The National Groups LLC v. Nardi
A factual misstatement in a contract about the absence of litigation may not provide a cause of action for negligent and intentional misrepresentation, if the plaintiff did not actually or reasonably rely on the misstatement, because the plaintiff was orally informed about the existence of litigation. The plaintiff buyer, The National Groups LLC, sued the defendant sellers, alleging that they engaged in negligent and intentional misrepresentation, because their contract included a false statement. Paragraph 10(d) of the contract stated the defendants possessed no "knowledge, information or notice . . . of any pending, threatened or contemplated judicial or administrative action, relating to the Premises." The Connecticut Supreme Court wrote in Williams Ford Inc. v. Hartford Courant Co., a 1995 decision, "One who, in the course of his business, profession or employment . . . supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information." The defendants, Marie and Charles Nardi, effectively admitted that Paragraph 10(d) was incorrect. In a separate suit, the defendants sued Attorney Daniel Mara, who represented them during contract negotiations, alleging that "he drafted and/or caused to be signed by the Nardis a document in which the Nardis made factual misrepresentations to the National Group." The court credited testimony that Attorney Mara allegedly informed Attorney Kenneth Gruder, who represented the plaintiff, about the litigation in early 2009, when Attorney Gruder expressed renewed interest in the property, as well as in e-mails in August and September 2009. This informal notification was sufficient to inform the plaintiff, because Attorney Gruder's knowledge is attributable to the plaintiff. "The plaintiff," wrote the court, "cannot claim actual or justifiable reliance on the misstatement in paragraph 10(d) when the defendant supplied the plaintiff, through its agent, with the true facts." The court also was not persuaded that the defendants possessed actual intent, to engage in fraud or to mislead the plaintiff. The court granted judgment to the Nardi defendants.