shows that he did not justifiably rely on the misrepresentations in accepting employment with plaintiff. On the other hand, defendant argues that in accepting employment with plaintiff he relied on the alleged misrepresentation that $ 2.5 million was available, and that he would not have accepted employment with plaintiff had he known the project was underfunded.
Recalling that we must draw all reasonable inferences in favor of the defendant, there is sufficient clear, precise and convincing evidence for a reasonable jury to conclude that defendant justifiably relied on the alleged misrepresentation, providing defendant succeeds in proving the misrepresentation was made in the first place. That is, a jury could reasonably conclude that a consultant could justifiably rely on a chief executive officer's representation of funding levels available to a project the consultant was considering joining. That the defendant may have submitted budgets calling for less than that amount of funding following the project's inception does not oppose this conclusion, nor does the fact that he may have sought employment years before the alleged misrepresentation. Defendant could have submitted such budgets, sought such employment, and still relied upon the misrepresentation. As the court stated in Delahanty, 318 Pa. Super. 90, 464 A.2d at 1252, "one deceived need not prove that fraudulent misrepresentation was the sole inducement. . . ."
We reach a similar conclusion with respect to defendant's reliance on the alleged misrepresentation of the IND filing deadline. Plaintiff and Kirk Pendleton argue that defendant stated at the time of hiring that he could complete the IND within four to six months. Therefore, they contend, defendant could not justifiably have relied upon the alleged misrepresentation that the IND must be filed by April 15, 1993. This argument is without merit; defendant arguably could have stated that it would take six months to complete the IND and at the same time could have justifiably relied, in accepting employment on the project, on the alleged misrepresentation about the filing deadline.
Damages. The victim of a misrepresentation is entitled to all pecuniary losses which result from his reliance on the misrepresentations. Browne, 663 F. Supp. at 1206; Delahanty, 318 Pa. Super. 90, 464 A.2d at 1257. Plaintiff and Kirk Pendleton argue that defendant did not suffer damages since he testified that he phased out his other consulting activities prior to the alleged misrepresentation. However, defendant states in an affidavit that he purposefully did not seek other employment although other employment was available during his consultancy with plaintiff, and, further, that he did not develop his consultancy business because of his employment with plaintiff. This is sufficient clear, precise and convincing evidence to allow a reasonable jury to find that, in accepting employment with plaintiff in reliance on the alleged misrepresentations, defendant suffered proximate pecuniary damages.
Negligent misrepresentation shares three of the five elements of fraudulent misrepresentation, namely: (1) a misrepresentation, (2) justifiable reliance by the recipient, and (3) damages proximately cause by that reliance. Browne, 663 F. Supp. at 1202. It differs from fraudulent misrepresentation in the standard of proof and mental state required; only a preponderance of the evidence is required and the alleged misrepresenter must be shown only to have failed to "exercise reasonable care or competence in obtaining or communicating the information." Id. (citing Restatement (Second) of Torts § 552; Rempel v. Nationwide Life Insurance Co., 471 Pa. 404, 370 A.2d 366 (1977) (adopting the Restatement definition)). Plaintiff and Kirk Pendleton argue that, even under the lesser evidentiary standard required to prove negligent misrepresentation, there is insufficient evidence to establish issues of fact on the elements above.
Since we have found sufficient evidence to defeat plaintiff and Kirk Pendleton's motion for summary judgment on defendant's fraudulent misrepresentation claim, we necessarily find sufficient evidence to defeat the motion on the negligent misrepresentation claim as well. That is, on the common elements of misrepresentation, justifiable reliance, and damages, evidence sufficient under a clear and convincing standard is necessarily sufficient under a preponderance of the evidence standard. Finally, with respect to the negligence aspect, there is sufficient evidence to present a genuine issue of fact on whether plaintiff and Kirk Pendleton exercised reasonable care in making the alleged misrepresentations. That is, assuming misrepresentation, justifiable reliance, and damages can be proved, a reasonable jury could find by a preponderance of the evidence that a chief executive officer's failure to accurately describe the funds available for a research and development project, or to advise the consultant of the IND filing deadline, constituted a breach of his duty to exercise reasonable care in communicating information to a potential member of the Fluasterone project team. Therefore, there is a genuine issue of fact on this element as well.
In sum, there exist genuine issues of material fact on all elements of defendant's counterclaims alleging fraudulent and negligent misrepresentation. Therefore, plaintiff and Kirk Pendleton's motion for partial summary judgment dismissing defendant's fraudulent and negligent misrepresentation counterclaims is denied. An appropriate order follows.
AND NOW, this 27th day of June, 1994, upon consideration of the motion of plaintiff and Kirk Pendleton for partial summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, and all responses thereto, it is hereby ORDERED that the motion is DENIED.
BY THE COURT:
J. Curtis Joyner, J.
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