Opinion
No. C1-97-422.
Filed October 28, 1997.
Appeal from the District Court, Hennepin County, File No. 94-18452.
Phillip Gainsley, (for Appellants).
Neil C. Franz, (for Respondents).
Considered and decided by Peterson, Presiding Judge, Klaphake, Judge, and Davies, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
Appellants challenge a judgment for respondents and the denial of a motion for a new trial on their claim for damages related to a home purchase. Because the trial court did not err in applying the comparative fault statute and because appellants waived any objection to the failure to instruct the jury on the effect of that statute, we affirm.
DECISION
Appellants, the Paulsons, purchased a home from respondents, the Kelnhofers, in March 1994. When appellants later determined that the home had water damage, they brought suit for misrepresentation.
Application of Comparative Fault Statute
Appellants contend that the trial court erred in applying Minnesota's comparative fault statute to their misrepresentation claim. See Minn. Stat. § 604.01 (1996). They do not contest the jury instructions on this issue, but argue that because the jury found all of the elements of intentional misrepresentation, the statute did not apply. This is a question of law, subject to de novo review. See Frost -Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n , 358 N.W.2d 639, 642 (Minn. 1984) (appellate court need not give deference to trial court's decision on legal issue).
A misrepresentation claim requires proof that the representer knew the representation to be false, or in the alternative, asserted it "as of his own knowledge without knowing whether it [was] true or false. Davis v. Re-Trac Mfg. Corp. , 276 Minn. 116, 149 N.W.2d 37, 39 (1967); see also 4 Minnesota Practice , CIVJIG 610 (1986) (jury instruction for fraud and misrepresentation). The special verdict form here asked if respondents made "the representations as of their own knowledge without knowing whether they were true or false." Pursuant to Florenzano v. Olson , 387 N.W.2d 168 (Minn. 1986), we hold that this case was submitted as a claim for negligent misrepresentation. See id. at 174-75 (insurance agent's representation negligent, not fraudulent, where evidence only supported finding that agent made representation as of his own knowledge without knowing it to be true).
We note that the comments to CIVJIG 610 refer to Florenzano with regard to crafting special verdict questions on the level of intent. See 4 Minnesota Practice , CIVJIG 610; see also Florenzano , 387 N.W.2d at 175 n. 5 (recommending use of separate interrogatories for intentional and negligent theories of misrepresentation). The trial court here struck all language from CIVJIG 610 relating to intentional misrepresentation, and appellants did not object. Because the jury instruction informed the jury only on the required intent for negligent misrepresentation, the trial court properly applied the comparative fault statute. See Florenzano , 387 N.W.2d at 176 (comparative fault statute applies to negligent misrepresentation claims).
2. Failure to Instruct on Effect of Comparative Fault Statute
Appellants contend that even if the trial court had correctly applied the comparative fault statute, they are entitled to a new trial because the court failed to instruct on its effect. Minn.R.Civ.P. 49.01(b) requires that a trial court inform the jury of the impact of its answers to a comparative fault interrogatory. The trial court recognized its omission when it denied appellants' posttrial motions, but concluded that the error did not require a new trial.
On appeal from an order denying a new trial, we review de novo claimed errors of law. Halla Nursery, Inc. v. Baumann-Furrie Co ., 454 N.W.2d 905, 910 (Minn. 1990). Minn.R.Civ.P. 51 provides:
No party may assign as error unintentional * * * omissions in the [instructions], unless that party objects thereto before the jury retires to consider its verdict, stating specifically the matter to which that party objects and the grounds of the objections. An error in the instructions with respect to fundamental law or controlling principle may be assigned in a motion for a new trial although it was not otherwise called to the attention of the court.
The parties received copies of the jury instructions before submission to the jury. Appellants knew the court intended to direct the jury to attribute fault among the parties without instructing them on the consequences of the fault determinations. Because appellants failed to object, they waived this issue. See American Reliable Ins. Co. v. Modern Homes, Inc. , 311 Minn. 1, 4, 247 N.W.2d 39, 41 (1976) (omitted instruction waived when counsel failed to call omission to court's attention before submission to jury), cited in Halla, 454 N.W.2d at 911. As determined in Halla , the trial court's failure to instruct on the effects of comparative fault was not a fundamental error of law requiring a new trial. See Halla , 454 N.W.2d at 912.
Affirmed.
I respectfully concur.
This case can best be understood through an appreciation that on the spectrum of misrepresentation there are not just the three kinds of representations, described by Justice Simonett in Florenzano v. Olson , 387 N.W.2d 168, 177 (Minn. 1986) (concurring specially). There are, instead, four.
The first kind is a purposeful misrepresentation of known falsity, that is, one made with an intent to deceive. This is, of course, the classic deceit or fraudulent misrepresentation.
At the other end of the spectrum is a negligent misrepresentation, one where the speaker believes the statement to be true and is simply mistaken as to the facts.
Between these two — between negligent misrepresentation and deceit/fraud — lie what Justice Simonett identified as a single category of misrepresentations, but which I believe to be two categories. Both of these have a common characteristic; that is, as in this case, that the speaker makes the misrepresentation without a basis in known facts. But the speaker's motive divides these misrepresentations into separate categories.
The motive can be to deceive. If that is the motive (if the speaker — to deceive — makes use of what is often called "purposeful ignorance"), the misrepresentation falls into a category that should be treated as fraud.
On the other hand, the motive can be quite innocent, that is to give information believed to be true. But if the information turns out to be incorrect because it was provided without making a reasonable effort to determine the facts (if the speaker carelessly relied on a guess), the misrepresentation falls into a category that should be treated as negligence.
This case should have turned on the distinction between these two — on respondents' motives. That was not how it was tried, however, which ties our hands on appeal.
The parties' attorneys and the trial court all treated the misrepresentation as a negligence issue subject to comparative fault. The special verdict form was formulated on that basis, without objection from appellant. Appellant asks now that some misrepresentations made without a basis in known facts be viewed, not as having been made carelessly without proper inquiry, but as having been made with an intent to deceive. Appellant argues that treating them so would make them all classic frauds and make the damages immune from any reduction for comparative fault. I believe that could have been a valid analysis in this case if it had been argued before the trial court and if facts had been presented that separate the representation here from those that are innocent, careless mistakes.
It is, however, too late now to ask that the case be analyzed in that way.