Posted on 09/12/2016 at 12:00 AM by Mollie Pawlosky
In 2004, developer Kester provided a “service lateral form” to the City of Marshalltown, detailing sewer connections and location of manholes for an undeveloped lot in Marshalltown. After Kester provided the information, the manhole’s location changed; no “service lateral form” was requested by or submitted to the City thereafter, showing the relocation of the manhole.
The Bolivers bought the property and hired a general contractor to build on the lot. The general contractor received from the City a copy of the 2004 service lateral form. The general contractor hired a plumbing company to connect the house to the sewer main, giving the plumbing company a copy of the 2004 service lateral form.
Plumbers dug from the house toward the location where the form stated the sewer connection would be found, but found nothing. Kester saw the digging, learned that the plumbers were having a problem, and brought a copy of the 2004 service lateral form. Kester stated the plumbers “really weren’t interested in what [he] had to offer.” Kester did not mention the changed location of the manhole or provide the more recent designs to the plumbers or the general contractor.
The original estimated cost of $2500 to connect the house increased to almost $15,000. The Bolivers sued Kester, alleging negligence and negligent misrepresentation. The district court concluded that the Bolivers failed to prove their claims.
Because the alleged negligent misrepresentation caused only economic damages, the Bolivers had to show: (1) Kester was in the business or profession of supplying information to others; (2) Kester intended to supply information to the Bolivers, or knew that the recipient intended to supply it to the Bolivers; (3) the information was false; (4) Kester knew or reasonably should have known that the information was false; (5) the Bolivers reasonably relied on the information in the transaction that Kester intended the information to influence; (6) and the false information was the proximate cause of damage to the Bolivers.
Although the Bolivers argued, “Kester gave erroneous information to [the Bolivers’] workers that caused them to spend time and money digging for a sewer connection at the wrong place,” the Iowa Court of Appeals in Boliver v. Kester, No. 15-1973 (Aug. 17, 2016) disagreed, holding, “Kester did not supply any information,” and the plumbers were “not interested in anything [Kester] might have had to offer.” As he provided no information, Kester could not make a misrepresentation. Even if Kester supplied information to the plumbers, it was not provided to them as part of Kester’s business. Also, the plumbers didn’t rely on the information; there was no testimony by the plumbers that they relied on the information Kester provided. The Bolivers admitted that the plumbers already had the 2004 service lateral form, and they were digging before speaking with Kester. The Bolivers were “in the same place they would have been if Kester had opted not to stop by the construction site.” Thus, the district court’s finding was affirmed.
For further information regarding negligent misrepresentation or other information regarding construction litigation from the developer’s position, contact Mollie Pawlosky.
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