Tuesday, March 13, 2012

D. Colo. Notes Split Re Whether FRCP 9(b) Applies to Negligent Misrepresentation Claims

Per Denver Health and Hosp. Authority v. Beverage Distributors Co., LLC --- F.Supp.2d ----, 2012 WL 400320 (D.Colo. Feb. 8, 2012):

Beverage contends that Rule 9(b), not Rule 8(a), applies to the negligent misrepresentation claim and that the claim cannot meet Rule 9(b)Rule 8(a) prescribes the pleading requirements for most claims. It requires a pleading to contain “a short and plain statement of the claim showing that the pleader is entitled to relief.”Fed.R.Civ.P. 8(a)(2). By contrast, Rule 9(b) requires that “a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b) (emphases added). This standard requires the complaint to “set forth the time, place and contents of the false representation, the identity of the party making the false statements and the consequences thereof.” Schwartz v. Celestial Seasonings, Inc., 124 F.3d 1246, 1252 (10th Cir.1997)(citation omitted). The rule's purpose is “to afford defendant fair notice of plaintiff's claims and the factual ground upon which [they] are based ...” Id. (quoting Farlow v. Peat, Marwick, Mitchell & Co., 956 F.2d 982, 987 (10th Cir.1992)).

As the parties note, whether Rule 9(b) applies to negligent misrepresentation claims divides the circuit courts of appeals. Compare, e.g., Trooien v. Mansour, 608 F.3d 1020, 1028 (8th Cir .2010) (concluding that Rule 9(b)applies to the claim), and Aetna Cas. & Sur. Co. v. Aniero Concrete Co., 404 F.3d 566, 583 (2d Cir.2005) (same);with Tricontinental Indus., Ltd. v. PricewaterhouseCoopers, LLP, 475 F.3d 824, 833 (7th Cir.2007) (holding Rule 9(b) does not apply to claim), and Baltimore Cnty. v. Cigna Healthcare, 238 Fed. App'x 914, 921–22 (4th Cir.2007)(same). The issue similarly splits this district court. Compare Gunningham v. Std. Fire. Ins. Co., No. 07–cv–02538–REB–KLM, 2008 WL 4377451, at *2 (D.Colo. Sept.18, 2008) (applying Rule 9(b) to claim), with Conrad v. Educ. Res. Inst., 652 F.Supp.2d 1172, 1182–83 (D.Colo.2009) (concluding Rule 9(b) does not apply to claim). The Tenth Circuit has not decided the issue.

I conclude that Rule 9(b) does not apply to the negligent misrepresentation claim before me. The crux of the claim is that Beverage failed to use reasonable care or competence in obtaining and communicating information concerning Hood's eligibility. This rings not of fraud but negligence.