Court Opinion

ID: 9713981
Source: CourtListenerOpinion
Date Created: 2023-08-26 05:28:05.809549+00
Date Added: 2024-06-11T18:23:22.501079
License: Public Domain

JUSTICE HEIPLE, dissenting: The complaint filed in this case by plaintiff Michael T. Brogan contained the following allegations. Brogan responded to a newspaper advertisement soliciting employment applications for the position of Mitchell’s marketing manager. On January 13, 1994, Brogan interviewed with Mitchell’s human resources manager, who told him that Mitchell was expanding and growing. On January 28, Brogan interviewed with Mitchell’s vice-president, who told him that Mitchell was a “$35 million per year” company which was going to “double its size” over the next two to three years. On February 14, the company’s president enthusiastically described to Brogan Mitchell’s anticipated growth in the near future. On February 25, Mitchell’s vice-president offered Brogan the position as marketing manager, telling Brogan that the position was a “real opportunity.” On March 4, the vice-president told Brogan that the real benefit of the offered position was its future. The complaint alleged that on the basis of these representations, Brogan terminated his previous employment, declined to seek employment elsewhere, and accepted the position with Mitchell. Shortly after beginning work on March 21, Brogan learned from other employees that Mitchell’s financial condition was not strong. Specifically, he discovered that Mitchell was not a “$35 million per year” company and that it was not likely to “double its size” over the next two to three years. On May 31, Mitchell announced that it was experiencing severe financial difficulties. On June 2, Brogan was fired as part of what Mitchell described as an “economically-induced restructuring.” The complaint alleged that as a result of the misrepresentations by Mitchell’s management regarding the company’s financial strength, Brogan suffered substantial economic harm and severe emotional harm attending the loss of employment. Defendant Mitchell International, Inc., moved to dismiss the complaint on the grounds that it was not subject to suit for negligent misrepresentation because it was not in the business of supplying information. The circuit court dismissed the action with prejudice. When the legal sufficiency of a complaint is challenged by a motion to dismiss under section 2 — 615 of the Code of Civil Procedure (735 ILCS 5/2 — 615 (West 1992)), we must accept all well-pleaded facts as true and determine whether the allegations of the complaint, when interpreted in the light most favorable to the plaintiff, are sufficient to establish a cause of action upon which relief may be granted. Connick v. Suzuki Motor Co., 174 Ill. 2d 482, 490 (1996). I agree with the majority that a defendant may not be held liable for emotional harm allegedly caused by a negligent misrepresentation. I nevertheless dissent because I believe that, in this case of first impression, this court should follow the lead of courts in other states by holding that parties to employment negotiations have a duty to avoid causing economic loss through negligent communication of inaccurate information. This court has heretofore allowed recovery of economic damages caused by a negligent misrepresentation only when the defendant was in the business of supplying information. As the majority notes, however, the court has indicated that there may be other appropriate bases of liability for economic loss in negligent misrepresentation actions. Board of Education v. A, C & S, Inc., 131 Ill. 2d 428, 454 (1989). I believe that allegations of negligent misrepresentation in the employment context, such as those in the instant case, implicate many considerations similar to those which have led us in the past to impose a duty of care upon suppliers of information. For example, prospective employers offering information about themselves to potential employees are in a position of decided superiority from which to verify the accuracy of that information. The potential employee is therefore justified in expecting that the prospective employer will use care in obtaining and communicating that information. Furthermore, the employment relationship is not readily analogous to the relationship between a typical buyer and seller of goods, in which economic damages based on negligent misrepresentation are precluded. Rather than ending with the delivery of certain merchandise, as does the typical commercial relationship, the employee/employer relationship is only just beginning during hiring negotiations. Because prospective employers know that the information provided during these negotiations will be relied upon and will influence the relationship well into the future, they should be under a duty of care in providing this information to potential employees. Finally, as with parties who contract with each other for the production of information, an employer and employee possess many common interests. Both stand to benefit from the employer’s success and suffer from its failure. Both thus have an interest in obtaining accurate information about the condition of the firm or potential employee. Given this commonality of interest, each party should be permitted to hold the other to a duty of care in making representations. These considerations apply forcefully in the instant case when the allegations of the complaint are taken as true, as they must be in the current procedural posture. First, Mitchell was uniquely capable of verifying the accuracy of the information regarding its financial strength it provided Brogan during the hiring negotiations. Second, the parties clearly contemplated that their mutual decision to embark on an employment relationship was merely the beginning of a long-term association. Finally, Brogan and Mitchell shared an interest in the accuracy of any information which might affect the firm’s employment of a marketing manager. I would therefore hold that Mitchell had a duty to use reasonable care to insure the accuracy of the information it provided Brogan during the parties’ hiring negotiations. Similar reasoning has led courts in other states to allow negligent misrepresentation actions for economic loss within the employer/employee context. See, e.g., Pearson v. Simmonds Precision Products, 160 Vt. 168, 624 A.2d 1134 (1993); Branch v. Homefed Bank, 6 Cal. App. 4th 793, 8 Cal. Rptr. 2d 182 (1992); D’Ulisse-Cupo v. Board of Directors of Notre Dame High School, 202 Conn. 206, 520 A.2d 217 (1987); Eby v. York-Division, Borg-Warner, 455 N.E.2d 623 (Ind. Ct. App. 1983); Myers v. Coradian Corp., 92 A.D.2d 643, 459 N.Y.S.2d 929 (1983). By failing to recognize such a duty, the majority encourages other potential defendants to engage in the types of exaggeration, distortion, and deception which allegedly caused Brogan’s damages in the instant case. For these reasons, I respectfully dissent.