Tessier v. Rockefeller

Supreme Court of New Hampshire
162 N.H. 324 (2011)

ELI5:

Rule of Law:

A fraudulent misrepresentation claim can be sustained even when the misrepresentation is made to a third party, not the plaintiff, if the maker intends or has reason to expect its terms will be communicated to and relied upon by the plaintiff. A promise made with no intention of performance, such as a promise to not report professional misconduct when there is an ethical duty to do so, constitutes an actionable fraudulent misrepresentation.

Facts:

Attorney Thomas Tessier was hired by Dr. Frederick Jakobiec for estate matters.
Attorney Regina S. Rockefeller, representing Dr. Jakobiec, accused Thomas Tessier of converting substantial assets from the Jakobiec family.
Rockefeller met with Thomas Tessier and threatened to report his misconduct to the Attorney Discipline Office and criminal authorities if the assets were not repaid.
Rockefeller promised Thomas Tessier that if the assets were repaid, no further disciplinary or criminal action would be taken against him.
In reliance on Rockefeller's promise, which was communicated to her by her husband, Lorraine Tessier (the plaintiff) executed a reverse mortgage on the family home and entered a settlement agreement, transferring substantial personal and joint assets.
After the assets were transferred, Rockefeller and her client reported Thomas Tessier's misconduct to the Attorney Discipline Office and other authorities.
As a result of these events, Lorraine Tessier suffered severe emotional and physical distress requiring hospitalization.

Procedural Posture:

Lorraine Tessier filed a lawsuit against Regina S. Rockefeller and Nixon Peabody, LLP in the New Hampshire Superior Court (the trial court).
The defendants filed a motion to dismiss for failure to state a claim upon which relief could be granted, arguing they owed no legal duty to the plaintiff.
The trial court denied the plaintiff's subsequent motion to amend her writ.
The Superior Court granted the defendants' motion to dismiss all claims.
The plaintiff, Lorraine Tessier, as the appellant, appealed the dismissal to the New Hampshire Supreme Court.

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Issue:

Does an attorney's promise to a third party not to report another attorney's misconduct, which she had a professional duty to report and thus no intention of keeping, constitute an actionable claim for fraudulent misrepresentation by the plaintiff who relied on that promise after it was communicated to her through the third party?

Opinions:

Majority - Justice Conboy

Yes. A claim for fraudulent misrepresentation is actionable even if the representation was not made directly to the plaintiff, provided the defendant intended or had reason to expect it would be communicated to and relied upon by the plaintiff. The court reasoned that a promise made without the intention to perform it is a fraudulent misrepresentation. Here, Attorney Rockefeller promised not to report Thomas Tessier's misconduct, yet New Hampshire's Rules of Professional Conduct (Rule 8.3(a)) mandated that she report such a violation. Because attorneys are presumed to know the rules, the court found the allegations supported the conclusion that Rockefeller had no intention of keeping her promise when she made it. Relying on the Restatement (Second) of Torts § 583, the court held that the misrepresentation did not need to be made directly to Lorraine Tessier; it was sufficient that Rockefeller had reason to expect her promise would be communicated to Mrs. Tessier and would influence her to transfer her assets. The court also found Mrs. Tessier's reliance to be justifiable, as a reasonable person would likely find the threat of public shame and criminal prosecution against a spouse to be a material factor in their decision-making. The court reversed the dismissal of the fraudulent misrepresentation, negligent infliction of emotional distress, and respondeat superior claims, but affirmed the dismissal of the other counts, such as abuse of process and breach of contract.

Analysis:

This case clarifies the scope of liability for fraudulent misrepresentation, particularly in cases involving indirect communication. It establishes that a defendant cannot evade liability by making a misrepresentation to an intermediary with the expectation that it will induce action from the ultimate target. The decision significantly highlights the legal weight of professional ethics rules, allowing a court to infer a lack of intent to perform a promise where that performance would violate a mandatory professional duty. This creates a powerful tool for plaintiffs in fraud cases against professionals, as their ethical obligations can be used to prove the element of fraudulent intent.

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