## Facts

- The sellers listed a resort hotel property through a listing broker and provided acreage and highway/river frontage figures that were recorded on a property specification sheet.
- The buyers worked with a separate broker and its salesperson, who obtained the specification sheet and reproduced the acreage and frontage figures on the broker’s own letterhead for use in marketing to the buyers.
- The salesperson did not independently measure or verify the acreage or frontage before presenting the figures to the buyers as factual property specifications.
- The buyers purchased the property relying on the stated acreage and frontage.
- A later survey or investigation showed the property’s acreage and frontages were substantially less than represented.
- The buyers alleged they overpaid due to the inaccurate property dimensions and suffered economic loss.

## Issues

1. Whether a real-estate broker and its agent can be held strictly responsible for misrepresentation when they convey property-dimension facts without independently verifying them, under circumstances implying personal knowledge or responsibility.
2. Whether the strict-responsibility instruction must require that the defendant could have known the truth or falsity of the statement “without an investigation.”
3. Whether the buyers’ alleged failure to investigate the property dimensions must be compared as contributory/comparative negligence against the defendants’ strict responsibility.
4. Whether additional special verdict questions were required on allocation among other parties and whether punitive damages had to be submitted to the jury.

## Decision

- The Wisconsin Supreme Court affirmed the judgment against the buyer’s broker, its agent, and its insurer based on strict responsibility for misrepresentation.
- The court upheld the strict-responsibility jury instruction and rejected adding a “without an investigation” limitation.
- The court held the case did not require submitting comparative-negligence questions based solely on the buyers’ failure to investigate.
- The court left undisturbed the lower courts’ handling of indemnity/allocation disputes and refusal to submit punitive damages.

## Legal Principles

- Misrepresentation claims may proceed under intentional, negligent, or strict-responsibility theories; each requires: (1) a factual representation by the defendant, (2) falsity, and (3) plaintiff reliance causing damage.
- Strict responsibility may attach when the defendant professes or implies personal knowledge of the represented facts, even if the defendant lacked actual verified knowledge.
- A broker who presents detailed property specifications as factual assertions in a sales context may imply personal knowledge or responsibility and be strictly liable if the statements are untrue and relied upon.
- Strict responsibility does not depend on whether the defendant could have known the truth “without an investigation”; the risk of falsity is placed on the party choosing to assert the facts as true.
- In strict-responsibility misrepresentation, a purchaser’s mere failure to independently verify the representation does not automatically warrant comparative-negligence reduction; the focus is on the reasonableness of reliance under the circumstances.

## Conclusion

The court held that real-estate brokers who convey specific property-dimension facts in a manner implying personal knowledge or responsibility can be strictly liable when those facts are false and relied upon, and it rejected both a “without an investigation” limitation and a comparative-negligence reduction based only on the buyers’ failure to verify.


Gauerke v. Rozga, 332 N.W.2d 804 (Wis. 1983)