Garcia v. Superior Court

LUCAS, C. J.,

Concurring.—The majority holds the facts alleged in the complaint may state a cause of action for “negligent misrepresentation,” as defined in the Restatement Second of Torts, section 311, but implicitly holds plaintiffs are precluded from stating a cause of action for “mere” or “regular” negligence. The dissent, quoting language from venerable commentators, asserts that for decades courts have upheld judgments predicated on regular negligence liability in cases of physical injury resulting from negligent misrepresentations, and have not required the plaintiff to meet the more demanding requirement of section 311, i.e., that he prove his “reasonable reliance” on the defendant’s representation. Because I believe the dis *742 sent misstates the common law rule that it would perpetuate, and because the majority neither responds, nor sets forth the history of section 311, I write separately to express my views.

The dissent finds support for its position in the statement in Prosser and Keeton on Torts (5th ed. 1984), section 33, at page 205, to the effect that “ ‘for the most part cases of misrepresentation resulting in physical harm have been dealt with in an action for negligence. ’ ” (Dis. opn., post, p. 751, italics added in dis. opn.) Similarly, it quotes 2 Harper et al., The Law of Torts (2d ed. 1986) section 7.6, page 403: “ ‘[wjhere misrepresentations entail the foreseeability of physical harm and such harm in fact results, the ordinary rules of negligence have for some time been applied. ’ ” (Dis. opn., post, pp. 751-752, italics added in dis. opn.) Whatever these statements may have been intended to convey, they do not stand for the proposition advanced by the dissent, i.e., that at common law a plaintiff’s reasonable reliance on another’s representation was irrelevant to stating a prima facie case for “negligence.” In each case cited in support of the italicized proposition in the respective treatises, the court implicitly or expressly recognized a need for reasonable reliance by the plaintiff—or the reasonableness of the reliance is patent on the face of the opinion. (See Prosser & Keeton, supra, § 33, at p. 205, fns. 27-30; 2 Harper et al., supra, § 7.6, at pp. 403-404, fn. 1.) Moreover, in fact, both treatises cite section 311 of the second Restatement in support of their italicized statements—a seeming anomaly that the dissent conveniently ignores.

The historical development of the tort explains and supports the conclusion of the majority that reasonable reliance is and should be an element of the cause of action. In the late 1920’s and early 1930’s there was considerable debate about the nature of the emerging mispresentation cause of action, and the limits that should be placed on such an action. (See, e.g., Bohlen, Misrepresentation as Deceit, Negligence, or Warranty (1929) 42 Harv.L.Rev. 733; Green, Deceit (1930) 16 Va.L.Rev. 749; Carpenter, Responsibility for Intentional, Negligent and Innocent Misrepresentation (1930) 24 (Ill.L.Rev. 749; Bohlen, Should Negligent Misrepresentation Be Treated as Negligence or Fraud? (1932) 18 Va.L.Rev 703; Green, Innocent Misprepresentation (1933) 19 Va.L.Rev. 242.)

On the basis of sparse and evolving case authority, in 1934 the drafters of the original Restatement of Torts adopted former section 311, which articulated a circumscribed rule under which certain persons whose business it is to give out information could be held liable for bodily harm resulting from a plaintiff’s “expectable” reliance on their misrepresentations. Thereafter a “negligent misrepresentation” cause of action, based in part on the authority of section 311 and in part on preexisting common law, continued to *743 develop. In response to ongoing concern that there should be limits on liability for negligent misrepresentation (cf. Harper, A Treatise on the Law of Torts (1938) § 76, and in particular pp. 178 [emphasizing the need for justifiable reliance] and 181 [discussing the plaintiff’s duty to exercise due diligence]), courts grafted onto the “negligence” action a “reasonable reliance” element. Accordingly, in two notable cases courts expressly declined to find liability for personal injuries because the plaintiff had failed to establish reasonable reliance on the defendant’s representation. (See, e.g., Holt v. Kolker (1948) 189 Md. 636 [ 57 A.2d 287 ]; Webb v. Cerasoli (1949) 275 App.Div. 45 , 48-50 (plur. opn.) & pp. 50-51 (conc, opn., asserting plaintiff" barred by contributory negligence) [ 87 N.Y.S.2d 884 ], affd. mem. (1949) 300 N.Y. 603 [ 90 N.E.2d 64 ].)

