St. Louis v. Wilkinson Law Offices, P.C. - 2012 ME 116, 55 A.3d 443

Rule:

The Supreme Judicial Court of Maine has discussed the tort of negligent misrepresentation as follows. One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information. Whether a party made a misrepresentation and whether the opposing party justifiably relied on a misrepresentation are questions of fact. Additionally, liability only attaches if, when communicating the information, the party making the alleged misrepresentation fails to exercise the care or competence of a reasonable person under like circumstances, an inquiry that is likewise for the factfinder. The defendant's knowledge is largely immaterial for negligent misrepresentation; the fact-finder's primary task is to ascertain whether the defendant's conduct was reasonable.

Facts:

Wilkinson Law was engaged by a party other than the borrowers. St. Louises to act as the settlement agent for the loan. The borrowers argued that the attorney from Wilkinson Law made misrepresentations as to the loan's prepayment penalty. The court's judgment further stated that it had been entered at trial in favor of Wilkinson Law "for failure to prove substantive elements of the claim, including that a misrepresentation was made." The St. Louises argued that the court erred in finding that they had failed to prove their claim of negligent misrepresentation because (1) an attorney from Wilkinson Law, acting as a closing agent, effectively made misrepresentations concerning the terms of a prepayment penalty when the attorney displayed, read, and quoted  a summary document that erroneously stated the prepayment penalty terms, and (2) the attorney expanded upon the misrepresentations by participating in a discussion at the closing concerning the prepayment penalty. The St. Louises also argued that, as a matter of law and of policy, any closing agent, whether an attorney or not, must be held to a standard of knowing and understanding the contents of closing documents, given the "public importance" of closings. The appellate court found that the trial court's finding that the law firm did not make a misrepresentation, given that the attorney was merely, and accurately, stating the information from the Funding Details section of the Funding Instructions, was supported by the evidence. 

Issue:

Did Wilkinson law make a misrepresentation?

Answer:

No.

Conclusion:

The Supreme Judicial Court of Maine discussed the tort of negligent misrepresentation as follows. One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information. Whether a party made a misrepresentation and whether the opposing party justifiably relied on a misrepresentation are questions of fact. Additionally, liability only attaches if, when communicating the information, the party making the alleged misrepresentation fails to exercise the care or competence of a reasonable person under like circumstances, an inquiry that is likewise for the fact-finder. The defendant's knowledge is largely immaterial for negligent misrepresentation; the fact-finder's primary task is to ascertain whether the defendant's conduct was reasonable. The borrowers only claimed misrepresentation, it was unnecessary to address whether the attorney, who did not represent the borrowers, was obligated to provide full and fair disclosure as to matters on which she spoke. The attorney only addressed what information the Funding Details contained and not whether the underlying documents purportedly summarized actually contained that information. There was no dispute that the attorney fairly disclosed the terms in the Funding Details. The only specific comment attributable to the attorney as to the prepayment penalty was that such penalties were standard in a commercial loan, which was not an alleged misrepresentation in this appeal.