## Facts

- Athanasios Karahalios sought to borrow $203,000 from Jeffrey Phillips, offering as collateral a “Hall of Fame Baseball Montage” consisting of photographs, baseball cards, and signatures of the original inductees to Major League Baseball’s Hall of Fame (the montage).
- Phillips agreed to make the loan only if the montage was appraised at at least $300,000.
- Karahalios, Phillips, and Mark Blumstein (Phillips’s associate) went to the place of business of Sports Immortals, Inc. (Immortals), which represented that it authenticated and appraised sports memorabilia.
- At Immortals’ office, the parties met with Joel Platt, Immortals’ representative, and told him the appraisal was being obtained for Phillips to rely on in deciding whether to make a loan secured by the montage.
- Platt issued a written appraisal valuing the montage between $350,000 and $400,000, with much of the value attributed to the autographs.
- Immortals did not charge a fee for Platt’s appraisal.
- Relying on the appraisal, Phillips made the $203,000 loan to Karahalios.
- After Karahalios defaulted, Phillips tried to sell the montage but could not do so because the autographs were not authentic.
- Immortals later offered to buy other memorabilia from Phillips for $2,700.
- Blumstein obtained Phillips’s claim by assignment and filed a second amended complaint against Immortals and Platt for negligent misrepresentation based on the allegedly inaccurate appraisal.
- The trial court dismissed the complaint for failure to state a cause of action, and Blumstein appealed.

## Issues

1. Whether the second amended complaint adequately alleged negligent misrepresentation under Restatement (Second) of Torts § 552, where defendants provided an appraisal in a commercial setting knowing it would be used to decide whether to make a loan.
2. Whether the absence of a fee for the particular appraisal required dismissal on the theory that the appraisal was a nonactionable, gratuitous “curbstone opinion” lacking the “pecuniary interest” element of § 552.

## Decision

- The Fourth District Court of Appeal reversed the final order dismissing the second amended complaint and remanded for further proceedings.
- Applying the motion-to-dismiss standard and accepting the pleaded facts as true, the court held the complaint stated a claim for negligent misrepresentation.
- The court concluded the allegations permitted an inference that defendants supplied valuation information in connection with their business activities and with a sufficient pecuniary interest, even though they did not charge a fee for the appraisal.

## Legal Principles

- Florida recognizes negligent misrepresentation liability consistent with Restatement (Second) of Torts § 552 for one who, in the course of a business, profession, employment, or other transaction involving a pecuniary interest, supplies false information for the guidance of others in business transactions, fails to use reasonable care or competence, and causes pecuniary loss through justifiable reliance.
- A statement characterized as a purely gratuitous, casual “curbstone opinion” will not support § 552 liability; however, whether an appraisal is merely gratuitous depends on the pleaded context, including the provider’s business activity and the provider’s awareness that the recipient will rely on the information in a specific transaction.
- A direct payment for the specific statement is not necessarily required at the pleading stage to show the “pecuniary interest” component of § 552; allegations that the appraisal was furnished through a business that provides authentication/appraisal services, and in circumstances tied to a contemplated financial transaction, can support the element.
- On a Florida Rule of Civil Procedure 1.140(b)(6) motion to dismiss, the court’s review is confined to the four corners of the complaint and its attachments; all well-pleaded allegations are taken as true and all reasonable inferences are drawn in favor of the pleader.

## Conclusion

The Fourth District held that Blumstein, as assignee of the lender’s claim, sufficiently pleaded negligent misrepresentation where a sports-memorabilia appraisal was provided in a business setting with knowledge it would be relied on to decide whether to make a secured loan; the fact that the appraisal was provided without a fee did not, by itself, require treating it as a nonactionable gratuitous opinion, so dismissal was reversed and the case was remanded.


Blumstein v. Sports Immortals, Inc., 67 So. 3d 437 (2011)