Negligent Misrepresentation

News & Analysis as of

Mortgage-Backed Securities: “It Is The Rare Ordinary Human Being Who Understands Them”

In re Lehman Bros. Holdings Inc., 513 B.R. 624 (Bankr. S.D.N.Y. 2014) – A purchaser of residential mortgage-backed securities filed proofs of claim based on alleged misrepresentations by the debtors in offering...more

National Union Prevails on $40 Million Coblentz Enforcement Action in D&O Case

On October 20, the U.S. District Court for the Middle District of Florida granted summary judgment to National Union Fire Insurance Company of Pittsburgh, Pa., in BondSafeguard v. National Union, 6:13-cv-561. The court held...more

American Pipe Tolling Inapplicable In Texas Negligent Misstatement Case

The Southern District of Texas found that negligent misstatement claims filed more than two years after the last alleged misstatement were time-barred and that the applicable statute of limitations was not tolled under...more

Connecticut Court Holds Negligence Misrepresentation Claim Does Not Trigger Defense

In its recent decision in Pa. Gen. Ins. Co. v. Thakur, 2014 U.S. Dist. LEXIS 110251 (D. Conn. Aug. 11, 2014), the United States District Court for the District of Connecticut had occasion to consider whether a claim for...more

Texas Supreme Court Unanimously Blocks Contractors' Economic Loss Tort Claims Against Designers

Texas contractors have long tried to directly sue their owners’ professional design firms -- rarely with success -- when faulty plans cause economic losses such as increased costs from delays and disruptions. A few cases in...more

Legal Alert: Supreme Court of Texas Finds Contractors Cannot Recover Delay Damages for Negligent Misrepresentation Against an...

On June 20, Texas joined a number of states that apply the economic loss rule to damages claims arising from negligent misrepresentation between contractors and the owner’s architect. In LAN/STV v. Martin K. Eby Construction...more

Second Circuit Vacates Judge Rakoff’s Ruling Rejecting SEC-Citigroup Settlement

On June 4, the U.S. Court of Appeals for the Second Circuit vacated a November 28, 2011, decision of the U.S. District Court for the Southern District of New York in which the district court declined to approve a settlement...more

CalPERS Allowed To Continue Rating Agency Suit

In 2009, the California Public Employees’ Retirement System filed a lawsuit alleging negligent misrepresentation and negligent interference with prospective economic advantage against Moody’s Investors Services, Inc., Moody’s...more

Insurance Coverage – Liability of Adjuster for Negligent Misrepresentation

Bock v. Hansen - Court of Appeal, First Appellate District (April 2, 2014)- 40 years ago in Gruenberg v. Aetna Ins. Co. (1973), the California Supreme Court held that in general, an insurance company’s agents...more

Recent Supreme Court Decision Undermines SLUSA Security for Secondary Actors in Ponzi Schemes

The Supreme Court’s February 26, 2014 decision in Chadbourne & Parke LLP v. Troice, et al., has eliminated a potential protection for secondary actors (such as investment advisors, law firms or insurance brokerages) that...more

Green v. CIBC: Court Of Appeal Revisits Limitation Period For Secondary Market Securities Class Actions And Limits Common Law...

Overview - The Court of Appeal for Ontario’s recent decision in Green v. Canadian Imperial Bank of Commerce(“Green”) is significant in two respects. First, the Court clarified the limitation period applicable to...more

Court of Appeal Addresses Outstanding Issues in Securities Class Actions - Green v Canadian Imperial Bank of Commerce

Ontario's statutory regime for secondary market liability came into effect in 2006 as a result of amendments to the Securities Act (Ontario) (the OSA), creating a statutory cause of action for deficient market disclosure....more

The State and Impact of Florida’s Economic Loss Rule

In March of this year, the Florida Supreme Court departed from established precedent and limited the application of the economic loss rule to product liability cases. The court explained that this was necessary given the...more

Auditors’ Liability to Third Parties: An Overview

Historically, the doctrine of privity of contract prevented third parties from claiming against auditors for negligently prepared audited reports. The landscape changed with the recognition of the tort of negligent...more

Economic Loss Doctrine and Negligent Misrepresentation Claims

In almost every state, the economic loss doctrine prevents claimants from pursuing tort claims that arise from solely economic injuries; instead, the doctrine requires that claimants pursue these purely economic claims...more

Economic Loss Rule of the Third Kind - Nothing New or Alien Concepts?

Can a contractor sue the project’s designer for losses allegedly caused by errors in construction documents? This question was presented in the Eby v. LAN/STV case, which is now before the Texas Supreme Court....more

Ninth Circuit Affirms Dismissal of Negligent Misrepresentation Claim

In its recent decision in MultiCare Health System v. Lexington Ins. Co., 2013 U.S. App. LEXIS 17981 (9th Cir. Aug. 28, 2013), the United States Court of Appeals for the Ninth Circuit, applying Washington law, had occasion to...more

SEC’s Alleged Failure to Notify SIPC of Ponzi Scheme Does Not Create Liability

A Florida federal court has dismissed a class action alleging that the Securities and Exchange Commission was negligent for failing to report that Robert Allen Stanford’s $7 billion fund was a Ponzi scheme, finding the...more

Deutsche Bank Sued for Fraud in Connection with US$535 Million in RMBS

In a lawsuit filed in New York State Court on August 5, Royal Park Investments SA/NV (RPI) alleged that several Deutsche Bank affiliates fraudulently induced it to invest in more than US$535 million worth of RMBS in...more

Arizona Supreme Court Has the Final Word—Again—on Economic Loss Doctrine

Last week, in Sullivan v. Pulte Home Corp., No. CV-12-0419-PR, Arizona’s highest court took on a lingering question about the scope of economic loss doctrine since its landmark decision of Flagstaff Affordable Hous. Ltd....more

Nevada Supreme Court Extends Design Professional Economic Loss Rule Defense to Negligent Misrepresentation Claims on Commercial...

In 2009, the Nevada Supreme Court (“NSC”) applied the economic loss rule to bar claims of professional negligence by design professionals in commercial construction projects, ruling that “[i]n the context of engineers and...more

Class Action Brought Against S&P and Moody’s in Illinois State Court

On July 3, First National Bank and Trust Company of Rochelle, Illinois (FNBR) filed a putative class action lawsuit against McGraw-Hill Companies Inc., Standard and Poor’s Rating Services (S&P) and Moody’s Corp. in Illinois...more

Eastern District Concludes That ERISA Preempts Negligent Misrepresentation Claim

Korman v. Consolidated Edison Co., No. 12-CV-1561 (JFB-ARL) (E.D.N.Y. Jan 16, 2013): The plaintiff brought the Employee Retirement Income Security Act (ERISA) and common law claims against his benefits provider,...more

California Supreme Court Eases Admissibility of Oral Statements in Contract Fraud Disputes

California, like most jurisdictions, prohibits parties to integrated contracts from introducing “parol evidence” — this is, evidence of prior written or verbal agreements made by a party to a contract — if those alleged...more

Promises to Keep—Lender Beware: California Supreme Court Expands Parol Evidence Fraud Exception

In 1935, the California Supreme Court in Bank of America National Trust and Savings Ass’n v. Pendergrass prohibited a borrower from introducing external or parol evidence to demonstrate fraud in connection with an agreement...more

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