## Facts

- Agribank owned a dairy farm formerly operated by Triple L Dairy; Farm Credit Services of North Central Wisconsin ACA (FCS) had financed the prior owner and financed the Ramsdens’ purchase.
- Mark A. Ramsden, Raelynn Ramsden, and Milton R. Ramsden (individually and doing business as Ramsden Dairy) were the high bidders at a public auction for the farm on March 19, 1996; the sale closed April 17, 1996.
- Thomas E. Hass acted as an agent for Agribank and FCS in connection with the transaction.
- The Ramsdens alleged Hass made affirmative representations that the farm was a good dairy farm, a “turn-key” operation, and suitable for dairy operations.
- The Ramsdens also alleged Hass knew of prior contamination-related problems affecting cattle at the farm but failed to disclose material facts about the property’s condition.
- After closing, the Ramsdens moved cattle onto the property; the herd became seriously ill, several cattle died from benzene poisoning, and Mark Ramsden was also affected.
- The Ramsdens alleged they relied on Hass’s statements and omissions in purchasing the farm and suffered economic loss and personal injury.

## Issues

1. Whether a buyer can state a claim for negligent misrepresentation against a disclosed principal’s agent without alleging a “special duty” beyond the agency relationship.
2. Whether an agent may be personally liable to a third party for misrepresentation based on affirmative statements and failure to disclose material facts about property in a transaction.

## Decision

- The Wisconsin Court of Appeals reversed the order dismissing the claims against Hass and remanded for further proceedings.
- The court held that, under certain circumstances, an agent may be liable to third persons for untrue statements of material fact and for failing to disclose material facts concerning property conditions.
- The court concluded the complaint sufficiently pleaded claims for both intentional and negligent misrepresentation against Hass under Wisconsin law.
- The court rejected the proposition that an agent is not liable in negligence to third parties absent a “special duty” beyond agency.

## Legal Principles

- An agent is not insulated from personal tort liability merely because the agent acted on behalf of a disclosed principal.
- In Wisconsin, an agent may be personally liable to third parties for intentional or negligent misrepresentation the agent personally commits in the course of agency.
- Misrepresentation may be based on affirmative false statements of material fact or on nondisclosure of material facts when circumstances impose a duty to disclose, including when nondisclosure makes prior statements misleading or when the speaker has superior knowledge and knows the other party is relying.
- On a motion to dismiss, the court accepts pleaded facts and reasonable inferences as true and dismisses only if recovery is impossible under any set of facts consistent with the complaint.

## Conclusion

The court reinstated the misrepresentation claims against the seller/lender’s agent, holding that an agent can face personal liability to buyers for intentional or negligent misrepresentation, including actionable nondisclosure, when the complaint plausibly alleges misleading statements or omissions, reliance, and resulting harm.


Ramsden v. Farm Credit Servs. of N. Cent. Wis. ACA, 590 N.W.2d 1 (Wis. Ct. App. 1998)