Plaintiff's Own Fault

Plaintiff's Own Fault

Section 552B measures recovery by the pecuniary loss that the misrepresentation legally caused.¹ The plaintiff's own conduct enters through general negligence law, which adds a further limit. Because negligent misrepresentation is a species of negligence, authorities typically allow the speaker to raise the plaintiff's contributory or comparative negligence as a defense; which one applies depends on the jurisdiction.² Contributory negligence is the older rule: the plaintiff's own carelessness defeats the claim entirely. Comparative negligence assigns each party a share of the blame and shrinks the recovery by the plaintiff's share. Either way, the defense operates on the figure that § 552B produces and does not change how that figure is computed.

The Second Restatement left a tension in this area. Its requirement of justifiable reliance, as opposed to reasonable reliance, suggests that carelessness in relying is not necessarily fatal to a negligent misrepresentation claim, while treating contributory negligence as a complete defense suggests that such carelessness always is.³ A careless plaintiff therefore met an element that seemed to forgive some carelessness and a defense that seemed to punish all of it.

The Third Restatement resolves the tension by dropping justifiable from § 5 and treating the plaintiff's responsibility as a matter of comparative fault.⁴ Justifiable reliance sounds like an all-or-nothing inquiry, which suited the period when contributory negligence was a complete defense. Comparative responsibility has since become standard in negligence cases, and courts have extended it to negligent misrepresentation.⁵ An all-or-nothing rule for imprudent reliance, set beside graded treatment of every other kind of plaintiff negligence, would also be hard to administer. The same conduct can often be described either as imprudent reliance or as negligence of some other kind, and the label would decide whether the plaintiff loses everything or only a share. Comparative responsibility removes that line-drawing problem. The question about the plaintiff's reliance becomes whether it was reasonable, and the plaintiff's share of blame is analyzed as in any other negligence case.

When does the plaintiff's own fault become a live issue? Comment j to § 5 answers in terms of what due care requires. Due care does not normally require a plaintiff to duplicate the precautions that the speaker should have taken before speaking, so the plaintiff is negligent only by omitting a precaution that due care would require even if the speaker had spoken carefully.⁶ The reason is structural. If trusting the speaker were itself carelessness, every plaintiff would share fault for relying on the very statement that the duty of care exists to make reliable, and the duty would shrink toward nothing.

Two situations put the plaintiff's care in issue. First, the stakes may be high enough, or the speaker's assumption of responsibility unclear enough, that exclusive reliance on the statement is imprudent and independent checking is expected.⁷ Second, the plaintiff may hold information pointing away from the statement, such as a writing inconsistent with what the speaker said or one that disclaimed its reliability.⁸

A disclaimer counts for more or less depending on where it appears. One the speaker made in a contract with the plaintiff is not usually important here, because claims arising from a contract between the parties are resolved by contract law or, on occasion, by the law of professional malpractice. Between parties with no contract, which describes a lawyer and a nonclient, a disclaimer may bear significantly on liability. It may show that giving the plaintiff a basis for reliance was no part of the speaker's purpose, or it may make the plaintiff's reliance unreasonable in other respects.⁹

The speaker's state of mind changes the answer. Fraud is the classic misrepresentation, and courts that allow recovery for it ordinarily reject contributory negligence as a defense, reasoning that a deceiver cannot complain that part of the loss flows from the victim's poor judgment.¹⁰ Negligent misrepresentation is different: the plaintiff's comparative fault may reduce the award there when it would not do so in a case of intentional fraud.¹¹

Change one fact in the lender hypothetical to see the contrast. Suppose the lawyer knew of the prior lien and wrote the letter, without any warning, to induce the loan, and the lender again skipped the lien search. The skipped search ordinarily does not reduce the recovery, because the lawyer deceived on purpose. Each speaker's conduct explains the difference. In a negligence case both sides failed to take care, so dividing the loss by fault is the ordinary response. Trimming a fraud victim's damages for credulity would reward the deceiver most when the lie worked best, since a lie that succeeds is one the victim believed.

On an exam, the speaker's state of mind therefore decides whether the plaintiff's conduct is in play at all. A fact pattern that gives a nonclient plaintiff a disclaimer, a contradictory document, or a high-stakes deal with no independent check, and a speaker who was only careless, is testing this limit together with the jurisdiction's choice between contributory and comparative negligence. The same plaintiff conduct set against a speaker who lied deliberately ordinarily leaves the recovery intact.