Court Opinion

ID: 8246507
Source: CourtListenerOpinion
Date Created: 2022-10-16 09:35:49.658321+00
Date Added: 2024-06-11T16:42:45.548986
License: Public Domain

MEYER, Justice
(concurring in part, dissenting in part).
I agree with the majority that the district court had subject-matter jurisdiction to resolve the negligent misrepresentation claim of James Williams against the University of Minnesota, but I respectfully dissent from the majority’s conclusion that public policy does not support imposing a duty of care on the University to supply accurate and truthful information to a prospective employee. The majority ignores our case law that expressly recognizes a cause of action against the government for negligent misrepresentations of fact when there is no other access to the information. Therefore, consistent with our precedent, I would affirm the jury verdict on the negligent misrepresentation claim.
*823The existence of a legal duty is a question of law based on public policy concerns. Smith v. Brutger Cos., 569 N.W.2d 408, 415 (Minn.1997) (Tomljanovieh, J., dissenting); M.H. v. Caritas Fam. Servs., 488 N.W.2d 282, 287 (Minn.1992). The majority erroneously states that we have never recognized a duty of care in the context of prospective government transactions.1 We first recognized a cause of action against the government for negligent misrepresentation of fact in Mulroy v. Wright, 185 Minn. 84, 88, 240 N.W. 116, 117-18 (1931), where we held that government employees have a duty of care in supplying accurate factual information on which they know that others will rely. In Mulroy, we concluded that a government official who furnished a certificate that inaccurately showed there were no special assessments on certain property — “knowing and intending that someone else rely thereon” — owed “a duty imposed by law” to the buyer of the property who relied upon the certificate. Id. at 88, 240 N.W. at 118. We imposed a duty on the government official as a matter of law because the law imposes a duty “when one assumes to act and knows that others will act in reliance upon such conduct.” Id. at 86, 240 N.W. at 117. As we explained, where the government official “was in a position to know the truth,” he had a duty to provide accurate factual information so that persons who relied on that information would “not suffer loss through improper performance of the duty or neglect in its execution.” Id. at 86-87, 240 N.W. at 117.
We have since reaffirmed that “[w]e will continue to allow a cause of action against government officers and employees for negligent misrepresentation of fact.” Northemaire Prods., Inc. v. Cnty. of Crow Wing, 309 Minn. 386, 390, 244 N.W.2d 279, 282 (1976). We explained the public policy rationale as follows:
Members of the public have no other access to factual information maintained by the government except through government officers and employees. Therefore, the policy of promoting accuracy through the prospect of tort liability outweighs the possibility of inhibiting performance of duties of office or employment.
Id. at 390, 244 N.W.2d at 282. We have distinguished negligent misrepresentations of law, concluding that subjecting public officials to liability for “innocent misrepresentations” regarding the interpretation of a zoning ordinance — a matter of law— “would frustrate dialogue which is indispensable to the ongoing operation of government” and noted that the public “had alternative means of obtaining an interpretation of the zoning ordinance.” Id. at 388-90, 244 N.W.2d at 281-82.
In this case, Smith, as a University employee, assumed to act on behalf of the University and knew that Williams would act in reliance upon his job offer. Williams presented evidence that the University’s head men’s basketball coach Tubby Smith offered him the job of assistant men’s basketball coach. Smith told Williams that he “got the money” they had discussed: $175,000 from the Athletics Department and $25,000 from basketball camps. Smith knew that the job offer was subject to the approval of the University’s Athletic Director, but falsely represented that Smith had final hiring authority, knowing and intending that Williams would rely on Smith’s representation to *824resign from his current position. At Smith’s urging, Williams immediately resigned from his position at Oklahoma State University (OSU) so that he could begin recruiting for Minnesota. Several weeks later, after Williams had given up his job at OSU, the University informed Williams that the assistant coaching position at Minnesota had been filled. Based on this evidence, the jury found that Smith falsely represented that he had final authority to hire assistant basketball coaches at Minnesota, a negligent misrepresentation of fact.
There is no evidence in the record that Williams had access to any publicly available information regarding the authority to hire within the men’s basketball program.2 In fact, the jury specifically found that Williams reasonably relied on Smith’s representation that he had final hiring authority and that Williams was not negligent in relying on Smith’s representation. Notwithstanding the jury’s findings and our obligation to view the evidence “in the light most favorable to the verdict,” Reedon of Faribault, Inc. v. Fid. & Guar. Ins. Underwriters, Inc., 418 N.W.2d 488, 491 (Minn.1988), the majority claims that “the parties stood on equal footing regarding the scope of Smith’s [hiring] authority.” The majority’s view of the evidence is not consistent with the jury’s finding that Smith failed to use reasonable care in communicating Ms authority to Williams, that Williams reasonably relied on Smith’s representation that he had final hiring authority and that Williams was not negligent in doing so. The evidence at trial demonstrates that Smith was well aware of the limits of his own hiring authority while Williams had no means of ascertaining the accuracy of Smith’s representation. The majority asserts, without record support, that information about Smith’s hiring authority was available on the University’s website. There is nothing in the trial record indicating that information about hiring authority within the men’s basketball program was accessible to the public when Smith offered Williams the job in 2007— just a few weeks after Smith became the head basketball coach — or that Williams was aware of the availability of that information. Significantly, the University asserts only that the exclusive authority of the Athletic Director to hire assistant coaches “was commonly known within the University’s athletic department.”
On these facts, I would conclude that the government official (Smith) owed a duty of care to provide accurate information to the public (Williams). The government official’s duty should be imposed as a matter of law by this court. Recognizing a duty of care in this case would serve the public policy of promoting accuracy when a government official knows that others will act *825in reliance on the official’s representations of fact, and would be consistent with this court’s precedent. See Northemaire, 309 Minn, at 390, 244 N.W.2d at 282.
The majority further observes that Smith and Williams were both “sophisticated business people” and “experienced participants in the collegiate basketball coaching environment,” thereby suggesting that Williams should have realized that Smith did not have final hiring authority. Williams testified, however, that in all his years of coaching, he did not know of a single head basketball coach who did not possess the authority to hire his own staff. Other experienced coaches similarly testified that they had never heard of a university administrator vetoing the hiring decision of a head coach. The majority also questions how Smith “could have misled Williams into believing that Smith had final hiring authority” when Smith told Williams that the Athletic Director had that authority, but this disclosure took place only after Williams had orally resigned from his position at OSU and the head coach had acted to fill that position. Therefore, in describing the nature of the relationship between Williams and Smith, the majority has unfairly skewed the evidence to support its result, contrary to our standard of review.
In addition, the majority erroneously suggests that a duty did not arise under these circumstances, in part because “Williams never asked whether Smith had the authority to hire.” The majority attempts to distinguish the duty we recognized in M.H. v. Caritas Family Services, 488 N.W.2d 282, 287 (Minn.1992), on the basis that the adoptive parents in Caritas “had inquired over time about the adopted child’s family background and genetic history.” The majority mischaracterizes Car-itas by implying that the duty in that case arose from the inquiries of the adoptive parents. The adoptive parents in Caritas did not make any specific inquiries about the incest in the child’s background before they adopted the child. See 488 N.W.2d at 284-85. Nonetheless, we explained that the adoption agency “had a legal duty to not mislead plaintiffs by only partially disclosing the truth.” Id. at 288. In other words, “having undertaken to disclose information about the child’s genetic parents and medical background,” the adoption agency could not “negligently withhold[] information in such a way that the adoptive parents were misled as to the truth.” Id. We recognized “the compelling need” of the adoptive parents for accurate medical background information where the adoption agency was their “only source of information.” Id. at 287-88. Williams makes a similar argument here — that “because once Smith chose to speak, he had a duty not to mislead Williams” — but the majority rejects this argument as conflating “the question of whether Smith owed a duty” with “the question of whether Smith supplied false information.”
Like the duty we recognized in Caritas, a duty to not negligently misrepresent factual information in the possession of the University does not impose an “extraordinary or onerous burden” on the University. 488 N.W.2d at 288. Smith knew the limits of his hiring authority and simply had a duty not to falsely represent the scope of his hiring authority when he knew that Williams would rely on that authority to resign from his position at OSU. On the other hand, the failure to use due care had enormous consequences for Williams, who suffered losses exceeding $1 million in reasonably relying on Smith’s false representation that he had final authority to hire assistant coaches. Imposing a duty of care on the University to provide truthful and accurate information to a prospective employee aligns with our established “policy of promoting accuracy through the *826prospect of tort liability” where the public has “no other access to factual information maintained by the government.” Northernaire, 309 Minn, at 390, 244 N.W.2d at 282. Therefore, I would affirm the jury verdict and uphold our precedent holding that the government has a duty to use due care in supplying factual information that is not otherwise accessible to the public.

