Meyer v. Santema

• Decision Date: 16 January 1997
• Docket Number: No. 19694,19694
• Citation: 559 N.W.2d 251,1997 SD 21
• Parties: Keith MEYER, Plaintiff and Appellant, and Meyer Dakota Freightways, Inc., Plaintiff, v. Leonard SANTEMA, Darwin Willmott, and the City of White, South Dakota, Defendants and Appellees. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 251

559 N.W.2d 251

1997 SD 21

Keith MEYER, Plaintiff and Appellant and Meyer Dakota Freightways, Inc., Plaintiff, v. Leonard SANTEMA, Darwin Willmott, and the City of White South Dakota, Defendants and Appellees.

No. 19694.

Supreme Court of South Dakota.

Considered on Briefs Jan. 16, 1997.

Decided Feb. 26, 1997.

Charles L. Dorothy, Sioux Falls, for plaintiff and appellant.

Robert G. Fite of Fite and Pierce, Brookings, for defendants and appellees Santema and Willmott.

Sandra Hoglund and Edwin Evans of Davenport, Evans, Hurwitz and Smith, Sioux

Falls, for defendant and appellee City of White.

SABERS, Justice.

¶1 Purchaser sued sellers and the City of White in connection with statements that certain land was zoned for industrial use. Claiming that he relied on those statements, he brought an action for "negligent misrepresentation" because he was not able to develop the land for industrial use. Summary judgment was granted to all defendants. We affirm.

FACTS

¶2 In July of 1994, Keith Meyer (Meyer) approached Darwin Willmott (Willmott) and Leonard Santema (Santema) to buy two lots which they owned in White, South Dakota. Meyer wished to build and operate a trucking terminal on the lots. Willmott and Santema told him the lots were zoned industrial and that a trucking operation could be located there. Meyer gave them $500 earnest money and signed a purchase agreement for the land (lots 3 and 4).

¶3 Meyer attempted to obtain a building permit but was informed that he needed to appear before the White City Council. He attended the August 1, 1994 meeting and described his plans for the lots. There was some debate whether the lots were zoned industrial or R-2 for residential use. Willmott was a member of the City Council and assured the other members that the lots were zoned industrial. The mayor stated, "If they are not industrial, we will make them industrial." The Council voted to zone the lots industrial and told Meyer to proceed with his building plans. City promised to install water and sewer lines to the edge of the lot, which it did on August 19.

¶4 On August 16, Meyer paid Willmott and Santema the balance due under the purchase agreement and began to prepare the site for the trucking terminal. ¹ He was advised a building permit would be forthcoming as soon as he supplied the dimensions of the proposed building.

¶5 On September 12, a citizen appeared before the City Council to protest the rezoning of lots 3 and 4. He bought land earlier in 1994 from Willmott and Santema in a proposed residential area west of those lots, and claimed Willmott and Santema assured him that lots 3 and 4 were zoned residential. He challenged the method by which City rezoned the lots as contrary to statute, and threatened to sue if City did not rescind the August 1 resolution. The resolution was defective because no notice was given and no hearing held. City rescinded the resolution and passed an identical resolution. Notice was published in accordance with SDCL chapter 9-19. ² At a hearing held on October 3, 1994, a number of citizens spoke in opposition to the rezoning of lots 3 and 4. After going into executive session, City voted to deny the rezoning of the lots to industrial.

¶6 Meyer purchased two adjacent lots (lots 1 and 2) which were zoned industrial and moved the mobile home and equipment to those lots. Although he obtained a permit to build the trucking terminal on that property, he has not done so. Willmott and Santema offered to buy back lots 3 and 4 but Meyer rejected the offer, apparently because they refused to compensate him for his expenses in preparing the lots for construction. ³

¶7 Meyer brought suit against Willmott, Santema, and City, claiming that the defendants' statements that lots 3 and 4 were zoned for industrial use constituted "negligent misrepresentation." Meyer appeals from summary judgment motions granted all defendants.

