The elements of such a claim are: "(1) a false statement of material fact, (2) carelessness or negligence in ascertaining the truth of the statement by the party making it, (3) an intention to induce the other party to act, (4) action by the other party in reliance on the truth of the statement, and (5) damage to the other party resulting from such reliance, (6) when the party making the statement is under a duty to communicate accurate information." Pox Associates, Inc. v. Robert Half International, Inc., 334 Ill. App.3d 90, 777 N.E.2d 603, 606 (1st Dist. 2002). There is generally no duty unless the defendant is in the business of providing information, for the guidance of others in business dealings.
A claim for negligent misrepresentation requires the same, except that: (1) instead of alleging that the defendant knew the statement was false, the plaintiff need only allege that the defendant was careless or negligent in ascertaining the veracity of the statement; and (2) the plaintiff must also allege that the party making the statement was "under a duty to communicate accurate information."Fox Assocs., Inc. v. Robert Half Int'l, Inc., 777 N.E.2d 603, 606 (Ill.App.Ct. 2002). Here, Case contends that Extra has failed to plead an actionable claim for misrepresentation because: (1) Case Brasil ratified the Agreement, and thus, no false statement was made; and (2) Extra has not sufficiently alleged that it relied on a misrepresentation or that a misrepresentation caused it to suffer damages.
Next PXRE seeks recovery for economic losses on a theory of negligent misrepresentation. Although the general rule in Illinois precludes recovery in tort for economic loss (Moorman Mfg. Co. v. National Tank Co., 91 Ill.2d 69, 435 N.E.2d 443 (1982) is the seminal decision on the subject), an exception exists "where one who is in the business of supplying information for the guidance of others in their business transactions makes negligent representations" (id. at 88-89, 435 N.E.2d at 452). As that quoted language reflects, that exception requires plaintiff to prove "(1) the defendant is in the business of supplying information for the guidance of others in their business dealings; (2) the defendant provided information that constituted a misrepresentation; and (3) the defendant supplied the information for guidance in the plaintiff's business dealings" (Fox Assocs., Inc. v. Robert Half Int'l, Inc., 445 Ill.App.3d 90, 95, 777 N.E.2d 603, 608 (1st Dist. 2002)). PXRE's claim falls at the very first of those hurdles.
A motion to dismiss pursuant to section 2-619 is a method of disposing of issues of law and easily proved issues of fact at the outset of the case. Fox Associates, Inc. v. Robert Half International, Inc., 334 Ill. App. 3d 90, 93, 777 N.E.2d 603 (2002). Wellpled facts in the complaint are admitted; however, legal conclusions and facts unsupported by specific allegations are not. Fox Associates, 334 Ill. App. 3d at 93.
Negligent misrepresentation is established by showing: "(1) a false statement of material fact, (2) carelessness or negligence in ascertaining the truth of the statement by the party making it, (3) an intention to induce the other party to act, (4) action by the other party in reliance on the truth of the statement, and (5) damage to the other party resulting from such reliance, (6) when the party making the statement is under a duty to communicate accurate information." Fox Associates, Inc. v. Robert Half Intern., Inc., 334 Ill.App.3d 90, 267 Ill.Dec. 800, 777 N.E.2d 603, 606 (2002). However, Illinois courts have held that a claim for negligent misrepresentation does not lie where the information transmitted between the parties is "merely ancillary to the sale of a product or service or in connection with the sale."
After all, "[t]o determine whether a party is in the business of supplying information, the precise facts of the specific case must be analyzed." Fox Associates, Inc. v. Robert Half Int'l, Inc., 777 N.E.2d 603, 608 (Ill.App. 1 Dist. 2002) (citation omitted); see also First Midwest Bank, N.A. v. Stewart Title Guar. Co., 823 N.E.2d 168, 169 (Ill.App.
One Illinois court gave examples of information suppliers, which included accountants, a bank providing credit information to a potential lender, stockbrokers, aircraft inspectors, inventory inspectors, and termite inspectors. See Fox Assocs., Inc. v. Robert Half International, Inc., 777 N.E.2d 603, 607 (Ill.App.Ct. 2002) (citations omitted). As that court explained:
Guar. Residential Lending Inc. v. Int'l Mortgage Center, Inc., 305 F. Supp. 2d 846, 863 (N.D. Ill. 2004). This exception is usually applied to "pure information" providers such as banks providing credit information to a potential lender, real estate agents, title companies, and stock brokers. Fox Assocs., Inc. v. Robert Half Int'l, Inc., 777 N.E.2d 603, 607-08 (Ill.App.Ct. 2002). In determining if such a duty exists, courts generally must make a "precise, case-specific inquiry."
ΒΆ 49 In Illinois, the tort of negligent misrepresentation is a narrow and limited exception to the Moorman doctrine, which generally bars a tort recovery for a purely economic loss. Fox Associates, Inc. v. Robert Half International, Inc., 334 Ill.App.3d 90, 94 (2002).
Whether a party is in the business of supplying information rests on the precise facts of the situation. First Midwest Bank, N.A., 218 Ill. 2d at 334, 843 N.E.2d at 332; Fox Associates, Inc. v. Robert Half International, Inc., 334 Ill. App. 3d 90, 95-96, 777 N.E.2d 603, 608 (2002). As stated in Fox: