*1 Company, Plaintiff-Respondent, v. O’Rourke Ollerman, Inc., Defendant-Appellant.
Supreme Court No. Submitted November 77-305. briefs 7, 1979. February 7, 1980. Decided (Also reported 95.) in 288 N.W.2d *3 appellant For the submitted on the briefs the cause was Quarles Daily Brady Frank J. & of Milwaukee. respondent For the the cause was submitted on attorney, Derzon, Walt, Alan L. brief of James L. counsel, both Milwaukee. appeal ABRAHAMSON, J. This
SHIRLEY S. overruling Co., from an motion of order O’Rourke brought Stats.,1 Inc., 802.06(2) (f), under sec. seller, Roy buyer’s, com- Ollerman’s, to dismiss amended failing plaint upon which can a claim relief state granted. complaint states conclude We claim, and affirm the order of the circuit court. we
I. overruling appeal from an order Because only complaint,2 the facts motion to dismiss the amended pleadings. in the record are those provides: 802.06(2), Stats., Sec. except improper “Every defense, fact, the defense of law *4 any pleading, venue, for relief in . . . shall be asserted to a claim required, except responsive pleading thereto if one that the is option following pleader at the be made the defenses upon by (f) can motion: . . failure state a claim which relief . making any granted, these he .... A motion defenses shall pleading permitted.” pleading if a is made before further 817.33(3) (e), a circuit order over- Under sec. Stats. court’s ruling 802.06(2) appealable under sec. an a motion to dismiss is order. original complaint the seller’s demurrer to the We sustained sufficiently allege complaint did not the the that seller because 25, 1977, complaint, July In the filed on Ms amended alleges buyer May 15, he that on or about entered purchase into a lot in the written offer a vacant Vil lage county, Wisconsin, Deer, for Brown Milwaukee agreed price $12,600; on or that about June conveyed buyer warranty the lot to a seller the buyer house; deed; purchased a that the the lot to build process excavating house, a and that in the for the property uncapped well on the re was water was leased. alleges complaint a
The that cor- further seller poration engaged developing and in the sell- business ing estate; experienced in of real real that it is matters estate; it the area of that owned and had subdivided subject located; it real that estate which the lot is was offering subject in the same area lot and other lots public sale; particular for familiar area that it is with the located; lot of real which the that area estate zoned residential and that seller knew was zoned residential. buyer complaint that “was further states
stranger inexperienced in area”; mat- that he was purchased transactions; lot ters of real estate that he house; ex- that he did not know construct of a well under the land hidden from istence surface view; well, if he had known of the he either would that pur- purchased property have or would have price; constituted chased it at lower well lot; condition of the well made defective property purposes than he had worth residential less believe; property un- that the well made the been led building expense; and that added suitable without sufficiently allege did not knew of the existence of the well and damage. buyer injury his induced to act to was buyer days given twenty replead. after remand to See Oller Inc., 75-409, unpublished Co., Per Curi- man v. O’Rourke Case No. opinion May 3, 1977. am filed *5 the seller’s failure to disclose the existence of the well upon by buyer thereby was relied the and he induced was buy ignorance to this lot in of the well. buyer alleges further that he incurred additional
expenses for water control and construction be- costs well; expended cause of $2,722.04 the that the sum of was attempt stop to the flow water so the subsoil building; would be suitable for and that the sum $10,575 change “incurred with the builder due to in plans necessitated said condition and to correct same.” allegations applicable
Additional to what is labeled complaint as the “first of action” cause are that through seller, agents, its knew the existence of underground buyer buy and, in well order to induce land, “falsely defraud,” and with intent failed to duty disclose this fact which it had a to disclose and bearing which would had have a material on con- property. struction of a residence on the allegations applicable Additional what is labeled complaint as the “second cause of action” are that the through seller, agents, its knew or in the exercise reasonable care should have known of the existence of underground well; had the means ascertain this fact; duty had a to ascertain and a to disclose this bearing fact which had would have a material property; construction of a on the and either residence knowingly negligently buyer breached its informing underground buyer in not well. buyer judgment demands on the first cause action, alternative, inor on the second of ac- cause tion, $20,000.3 the sum complaint The seller maintains should be dismissed because first and second of action are not causes stated in the 802.02, general alternative. Stats. forth the sets rules of Sec.
pleading as follows: *6 disclosing court, rationale, circuit over- The without its the com- ruled motion to the amended seller’s dismiss pleading. (1) “802.02 General of Relief. rules Claims foe pleading original relief, A which sets forth a claim for whether claim, counterclaim, third-party claim, con- cross-claim, shall or identifying (a) plain claim, the tain a short of the and statement transaction, and occurrence the arises or event out of claim which showing (b) pleader a demand the is to relief and entitled judgment pleader for to he en- for the relief to deems which the types Relief in alternative different titled. the or of several be demanded. Pleadings consistency, (a) “(5) direct; be concise and simple, concise, pleading Each averment of and direct. be shall required. pleading No technical are forms or motions of “(b) party may claim or A forth 2 or more of set statements alternatively or de- hypothetically, claim defense or either one separate or 2 more state- fense claims or or When defenses. inde- them if made are made the alternative one of ments and pendently sufficient, pleading the is not made insufficient would be insufficiency alternative statements. the of one more of the or many he party may as separate or A state as claims defenses also legal consistency regardless or of based on has and whether subject the equitable grounds. All be made statements shall obligations s. 802.05.” set forth in Thus, alterna- of can be stated as alternative a claim statements Conway, also, separate or See tive one claim as claims. versions 1976). (2d and 26.03 Court Procedure s. ed. Wisconsin Federal complaint separately The causes action. entitled The stated two set significant as causes action difference between two buyer complaint cause action forth in the in the first alleged and inten- of the well that the knew existence seller the second tionally and in did not the existence of well disclose complaint in the knew or of action that the seller cause recites of the of the should existence exercise of reasonable care of known existence had the means and to ascertain well buyer knowingly negligently to inform the failed and either well the existence of the well. about he or theory plaintiff of law under which not state A need may permit pleaded re pleading. facts If statement of she theories, required covery not to indicate different on two Dairyland Cooperative, 45 Wis.2d theory Power Jost or theories. plaint can upon claim which relief failure to state a granted. be claim, like motion for failure to state a dismiss legal sufficiency previously demurrer, tests the used pleaded in the claim. The all reasonable facts true, pleadings
ferences from the are admitted to but be only sufficiency purpose testing legal for the claim, purpose pleadings are to of trial. The liberally justice construed to substantial with view parties.4 complaint required all to state is not constituting action; the ultimate each cause of facts complaint legally should be dismissed insufficient *7 only quite if “it that under no conditions can clear plaintiff recover.”5 recognized misrepresentation court
This has generic concept separable tort into the three familiar (sometimes intent mis- classifications: called fraudulent negligence representation, deceit or intentional deceit), responsibility.6 and strict Schweiger Co., Inc., 164, Loewi & (1969); 172 647 65 v. N.W.2d 56, 66, (1974).
