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

Jill and Travis B. sought to adopt K.D.M.; State child-services specialist Jodene Gall told them on multiple occasions that K.D.M. had no sexual-history issues, while only mentioning some “inappropriate” contact.
Gall had access to case files and intake/forensic reports that contained allegations K.D.M. had been sexually abused and had acted out sexually; she had been assigned to the case earlier and had drafted adoption materials referencing concerns.
K.D.M. was placed with the parents in July 2010; about 5 months later K.D.M. sexually assaulted the parents’ child.
The parents sued the State (Nebraska and DHHS) under the State Tort Claims Act for failure to warn/disclose and negligent supervision; the State pled sovereign immunity under the intentional-torts/misrepresentation exception, § 81-8,219(4).
The district court denied summary judgment, tried the case to the bench, found Gall intentionally misrepresented/withheld K.D.M.’s sexual history, concluded the gravamen of the claims was misrepresentation, and dismissed the complaint as barred by the misrepresentation/deceit exception.
On appeal the Nebraska Supreme Court affirmed, holding the misrepresentation exception applies (including to personal-injury claims), strictly construing waivers of sovereign immunity in favor of the State.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether law-of-the-case barred relitigation of immunity after denial of summary judgment	Denial of SJ decided immunity didn't apply	Denial of SJ is interlocutory and creates no final law-of-the-case	Denial of SJ is interlocutory; law-of-the-case inapplicable
Whether State properly raised misrepresentation/deceit as an affirmative defense	State’s answer referenced intent only; plaintiffs lacked notice of § 81-8,219(4) defense	Answer and pretrial order gave fair notice; issue was preserved	Defense sufficiently pleaded and incorporated in pretrial order
Whether misrepresentation/deceit exception bars claims based on nondisclosure that caused physical injury	Misrepresentation tort is economic; exception should be limited to pecuniary/commercial losses	Exception covers communication of misinformation generally; applies where gravamen is misrepresentation	Exception applies to claims causing physical injury when claim’s gravamen is misrepresentation; plaintiffs’ claims barred
Whether negligent supervision claim survives because it alleges an operational duty independent of misrepresentation	Supervision failure is separate operational tort	Negligent supervision is inextricably linked to and arises from the misrepresentation	Claim barred because negligence arises out of misrepresentation; cannot recast excluded intentional torts as independent negligence

United States v. Neustadt, 366 U.S. 696 (1961) (FTCA misrepresentation exception covers negligent misrepresentation; essence is communication of misinformation on which recipient relies)
Block v. Neal, 460 U.S. 289 (1983) (misrepresentation exception applies when claim’s essence is erroneous communication; distinguishes operational duty claims)
Stonacek v. City of Lincoln, 279 Neb. 869 (2010) (Nebraska holds failure to communicate critical information is barred by misrepresentation exception)
Fuhrman v. State, 265 Neb. 176 (2003) (disapproved to extent it held complete nondisclosure without inference of deliberate concealment falls outside misrepresentation exception)
Johnson v. State, 270 Neb. 316 (2005) (negligent supervision/hiring claims that stem from intentional torts are barred by exception)