Springdale Gardens, Inc. v. Countryland Development, Inc.

• Decision Date: 24 August 1982
• Docket Number: No. 44783,44783
• Citation: 638 S.W.2d 813
• Parties: SPRINGDALE GARDENS, INC., Appellant, v. COUNTRYLAND DEVELOPMENT, INC. and Gerald Hughes, d/b/a Hughes Realty, Respondents.
• Court: Missouri Court of Appeals

Page 813

638 S.W.2d 813

SPRINGDALE GARDENS, INC., Appellant, v. COUNTRYLAND DEVELOPMENT, INC. and Gerald Hughes, d/b/a

Hughes Realty, Respondents.

No. 44783.

Missouri Court of Appeals,

Eastern District,

Division Three.

Aug. 24, 1982.

J. Kehlor Carr, Jr., House Springs, for appellant.

James E. Bowles, Hillsboro, for respondents.

REINHARD, Presiding Judge.

Plaintiff appeals from the granting of a motion for a directed verdict at the close of plaintiff's case. We affirm.

In 1975, plaintiff's president, Vincent Mueller, sought to purchase land for the development of a residential subdivision in Jefferson County. Gerald Hughes, president of defendant, Countryland Development, Inc. and owner of Hughes Realty Co., contacted Mueller and advised him that Countryland Development owned a 59.76 acre parcel for sale (hereinafter referred to as the Schneider tract). The two met in Hughes' real estate office where Hughes gave Mueller a preliminary plat (hereinafter referred to as the Rowland survey) prepared by a surveying company showing the Schneider tract could be subdivided into 171 lots, each lot containing 12,000 square feet and having appropriate streets and access. Hughes also gave Mueller a cost analysis of engineering and survey costs for developing the subdivision based on 171 lots and an out boundary survey showing only the boundaries of the Schneider tract (hereinafter referred to as the Hurtgen survey).

On January 5, 1976, defendant Countryland Development, Inc. entered into a contract with Mueller, whereby it agreed to convey the 59.76 acre Schneider tract. On February 10, Countryland conveyed this acreage to Springdale Gardens, Inc. ¹ Subsequently, Mueller discovered an error in the northeast corner boundary line on the Rowland survey so that the tract was only suitable for division into 165 lots instead of 171. All parties concede that the Rowland survey contains an error, that the Hurtgen survey showing the outer boundaries of the Schneider tract was completely accurate and that plaintiff received title to 59.76 acres of land.

Plaintiff initially brought this action against the engineer, who prepared the Rowland survey, Countryland Development and Hughes Realty. Plaintiff's first amended petition on which it proceeded to trial, named only Countryland Development and Hughes Realty as defendants and sought to recover the additional surveying expenses and the value of the six raw lots alleging that it relied upon the Rowland survey to its detriment.

Vincent Mueller, Donald Roach, a real estate appraiser, and Robert Birnstill, a bank officer for Gravois Bank, testified for plaintiff. At the close of plaintiff's case, defendants filed a motion for a directed verdict alleging that there was no evidence that defendants knew the Rowland plat was incorrect or recklessly represented the plat as correct. Apparently, on this basis, the trial court granted defendants' motion. In reviewing the propriety of the trial court's ruling on such a motion, we apply the fundamental and settled rules that we consider all of the evidence in the light most favorable to the plaintiff, accept it as true, accord to plaintiff the benefit of all favorable inferences deducible from the evidence and reject all unfavorable inferences. Barnett v. M & G Gas Co., 611 S.W.2d 370, 371 (Mo.App.1981).

On appeal, plaintiff asserts that it made a submissible case on either fraudulent misrepresentation or negligent misrepresentation. The elements of fraudulent misrepresentation are: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or his ignorance of the truth; (5) the speaker's intent that his statement be acted upon; (6) the hearer's ignorance of the falsity of the statement; (7) his reliance on the truth of the statement; (8) the hearer's right to rely on the statement; and (9) the hearer's consequent and proximate injury. Cantrell v. Superior Loan Corp., 603 S.W.2d 627, 634 (Mo.App.1980).

Failure to establish any one of the essential elements is fatal to recovery. Twiggs v. National Old Line Ins. Co., 581 S.W.2d 877, 881 (Mo.App.1979). Mueller testified that he had no knowledge "that would indicate that Mr. Hughes knew there was anything wrong with that plat." Further, at the close of plaintiff's case, the following colloquy between plaintiff's counsel and the trial court took place:

THE COURT: What evidence supports the conclusion that the Defendant knew that the representation was false or should have known that the representation was false?

MR. CARR: Well, Your Honor, that is in the depositions, but the depositions haven't been read, yet. There is no direct evidence to that right now.

It is evident that plaintiff failed to present evidence of one of the elements of fraudulent misrepresentation and consequently, it failed to make a submissible case.

Neither did plaintiff make a submissible case of negligent misrepresentation. The elements of negligent misrepresentation differ from those of fraudulent misrepresentation in one major respect: while the latter requires proof that the defendant knew the statement was untrue or was reckless as to whether the statements were true or false, the former merely requires proof that the defendant failed to exercise reasonable care or competence to obtain or communicate true information. Huttegger v. Davis, 599 S.W.2d 506, 514 (Mo. Welliver, J.). In Ligon Specialized Hauler, Inc. v. Inland Container Corp., 581 S.W.2d 906 (Mo.App.1979), this court in reinstating a jury verdict for plaintiff, recognized the tort of negligent misrepresentation relying on...