Wis.2d
tions in common: torts have three elements least (1) representation the un- made must be of fact and defendant; (2) representation must of fact be true; (3) plaintiff represen- must believe such damage. The rely tation to be true and thereon to his respects. In intentional classifications differ in several representation deceit the defendant must either know recklessly representation is untrue without made or caring and with whether it was or false true upon it plaintiff intent act deceive and induce respon- plaintiff’s damage. pecuniary In strict sibility, made on must be knowledge personal or circumstances defendant’s under ought or necessarily the truth in which to have known he have untruth must of the statement and defendant an ceive Intent to de- economic interest in the transaction. representa- good-faith truth of the belief in the speaker is tion are immaterial. In classification knowledge facts supposed possess complete normally in- expected to them without or could know Synthesis vestigation. A Harper McNeely, (1938), Misrepresentation, Law Rev. 22 Minn. L. justified in 12, p. person A is therefore at Note 988. infallibility representations of fact. expecting as to only to exercise negligence, need fail In the defendant making misrepresentation in as- ordinary care in *8 certaining negligence, of like other cases the facts but assumption of a voluntary requires duty of a a care or duty.” complaint argues fails appeal, the seller On granted three upon can a which relief state claim a claim complaint not state First, does reasons: because, misrepresentation intentional actionable duty the ex- to disclose had no law, the seller matter complaint Secondly, the does of the well. istence negligent misrepresentation for actionable a claim state because, law, duty aas matter of had no of care seller buyer. any Third, allege complaint to the does not damages buyer by purchase caused of the lot. We shall discuss each of these issues turn.
II. complaint discuss first whether the states a claim We observe, misrepresentation. Initially for intentional we allege seller, complaint as did does not misrepresent- first of the tort of two elements intentional ation, namely representation the seller made a grava- representation fact that the untrue. The wrong men of the is the nature of the false words used they may reasonably and the reliance which In induce. allegations words, complaint lieu of these false re- fact, cites that the failed to seller disclose a the existence general silence, well. rule is that a failure fact, to disclose a not an intentional duty unless the seller has to disclose.7 If there is fact, disclose failure to disclose that fact equivalent representation treated the law as to a the nonexistence of the fact. In Southard Occidental (Second) Torts, (1977) 551, Restatement Comment 6 sec. states: “. . In the . of a absence disclosure . . . one who negotiating a business transaction is not liable in deceit because of adversary failure to disclose a fact his that he knows would his regard as material.. . .” also, Emptor Berman, Realty See Caveat in Sales As- —Recent Upon Rule, 541, saults (1961); Vand L. Rev. James & Misrepresentation Gray, II, L. Rev. 37 Md. —Part Keeton, Nondisclosure, Fraud —Concealment & 15 Tex. L. Rev. Rights Disappointed (1936); Keeton, Purchasers, 32 Tex. L. (1953); Goldfarb, Rev. Fraud 2-7 & Non-Disclosure: The Ven- Relation, dor-Purchaser 8 W. L. Rev. Res.
27 Co., (1966), 142 844 Ins. N.W.2d Wis.2d Life we said: duty to person under “A in a deal must a business be charged a a can with disclose material fact he before Restatement, Torts, p.
failure to disclose. sec. (1), to disclose states as fails the rule follows: ‘One who thing may justifiably in- to another a which knows he acting a from in business duce the other to act refrain liability subject to other transaction is the same the to though represented of the had the nonexistence he if, only disclose, if, which has to but matter he is under a he failed duty to other to exercise reasonable ”8 question.’ to care disclose matter question presented wheth thus in the case bar is buyer duty ex had a to disclose to the er the seller duty disclose, If there istence the well. liability tort for intentional incurs seller (i representation of the non-existence .e. misrepre fact), tort of if elements of the intentional Whipp Iverson, supra, proved. are See sentation at 169. Wis.2d legal law, question duty presents an issue of Currie, writing pointed court, out for this has Justice legal duty question
that when a court resolves Simon, making policy court is Fisher v. determination. (1961). To 211-212, Wis.2d d explains “rea Comment of the Restatement sec. transmitting care to refers to means sonable disclose” duty proper party information if there is a disclose. “d. Under the rule stated in person under Subsection merely subject liability has he of disclosure is not because bring required person en- information home to the failed to If care to to it. His to exercise reasonable do so. titled exercised, fact care is information does reasonable subject person it does not him lia- reach the entitled to bility. . .” .
demonstrate assertion, the truth of quoted this court Dean Prosser as follows: generations “For more than repeated two it has been that duty there can be no child; toward an unborn now all aof prenatal injury going sudden the on cases are way. other into gets It used to be held that one who himself danger duty saving owes injured no ato rescuer in him; now all duty at once the is there. It was once well- settled law that negligently one misrepresent- who made possible duty ations could owe no person third to a into they might whose authority come; hands respectable there is now duty that in some situations such a can be
found. It leasing was once the law that a landlord shop small public duty the admission of the owed no entered; to those who agree all of the recent cases duty is clear. shifting sands, “These are and no fit foundation. duty There is a says duty; court there is a if law, like the constitution, Duty is what we make it. only a word with which we state our conclusion that there is or sential liability; is not to he necessarily begs the es- question. duty, breach, When we find a and dam- age, everything has been said. The word serves a useful purpose directing in obligation attention to the to be imposed upon quence defendant, rather than the causal se- event; beyond it serves In none. decision whether or duty, many not there is a factors interplay: history, The hand of our ideas of morals and justice, rule, convenience of administration of the and our social ideas as to where the loss fall. In should the end the court will decide whether there is a community, the basis of the ‘always mores of the keeping in mind the fact that we endeavor to make a in rule each practical case that will keeping gen- in with the ” understanding eral (Emphasis of mankind.’ supplied,,)9 Light Co., Klassa v. Milwaukee Gas 183-184, Wis. (1956) quoting Palsgraf Prosser, N.W.2d 397 Revisited, 52 Mich. Rev. 14-15 L. expression For concept a similar Goldfarb, of this see Fraud & Nondisclosure Relation, Vendor-Purchaser Res. L. W. Rev. (1956): accepted “The theorem in this field he summed recognize that the We traditional rule in Wisconsin in an action intentional length estate, dealing seller of real arm’s with buyer buyer, has no disclose information liability therefore has no an action for intentional misrepresentation for failure to disclose.1 legal duty to The traditional rule that no there is arm’s-length part in an disclose transaction is common emptor law doctrine of which traced caveat rugged attitude individualism reflected *11 century.11 economy and law 19th business traditionally law of has been closely aligned with the mores of the commercial world12 type protected by the law of mis- because interest representation in interest business transactions up ac- an as follows: or nondisclosure not constitute Silence does duty speak wrong, and tionable unless the a defendant is under stated, reason, a . a but rather disclose. . The not . ‘rule/ imposes liability facts under the Once the court rationalization. conversely, And, particular case, duty is found exist. ‘reasons,’ true it is once decided that defendant whatever liable, not be it there was no held is ‘concluded’ that should admit, realize, or to that a exists The court refuses to .... imposition it, it is not a condition to the court finds if liability consequence abut thereof.” 10 Trzesniewski, Kamuchey 403 8 98 v. Wis.2d N.W.2d Co., 351, 142 (1959); 31 Wis.2d Southard Occidental Ins. Life Guyer Supp. Co., (1966); F. 844 v. Cities Service Oil 440 1977). (E.D. 630, 632 Wis. 11 (1956) ; Friedman, in America Contract Law 12 Williston Contracts, p. 1970); Keeton, (Jaeger Fraud sec. 3d ed. Non-Disclosure, Rev & 15 Tex. L. n. —Concealments Emptor, (1936); Hamilton, The Maxim 40 Yale Ancient Caveat Fine, Culpa Contrahendo, (1931); Bar in Kesseler & L.J. Comparative Faith, gaining A & Freedom Contract: in Good Young, Study, L. Rev. Sorrell Harv. App. 220, 491 P.2d Wash. Misrepresentation I, Gray, Rev. 37 Md. James L. —Part 286, 287 formulating judgments
in being business without misled is, being others —that an in interest not cheated. emptor person Under the doctrine of caveat no was required to tell all that he or she knew in a business transaction, diligent in a free market should deprived superior knowledge of the fruits of skill and lawfully acquired. world, The business and the law re- flecting required parties business mores and morals, to a transaction to use their faculties and exercise ordi- nary sense, and business not to call on the law stand 'parentis protect ordinary in loco them in their deal- ings people. with other business picture is, “The sales and land be- deals ginning, community simple that of a trade is whose neighbors. goods face to face and whose traders are during negotiation and the land were there to be seen particularly land, everybody in the case knew everybody’s land; length not, prop- if trade was arm’s against osition with wits matched skill. Of course caveat emptor society. would be the rule in But caveat such emptor liability; was more than a rule no philosophy that left each his of standards individual own devices public imposition with a minimum of practice. beginning In fair common law did grant recognize relief from did that if the seller fraud and express promise product made an toas his at the time of *12 the sale he remained liable on ‘col- after the sale this promise. lateral’ Indeed covenants for title in deed promises were such collateral which the sale.” survived Obligation Dunham, as to Fitness Land Vendor’s of Purpose, 108, (1953). a Particular 37 L.R. 110 Minn. years society’s good Over the attitudes toward faith dealing undergone and fair in business transactions have significant change change, has been reflected departed in the law. Courts have from or relaxed the duty by carving exceptions “no to disclose” rule out to refusing the rule and to adhere to the rule when it injustice. works an courts have Thus held that the rule
31 apply actively a defect does not where seller conceals prevents investigation;13 or he the seller where where ambiguous told a half-truth or has made an state- has impression if the intent a ment seller’s is to create false fiduciary relationship so; and he there does where parties; peculiarly are between the or where the facts knowledge exclusively party within one to party position other not in transaction and the himself.14 discover facts for basis of the the case at does not complaint, On the bar well-recognized excep- appear to fall one of into these However, Dean to the rule. tions “no disclose” tendency amorphous found a “rather Prosser has finding part of most courts toward of disclosure knowledge special in cases where the defendant has knowledge open plaintiff aware means and is acting plaintiff misapprehension as under 13 (Second) Torts, (1977) 3 Restatement 550 states: sec. party hy action “One a transaction who or other concealment intentionally prevents acquiring informa- the other material from liability subject other, pecuniary loss tion is to the same though as he of the matter had stated nonexistence prevented discovering.” other thus from Kamuchey 99, Trzesniewski, 94, 403 8 98 N.W.2d Wis.2d 300, Koehler, 297, 64 (1959); Laehn Coal Co. v. 267 & Wood Wis. 823 14 Misrepresentation II, Gray, Rev. James & Md. L. 37 —Part Harper James, 488, (1978); The Law Torts sec. 523-527 1 & 7.14, p. (1956); Prosser, (1971); Torts 12 Law 696-697 (Jaeger seq. 1970); 8A on Contracts 1497 et 3d ed. Williston sec. Property Thompson, on the Commentaries Modern Law Real ; Emptor (1963) Note, Real Caveat Sale secs. Property Epitaph Maxim, Inequitable Memphis am. L. St. U. — Emptor (1973); Seavey, 1960, 38 L. Caveat Tex. Rev. (1960); Goldfarb, Nondisclosure in Vendor- Rev. 439 & Fraud Keeton, Relation, Rev., (1956); Purchaser W. Res. L. (1936); Nondisclosure, L. Fraud — Concealment & 15 Tex. Rev. (Second) Torts, Killeen Restatement secs. Parent, 244, 251-252, 23 Wis.2d 127 N.W.2d
32
importance
facts which could
him,
he of
and would
5
probably affect his decision.”1
1 5 Prosser,
Law Torts 697
Jersey Supreme
Court, reversing
summary judgment
New
remanding
and
for a full trial
in a
rescission action because
seller,
house
roaches,
by
was infested with
a fact not
disclosed
stated:
long
days
judi
“Our
way
have come
courts
since
when
emphasis
cial
precedents
was on formal rules
ancient
rather
and
concepts
justice
than on
mittedly
dealing.
modern
ad
and fair
While
progressed
slowly
property
our law has
more
in the real
fields,
stirrings
field than in other
there have been notable
even
Schipper
Sons,
70,
there.
. . .
Inc.,
In
Levitt &
44
207
[v.
N.J.
(1965)]
A.2d 314
we elevated the duties of the builder-vendor
opinion
repeat
sale
its
and
homes
in the course of our
we
edly stressed that
our
current
law should be based on
notions
‘right
just.’
what
90,
and
44
314. In Reste
N.J.
207 A.2d
[Realty Corp.
Cooper,
(1969)]
v.
444,
53
251
N.J.
A.2d 268
we
expressed
thoughts
similar
the lease of real
connection with
property.
despite
acceptance
We there noted that
lessee’s
premises
(a
‘present
stipulation comparable
in their
condition’
purchasers
here),
to that of the
in their contract
the landlord was
condition,
under a
disclose a
to him
material
latent
known
by
tenant;
pointed
but unobservable
out
in the cir
we
wholly inequitable application
cumstances ‘it
emptor
of caveat
would be a
charge
453-454,
knowledge
her with
of it.’ 53 N.J. at
Sohipper
departures
33
abandoning the
Dean Keeton
these cases
described
duty
“no
to disclose” rule as follows:
stage
law,
present
“In the
the decisions show
drawing away
is
from
idea
nondisclosure
[that
many
attempt by
actionable], and there can
an
be seen
yet
just
possible,
courts to reach a
in
far
but
result
so
as
maintaining
degree
certainty
must
which the law
if
have. The
found that
either
a
statement
often be
party
suppresses ma-
to a
contract of
conceals
sale
good
to disclose
terial fact which he
in
faith bound
then his silence is fraudulent.
“The attitude of the courts toward nondisclosure
undergoing
change
and ...
it would seem
impose
object
of the law in these
to
cases should be
parties
justice,
speak
whenever
to the transaction a
dealing
equity,
it. This state-
and fair
demand
only
where
ment is made
party
with reference to instances
charged
This
an actor in the transaction.
speak
implied representa-
does not result from
speak con-
silence,
tion
exists because
refusal
but
and Non-
unfair conduct.” Fraud —Concealment
stitutes
disclosure,
1,
15
L.
31
Tex. Rev.
from
to deter-
test Dean Keeton derives
the cases
abandoned
of nondisclosure should be
mine when
rule
;
resulting
improper settling)
(1960)
Brooks v.
(filled
366
land
214,
(1960)
Co.,
116
454
Ervin Construction
253 N.C.
S.E.2d
Schlemeyer,
settling);
(filled
resulting
improper
Obde v.
land
infestation)
;
(1960)
(termite
449,
Cur
16 Goldfarb,
Nondisclosure
Fraud &
in the Vendor-Purchaser
*15
Relation,
analyzed
(1956),
8 Western
L.
41-42
the
Res.
Rev.
by
impose
trend
the courts to
to disclose as follows:
is,
particular
facts,
“. . . If a failure to
under the
shock-
disclose
enough
ing
sense,
granted.
If it falls
to the moral
relief will be
say
effect,
the
short
this
the courts will
that whatever
status
the
it is not
defendant’s conduct in the ‘forum of the conscience’
actionable in the forum of the law.
“Many cases demonstrate that
the
are concerned with
courts
honesty
speaks
morality.
‘honesty
good
as
and
One
and
faith’
requires
speaks
‘common
that which
disclosure.149
Another
honesty
dealing.’150
happens,
And,
the
when,
and fair
often
as
deciding
assigned
fraud,
ultimate
is
task
whether there was
jury,
body (except
to the
the
members of that
extent
surely
they
effectively
by
instructions)
are
will
limited
court’s
apply
deciding
their
moral
the defend
own
standards
whether
sufficiently
justify giving
reprehensible
ant’s conduct
was
plaintiff relief.151
“It
ethics
has been said that
there has been a shift in business
period
hardly
justified
from a
reliance
ever
and when
which
party
overreach,
one could assume that
to one in
the other
would
prevails
higher
have
which there
a new and
standard.152 Others
emptor
said that
the doctrine of caveat
has
much of its con-
lost
accuracy
observations,
evaluating
tent.153 Without
of these
safely
they
possess
basis,
one
conclude
some
and
try
they might
attitudes,
judge
jury,
objectify
both
their
grosser changes
ethics.
are sensitive at least
in business
high
question
here is
an ethical
will be de-
how
standard
Or,
premium
differently,
manded.
how much of a
will
stated
placed
bargaining skill,
on
and astute
either
shrewdness
purchaser,
falls short of active concealment
vendor or
which
misrepresentation?
many
legal questions,
clear
Like
other
fundamentally
question.
an ethical and social
The answer is still
Large,
Professors
MacDonald, and Raushenbush of
University
School,
of Wisconsin Law
warn real es-
agents
tate
possibility
being
misrepre-
silence
give
sentation
following
them the
advice:
telling
leading
“[N]ote
statement
au-
text
thority:
appears
working
‘The law
to be
toward
ul-
timate conclusion that
full disclosure of all material
facts must
elementary
be made whenever
fair conduct
it.’
(2d
demands
1955) p.
[Prosser
Torts
ed.
535]
words,
you
“In other
if
have a sensitive
let
conscience
guide
your
you
it be
difficulty.
should have no
to decide whether
You
position
are
fair conduct’
‘elementary
best
you
buyer.
demands that
tell the
buyer
the material
“Where
facts unknown to the
have
physical
agent
to do with a
condition known to the
but
buyer
difficult
find, certainly
for the
then there
being formulated,
though
static,
law,
gradual,
and since the
process
of formulation will be endless.”
“149
Smith,
Lovell
232 Ala.
Real Law 4-6
The draftsmen the most recent Restatement of attempted (Second) (1977) Torts a have to formulate embodying in cases toward a more rule trend duty 551(1) frequent recognition of a to disclose. Sec. rule the Restatement sets forth the traditional may a fact induce one who to that he knows fails disclose subject to in transaction is the same reliance a business liability represented had as if he nonexistence only if, if, and he matter that he failed to disclose duty disclose a to exercise reasonable care to under (2) then question.17 matter of sec. Subsection duty has a sets forth conditions under which the seller information.18 to to disclose certain use reasonable care Liability Nondisclosure “Sec. 551 “(1) to a knows One disclose to another fact he who fails acting a justifiably to act or from induce the other refrain liability subject to other transaction is business same though represented the the matter that he nonexistence of had disclose, only if, a if, he is under to he failed hut has ques- care matter to exercise reasonable to disclose the other tion.” 551: Sec. party a “(2) One is under business transaction the trans- care disclose to the other before exercise reasonable is consummated. action “(a) entitled to know known to him that the other is matters fiduciary trust con- or relation of because of other similar them; fidence between necessary to “(b) be known to him that he knows to matters being partial ambiguous prevent facts from or statement of the his misleading; and acquired “(e) subsequently information that he knows make will previous misleading representation made that when untrue or so; true believed representation falsity expecta- not made “(d) with upon, subsequently if he learns be acted tion that would *17 (2) (e) setting Sec. 551 provision the “catch-all” is forth conditions exists; under which to a disclose it states party that a to a transaction is a under to exercise reasonable care to to disclose the other to “facts basic transaction, if he that knows to other is about them, enter into it under mistake toas and that other, of relationship them, because between objective circumstances, customs of the trade or other reasonably expect would a disclosure of those facts.” recognizes difficulty Comment to speci- sec. of l fying give expec- factors that to rise a reasonable of tation disclosure: continuing “l. development of modern business has, however, ethics privilege limited to some extent this advantage ignorance.
to take There are situations only bargaining which the defendant not knows that his adversary acting under a mistake to the trans- basic action, adversary, but also knows that reason them, the relation between of the trade or customs objective reasonably circumstances, relying upon other a disclosure of the fact unrevealed if it exists. In type good dealing may require case faith and fair disclosure. extremely specific “It is difficult to the factors as give known, reasonable, expectation rise to this general, In disclosure. in which the rule cases stated in in which the (e) applied Clause has been have been those advantage ignorance plaintiff’s taken shocking community, so the ethical sense so and unfair, is swindling, extreme as to a form of amount plaintiff by appearances in which the is led bargain trap, into a is a and sub- whose essence upon the other is about act in reliance it in a transaction with him; and “(e) transaction, facts basic to the if he the other knows that them, is about to enter into it under mistake other, relationship them, because of the between the customs of objective circumstances, reasonably expect the trade or other would disclosure facts.” those *18 case, action in a tort In such a even stance he is unaware. compensated deceit, plaintiff to entitled be is has sustained.” the loss that he (Second) 551(2) (e) of the Restatement
Section duty of those Torts to disclosure to disclose limits j to sec. Comment to the transaction. “facts basic” as facts and material basic facts differentiates between follows: parties that assumed “A fact is a fact basic goes that It is a fact transaction itself. as a for the basis transaction, im- essence, is an basis,
to the portant part bargained for of what substance may important and with. Other facts serve or dealt transaction, into the persuasive to enter inducements material, may go be These facts to its but not essence. they are not but basic.”19 recognized However, of the Restatement the draftsmen developing expand to dis- law was beyond in sec. 551. closure described changing also, ethical indications, that with are “There concept many business, the of modern attitudes in fields expanding may be to the transaction of facts basic duty care to disclose the facts the be use reasonable increasing intended This is not somewhat. Subsection development.” Z, 3 Re- impede Comment Sec. (Second) of Torts statement away from the rule of caveat court has moved This transactions, emptor estate as have courts in real other states. Perssion, 590, 594, 595, Pines v. N.W.
In Wis.2d recognizing court, ten- (1961), while 2d subject in land and purchaser of an estate ant is a pp. 42-43, infra, facts, discussion of material see For further Regulation Coffey Welch, Land Full Dis Federal Sales: & Earth, 21 Case Res. L. Rev. Down Western closure Comes 58-59 emptor, the doctrine of caveat that “the frame concluded operated of reference in which the old common-law rule changed.” im- has held that contained an We lease plied warranty habitability.20
In Fisher v. Simon, Wis.2d (1961), this court was with the issue of whether faced damage pecuniary a builder-vendor should liable for *19 by failure caused defective home construction due to his Unwilling ordinary to exercise to follow earlier care. holding injury that the not liable for cases contractor was negligent arising completion of from construction after by acceptance owner, the work and its the this court policy preclude that the of the law does not re- concluded negligence covery damages resulting of a for from the builder-vendor. analysis jurisdiction and
An of the cases of this others following presence that elements is indicates of significant equity persuade of a court the fairness imposing on a of to disclose of a vendor real estate readily and not known facts: the condition is “latent” purchaser; purchaser upon acts observable (or assumption that the condition does the reasonable knowledge special not) exist; has does vendor knowledge purchaser; and of to the méans not available transac- existence the condition is material of 20 appli liability is that the doctrine of strict For discussion extend to cable to or that courts should purchaser in the real estate business of raw land from vendor implied warranty warranty protection (here of fitness per purchaser of particular purpose) affords for a that law Implied Warranty Haskell, see The Case property, sonal for ; Quality Georgetown (1965) Property, Real in Sales L. J. 633 53 Applied Emptor Both the The Doctrine Caveat Note, Property: Reappraisal Leasing Real The Need and Sale for Reform, Dunham, Vendor’s Eutgers (1970); 2 120 Camden L. J. Purpose, Obligation a Particular as to Fitness Land 37 for 108, 118 Rev. L. Minn.
40
tion,
is,
con-
that
influences whether
transaction
price.21
cluded
all or at the same
argues
public policy
demands that we
seller
not
lies
abandon the traditional
rule
no action
against
of real
to disclose
the seller
estate
failure
contends,
arm’s-length
in an
transaction.22
seller
brief,
court’s
in its
if this court affirms
circuit
overruling
order
the motion to
allows
dismiss and
21
Torts,
Berger
Prosser,
(1971);
Hirsch, Penn
Law
&
697
sylvania
Liability
in Busi
Tort
Concealment & Nondisclosure
Temple L.Q.
Keeton,
Transactions,
(1948);
ness
368
Fraud—
Nondisclosure,
1,
(1936);
Concealment &
L.
31-40
15 Tex.
Rev.
Rights
Keeton,
Disappointed Purchasers,
1,
2-7
Tex. L. Rev.
Contracts,
1970);
(1953);
(Jaeger
3d ed.
Williston
sec.
Schlemeyer,
(1960);
v.
Obde
The seller’s are alleged complaint hold- in the and our narrow the facts ing in this case.23 and the vendor in the real estate business
Where knowledgeable purchaser not, the and the skilled purchaser poor position to a condition is in a discover discernible, readily purchaser which is knowledge rely vendor. justifiably on the and skill of the argument strong imposing Thus, instant case in this this “re- material facts is on the seller to disclose against arguments con For a discussion emptor, Doctrine caveat see Note, application tinued *21 Applied Leasing Emptor Real & Sale to Both Caveat Reappraising Reform, Rutgers Property: Cam The Need for 120, 134 (1970). den L. J. buyer complaint portrayed
liance factor.” The in this expectation honesty had a reasonable in the market- place, is, material the vendor would disclose readily facts which it knew and which were not discern- impose ible. Under these law should circumstances honesty on the seller. In complaint order in to determine whether case at bar states a claim for intentional mis representation we hold that subdivider-vendor of a residential lot has a to a “non-commercial” purchaser to disclose to the facts which are known vendor, transaction, which are material to the readily pur and which are not discernible A fact chaser. is known to the vendor if the vendor has knowledge actual or if in fact the vendor acted disregard reckless as to This the existence of the fact. usage of the word “know” is the as in action same for intentional based a false state Barwineck, ment. See Stevenson v. Wis.2d (1959); Whipp Iverson, Wis.2d Torts, (Second) 3 Restatement secs. 526-529 purchaser A fact is material if a reasonable importance would attach to its existence or nonexist determining ence in the choice of action the trans question; action or if the vendor knows or has reason purchaser regards likely regard to know that the or is determining important the matter as the choice of although action, purchaser a reasonable would not so re gard (Second) Torts, See Restatement it. sec. 538 readily the fact is or is not Whether discernible depend fact, will on the nature the relation of the purchaser and the vendor nature of the transaction.24 seller’s brief asserts that well is ma- not a terial fact because does not constitute a con- defective readily discussion of For a “material facts” and “facts dis questions “justifiable reliance,” cernible” as these relate to see note 26 text at infra.
43
dition;
in
that the
of the well
known
existence
was well
community;25
buyer
and
made
have
should
inquiry
at
about the lot.
are
to be raised
These
matters
trial,
buyer
prove
not on a
at
motion to
The
must
dismiss.
trial
fact
the existence
a material
of the well was
justifiable.26
and that his reliance was
correctly points
buyer alleged
fact
seller
out that the
this
original complaint.
accept
in his
We do not
assertion
seller’s
allegations
motion
on a
we
to dismiss
must look to the
of both
original
complaints.
only
at the
the amended
We need look
complaint
supplanted
original complaint.
amended
which has
Allegations
original
complaint
in the
constitute evidence
Davidson,
19,
(1930);
22,
Dixon
trial.
v.
III. turn action, now to We the second cause of action negligence misrepresentation.27 based on reach We *23 misrepresentation. of implied present It is one of the theses inquiry logical, helpful, True, that it is not or even do under so. circumstances, may some speak equiva- a failure to amount to the actual, lent representation is, of an verbal of fact. after Silence all, type conduct, a repre- of or at least of forbearance. If the implied fact, sentation is, false, thus if other elements and the. ought remedy. of present, plaintiff fraud are to be to a entitled many But, circumstances, merely says under silence It is silence. nothing. party may deny given The silent fail to or a assert fact. may But it be unfair and unreasonable to label his behavior as representation, misrepresentation. yet, much less a And even un- circumstances, may der such the silence be tortious. relating “The courts’ insistence on such mis- nondisclosure to representation labeling seems to stem from tradition of and categorizing. fight tendency. It will avail us little to It enough help prevent to be aware of it. This alone can awareness falling prey us from traps: to that most of treacherous semantic tyranny of labels. misrepresentation an action for “[In intentional based on non- disclosure, assume all the formal elements of he I] fraud [must proved]: scienter, materiality, falsity, intent to induce ‘reliance’ injury. emphasized may Reliance is thus because be asked may rely appear- whether one on relies In effect one silence. on same, always ances. But this for silence does not create appearance. question This discussed above in connection problem always with the or not whether nondisclosure involves representation.” misrepresentation, In an recipient action for intentional representation only the false repre- can recover if he relies on the justifiable. upon sentation and his reliance is Reliance a false representation justifiable misrepresented is not unless the matter (Second) is material. 3 Torts, Restatement sees. and 538 recipient’s duty investigate For a discussion of the his ability rely representation obviously false, her on a which is speaker representation fact, where made a false see 3 Re- (Second) Torts, (1977): secs. 540 and 541 statement this court twice come before this case has issue because cause of action motion to dismiss this the seller’s it con- discuss concerned that unless we we are because prior case our in the trial of the fusion caused be per opinion. curiam liability misrepresentation
This court has held speaker fails imposed who can on the a fact making representation. care in exercise reasonable 99 N.W. Stevenson Barwineck, Wis.2d 2d 690
However, bar, unlike the usual case the case allegation negligent misrepresentation, no there is information; negligently false disseminated the seller negligently allegation is that the seller at bar the the case The com- information. material to disseminate failed the seller a fact which plaint nondisclosure of treats Investigate Duty to 540. “See. justi- recipient of fact “The fraudulent *24 might although relying upon truth, he have ascertained fied in its investigation.” falsity representation an he made of the had Obviously Representation or False Known to Be 541. “Sec. justified misrepresentation recipient is not of a fraudulent “The falsity its relying upon it is false or truth if he knows that in its to him.” is obvious 27 negligent misrepresenta comparison and of intentional For Misrepresentation I, 37 Md. L. Rev. see, Gray, tion, & James —Part Torts, (Second) (1977); secs. 3 Restatement 286, 296-315 Language, Liability Negligent 14 Harv. L. Smith, (1977); 552 for Misrepresenta Liability Honest (1900) ; Williston, 184 Rev. for Misrepresentation as Bohlen, tion, (1911); L. Rev. 415 24 Harv. (1929); Warranty, Deceit, Negligence, L. 733 or 42 Harv. Rev. Carpenter, (1930); Deceit, Green, 758-762 L. Rev. Va. Misrepre Negligent Intentional, Innocent & Responsibility for Negligent (1930); Bohlen, Should sentation, Rev. 749 24 Ill. L. Negligence Fraud, or L. Treated Va. Misrepresentations Be as Liability Economic Limitations James, (1932); Rev. 703 Pragmatic Appraisal, by Negligence: L. A 25 Vand. Loss Caused Fraud-Negligence-Liability Innocent Note, Rev. (1936); Note, Deceit & Misrepresentation, L. 21 Minn. Rev. Maryland, Misrepresentation 35 Md. L. Rev. Negligent duty equivalent has a to disclose as to a statement of nonexistence of the fact.28 complaint appears
The (1) to recite in the alternative that the seller (2) knew of the existence well the seller had reasonable cause to know of the ex- well, istence of that, event, in either the seller knowingly buyer failed to disclose information to the ordinary or failed to exercise supplying care in the in- buyer. previously, allega- formation to the As noted tions in the intentional cause of action were, alia, inter that the seller knew of the existence intentionally the well and failed to disclose the fact buyer order to induce the to enter into the transaction. frequently haveWe stated that order constitute negligence a cause of action for (1) there must exist duty part of care on defendant; (2) a breach duty; (3) a causal connection between the conduct injury; (4) damage an actual loss or aas injury. Coffey result of the Milwaukee, 74 Wis.2d N.W.2d seller asserts that it no had care buyer. frequently We have concept said that duty, negligence cases, relates inexorably interwoven foreseeability. with person of each is to exer- ordinary cise any care to refrain from act which will cause another, any foreseeable harm to to refrain from act which creates unreasonable risk In others. Antoniewicz v. Reszczynski, 70 Wis.2d (1975), we ordinary described the standard of negligence care used in Wisconsin, cases in and we ex- *25 plained negligent that if the action is under the Wiscon- question sin standard the becomes one of which cause may public policy include factors:
28 For similar treatment see Wis. J I—Civil 2403. No.
47
care,
mean
By
ordinary
we
.
“. .
such standard
in
negligence cases
in
other
standard that
is used
all
appear-
Typical of such formulations is
Wisconsin.
223,
ing
236,
Montgomery (1931), 203 Wis.
in Osborne v.
