to finalize the contract with Webster #3. As the cases cited in Part I demonstrate, the ‘negligent misrepresentation’ which gives rise to the cause of action is frequently found in contract documents.
III.
In ruling that the necessary elements for negligent misrepresentation were not proved, the trial court stated:
Furthermore, the tort of negligent misrepresentation requires the existence of certain elements not present in the instant case. The “false information” must be supplied in the course of the maker’s business, profession or employment or in “any other transaction in which he has a pecuniary interest.” Restatement (Second) of Torts § 552. Neither Lyle Cobbs nor Jack Kennevick made the leases in the course of business, profession or employment of either of them or the partnership. While Mr. Hudson alleged that there was a pecuniary interest in the transaction, none existed at the time of the leases. Thus, even assuming that the leases were “false information,” the proof did not establish the type of relationship which justifies the imposition of the duty not to make a negligent misrepresentation. This case presents the anomaly that, while Jack Kennevick and Lyle Cobbs thought they were entering into non-binding agreements they actually were entering into binding agreements upon which they were liable. However, because the proof never established any pecuniary interest, the tort of negligent misrepresentation does not lie even if the other elements are assumed to be present. The plaintiff speculated that there would be pecuniary interest based on Mark Bazeghi’s statements to him that Cobbs and Kennevick would receive additional business from him, but the proof never sustained the plaintiff’s speculations.
*511Our review of the record establishes the trial court was correct in ruling that the elements for establishing negligent misrepresentation were not proved and, therefore, the jury verdict for plaintiff cannot stand and must be vacated. However, the grant of judgment n.o.v. to defendant was improper, the appropriate remedy being to grant a new trial under the authorities discussed in Part IV, post.
IV.
The next issue presented is whether the court erred in refusing to order a new trial.
Idaho Rule of Civil Procedure 59(a) provides in pertinent part:
Rule 59(a). New trial — Amendment of judgment — Grounds.—A new trial may be granted to all or any of the parties and on all or part of the issues in an action for any of the following reasons:
1. Irregularity in the proceedings of the court, jury or adverse party or any order of the court or abuse of discretion by which either party was prevented from having a fair trial.
7. Error in law, occurring at the trial. Any motion for a new trial based upon any of the grounds set forth in subdivisions 1, 2, 3, or 4 must be accompanied by an affidavit stating in detail the facts relied upon in support of such motion for a new trial. Any motion based on subdivisions 6 or 7 must set forth the factual grounds therefor with particularity. [Amended March 20, 1985, effective July 1, 1985.] (Emphasis supplied.)
******
In the instant case, the trial court instructed the jury that it could find the defendants liable or innocent on either one of two tort theories; fraud or negligent misrepresentation. After extended deliberation, the jury returned a verdict wherein it found Cobbs and Kennevick innocent of fraud but liable for negligent misrepresentation. Seven months later, the trial court granted defendant’s motion for judgment n.o.v. on the grounds that the tort of negligent misrepresentation had not yet been recognized in the state of Idaho, and that even if it were recognized, the facts herein would not establish a case of negligent misrepresentation, and that it therefore erred in instructing the jury.
The tendering to the jury of an inapplicable legal theory was certainly an irregularity in the proceedings, and an abuse of discretion which prevented Hudson from having a fair trial. The incorrect instruction was also a significant error in law occurring at the trial court level.
Idaho has a long line of cases holding that where a jury is instructed on theories of law for which there is no substantial evidence to support the theory, that such constitutes reversible error. For example, in Kuhn v. Dell, 89 Idaho 250, 404 P.2d 357 (1965) this Court held:
It is reversible error to instruct the jury on the doctrine of last clear chance where there is no substantial evidence to support the doctrine. Graham v. Milsap, supra [77 Idaho 179, 290 P.2d 744 (1955)]; Cournyer v. Follett, 85 Idaho 119, 376 P.2d 707 (1962); Hale v. Gunter, 82 Idaho 534, 356 P.2d 223 (1960); Ralph v. Union Pacific Railroad Company, 82 Idaho 240, 351 P.2d 464 (1960); Laidlaw v. Barker, 78 Idaho 67, 297 P.2d 287 (1956).
In Everton v. Blair, 99 Idaho 14, 576 P.2d 585 (1978) this court held:
The trial court is under a duty to instruct the jury on every reasonable theory recognized by law that is supported by trial. Hodge v. Borden, 91 Idaho 125, 417 P.2d 75 (1966); Domingo v. Phillips, 87 Idaho 55, 390 P.2d 297 (1964); Wurm v. Pulice, 82 Idaho 359, 353 P.2d 1071 (1960). However, instructions should not be given which are not based on evidence from the trial. Bratton v. Slininger, 93 Idaho 248, 460 P.2d 383 (1969); Fawcett v. Irby, 92 Idaho 48, 436 P.2d 714 (1968). Instructions should not be given on a theory which is not legally sound. Co*512rey v. Wilson, 93 Idaho 54, 454 P.2d 951 (1969); Cassia Creek Reservoir Co. v. Harper, supra [91 Idaho 488, 426 P.2d 209 (1967)]
An instruction which incorrectly states the law provides grounds for ordering a new trial. Corey v. Wilson, supra; Walker v. Distler, 78 Idaho 38, 296 P.2d 452 (1956); I.R.C.P. 59(a)(7).
The submission of the incorrect alternative theory is of some substantial moment on the facts of this case. One may analogize to the negligent misrepresentation being a sort of ‘lesser included tort’ of fraud. Fraud required clear and convincing proof while negligent misrepresentation required only a preponderance of the evidence. That the jury decided the case on the alternative requiring the lesser degree of proof leaves open the question of what nine jurors might have done had they been faced with a choice of all or nothing on the fraud cause.
Accordingly, we reverse and remand for new trial.
V.
We have considered appellant’s remaining assignments of error and find them to be without merit.
Reversed and remanded for new trial consistent herewith. Costs to appellants, no attorney fees awarded on appeal.
JOHNSON, J. and McFADDEN, J., Pro Tern., concur.
SHEPARD, J. sat but did not participate due to his untimely death.