STANDARD OF REVIEW

¶8 Our standard of review for summary judgment is well-established:

In reviewing a grant or a denial of summary judgment under SDCL 15-6-56(c), we must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. The nonmoving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.

Lamp v. First Nat'l Bank of Garretson, 496 N.W.2d 581, 583 (S.D.1993) (citation omitted). "The burden of proof is upon the movant to show clearly that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law." State Dep't of Revenue v. Thiewes, 448 N.W.2d 1, 2 (S.D.1989) (citation omitted). There are no genuine issues of material fact present in this case; therefore, summary judgment will be affirmed only if the trial court has correctly decided the legal issues before it. Farmland Ins. Cos. v. Heitmann, 498 N.W.2d 620, 622 (S.D.1993) (citing Stroh v. Town of Java, 463 N.W.2d 923 (S.D.1990); Bego v. Gordon, 407 N.W.2d 801 (S.D.1987); Trapp v. Madera Pacific, Inc., 390 N.W.2d 558 (S.D.1986)).

NEGLIGENT MISREPRESENTATION

¶9 Meyer claims the defendants negligently misrepresented the zoning status of lots 3 and 4.

The tort of negligent misrepresentation occurs when in the course of a business or any other transaction in which an individual has a pecuniary interest, he or she supplies false information for the guidance of others in their business transactions, without exercising reasonable care in obtaining or communicating the information.

Pickering v. Pickering, 434 N.W.2d 758, 762 (S.D.1989) (emphasis omitted) (citing Restatement (Second) of Torts § 552 (1977)). A party seeking relief for the tort of negligent misrepresentation must prove:

[K]nowledge, or its equivalent, that the information is desired for a serious purpose; that he to whom it is given intends to rely and act upon it; that, if false or erroneous, he will ... be injured in person or property. Finally, the relationship of the parties, arising out of contract or otherwise, must be such that in morals and good conscience the one has the right to rely upon the other for information and the other giving the information owes a duty to give it with care.

Rumpza v. Larsen, 1996 SD 87, p 19, 551 N.W.2d 810, 814 (citing Swanson v. Sioux Valley Empire Elec. Ass'n, 535 N.W.2d 755, 757 (S.D.1995)) (quoting Aesoph v. Kusser, 498 N.W.2d 654, 656 (S.D.1993)).

¶10 Sellers' misrepresentation of fact might be actionable had Meyer relied on that statement to his detriment. However, by Meyer's own admission, Willmott and Santema are not to blame for Meyer's closing of the land sale:

[Meyer] would not have closed the sale (i.e. paid the remaining money owed on the lots) had the City Council of White not told him the lots were zoned industrial and that a trucking terminal could be built on them.

Appellant's Brief at 17. Therefore, it was Meyer's reliance on City's, not sellers', representations that led to his claimed pecuniary loss. Cf. Mark Twain Kansas City Bank v. Jackson, 912 S.W.2d 536, 540 (Mo.Ct.App.1995) (stating that plaintiff must establish its justifiable reliance on the misrepresentation).

¶11 When City told Meyer it would rezone the lots to industrial, the statement indicated a future event or occurrence. ⁴ Generally, representations as to future events are not actionable and false representations must be of past or existing facts. Mobridge Community Indus., Inc. v. Toure, Ltd., 273 N.W.2d 128, 133 (S.D.1978) (citing Aschoff v. Mobil Oil Corp., 261 N.W.2d 120 (S.D.1977)). ⁵

¶12 Additionally, Meyer is presumed to know the law, including the nature and extent of City's authority. State v. Dorhout, 513 N.W.2d 390, 395 (S.D.1994) (citing Hanson v. Brookings Hosp., 469 N.W.2d 826, 828 (S.D.1991) ("The law includes municipal ordinances.")); see also Northernaire Productions, Inc. v. County of Crow Wing, 309 Minn. 386, 244 N.W.2d 279, 282 (1976) ("The plaintiffs here had alternative means of obtaining an interpretation of the zoning ordinance, either by consulting an attorney or by applying to the full ...