Carole Chestnut appealed a judgment in favor of her aunt, Elsa Goodman. The jury found Chestnut liable for negligent misrepresentation when she convinced Goodman to give her an interest in her property on St. Croix, U.S. Virgin Islands in exchange for Chestnut’s promise to move in and care for Goodman in her advancing age.
Goodman filed the original complaint of fraud, breach of contract, and negligent misrepresentation that upon her death, she promised to give her property–Plot No. 190 of Estate Mary’s Fancy, Queen’s Quarter, St. Croix, U.S. Virgin Islands–to Chestnut. In return, Chestnut agreed to care for her aunt. Goodman also alleged, relying on Chestnut’s promise, that she changed the title to create a joint tenancy with rights of survivorship in the St. Croix property. Goodman claimed Chestnut breached her duty by failing to care for her and capitalized on the situation to get title to the St. Croix Property.
Chestnut denied that she agreed to care for Goodman, asserted that Goodman conveyed the St. Croix property as an irrevocable gift, and asked for 50% of the rent proceeds Goodman had collected from renting out the St. Croix property.
Goodman testified that prior to 2006 the two had not be in contact for nearly 40 years, when the two reunited on Chestnut’s visit to St. Croix. Goodman claimed that Chestnut told her during the visit that she would move to the Virgin Islands to take care of her. Goodman added Chestnut’s name to her checking account at Chestnut’s request, after Chestnut told her that it would make it easier for Chestnut to care for her if she became ill. Likewise, Goodman testified that Chestnut suggested Goodman add her name to the St. Croix property’s deed to avoid issues while she was caring for Goodman. Goodman executed the quitclaim deed creating the joint tenancy. However, Goodman testified that she did not understand that the deed would give her niece an immediate interest in the property, as she wanted the property to pass to Chestnut only upon her death.
Goodman later moved to Maryland at Chestnut’s request so that Chestnut could take care of her there, but after eight months their relationship ended. Goodman asked Chestnut to remove her name from the St. Croix property, but Chestnut refused. Goodman testified that she felt deceived by Chestnut’s representations. Chestnut testified that Goodman added her to her bank accounts on her own initiative and that adding her to the deed to the St. Croix property was Goodman’s idea. Chestnut testified that she never promised to care for Goodman and that Goodman never requested any help. The jury found that, although Chestnut was not liable for fraud, she was liable for negligent misrepresentation, and that the St. Croix property should be conveyed to Goodman alone.
On appeal, Chestnut argued that the Superior Court erred by not granting her motion for summary judgment on her counterclaim because Goodman had given her an irrevocable inter vivos gift. She also claimed that the court erred by denying her motion for judgment as a matter of law because even if Goodman’s witnesses were accepted as credible, their testimony–as a matter of law–didn’t support the elements of negligent misrepresentation. The Superior Court held that there was a genuine issue of material fact as to if when Goodman signed the deed, she did it with the necessary donative intent.
Supreme Court of the Virgin Islands Associate Justice Maria M. Cabret wrote the court’s opinion. She stated that in order to determine whether the Superior Court’s decision was appropriate, the Supreme Court was required to analyze it in the context of the substantive law that governed the cause of action. For an inter vivos gift of real estate to be effective, “the donee must show: (1) a donative intent on the part of the grantor at the time the deed was executed; and (2) an actual or constructive delivery of the deed to the grantee.” The donee must show that there was a “clear, unmistakable, and unequivocal intention on the part of a donor to make a gift of his or her property in order to constitute a valid, effective gift inter vivos.” Additionally, the “donor must have a present donative intent; a mere intention to give in the future will not suffice.”
Justice Cabret said that the Superior Court correctly determined that there were genuine issues of material fact concerning Goodman’s donative intent for the jury to determine, as she claimed she signed because of Chestnut’s promise of care and denied that it was intended as a gift. Chestnut argued that Goodman made the gift without being asked proved that Goodman had the necessary donative intent. Nevertheless, in deciding whether to grant summary judgment, the Superior Court was not permitted to make a credibility determination and instead had to accept Goodman’s allegations as true. Since it’s the unique role of the factfinder to make the necessary credibility determinations, the justice said that the Superior Court correctly denied summary judgment. Consequently, the Supreme Court affirmed the denial of Chestnut’s summary judgment motion.
Chestnut also asserted that the trial court erred by denying her renewed motion for judgment as a matter of law. The Superior Court reasoned that the record contained sufficient evidence to support the jury’s finding, and that Chestnut’s arguments for judgment as a matter of law would require the court to reweigh the credibility of the witnesses, which it refused to do. In reviewing the Superior Court, the Supreme Court exercises plenary review of an order granting or denying a motion [for judgment as a matter of law]. When reviewing such motions, Judge Cabret explained that it applies the same standard as the Superior Court should have utilized: “viewing the evidence in the light most favorable to the nonmovant and giving it the advantage of every fair and reasonable inference, there is insufficient evidence from which a jury reasonably could find liability.” To support her claim of negligent misrepresentation, Goodman was required to introduce sufficient evidence for a reasonable trier of fact to find:
(1) Chestnut supplied false information;
(2) The information was supplied in the course of Chestnut’s business, or in a transaction in which Chestnut had a pecuniary interest;
(3) Goodman was guided by the information in her business transactions;
(4) Goodman suffered pecuniary loss as a result of her justifiable reliance upon the information; and
(5) Chestnut failed to exercise reasonable care or competence in obtaining or communicating the information.
Chestnut argued that the alleged promise she made to Goodman was only an expression of an interest in moving to St. Croix in the future, and that there was no proof of a material representation of fact that was false when made. Negligent misrepresentation, Justice Cabret analyzed, requires an express representation which is false or misleading at the time it is made. An alleged misrepresentation must be factual in nature and not promissory or relating to future events that might never come to fruition.
The justice concluded that representations were promises based on Chestnut’s then-present intent to perform a future action. She couldn’t negligently misrepresent her present intent to perform an action in the future. Chestnut either made the promise intending to follow through with it or she made the promise knowing then that she didn’t intend to follow through. Consequently, because this alleged misrepresentation was promissory concerning future events that might never come to fruition, it couldn’t form the basis of negligent misrepresentation.
There was insufficient evidence that she relied on a negligent misrepresentation of fact in her decision to give Chestnut an interest in the St. Croix property. Instead, Goodman relied on promises of future intent and statements that were not made in a business context, which could not form the basis of an action for negligent misrepresentation. Justice Cabret resolved that the Superior Court erred when it failed to grant Chestnut’s motion for judgment as a matter of law, and the Supreme Court reversed the judgment and remanded the case with directions to grant Chestnut’s motion. Chestnut v. Goodman, 2013 WL 4133013 (V.I. August 12, 2013)
A negligent misrepresentation requires an express representation which is false or misleading at the time it is made, not or future events.