GAUERKE V. ROZGA 332 N.W.2d 804 (1983) CASE BRIEF

GAUERKE V. ROZGA

332 N.W.2d 804 (1983)

NATURE OF THE CASE: Rozga (Ds) realty companies, real estate agent, and insurer, sought review of a decision, which found them liable on a theory of strict responsibility for the misrepresentations of D real estate agent regarding the acreage and the amount of road and river frontage of resort property purchased by Gauerke (P) purchasers.

FACTS: Robert and Ann Rozga listed their resort hotel for sale with Gudim Realty, Inc. The Rozgas advised Gudim that they had five and one-half acres of land with approximately six hundred feet of frontage on the Eagle River and about the same amount of frontage on Highway 70. Their knowledge concerning the amount of land was based upon what the former owners, Joseph and Geraldine Caz, had told them when they purchased the property. The Rozgas gave the same explanation to Schulz, a Robert Frost agent. Gudim prepared a specification sheet and mailed it to the Rozgas, requesting that they check the accuracy of the information. The Rozgas returned the sheet with their approval, without changing the frontage and acreage information. Gauerkes (P) was looking of a hotel to buy. P asked Frost Realty (D1) to act for them. D1 contacted Gudim (D2) who had a property for sale owned by Rozga (D3). D3 had told D2 that the property was 5.5 acres according to the former owners. P read the spec sheets and purchased the property. Two years later, P discovered that the property was less than three acres. It had two and seven-tenths acres and had only four hundred fifteen feet of river frontage and two hundred seventy-eight feet of highway frontage. Ps sued for the misrepresentations against Ds. The jury was instructed on theories of both negligent misrepresentation and strict responsibility for misrepresentation. The jury found liability based on strict responsibility on the part of Gudim and Frost. The jury apportioned negligence (based on a strict responsibility theory) forty percent to Frost, sixty percent to Gudim Realty, and zero percent to the Rozgas. The damages were found to be $10,000. and a jury found D1 liable under strict responsibility for the misrepresentation. Frost appealed, and the Gauerkes cross-appealed.

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