Fluid Technology, Inc. v. CVJ Axles, Inc.

• Decision Date: 20 August 1998
• Docket Number: No. 97CA0382,97CA0382
• Citation: 964 P.2d 614
• Parties: 98 CJ C.A.R. 4421 FLUID TECHNOLOGY, INC., Plaintiff-Appellant and Cross-Appellee, v. CVJ AXLES, INC., Defendant-Appellee and Cross-Appellant. . IV
• Court: Colorado Court of Appeals

Page 614

964 P.2d 614

98 CJ C.A.R. 4421

FLUID TECHNOLOGY, INC., Plaintiff-Appellant and Cross-Appellee, v. CVJ AXLES, INC., Defendant-Appellee and Cross-Appellant.

No. 97CA0382.

Colorado Court of Appeals Div. IV.

Aug. 20, 1998.

Kissinger & Fellman, P.C., Kenneth S. Fellman, Denver, for Plaintiff-Appellant and Cross-Appellee.

Anderson & Jahde, P.C., Steven R. Anderson, Denver, for Defendant-Appellee and Cross-Appellant.

Opinion by Judge CASEBOLT.

In this action asserting negligent misrepresentation, plaintiff, Fluid Technology, Inc., appeals the dismissal of its complaint against defendant, CVJ Axles, Inc. Defendant cross-appeals, contending that the trial court erred in denying its request for attorney fees and costs. We affirm in part, reverse in part, and remand for further proceedings.

According to the complaint, a bookkeeper employed by plaintiff who had previously been employed by defendant stole money from plaintiff. Before plaintiff hired the employee, defendant had supplied plaintiff with false information about the employee's job performance.

Specifically, when plaintiff conducted an employment reference check, defendant gave a positive recommendation, indicating that the employee had worked for it for three years and had been a "fine employee." In fact, defendant had terminated the employee for stealing from it and the employee had been convicted for that theft.

The complaint further alleged that defendant had provided this false information to plaintiff in the ordinary course of its business; that, based on this misrepresentation from defendant, plaintiff had hired the employee; and that plaintiff was damaged when the employee embezzled its funds.

Defendant contended that the complaint failed to state a claim upon which relief could be granted because plaintiff had failed to allege that defendant had a pecuniary interest in the transaction when it conveyed the information to plaintiff. Thus, defendant moved to dismiss under C.R.C.P. 12(b)(5). The trial court granted the motion.

Defendant then requested attorney fees and costs under § 13-17-102, C.R.S.1997, which the trial court denied, and this appeal followed.

Plaintiff contends that the trial court erred in granting the motion to dismiss because its complaint alleged sufficient facts to state a claim under the theory of negligent misrepresentation. We agree.

Motions to dismiss under C.R.C.P. 12(b)(5) are viewed with disfavor. Rosenthal v. Dean Witter Reynolds, Inc., 908 P.2d 1095 (Colo.1995).

We review a trial court's determination on a motion to dismiss de novo, Abts v. Board of Education, 622 P.2d 518 (Colo.1980), and, like the trial court, must accept all averments of material fact contained in the complaint as true. Shapiro & Meinhold v. Zartman, 823 P.2d 120 (Colo.1992).

A complaint need not express a complete recitation of all facts that support the claim, but need only serve notice of the claim asserted. Elliott v. Colorado Department of Corrections, 865 P.2d 859 (Colo.App.1993). Indeed, the chief function of a complaint is to give notice to the defendant of the transaction or occurrence that is the subject of plaintiff's claims. Kluge v. Wilson, 167 Colo. 526, 448 P.2d 786 (1968). Thus, C.R.C.P. 12(b)(5) motions "are rarely granted under our notice pleadings." Dunlap v. Colorado Springs Cablevision, Inc., 829 P.2d 1286, 1291 (Colo.1992).

Allegations in the complaint must be viewed in the light most favorable to the plaintiff. Also, it is fundamental that, in passing upon a motion to dismiss a complaint, the court can consider only matters stated in the complaint and must not go beyond the confines of the pleading. McDonald v. Lakewood Country Club, 170 Colo. 355, 461 P.2d 437 (1969).

The tort of negligent misrepresentation was first recognized in First National Bank v. Collins, 44 Colo.App. 228, 616 P.2d 154 (1980). There, a division of this court adopted the rationale of Restatement (Second) of Torts § 552(1) (1976) which sets forth the following elements necessary to state a claim for relief in negligent misrepresentation:

One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

That formulation has since been approved by the supreme court. See Keller v. A.O. Smith Harvestore Products, Inc., 819 P.2d 69 (Colo.1991)...