## Facts

- Matt Matthews owned a four-family home (four-plex) and was also a real-estate broker associated with Century 21 Heritage Homes & Investments (Century 21).
- Matthews listed the four-plex for sale with Century 21, but the property had **no off-street parking**.
- On the listing agreement, Matthews left the space next to “parking units” blank.
- Matthews provided an “as-built” lot survey that showed **no available parking**, and a subdivision plat that distinguished his lot from neighboring lots that did have off-street parking.
- Suzanne Kincaid purchased the property for $155,000 but did not deal directly with Matthews; she worked with Diane Albert, another Century 21 agent.
- Albert assured Kincaid that parking would be available in the parking lot next door (serving a neighboring six-plex).
- Kincaid questioned the assurance because the adjacent lot appeared too small for the combined properties’ cars and was separated from the four-plex by a chain-link fence.
- When Albert asked Matthews about parking, Matthews told her that parking was available on the street most of the day (his “pat answer” that street parking was available about 22 hours per day).
- At trial, there was conflicting testimony about whether Albert corrected her earlier statements and accurately conveyed Matthews’s street-parking qualification to Kincaid before closing.
- After the purchase, one of Kincaid’s tenants was told not to park in the adjacent lot; about a year later, the city closed the street to parking and towed several tenants’ cars.
- Kincaid sued Matthews, Albert, and Century 21 for fraudulent and negligent misrepresentation based on the claim that the property had off-street parking.
- Kincaid settled with Albert and Century 21 before trial; the case proceeded against Matthews, and the jury found for Kincaid and awarded $98,258.20 in damages.
- The trial court denied Matthews’s motions for judgment notwithstanding the verdict (JNOV) and a new trial, and Matthews appealed.

## Issues

1. Whether the evidence supported holding Matthews liable for fraudulent misrepresentation or negligent misrepresentation concerning parking, even though Kincaid dealt primarily with Albert rather than Matthews directly.
2. Whether Matthews could be liable based on nondisclosure or incomplete disclosure of the lack of off-street parking when he knew parking was important and knew the buyer was likely proceeding under a mistaken belief.
3. Whether the evidence and the trial court’s rulings were sufficient to sustain the verdict and justify denial of JNOV and a new trial.

## Decision

- The Alaska Supreme Court **affirmed** the judgment for Kincaid.
- The court held that the evidence was sufficient for a reasonable jury to find Matthews liable for **fraudulent misrepresentation** and **negligent misrepresentation** regarding the property’s parking situation.
- The court concluded that, under Alaska law governing misrepresentation and nondisclosure in business transactions, Matthews had a duty to use reasonable care to disclose the lack of off-street parking when he knew the fact was material and that the buyer was likely misled without disclosure.
- The court affirmed the trial court’s denial of Matthews’s post-trial motions, viewing the evidence in the light most favorable to the verdict.

## Legal Principles

- A party may be liable for **fraud** when a material misrepresentation (including a misleading half-truth in context) is made knowingly or recklessly, the speaker intends or expects the other party to rely, the other party justifiably relies, and damages result.
- A party may be liable for **negligent misrepresentation** when supplying false or misleading information in a transaction without using reasonable care, where reliance is foreseeable and causes loss.
- Under **Restatement (Second) of Torts § 551**, **nondisclosure** can support liability similar to an affirmative misstatement when the defendant has a duty to disclose a material fact and knows the other party is likely to be misled if the fact is not communicated.
- A person with a duty to disclose satisfies that duty by using **reasonable care** to ensure the information is communicated; failing to take reasonable steps to prevent a misleading impression can support liability.
- On review of denials of **JNOV** and **new trial** motions, appellate courts defer to the jury’s role in resolving conflicts in testimony and uphold the verdict if supported by evidence that reasonable jurors could credit.

## Conclusion

Matthews v. Kincaid affirmed a jury verdict imposing liability on a seller who was also a broker for fraudulent and negligent misrepresentation tied to parking representations and the failure to clearly disclose that the four-plex had no off-street parking. The Alaska Supreme Court held the record permitted findings of justifiable reliance and causation, and it upheld the trial court’s refusal to overturn the verdict or grant a new trial.


Matthews v. Kincaid, 746 P.2d 470 (1987)