. To illustrate the procedural morass which this controversy became involved in, there were twenty-seven volumes of record amassed before the case came at issue on the plaintiffs third amended complaint and the pleadings responsive thereto.

. What was plainly visible to me was a prima facie case of constructive fraud of which Wayne Hudson became victim by reason of the non-disclosure to him that the Suite 101 and 103 leases were absolutely bogus, and "The Professionals” lease of Suite 102 was at the least presumably likewise, all three leases being fabricated to placate the bank’s requirements.

. Attached hereto as Appendix B are the salient allegations of the plaintiffs third amended complaint. It will be noted that Mr. Boyd was absolutely correct in reminding the court as to the plaintiffs theory not being negligent misrepresentation. 1-36,1-37, and 1-38 are the allegations of nondisclosure.

. Mr. Boyd’s statement is also squarely in line with the reporter’s transcript of the instructions conference, attended by Mr. Eismann for the plaintiff. See Appendix C, attached hereto.

. Mr. Boyd’s statement squares exactly with the plaintiffs final complaint. See Appendix B, attached hereto.

. Of additional significance is an affidavit which Mr. Boyd filed contemporaneously with the filing of his alternative motion for entry of judgment n.o.v., or for new trial, the contents of which he avers is made of his own personal knowledge. His affidavit states that the court accepted a proposed form of judgment presented by one of Hudson's trial counsel, modified it, and entered it of record, all without giving defense counsel any opportunity to review its content or form or to register an objection. His lament was that it was based solely on the jury's verdict, and not upon separate findings and conclusions of the court, whereas he, Mr. Boyd, was:
[U]nder the belief, based on the court’s comments during the course of the trial, that the jury verdict rendered ... was advisory only, equity having taken jurisdiction over the entire case because plaintiffs dominant claim for relief sounded in equity.
I raised all of these objections to the court via telephone conference call 'on December 16, *4811985, and for these reasons respectfully move that the judgment of the court entered December 17, 1985, be declared void ab initio.
R. 1674-76 (emphasis added). This motion and its sworn contents received no mention in the district court’s memorandum decision, nor in today's majority opinion.

. See Appendix C, which demonstrates that Mr. Eismann, for plaintiff, was insisting on the giving of the simple negligence instruction and did object to instructing on negligent misrepresentation. It was an astute counselor who advised the court against pioneering.

