Law School Case Brief
Onita Pac. Corp. v. Trs. of Bronson - 315 Or. 149, 843 P.2d 890 (1992)
A negligence claim for the recovery of economic losses caused by another must be predicated on some duty of the negligent actor to the injured party beyond the common law duty to exercise reasonable care to prevent foreseeable harm.
Plaintiff buyer filed suit against defendant sellers alleging, inter alia, negligent misrepresentation in an agreement for real estate development when defendant refused to release parcels of land to plaintiff until plaintiff's resale, although defendant's representative had advised plaintiff that the parcels would be released upon payment by plaintiff. A trial court granted defendant a new trial on the grounds that jury instructions were erroneous, but the lower appellate court reversed the order and upheld a verdict in favor of plaintiff. Defendant sellers appealed. They contended that, as between parties to an arm's-length transaction, one party should not be held liable to another party for economic losses caused by the latter's reliance on the former's negligent misrepresentations.
Did plaintiff buyer make out a claim of defendant sellers' negligent misrepresentation in a dispute regarding the terms of a real estate development agreement?
The Supreme Court of Oregon reversed the order by which the verdict on the negligent misrepresentation claim was reinstated. The Court found that plaintiff buyer failed to make out a claim for negligent misrepresentation under the facts of the case. The Court held that defendant sellers' negligent representations concerning the release of land parcels was not actionable. Defendants did not owe plaintiff a duty of care by virtue of a contractual, professional, or employment relationship or as a result of a fiduciary relationship implied in law because defendants and plaintiff were adversarial parties negotiating at arm's length seeking to further their own economic interests. The Court noted that where the recovery of economic losses is sought on a theory of negligence, the concept of duty as a limiting principle takes on a greater importance than it does with regard to the recovery of damages for personal injury or property damage.
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