Hardin County Savings Bank v. Housing & Redevelopment Authority of the City of Brainerd, 821 N.W.2d 184

Six banks purchased $3.3 million in Brainerd bonds in 2003 relying on Bedard appraisal and Bedard feasibility study.
Bedard appraisal allegedly overstated project value by at least $1 million and ignored $1,085,000 in improvements financed by a special assessment.
Bonds defaulted in 2007 after limited lot sales and protracted absorption; City expanded TIF and sought new bonds but hearing led to rejection.
Banks asserted state and federal claims against Bedard based on negligent misrepresentation and related fraud theories arising from Bedard’s disclosures.
District court dismissed for lack of particularity under Minn. R. Civ. P. 9.02; appellate panel affirmed; Minnesota Supreme Court granted review and reversed, remanding for proceedings consistent with the decision.
First Amended Complaint added certain oral statements and preserved Bedard-specific negligent misrepresentation claims; underlying facts largely remained tied to Bedard’s appraisal/feasibility materials.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Banks pled negligent misrepresentation with particularity.	Banks pleaded ultimate facts underlying each element.	Bedard argued pleading lacked particularity under Rule 9.02.	Yes; Banks pleaded the ultimate facts for each element.
Whether incorporation by reference undermines the particularity requirement.	Rules allow incorporation by reference of earlier pleadings.	Incorporation by reference obscures Bedard’s specific conduct.	Permissible; does not defeat Rule 9.02 particularity.
Whether the complaint and attached exhibits can be considered together to satisfy Rule 9.02.	Attachments (appraisal/feasibility) and overall complaint should be read as a whole.	Reliance on the main count should be explicit without external documents.	Yes; the complaint as a whole, including exhibits, meets 9.02 standards.

Gen. Ins. Co. v. Lebowsky, 312 Minn. 370 (Minn. 1977) (negligent misrepresentation constitutes fraud; heightened pleading required)
Williams v. Estate of Williams, 254 Minn. 272 (Minn. 1959) (pleading ultimate facts under fraud standard)
Bonhiver v. Graff, 311 Minn. 111 (Minn. 1955) (elements of fraud; expectation of reasonable care in reliance)
Martens v. Minn. Mining & Mfg. Co., 616 N.W.2d 732 (Minn. 2000) (reviewing complaint as a whole; documents may be considered)
Twin Ports Oil Co. v. Whiteside, 218 Minn. 78 (Minn. 1944) (pleading fraud; requires underlying facts for each element)