Opinion
No. X06 CV 06 5007184 S
December 8, 2008
SUMMARY RULING ON THE DEFENDANT'S RE MOTION FOR SUMMARY .JIJDGMENT
The plaintiff, Ridgefield Professional Office Park, instituted this action alleging that the defendant, ASML, US, Inc., is liable for negligent misrepresentation. Pending before the court is the defendant's motion for summary judgment. For the following reasons, this motion is denied. The procedures for a motion for summary judgment are governed by Practice Book Sections 17-44—17-51. The standards governing the court's consideration of a motion for summary judgment are well established and will not be restated here. See Weber v. U.S. Sterling Securities, 282 Conn. 722, 728, 924 A.2d 816 (2007). Section 17-49 of the Practice Book provides that summary judgment shall be "rendered forthwith if the pleading, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law."
In order to prevail on a claim of negligent misrepresentation, the plaintiff must prove that the defendant made a misrepresentation of fact, that the defendant knew or should have known that the representation was false, that the plaintiff reasonably relied on the misrepresentation, and that the plaintiff suffered pecuniary harm as a result. Glazer v. Dress Barn, Inc., 274 Conn. 33, 73, 873 A.2d 929 (2005). In the complaint, the plaintiff alleges that the defendant executed a contract agreeing to sell certain property to the plaintiff's predecessor. (For convenience, the court will refer to the buyer as the plaintiff.) As part of the negotiation and execution of this contract, the defendant negligently misrepresented to the buyer that materials on the property containing asbestos ("ACM") had been removed. After the closing, the plaintiff discovered the defendant's misrepresentation and the plaintiff incurred damages in order to remediate the ACM. More specifically, the parties' submissions indicate that the plaintiff was aware of ACM in certain limited areas of the property, but according to the plaintiff, it was led to believe falsely, through the defendant's negligent misrepresentations, that more extensive contamination had been removed during an earlier renovation.
As a general rule, what exact representations were made, whether they were made negligently, and whether they were reasonably relied on present issues of fact not subject to resolution on a motion for summary judgment. The defendant, however, essentially argues that if it is assumed arguendo that a negligent misrepresentation was made, the plaintiff's claim must nevertheless fail because the plaintiff cannot prove justifiable reliance. According to the defendant, the property was sold pursuant to a contract containing an "as is" clause that provided that the property was being purchased "as is with all faults" and that the buyer was not relying on representations or warranties of any kind not made expressly in the contract. The contract also contained a provision indicating that its terms represented the parties entire agreement. On the basis of the parties' contract, the defendant contends that the plaintiff cannot now be heard to complain about reliance on representations made outside the provisions of the contract when the plaintiff expressly affirmed in the contract that it was not relying on any such representations.
This paragraph of the agreement stated the following:
" AS IS" Transaction. Buyer specifically acknowledges and agrees that, except for the representations and warranties of Seller expressly set forth in this Agreement and any other agreement executed and delivered by Seller at Closing, Seller is selling, and Buyer is purchasing, the Property on an "AS IS WITH ALL FAULTS" BASIS, and Buyer is not relying on any representations or warranties of any kind whatsoever, express or implied, from Seller, its employees, directors, officers, agents, consultants, contractors, subcontractors or brokers as to any matters concerning the Property.
The parties concede that an action for fraudulent or reckless misrepresentation of material facts in the inducement of a contract is not defeated by contractual provisions waiving reliance on warranties or representations. Warman v. Delaney, 148 Conn. 469, 172 A.2d 188 (1961). The parties disagree about whether under Connecticut law an action for negligent misrepresentation of material facts in the inducement of a contract may be defeated by such provisions. The court concludes that the Appellate Court's holding in Martinez v. Zovich, 87 Conn.App. 766, 867 A.2d 149 (2005), is controlling on this question:
In Warman v. Delaney, supra, 148 Conn. 469, the Supreme Court explained the following in response to a defendant's claim that the waiver provisions of a contract for the sale of real estate precluded a claim for fraudulent misrepresentation:
In making such a claim, the defendant overlooks the fact that in this action the plaintiffs are not seeking to add to, subtract from or alter the terms of the written contract itself. They are claiming that they were induced to enter into the contract by misrepresentations of material facts. This action is concerned solely with material misrepresentation in the inducement of the contract.
