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

In 2010 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, though she knew of allegations and records indicating sexual abuse and acting out.
K.D.M. was placed with the parents; about five 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 the misrepresentation/deceit exception to sovereign-immunity waiver under Neb. Rev. Stat. § 81-8,219(4).
District court denied the State’s summary-judgment motion, held a bench trial, found Gall intentionally misrepresented K.D.M.’s history (or at least that misrepresentation was the gravamen), and concluded the claim was barred by the misrepresentation/deceit exception; judgment for State followed.
On appeal the Nebraska Supreme Court affirmed, holding the misrepresentation exception bars claims grounded in misinformation even when the injury is physical rather than purely pecuniary, applying strict construction of sovereign-immunity waivers.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether law-of-the-case barred district court from reconsidering immunity after denial of summary judgment	Parents: denial of summary judgment resolved immunity against State	State: denial was interlocutory; factual issues remained for trial	Denied: summary-order was interlocutory; law-of-the-case inapplicable
Whether State properly pleaded affirmative defense of misrepresentation/deceit	Parents: answer failed to give fair notice; referenced intentional conduct only	State: answer, §81-8,219(4) citation, and pretrial order provided fair notice	Held: pleading and pretrial order gave fair notice; defense properly raised
Whether misrepresentation/deceit exception bars these claims (physical injury from placement)	Parents: misrepresentation tort traditionally protects pecuniary/commercial losses only; their damages are physical	State: misrepresentation exception applies to claims grounded in misinformation regardless of economic/physical nature; sovereign immunity strictly construed	Held: exception applies; misrepresentation can bar claims for physical injury when the gravamen is misinformation
Whether negligent supervision claim survives despite exception	Parents: negligent supervision/overwork of Gall caused harm	State: claim arises from and is inextricably linked to misrepresentation and thus barred	Held: barred — negligent-supervision claim arises out of the misrepresentation and is excluded

Fuhrman v. State, 265 Neb. 176 (2003) (discussed factual distinction between nondisclosure and misrepresentation; Court here disapproved part of Fuhrman)
United States v. Neustadt, 366 U.S. 696 (1961) (FTCA misrepresentation exception covers negligent and intentional misrepresentations; essence is communication of misinformation on which plaintiff relies)
Block v. Neal, 460 U.S. 289 (1983) (misrepresentation exception applies where claim’s essence is misinformation; distinguishes operational duties separate from communication)
Stonacek v. City of Lincoln, 279 Neb. 869 (2010) (under similar statutory language, failure to communicate critical information is a misrepresentation barred by immunity)
Johnson v. State, 270 Neb. 316 (2005) (negligent supervision claims that arise from intentional torts are barred by the intentional-torts exception)
United States v. Shearer, 473 U.S. 52 (1985) (plurality discussion of rationale behind FTCA intentional-torts exception)