Gate-
234
also:
v. Standard
See
N.W. 372.
Pfeifer
29;
229,
way Theater,
(1952),
Inc.
55
262
N.W.2d
Wis.
525,
Schilling
(1965),
133 N.W.2d
v. Stockel
26 Wis.2d
negli-
stated,
repeatedly
test,
335. Under that
as we have
gence
ascertaining
the
un-
whether
tois
be determined
foreseeably
an
created
exercise of care
defendant’s
applied at
That test
is to
reasonable risk to others.
the
large
analysis
negligence phase
to the world
our
particular plaintiff.
respect,
In this
and not to the
negligence
ma-
analysis
the Cardoza
does not follow
Long
R. Co.
jority
Palsgraf
Island R.
opinion
v.
rely upon
(1928),
339,
rather
tiff’s
to not
determination
negligent
in instances where a
act
committed
has been
causing
injury
and the
is a
in
act
‘substantial factor’
upon
public policy.”
rests
considerations
public policy
We have enumerated several
reasons for
liability
negligence
imposing
finding
despite a
producing injury:
as a
factor
causal
“(1)
injury
negligence;
is too
or
remote from the
(2)
injury
wholly
proportion
is too
out of
to the cul
pability
it
should have
negligent tortfeasor;
retrospect
the
too
(3)
or
in
appears
highly extraordinary
negligence
brought
harm;
(4)
about
or
because
recovery
place
allowance of
would
too
unreasonable
negligent
tortfeasor;
burden on
lowance of
(5)
al
or
because
recovery
way
likely
open
would be too
claims;
(6)
recovery
for
fraudulent
or
allowance of
would
just stopping
enter a field that has no sensible or
point.” Morgan
Pennsylvania
Co.,
Gen’l Ins.
87 Wis.
723, 737,
Wulf,
;
2d
Stewart
(1979)
461, 479,
85 Wis.2d
Courts
actions
personal
injury
damage
property
by
or
caused
false
or
However,
statements
caused
nondisclosure.
courts
negli-
impose liability
have been more reluctant
gence
misrepresentations
causing pecuniary
actions for
(not resulting
bodily
damage
physical
loss
from
or
harm
property).30
Gray (Misrepresentation—
James and
I,
Part
Md.
explain
(1977))
L. Rev.
impose liability
negligent
courts’ reluctance to
mis-
representation causing pecuniary loss as follows:
pecuniary loss,
is,
For
discussion of
the invasion of
a interests
financial
commercial character
in the course of
dealings,
distinguished
business
from losses from the invasions
tangible
person
property,
interests
Prosser,
see
Law of
Torts, 683-684,
(Second)
Torts,
Restatement
ch.
22, Scope
p.
Note,
foreseeability
misrepresentations
entail the
“Where
ordinary
physical
results,
harm and
such harm fact
negligence
applied.1
rules of
Courts
time
have for some
been
reluctant, however,
impose lia
*27
more
to
have been
solely
bility
on
leads
this basis where a
to
that
economic
is
loss.2 The reason for the difference
by
large
range
physical
more limited.3
of
harm is
liability
however,
harm,
In the field of economic
‘[i]f
negligence
thoughtless
. .
exists,
slip
for
.
a
blunder
or
may expose
liability in an indetermi
ato
[defendants]
nate
indeterminate
amount for
time to an
an indeterminate
cla ss.'4
who
1975) (air
about location and
tort’ the
tendant
gence
nomic loss is
St.
disaster,
proprietary
Rev. treme as to enkindle doubt
Consider, however,
economic
L. claimant or
Economic
Vand. implication
James,
[1964]
‘[t]he
dictable. See note
“1
“2
“It is also
“3
“4
threatened
target
result from
N.E.
(Ohio
consequently jumped,
See, e.g.,
This
This is
Ultramares
for
hazards
1
160
Q.B.
physical consequences
loss.
the case of
airfield; government liable);
economic
Loss Caused
parallels
Ct.
traffic controller
of a
interest.
from
true,
Law
N.E.
commonly
533
App. 1946).
regularly
nuclear
See,
Freeman v. United
of a business conducted on these
negligence
Corp.
(C.A. 1963).
physical damage
on the
caused, however, recovery
456
direction
(1931)
the case of
a
loss
e.g.,
infra.
general
Torts
See, e.g.,
that
incident. But even
thalydomide,
(1928);
by Negligence:
which does
allowed.
Stevenson v. East Ohio Gas
stated
other
Touche,
(Cardozo,
exposes
is in some cases finite
to their
note
to
§§25.6,
whether
reluctance to
negligently gave
pilot
hand,
Mrs.
James,
are far narrower
and, presumably,
Clay
See
Niven &
to these
States,
not result from
infra.
25.9
of
death,
O’Leary’s
or
C.J.).
that
v. A.J.