A claim that a seller's intentional, reckless or negligent misrepresentations caused a buyer to enter into a contract for the sale of property is a valid cause of action, even if the contract that the parties entered into constituted the entire agreement between the parties and the contract included a clause disclaiming any representations by the seller as to the condition of the property.
(Emphasis added.) Id., 778; accord Dalton v. Dampf, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 04 0199611 (April 12, 2005; Nadeau, J.) ("a party cannot induce another to contract by [negligent] misrepresentation of a material fact, then shield itself from the consequences with a general disclaimer").
In comparing New York and Connecticut law on this issue, the District Court in Intellivision v. Microsoft Corporation, Docket No. 07 Civ. 4079 (JGK) (S.D.N.Y.; August 20, 2008), stated the following: Under New York law, where a party specifically disclaims reliance upon a particular representation in a contract, that party cannot, in a subsequent action for common-law fraud, claim it was fraudulently induced to enter into the contract by the very representation it had disclaimed reliance upon. Under Connecticut law, however, such a disclaimer may bar claims for innocent misrepresentation, but does not act as a bar to either fraudulent or negligent misrepresentation.
(Citations omitted; internal quotation marks omitted.) Id., at 11.
Because the plaintiff has alleged that it was induced into the execution of the contract by the defendant's negligent misrepresentations, the defendant cannot avoid liability for such tortious conduct by merely relying on the waiver and integration provisions of the parties' agreement. Martinez v. Zovich, supra, 87 Conn.App. 778. The defendant's reliance on Gibson v. Capano, supra, 241 Conn. 725, is misplaced because Gibson involved innocent misrepresentation and not negligent misrepresentation as alleged here. Contrary to the defendant's position, these torts are separate causes of action, and particularly in the context of the issues presented here, their distinction has legal significance. Dalton v. Dampf, Superior Court, judicial district of Stamford-Norwalk at Stamford, Docket No. CV 04 0199611 (April 12, 2005; Nadeau, J.); see also Martinez v. Zovich, supra, 87 Conn.App. 744 (emphasizing that Gibson involved innocent misrepresentation).
Innocent misrepresentation, as explained by the Supreme Court in Johnson v. Healy, 176 Conn. 97, 405 A.2d 54 (1978), is predicated on principles of warranty, whereas, negligent misrepresentation is predicated on the doctrine of reasonable care. Consequently, the issues concerning a buyer's knowledge about a defective condition and its reliance on representations about the condition must be evaluated in a much different way in an innocent misrepresentation case as compared to a negligent misrepresentation case. See generally Martinez v. Zovich, 87 Conn.App. 762-74 (discussing how the issue of knowledge was addressed in Gibson). For example, in Gibson, one of the questions presented was whether a buyer's partial knowledge about a defect was sufficient to preclude a claim for innocent misrepresentation premised on a theory of warranty. A much different legal question is presented here concerning whether a buyer, who has partial knowledge about a problem, may maintain a misrepresentation action for being negligently deceived about the scope or extent of the problem.
More specifically, the defendant contends that the plaintiff cannot prove justifiable reliance in this case because like the buyers in Gibson, the plaintiff was generally aware about the contamination problem with the property, and despite this knowledge, the plaintiff proceeded to execute the contract containing the "as is" waiver provisions. However, the reasonableness of the plaintiff's reliance on the defendant's negligent misrepresentations in light of the extent or nature of the plaintiff's knowledge about the ACM, the provisions of the parties' contract, and the overall circumstances of the parties' transactions and communications collectively involve disputed, material factual issues not amenable to summary disposition.
Therefore, the defendant's motion for summary judgment is denied.
So ordered this 8th day of December 2008.