23CA1265 LBI v Scanlan 07-11-2024
COLORADO COURT OF APPEALS
Court of Appeals No. 23CA1265
Summit County District Court No. 23CV30050
Honorable Karen A. Romero, Judge
LBI Group, LLC, a Colorado limited liability company; Steven Robert Anderson;
and Debra Sue Anderson,
Plaintiffs-Appellants,
v.
Tim Scanlan,
Defendant-Appellee.
JUDGMENT AFFIRMED
Division III
Opinion by JUDGE DAVIDSON*
Yun and Moultrie, JJ., concur
NOT PUBLISHED PURSUANT TO C.A.R. 35(e)
Announced July 11, 2024
Dill Dill Carr Stonbraker & Hutchings, PC, Patrick D. Tooley, Denver, Colorado;
Hamil Law Group LLC, J. Lawrence Hamil, Denver, Colorado, for Plaintiffs-
Appellants
Beltzer Bangert & Gunnell LLP, Buck S. Beltzer, Eric J. Moutz, Greenwood
Village, Colorado, for Defendant-Appellee
*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2023.
1
¶ 1 Plaintiffs, LBI Group, LLC; Steven Robert Anderson; and Debra
Sue Anderson (collectively, the Andersons), appeal the district
court’s judgment dismissing under C.R.C.P. 12(b)(5) their complaint
against defendant, Tim Scanlan. We affirm.
I. Background
¶ 2 In 2019, Mr. Anderson approached Mr. Scanlan about
building a home in Silverthorne, Colorado. During precontract
discussions, Mr. Anderson told Mr. Scanlan that the Andersons had
to finance the home’s construction costs and had a total budget of
$2 million. Mr. Scanlan provided an initial budget in July 2020,
estimating the building cost at $1,698,452 plus a $30,000
contingency. The budget also accounted for $634,300 in high-end
allowances, raising the total cost to $2,332,752.
1
¶ 3 Mr. Anderson told Mr. Scanlan that this estimate exceeded the
Andersons’ budget, and after some back and forth, Mr. Anderson
spoke with the lender to see whether he could increase the loan to
meet the estimate. Mr. Anderson then told Mr. Scanlan the lender
1
The parties’ contract defines “allowances” as “specifically itemized,
optional portions of the Work or materials for which the Contractor
or Owner has estimated a cost.”
2
would finance the home if costs were kept to $2.1 million. Mr.
Scanlan responded, “I know we can get it done for that budget
number.”
¶ 4 After reviewing the Andersons’ finalized architectural
drawings, Mr. Scanlan provided an updated budget in September
2020. The updated budget estimated the building cost at
$2,278,284 plus a $30,000 contingency fee. And with high-end
allowances, the total cost of the home would be $2,408,784.
¶ 5 Later that month, the Andersons contracted with Raptor
Construction, Inc. (Raptor), Mr. Scanlan’s business, to build the
home. Raptor built the Andersons’ home, but by May 2022, Raptor
claimed the home’s total costs had increased to over $3.1 million.
To cover these increased costs, the Andersons had to refinance their
home with a larger mortgage.
2
2
After the home was finished, the Andersons refused to pay the full
costs claimed by Raptor. Raptor subsequently recorded a lien on
the home and sued the Andersons to foreclose on its lien. In
return, the Andersons asserted several contract and tort
counterclaims against Raptor, the latter of which appear nearly
identical to the claims here. As best we can ascertain, the other
suit is still ongoing.
3
¶ 6 The Andersons sued Mr. Scanlan, alleging that he
misrepresented or concealed the true building costs to induce the
Andersons to contract with Raptor. Based on these allegations, the
Andersons brought claims for fraudulent misrepresentation,
negligent misrepresentation, and nondisclosure or concealment.
¶ 7 Mr. Scanlan moved to dismiss the complaint under Rule
12(b)(5), attaching the parties’ contract as an exhibit. In relevant
part, Mr. Scanlan argued that the Andersons failed to allege
reasonable reliance as a matter of law because the contract
expressly disclaimed the accuracy of any cost estimate and warned
that costs could increase.
3
¶ 8 Considering the contract without converting the motion to
dismiss into one for summary judgment, the district court granted
the motion and dismissed the complaint with prejudice.
3
In his motion to dismiss, Scanlan also argued that (1) the
complaint failed to allege he acted in an individual capacity, and (2)
the economic loss rule barred the Andersons’ claims. However, the
district court did not reach those issues, and they are not at issue
in this appeal.
4
¶ 9 The Andersons now appeal, asserting the district court erred
in multiple respects by dismissing the complaint. We address each
argument in turn and perceive no error.
II. The Court Properly Dismissed the Complaint
A. Standard of Review
¶ 10 We review de novo a district court’s ruling on a motion to
dismiss. Patterson v. James, 2018 COA 173, ¶ 16. We apply the
same standards as the district court, accepting the complaint’s
factual allegations as true and viewing those allegations in the light
most favorable to the plaintiff. Id.
¶ 11 A court may dismiss a complaint under Rule 12(b)(5) if the
factual allegations do not, as a matter of law, support a claim for
relief. Froid v. Zacheis, 2021 COA 74, ¶ 17.
¶ 12 We also review de novo the interpretation of a contract. Klun
v. Klun, 2019 CO 46, ¶ 18.
B. The District Court Properly Applied
the Rule 12(b)(5) Standard
¶ 13 We reject the Andersons’ assertions that the district court
misconstrued the complaint, and we conclude that nothing in the
5
court’s analysis suggests it misapplied the Rule 12(b)(5) standard in
resolving the Andersons’ motion to dismiss.
