In Jossund v. Heim Plumbing, Inc. (2018AP209), the Court of Appeals District II allowed fraudulent misrepresentation claims against US Bank to proceed because the complaint alleged misrepresentation by US Bank’s agent.

Benjamin and Kristina Jossund purchased a house through US Bank. When they found defects in the plumbing, they filed the instant lawsuit against the plumbing inspector and its insurer, the realtor, and US Bank. The complaint contained four causes of action related to misrepresentation and also alleged negligence. A circuit court allowed the claims to proceed against the plumbing inspector and realtor but granted US Bank’s motion to dismiss. The Jossunds appealed.

The court of appeals partially reversed the circuit court. The Jossunds’ complaint failed to suggest US Bank itself made misrepresentations damaging to the Jossunds. However, previous case law shows that sellers may be held liable for their agents’ representations. In this case, the court found the complaint did sufficiently specify misrepresentations by the realtor, which was acting as an agent of US Bank by negotiating the sale on the bank’s behalf.

Because the misrepresentation claims were against US Bank’s agent, the court allowed the four misrepresentation claims to proceed. The court dismissed the negligence claim against US Bank.