Will Shatford v. Smallbusiness.com, Rex Hammock, and Hammock Publishing, Inc.

This case is about fraud and negligent misrepresentation. In the fall of 2000, the plaintiff employee accepted an offer for employment with the defendant's internet company. Approximately three months after the employee began work, the company became insolvent and closed. The employee sued the defendant owner of the internet company, asserting that the company owner made false statements to him regarding the financial strength of the company. The employee sought damages for breach of contract and for fraud and negligent misrepresentation. The employee received a judgment against the company for contract damages related to the employment contract. The company owner then sought summary judgment on the remaining claims of fraud and negligent misrepresentation. The trial court granted the company owner's motion for summary judgment, finding that the employee could not, as a matter of law, establish that he had relied on the company owner's statements that were the basis for the claims of fraud and negligent misrepresentation. The employee appeals. We reverse, finding that the employee's reasonable or justifiable reliance on the statements was a genuine issue of fact and thus summary judgment was not proper.