. The majority indicates that parties who challenge government action must show "wrongful'' conduct. City of N. Oaks v. Sargal, 797 N.W.2d 18, 25 (Minn.2011). This is the standard that applies in the context of equitable estoppel claims against the government and has no application to a negligent misrepresentation claim. See id.

. The University relies on our 1903 decision in Jewell Belting Co. v. Village of Bertha, 91 Minn. 9, 12, 97 N.W. 424, 425 (1903), for the proposition that a person contracting with a municipal corporation is “conclusively presumed to know the extent of authority possessed by the officers with whom they are dealing.” Jewell Belting is distinguishable. Jewell Belting was an action to recover under a contract, not a negligent misrepresentation case. See id. at 10, 97 N.W. at 424. Further, the narrow issue we decided in Jewell Belting related to the legal power of a village council to delegate authority to enter into a contract; the presumption of knowledge concerned the power of the village council to delegate authority — a legal question, not a fact question. See id. at 10-11, 97 N.W. at 424-25 (concluding that village council did not have power to delegate authority to enter into contract for fire engine, which involved the exercise of judgment and discretion); cf. Miller v. Osterlund, 154 Minn. 495, 496, 191 N.W. 919, 919 (1923) (explaining that "the law is presumed to be equally within the knowledge of both parties”). In this case, the University is not arguing that the Board of Regents did not have the power to delegate hiring authority to the head basketball coach.