law-negligent misrepresentation
NEGLIGENT MISREPRESENTATION CLAIM
The elements of a negligent misrepresentation claim are: (1) the defendant made a
representation in the course of its business, or in a transaction in which it had a
pecuniary interest; (2) the defendant supplied false information for the guidance of
others in their business; (3) the defendant did not exercise reasonable care or
competence in obtaining or communicating the information; and (4) the plaintiff
suffered pecuniary loss by justifiably relying on the representation. Fondren Constr.
Co., Inc. v. Briarcliff Housing Dev. Assocs., Inc., 196 S.W.3d 210, 218 (Tex. App.--Houston [1st Dist.]
2006, no pet.).
To prevail on a claim for negligent misrepresentation, a plaintiff must prove (1) the representation was
made by a defendant in the course of his business, or in a transaction in which he has a pecuniary
interest; (2) the defendant supplied "false information" for the guidance of others in their business; (3)
the defendant failed to exercise reasonable care or competence in obtaining or communicating the
information; and (4) the plaintiff suffers pecuniary loss by justifiably relying on the misrepresentation.
McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests, 991 S.W.2d 787, 791 (Tex. 1999), citing
Restatement (Second) of Torts § 552; Fed. Land Bank Ass'n v. Sloane, 825 S.W.2d 439, 442
(Tex.1991). The 868*868 plaintiff must also demonstrate that the defendant misrepresented an existing
fact rather than the promise of future conduct. Sloane, 825 S.W.2d at 442.
It is well settled rule that a party may not justifiably rely on an opposing attorney's statements made in an
adversarial setting, including litigation. Valls v. Johanson & Fairless, LLP, 314 S.W.3d 624, 634-35
(Tex.App.-Houston [14th Dis.] 2010), citing McCamish, 991 S.W.2d at 794, and Ortiz v. Collins, 203
S.W.3d 414, 422 (Tex.App.-Houston [14th Dist.] 2006, no pet.) (holding that a party to an armslength
transaction must protect his own interests and cannot excuse his failure to do so on "mere confidence in
the honesty and integrity of the other party"). The purpose behind the rule is "to allow an attorney to fulfill
his duty and zealously represent his clients without subjecting himself to the threat of liability.... An
attorney who could be held liable for statements made or actions taken in the course of representing his
client would be forced constantly to balance his own potential exposure against his client's interest.
[internal citations omitted]" Dixon Financial Services, Ltd. v. Greenberg, Peden, Siegmyer & Oshman,
PC., No. 01-06-00696-CV, 2008 WL 746548, *7 (Tex.App.-Houston [1st Dist.] Mar. 20, 2008) ("To
promote zealous representation, courts have held that an attorney has `qualified immunity' from civil
liability, with respect to nonclients, for actions taken in connection with representing a client in litigation.").
That qualified immunity applies regardless of whether the conduct is wrongful for purposes of the
underlying lawsuit. Id.
The court may decide issues of justifiable reliance as a matter of law. Valls, 314 S.W.3d at 635-36, citing
Ortiz, 203 S.W.3d at 422 ("We hold that as a matter of law, the parties' relationship remained adversarial,
and thus any reliance by Ortiz on statements made by appellees during the negotiation process was
unjustified and unreasonable."); Chapman Children's Trust v. Porter & Hedges, LLP, 32 S.W.3d 429, 443
(Tex.App.-Houston [14th Dist.] 2000, pet. denied) (affirming summary judgment because party was not
justified in relying on opposing counsel's representations "given the adversarial nature of the parties'
relationship").
Elements of negligent misrepresentation
In order to prove negligent misrepresentation, a plaintiff must show that (1) the defendant made a
representation in the course of her business, or in a transaction in which she has a pecuniary interest,
(2) the defendant supplied "false information" for the guidance of others in their business, (3) the
defendant did not exercise reasonable care or competence in obtaining or communicating the
information, and (4) the plaintiff suffered a pecuniary loss by justifiably relying on the representation.
Henry Schein, Inc. v. Stromboe, 102 S.W.3d 675, 686 n.24 (Tex. 2002).
The common element of all of Wood's causes of action is reliance. TCC moved for summary judgment,
asserting that there was no evidence of reliance. Neither in the trial court below nor in her briefing to this
Court has Wood shown how she relied on any of TCC's alleged misrepresentations that she did not have
to take and pass the CSCE as a requirement for graduation. Dr. Conklin's purported statement to her,
before she took the CSCE, simply noted that students who had failed the CSCE did eventually graduate.
Also, the fact that TCC had approved her application for graduation does not show that Wood did not
have to take and pass the CSCE as a requirement for graduation. Moreover, the clinic director's
certification that Wood satisfied the internship requirements and the transcript do not show that the
CSCE was not a requirement for graduation.
Accordingly, we hold that the trial court did not err in granting TCC's no-evidence summary judgment
motion because Wood did not show how she relied on any alleged misrepresentation by TCC.
Source: Wood v. Texas Chiropractic College (Tex.App.- Houston [1st Dist.] July 24, 2008) (Jennings)
(suit by student against private educational institution, DTPA, misrepresentation, no reliance shown,
NE-SJ)
AFFIRM TC JUDGMENT: Opinion by Justice Jennings
Before Justices Taft and Jennings, The Honorable Hudson
01-07-00952-CV Kelly Wood v. Texas Chiropractic College
Appeal from 190th District Court of Harris County
Trial Court Judge: Hon. Jennifer Walker Elrod
A negligent misrepresentation cause of action has four elements: (1) the representation is made by a
defendant in the course of his business, or in a transaction in which he has a pecuniary interest, (2) the
defendant supplies "false information" for the guidance of others in their business, (3) the defendant did
not exercise reasonable care or competence in obtaining or communicating the information, and (4) the
plaintiff suffers pecuniary loss by justifiably relying on the representation. Henry Schein, Inc. v. Stromboe,
102 S.W.3d 675, 686 n.24 (Tex. 2002). Grant v. Laughlin Environmental, Inc. (Tex.App.- Houston [1st
Dist.] Dec. 18, 2008)(Jennings)(summary judgment evidence, conclusory affidavit, breach of contract,
quantum meruit, fraud, negligent misrepresentation)
CAUSES OF ACTION ELEMENTS | FRAUD AND NEGLIGENT MISREPRESENTATION
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