Jill B. & Travis B. v. State, 297 Neb. 57

In 2010 Jill and Travis B. inquired of DHHS worker Jodene Gall whether prospective adoptee K.D.M. had any sexual history; Gall answered "no" while records and a master case file contained allegations of sexual abuse and acting-out behavior.
K.D.M. was placed in the parents’ home; about 5 months later K.D.M. sexually assaulted the parents’ child.
The parents sued the State and DHHS under the Nebraska State Tort Claims Act alleging failure to warn/disclose and negligent supervision. The State pleaded sovereign immunity under the misrepresentation/deceit exception (§ 81-8,219(4)).
The district court denied the State's summary judgment motion, held a bench trial, found Gall intentionally misrepresented/withheld K.D.M.’s history, and concluded the parents’ claims "arose out of" misrepresentation; judgment for the State followed.
On appeal the Supreme Court of Nebraska reviewed (1) procedural challenges (law-of-the-case; sufficiency of pleading the defense), and (2) whether the misrepresentation exception bars claims alleging physical injury arising from a government employee's misstatement or nondisclosure, and (3) negligent supervision.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether law-of-the-case precluded relitigation after denial of summary judgment	Denial of summary judgment meant immunity rejected	Denial is interlocutory and did not decide immunity	Denied — law-of-the-case not invoked; denial was interlocutory
Whether State properly pled misrepresentation/deceit affirmative defense	Answer referenced intent only; complaint alleged negligence	Answer and pretrial order gave fair notice and raised §81-8,219(4) defense	Held: pleading and pretrial order gave fair notice; defense properly presented
Whether misrepresentation/deceit exception bars claims for noncommercial/physical injuries caused by a governmental misstatement or nondisclosure	Plaintiffs: misrepresentation tort protects pecuniary losses; exception should not bar physical-injury claims	State: exception applies where gravamen is misrepresentation, regardless of pecuniary nature; must be strictly construed in favor of sovereign	Held: Exception applies to negligent or intentional misrepresentation causing physical injury where claim’s gravamen is misinformation; plaintiffs’ claims barred
Whether negligent supervision claim is independent and falls outside misrepresentation exception	Plaintiffs: supervision duty independent from disclosure duty	State: negligent supervision arises out of the intentional/misleading placement and is barred	Held: Claim arises out of misrepresentation and is barred; negligent supervision not independent here

United States v. Neustadt, 366 U.S. 696 (U.S. 1961) (FTCA misrepresentation exception covers negligent misrepresentation; essence is communication of misinformation on which recipient relies)
Block v. Neal, 460 U.S. 289 (U.S. 1983) (misrepresentation exception applies where claim’s essence is misinformation relied upon; distinguishes operational duties)
Stonacek v. City of Lincoln, 279 Neb. 869 (Neb. 2010) (failure to communicate critical information held to be claim based on misrepresentation under the tort-claims exception)
Johnson v. State, 270 Neb. 316 (Neb. 2005) (intentional-torts exception bars negligence claims that "arise out of" intentional torts; negligent supervision claims can be barred)
Fuhrman v. State, 265 Neb. 176 (Neb. 2003) (disapproved in part — previously held complete nondisclosure without inference of deliberate concealment falls outside misrepresentation exception)
United States v. Shearer, 473 U.S. 52 (U.S. 1985) (discusses the rationale for excluding certain intentional torts from FTCA waiver)