generally
plane carrying
property
Limitations
A
flaw
Jones
(1956
the economic
Pragmatic
impose
Where
in these cases of
over
Professor Williston that scope negligent limit misrepresenta- action every tion for hold consequences “to man liable for the carelessly spoken degree impose words would be to liability beyond what Williston, reasonable.” Con- 1512, p. (Jaeger 1970) tracts sec. .31 3d ed. Similarly, draftsmen the Restatement of Torts discussing negli- (Second), liability for information gently guidance supplied for the others their busi- transactions, ness liability that scope caution failing supplying to exercise reasonable care in correct govern information is not determined the rules liability negligent supplying for the of chattels im- peril security persons negli- property or other gent misrepresentation physical results in harm. only negligence, When is no deceive, there intent but *28 the misrepresentation fault of the maker of the is suf- ficiently justify responsibility less a narrower for its consequences. a scope liability “The reason narrower of is fixed for
negligent misrepresentation than for deceit is to be found obligations in of honesty the difference of between the care, significance in the of to the this difference expectations reasonable of the users of information that supplied is in connection with commercial transactions. Honesty requires only representa- that the of a maker good speak tion in faith and a without of consciousness any lack what accuracy of in basis for belief the or of truth says. honesty he unequivocal The standard of regard and ascertainable without character of the ultimately transaction in which the information will be upon relying relied party upon of situation it. 3 1 alleged In the at case bar it that the seller who would buyer benefit the sale from to the failed to disclose material buyer. problems fact Thus of the some referred to in the liability misstatement, cited, texts as to extent of for careless present are Barwineck, in the instant Stevenson v. case. Wis.2d N.W.2d 690 Any may reasonably of ex- user commercial information pect by supplier in- a of observance this standard reasonably formation to whom use foreseeable. his every hand, it user “On the other does not follow every maker to commercial information hold . of care. . . limiting negligence supplier “By liability of a transactions of information to cases in commercial be used supply in- in which intent he manifests an plaintiff’s loss formation for the in sort use which occurs, policy of promotes important the law social upon encouraging the of commercial information flow economy limita- operation which the rests. only information however, in the case of applies, tion society good supplied faith, is served for no interest of genuinely by lieved be- promoting of information not the flow (Second) Restatement its maker to true.” be also, Prosser, (1977). See Comment Torts, sec. 1971). Law Torts 704-710 (4th ed. do not decide time —and we need not decide at this
We cause of action” the “second at this time —whether negligent theory misrepre- complaint on the based upon claim which for nondisclosure states sentation granted. determined have relief could We complaint a claim for intentional states go further. need no we Although whether this court has decided cases some negligence mo- liability in at the public policy precludes many stage, refused cases dismiss has tion to stage pleading policy question at the public decide usually prac- better it is have stated case. We trial before we a full factual resolution to have tice *29 Morgan v. policy considerations involved. the evaluate 738, Pennsylvania Co., Ins. Gen’l Wis.2d Coffey v. Milwaukee, 74 Wis.2d (1979); N.W.2d Earling Hiller, & Komitz 247 N.W.2d 103-104, 181 N.W.2d Inc., 49 Wis.2d negligent allegations conduct bar, In the case explicit; the facts less than are part of the seller on the negligent complaint offered in the as to the nature of the sketchy. complaint pre- conduct are at best The does not consider, sent factual basis for us to evaluate sufficient including policy involved, public resolve issues impact liability may imposition have on ven- security dors of real estate and on the of real estate transactions. complaint conclude that at and motion-to-dis-
We stage public miss the case at we cannot bar resolve policy involved; precede a full trial issues must the trial appellate of the court’s court’s determination issue any, toas what if for its liability, attaches to seller ascertaining ordinary failure to exercise care or dis- closing jury the existence of the A trial court or well. finding damage negligence, as to and the causal relation evaluating helpful in between them would be material and public policy Coffey Milwaukee, considerations. Wis.2d IV. complaint seller further should asserts “it from the face of the
be dismissed because is clear damaged by complaint [buyer] plaintiff not his correctly purchase lot.” The seller states bargain in in- follows the benefit of the rule Wisconsin tentional brief cases. seller’s allegation complaint then asserts that there is no purchase price that the value of the land is less than the today or that the home built is worth less than what was allegation paid for it. is not Such needed because correctly damages it does reflect measure of un- bargain of the rule. Under the der the benefit benefit bargain rule, purchaser’s the measure of dam-
53 ages typically as the stated difference between property represented value of the as actual value its purchased.32 as damages give necessary purchaser the bene-
The bargain depend fit of the on the of the bar- will nature gain and the of each It neces- circumstances case. sary give purchaser in all cases to the value bargain thing represented. as Under the benefit of the recovery rule, an alternative the reasonable measure placing property cost condition received in the represented purchaser in which it was to be33 and the is, compensation damage, is not limited to the direct represented based on the difference between real and purchaser may or con- recover for indirect value. sequential damages caused damages.34 or in lieu
addition to of direct alleges property complaint value of purposes represented for residential was less than property unsuitable for intended use cap expenditures to re- added well and without complaint design forth the house. The therefore sets 32 Harweger 526, 533, 534, Wilcox, v. 818 16 114 N.W.2d Wis.2d Biechler, v. 243, 246, Northern Bank (1962); 191 State 53 Wis.2d Marvin, 630, 633, 921, (1971); Chimekas v. 923 25 Wis.2d Improvement Anderson v. Tri-State Home (1964); 131 N.W.2d 297 Co., (1955). 853, 68 268 Wis. 67 N.W.2d N.W.2d 705 33 (Second) McCormick, Damages, (1935); 3 Restatement 454 Howard, Ky. Torts, l Nunn v. (1977); 216 comment to sec. 549 Shepard Farms, 685, Cal-Nine (1926); 252 F.2d 678 S.W. 951; Bechtel 1958), cert. denied 884, (9th Cir. U.S. Liberty Bank, 1335, (9th 1976); Cir. Nat. F.2d 1341-1343 Bargain” Proper Buie Pocket” or “Out of Annot., “Benefit of Representations Inducing Damages Contract Fraudulent Property, 13 ALR3d Transfer of p. McCormick, Torts, Law Prosser, (1971); sec. Torts, Damages, (Second) sec. Restatement d sec. Comment
damage, claim on the essential element based *31 theory misrepresentation. of intentional allegations forth, that the
For the reasons set we hold upon complaint which relief can be of the state claim granted complaint and that the to motion dismiss the properly overruled.
By the affirmed. Court. —Order (concurring). HANSEN, T. I concur with CONNOR J. However, by majority the in this case. result reached join opinion I am unable to of the court. overruling appeal This from an order a motion is single complaint. Therefore, to dismiss the amended complaint issue this court is whether the states before granted. any upon claim can which relief be Kurtz City Waukesha, 103, 107, Wis.2d N.W.2d Asso., (1979) ; Pro. Attoe Madison Policemen’s Wis. Emp. 2d Int’l. Found. N.W.2d Ben. Plans v. Brookfield, Wis.2d majority opinion a dis contains Yet the applicable claims relief sertation of the law for length alleged. opinion such which are discusses origin is of the traditional that there matters as the rule arm’s-length transaction, no to disclose in an rule, exceptions courts creation this the tests used rule of non-disclosure should to determine whether the be abandoned, rule and the Restatement’s formulation of a recognition embodying frequent toward a more the trend opinion writer, of a to disclose. In the of this such unnecessary, inappropriate totally a discussion only issue the court is because the before whether any pleadings upon forth facts relief can set which granted. having complaint
Moreover, determined states majority misrepresentation, a claim for intentional' complaint claim for states a does not decide whether proceeds negligent misrepresentation. opinion Yet the may preclude public policy considerations discuss liability courts negligence, and the reluctance of the negligent misrepresentation caus- impose liability ing Liability pecuniary not at here. issue What loss. sufficiency complaint. Since at issue is the unnecessary majority to determine it is concludes negli- complaint action for a cause of states whether gent is no reason it would there misrepresentation, seem recovery. theory possible to further such discuss generally case, di- court has Except in unusual con- appeal issue of the when rected its attention denying sidering a motion dis- of an order the review *32 my opinion adhere complaint. In the court should amiss necessity There is no practice in the instant case. to this relating legal principles expounding on various by plaintiff recovery advanced theories stage. instances, attempting to decide pleading In most not been tried the case has law of the case when appellate the court are not before and the facts practice to be avoided. although result reached
Therefore, I concur join opinion. majority, respectfully I decline Beil- that Mr. Chief Justice authorized to I am state Coffey concurring join in this and Mr. Justice euss opinion.