Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Carl B. Beers, et al.,
File No. C6962586
Grant J. Merritt, Kalina, Wills, Gisvold & Clark, 941 Hillwind Road Northeast, Suite 200, Minneapolis, MN 55432-5964 (for respondents)
Timothy J. Hassett, Paul H. Yoo, Felhaber, Larson, Fenlon & Vogt, 601 Second Avenue South, Suite 4200, Minneapolis, MN 55402 (for appellants)
Considered and decided by Randall, Presiding Judge, Kalitowski, Judge, and Schultz, Judge.*
* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.
Appellants Carl and Susan Beers challenge the district court's grant of summary judgment and award of attorney fees to respondents Ricardo and Mary Jo Garay under the Consumer Fraud Act (Minn. Stat. § 325F.68-.70 (1996 & Supp. 1997)), based on an alleged negligent misrepresentation that a parcel of real estate sold by appellants to respondents was buildable. We reverse and remand.
This court considers two things on an appeal from summary judgment: (1) whether any genuine issues of material fact exist, and (2) whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). "A material fact is one of such a nature as will affect the result or outcome of the case depending on its resolution." Zappa v. Fahey, 310 Minn. 555, 556, 245 N.W.2d 258, 259-60 (1976).
A motion for summary judgment shall be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law. On appeal, the reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted.
Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993) (citation omitted). This court reviews a grant of summary judgment de novo to determine whether there is a disputed issue of material fact. Zip Sort, Inc. v. Commissioner of Revenue, 567 N.W.2d 34, 37 (Minn. 1997).
The Consumer Fraud Act (Act) provides:
The act, use, or employment by any person of any fraud, false pretense, false promise, misrepresentation, misleading statement or deceptive practice, with the intent that others rely thereon in connection with the sale of any merchandise, whether or not any person has in fact been misled, deceived, or damaged thereby, is enjoinable as provided herein.
Minn. Stat. § 325F.69, subd. 1 (1996). The term "merchandise" includes real estate. Minn. Stat. § 325F.68, subd. 2 (Supp. 1997). Any person injured by a violation of Minn. Stat. § 325F.69 may bring a civil action to recover damages, costs, disbursements, costs of investigation, and reasonable attorney fees, and receive other equitable relief. Minn. Stat. § 8.31, subd. 3a (1996). "Minnesota courts have held that a finding of negligent or unintentional misrepresentation violates the Act." Church of the Nativity of Our Lord v. WatPro, Inc., 474 N.W.2d 605, 612 (Minn. App. 1991), aff'd, 491 N.W.2d 1 (Minn. 1992).
The protections of the Act are broader in scope than those provided by the common law. LeSage v. Norwest Bank Calhoun-Isles, 409 N.W.2d 536, 539 (Minn. App. 1987). In applying the Act, however, we consider the elements of common law misrepresentation:
1. There must be a representation;
2. That representation must be false;
3. It must have to do with a past or present fact;
4. That fact must be material;
5. It must be susceptible of knowledge;
6. The representer must know it to be false, or in the alternative, must assert it as of his own knowledge without knowing whether it is true or false;
7. The representer must intend to have the other person induced to act, or justified in acting upon it;
8. That person must be so induced to act or so justified in acting;
9. The person's action must be in reliance upon the representation;
10. That person must suffer damage;
11. That damage must be attributable to the misrepresentation, that is, the statement must be the proximate cause of the injury.
Yost v. Millhouse, 373 N.W.2d 826, 829-30 (Minn. App. 1985).
Appellants contend that, because in a deposition Mr. Garay stated he could not remember if Mr. Beers's alleged misrepresentation was made before or after he signed the purchase agreement, there is a genuine issue of material fact whether respondents could establish the requisite reliance on the statement. We disagree. Garay stated in the answers to interrogatories that the statements were made prior to the signing of the purchase agreement. Further, there is no evidence in the record that Beers denies providing Garay with this information prior to the signing of the purchase agreement. We therefore conclude that appellants' allegation of contradictions in Garay's testimony alone is insufficient to reverse the district court's determination that there is not a genuine issue of material fact on this issue.
We note, however, that the reasonableness of reliance is generally a fact question for the jury. Nicollet Restoration, Inc. v. City of St. Paul, 533 N.W.2d 845, 848 (Minn. 1995). The supreme court has determined that "establishing the reasonableness of the reliance is essential to any cause of action in which detrimental reliance is an element." Id. Here the district court did not address whether respondents were justified in relying on the representation that the parcel was buildable. Thus, although the district court did not err in determining there is not a genuine issue of fact regarding reliance, whether the reliance was reasonable presents a disputed fact question and therefore the district court erred in granting summary judgment.
Appellants further contend the district court erred in holding that it was immaterial whether respondents actually relied on the alleged misrepresentation because the Act does not require that a person be misled by the statements. Under the facts here, we agree the district court erred.
In an action for money damages under the Act plaintiffs "bear the burden of proving the proper legal nexus between the complained of acts and their alleged monetary losses." LeSage, 409 N.W.2d at 539. See also Mikulak v. Scura, 691 F. Supp. 1218, 1223 (D. Minn. 1988) (affirmatively citing LeSage for the proposition that proximate cause is a necessary element of a consumer protection action and granting summary judgment against the plaintiffs because there was no evidence to support proximate causation).
Because respondents here are claiming pecuniary damages, they must establish both that they reasonably relied on appellants' alleged misrepresentation and that this reliance proximately caused their damages. Because these issues were not addressed in the district court's grant of summary judgment, we reverse and remand this matter to the district court for proceedings consistent with this opinion.
Finally, appellants contend that because Beers's statement was a misrepresentation of law, the district court erred in concluding that it is actionable under the Act. See Northernaire Prods., Inc. v. Crow Wing County, 309 Minn. 386, 388-89, 244 N.W.2d 279, 281 (1976) (holding that misrepresentations of law generally are not actionable under the common law). However, we conclude the representation by Beers that the lot was buildable was a misrepresentation of fact so we need not determine whether misrepresentations of law are actionable under the Act. See Simonsen v. BTH Properties, 410 N.W.2d 458, 461 (Minn. App. 1987), review denied (Minn. Oct. 26, 1987) (concluding that the misrepresentation of whether a building violated the zoning law was a misrepresentation of fact); Miller v. Osterlund, 154 Minn. 495, 496, 191 N.W. 919, 919 (1923) (stating "[a] misrepresentation though involving a matter of law, will be held actionable if it amounts to an implied assertion that facts exist that justify the conclusion of law which is expressed").
Reversed and remanded.