. Somewhat naively, the court could only so write, after it had just written and found "that Wayne Hudson’s name was on the leases as lessor when Cobbs and Kennevick signed them." As written, this suggests, as is the case, that a serious and perhaps insurmountable defense existed for any cause of action on the leases, and the defense might have prevailed. The court also did not consider that a convincing liar could have convinced a jury or judge that Hudson was at all times aware of the secret agreement between Cobbs, Kennevick, and Bazeghi, and acquiesced in their scheme to obtain the coveted long-term financing. Considering that possibility, what would Hudson’s action for the lease payments gain him? Why would he bother for trifling amounts when his real concern was much greater, namely to retreat from a transaction in which the bank itself could have readily retreated at any time it found that it had been deceived by the phonied-up Cobbs/Kennevick lease agreements, and might or might not believe that Wayne Hudson was particeps criminis.

. See Appendix E, which includes the Black’s Law Dictionary definition of fraud, as well as a short statement of the law of fraud in Idaho.

."Re consider,” because the record demonstrates that the district court had already denied a motion for a directed verdict. Under those circumstances, with plaintiff presenting his simple negligence theory, and attempting to avoid the negligent misrepresentation theory advocated by the court, the court’s denial of a directed verdict established that the case put on by plaintiff to prove his pleaded theory also satisfied the court’s requirement on negligent misrepresentation, at least for the time being and until the court had a convenient change of mind when challenged post-trial by Mr. Boyd’s motion.

. It was defendants’ motion which alleged the error, and defendants were absolutely entitled to a new trial because of the court’s error. For that, and other errors mentioned herein, plaintiff also moved for a new trial. Instead, for reasons which have been alluded to, the court did not properly respond.

. For some time it has been my view that the Court should not withdraw previous opinions, but, where a different result is reached on rehearing, simply so state with the expectation that the trial bench and bar will readily under*489stand whether a prior opinion for the Court stands or is superseded. One example is Felton v. Finley, 69 Idaho 381, 209 P.2d 899 (1949). There the first opinion for the Court issued on January 6, 1949, authored by Justice Givens and joined by Judges Featherstone and Taylor. Justice Holden and Judge Sutphen dissented. A rehearing was granted, and the case reargued in May 1949. A second opinion for the court issued shortly thereafter which was authored by Justice Holden, joined by Judge Featherstone, Judge Sutphen, and Justice Taylor (who had been elevated to the Supreme Court bench and took office on April 13, 1949). Without the nonsense of withdrawing the January opinion, the Court issued its second and final opinion consisting of three sentences:
A rehearing was had at Lewiston at our May, 1949, term. Since such rehearing the various contentions of the respective parties have been fully and carefully re-examined. We conclude, as a result of such re-examination, that the decree appealed from in the case at bar should be, and it is hereby, reversed and the cause remanded with directions to dismiss the action, in accordance with the views expressed in the foregoing dissenting opinion of Chief Justice Holden.
Justice Givens, remaining constant to his earlier views, dissented.

. Because Justice McDevitt’s statement of the case is essentially a replay of Justice Huntley’s, the facts set out in Justice Huntley’s opinion are omitted as indicated in Appendix G. The interested reader can obtain a complete version of the opinions from the Idaho Capital Reporters. Justice Huntley omitted stating that the trial court also instructed the jury on plaintiffs rescission theory of defendants’ liability. Likewise, Justice McDevitt makes the same omission. The jury returned a plaintiffs verdict on that theory.

. The Steams case mentioned in this Court’s Bethlahmy opinion is deserving of some elaboration. It is a landmark case in Idaho jurisprudence, and has been often cited and followed in Idaho, and other jurisdictions as well. That case was first decided by an able district judge, the Hon. Preston Thatcher, and affirmed in a unanimous opinion authored by Justice Darwin Thomas. Eminent counsel represented the parties. The case undoubtedly made new law in Idaho, and it is still the law.
Although it is not often, if ever, so heralded, it is very likely the first case in Idaho imposing the obligation of good faith, considering which doctrine there has been considerable discussion and controversy of recent years. The statement as it appears in Steams is that:
A fiduciary relationship does not depend upon some technical relation created by or defined in law, but it exists in cases where there has been a special confidence imposed in another who, in equity and good conscience, is bound to act in good faith and with due regard to the interest of one reposing the confidence.
Stearns v. Williams, 72 Idaho 276, 288, 240 P.2d 833, 840-41 (1952) (citations omitted).