This evolution of the common law was codified by the drafters of the second Restatement. In their Tentative Draft No. 5, issued in April 1960, the drafters revised former section 311 by, inter alia, inserting an express “reasonable reliance” condition. They also observed in their note to the American Law Institute that both Holt, supra, 189 Md. 636 , and Webb, supra, 275 App.Div. 45 , found absence of liability on the ground that there was no justifiable reliance . . . .” (Italics added.) 1

Accordingly, it appears to me that the dissent—and the commentators on which it relies—misperceive the true state of the common law by asserting without qualification that actions for negligent misrepresentation have long been analyzed under simple “negligence” principles. In fact, as noted above, *744 each of the prior cases in which recovery was allowed either recognized the plaintiff’s reasonable reliance, or such reliance was clear from the facts. Conversely, when reasonable reliance has not been proved, recovery has not been allowed. The second Restatement did not alter this common law rule, but merely “codified” it; the majority opinion, by following the second Restatement, does not depart from the common law, but rather adheres to it.

I believe there are legitimate jurisprudential and policy reasons to require a plaintiff to plead and prove reasonable reliance when alleging that a negligently made misrepresentation resulted in physical injury. In such situations the plaintiff will often be in the best position, and have the final opportunity, to avoid any risk of harm. He must ultimately decide, based on his own assessment of the circumstances known to him, whether to act on the representations of the defendant. Moreover, a plaintiff will often be the party most capable of correctly evaluating a risk. Finally, fairness dictates that a plaintiff justify his reliance, and that the reliance be reasonable, lest the speaker incur liability out of all proportion to his culpability for careless speech. For these reasons I concur in the majority’s election to adopt the second Restatement view of liability for negligent misrepresentation resulting in physical harm, to the exclusion of a “traditional” negligence action. 2

Eagleson, J., concurred.

Nothing in the dissent’s analysis of Holt, supra, 189 Md. 636 , or Webb, supra, 275 App.Div. 45 , convinces me that the drafters of the second Restatement erred in their interpretation or characterization of those decisions.

The dissent concedes, as it must, that the court in Holt, supra, 189 Md. 636 , affirmed a directed verdict for the defendants because plaintifffailed to state a prima facie case of reasonable reliance. The appellate court concluded, “the alleged statements of [defendants] were such casual expressions of opinion as plaintiff was not entitled to rely upon under the circumstances.” (Id., at p. 640.)

Through selective quotations from Webb, supra, 275 App.Div. 45 , the dissent suggests the plurality opinion in that case did not view the plaintiff’s reasonable reliance as an element of his prima facie case. I believe, consistently with the apparent interpretation of the drafters of the second Restatement, that the Webb opinion did view reasonable reliance as an element of the plaintiff’s case. After posing the question, “what then are the essential elements” for an action based on “negligent language?” (275 App.Div. at p. 49), the court listed four elements, the last of which was: “the relationship of the parties arising from contract or otherwise must be such that in morals and good conscience the one has the right to rely upon the other for information, and the other giving the information has a duty to give it with care.” (Id., at p. 50.) The opinion concluded, “Under these rules I fail to see how the relationship of the plaintiff and the defendants was such that in morals and good conscience the former had any right to rely on what he is shown to have overheard [defendant] to say, as information of a fact for the guidance of his conduct which brought him injury, or how plaintiff can be exonerated from contributory negligence as a matter of law.” (Ibid.)

As the majority notes (ante, p. 734, fn. 4), plaintiffs have not pleaded an action based on failure to warn, and we need not decide today whether such an action would be appropriate.