Coppola Construction Company, Inc. v. Hoffman Enterprises Limited Partnership
A corporate principal or officer may be held personally liable for the tort of negligent misrepresentation in connection with statements made by that principal or officer that, under the apparent authority doctrine, also create binding contractual liabilities for the corporate entity. Coppola Construction Company filed a complaint against Jeffrey Hoffman and Hoffman Enterprises Limited Partnership, to recover money damages for site work performed for Hoffman Enterprises on property known as Hoffman Auto Park. The trial court granted the defendants' motion to strike the negligent misrepresentation count against Jeffrey Hoffman. Essentially, the plaintiff alleged that, upon information and belief, Jeffrey Hoffman received below market rates for the construction of his residence in exchange for inflating the compensation of Signature Construction Services, LLC through a bank funded expansion of Hoffman Auto Park and that the plaintiff relied to its fiscal detriment on Jeffrey Hoffman's representations regarding Signature's authority to act for him and of payment for extra work when the costs of change orders and extra work exceeded bank financing. The Appellate Court reversed the trial court's judgment. Jeffrey Hoffman appealed, contending that the plaintiff could not, as a matter of law, satisfy the detrimental reliance element of a negligent misrepresentation claim because his apparent authority to bind the corporate entity contractually meant that the plaintiff could not have relied to its detriment on his statements. The Supreme Court disagreed and affirmed the Appellate Court's judgment. The plaintiff pleaded a legally sufficient claim of negligent misrepresentation against Jeffrey Hoffman. The fact that the allegations pleaded might also state a contractual claim against a corporate entity under the apparent authority doctrine did not preclude a separate claim of negligent misrepresentation against a principal of that corporate entity as a matter of law. The defendant's unsupported claim to the contrary was inconsistent with numerous points of well settled law including the black letter law that, as stated in the 1991 Connecticut Supreme Court case of Kilduff v. Adams, Inc., "an officer of a corporation who commits a tort is personally liable to the victim regardless of whether the corporation itself is liable." The Appellate Court aptly noted that Hoffman's claim also failed to accommodate the plaintiff's right to plead alternative or inconsistent theories as provided in Practice Book §10-25.