¶ 14 First, we disagree with the Andersons that the district court
misread their complaint. To the contrary, the court accurately
summarized the basis for the Andersons’ lawsuit and acknowledged
the Andersons’ allegations of misrepresentations by Mr. Scanlan as
to how he reached the estimated budget and how he could build the
home within the Andersons’ budget. The court properly interpreted
these statements to mean that the home would cost no more than
$2.1 million and that this was the only reason the Andersons
decided to sign the contract. In the words of the court: “[The
Andersons] claim they justifiably relied on [Mr. Scanlan’s]
statements concerning the cost of building their home.”
¶ 15 Moreover, and also contrary to the Andersons’ assertions, the
district court repeatedly referred to the concealment claim as
separate from the misrepresentation claims, and the court
addressed allegations that specifically related to the concealment
claim.
¶ 16 Nor did the district court misapply the standard of review.
6
By its plain terms, the order accurately states the applicable
Rule 12(b)(5) standard and explicitly confirms that the court
accepted the allegations in the complaint as true and viewed them
in the light most favorable to the Andersons. The court’s order then
provides that, based on its determination of clear and specific
language in the contract, the Andersons could not establish
reasonable reliance as a matter of law.
4
C. The Contract is Central to the Andersons’ Claims
¶ 17 Even so, the Andersons contend that the district court’s Rule
12(b)(5) ruling must be reversed because it improperly considered
the parties’ contract without converting the motion into one for
summary judgment. Again, we disagree.
¶ 18 When resolving a motion to dismiss under Rule 12(b)(5), a
court may only consider the complaint’s factual allegations,
documents attached to or referenced in the complaint, and matters
of which the court may take judicial notice. Froid, ¶ 18. If a court
considers “matters outside the pleading” when resolving a Rule
4
Even if the district court had misapplied the C.R.C.P. 12(b)(5)
standard, any such error would be harmless because we review the
motion to dismiss de novo. See Roane v. Elizabeth Sch. Dist., 2024
COA 59, ¶ 21.
7
12(b)(5) motion, “the motion shall be treated as one for summary
judgment and disposed of” under C.R.C.P. 56. C.R.C.P. 12(b).
¶ 19 However, a document is not considered a “matter outside the
pleading” if the plaintiff refers to it in their complaint, even when
the plaintiff does not attach the document to the complaint or
incorporate it by reference. Yadon v. Lowry, 126 P.3d 332, 336
(Colo. App. 2005). Thus, if the plaintiff refers to a document in
their complaint and that document is central to the plaintiff’s claim,
the defendant may attach an authentic copy of the document to
their motion to dismiss, and the court may consider the document
without converting the motion into one for summary judgment. Id.
“The reason for the rule is obvious: ‘If the rule were otherwise, a
plaintiff with a deficient claim could survive a motion to dismiss
simply by not attaching a dispositive document upon which the
plaintiff relied.’” Id. (quoting GFF Corp. v. Associated Wholesale
Grocers, Inc., 130 F.3d 1381, 1385 (10th Cir. 1997)).
¶ 20 That is exactly what happened here: the Andersons did not
attach the contract to their complaint, Mr. Scanlan attached it to
his motion to dismiss, and the district court considered it without
converting the motion to dismiss into a motion for summary
8
judgment. The court reasoned that the contract was central to the
Andersons’ claims because the complaint referenced the contract
approximately thirteen times in the context of those claims.
¶ 21 The Andersons contend that the district court’s ruling was in
error. More specifically, they assert that their “tort claims against
Scanlan are neither based on nor derive from” the contract but
rather “are premised on Scanlan’s fraud . . . during the
[p]re[c]ontract [p]eriod.” In support, they emphasize that Mr.
Scanlan is not a party to the contract, the contract has no legal
effect on the communications between the Andersons and Mr.
Scanlan, and the contract postdates the “false representations and
fraudulent omissions” Mr. Scanlan made prior to the contract.
¶ 22 However, the thrust of the Andersons’ claims is that Mr.
Scanlan, by misrepresentations and omissions, fraudulently
induced them to execute the contract, resulting in damages. As the
Andersons acknowledge in their opening brief, “it would be difficult,
if not impossible, to plead fraud in the inducement of a contract
without referring to the contract.” And, although the Andersons say
this “hardly” makes the contract central to their claims, they do not
explain — nor is it apparent to us — how, under the circumstances
9
here, a court could assess alleged fraudulent or negligent
misrepresentations or omissions without looking at the subsequent
agreement.
¶ 23 To illustrate, regarding their nondisclosure or concealment
claim, the Andersons allege in their complaint that
• “Scanlan concealed or failed to disclose facts with the intent
that [the Andersons] rely on the fact that the disclosed facts
did not exist, and enter the [c]ontract with Raptor”;
• the Andersons “entered the [c]ontract with Raptor relying on
their belief the concealed or undisclosed facts were different
than they actually were”; and
• the Andersons’ “reliance was justified” and “caused
damages to them.”
¶ 24 Likewise, regarding their negligent misrepresentation claim,
the Andersons allege in their complaint that
• “Scanlan gave [the Andersons] false information in the form
of the false representations, concealments, and
non-disclosures”;
10
• “Scanlan gave the information to [the Andersons] as
guidance for [the Andersons] to use in a business
transaction with Raptor, namely the [c]ontract”;
• “Scanlan gave the information to [the Andersons] with the
intent that the Andersons would rely on it to enter the
[c]ontract with Raptor”; and
• the Andersons “justifiably relied on the information
provided by Scanlan and did enter the [c]ontract with
Raptor,” which “caused the Andersons damage.”
¶ 25 Thus, while the Andersons insist that their claims are confined
to precontract actions that induced them to come to the table, it
remains that there could be no completed tort claim under these
circumstances unless they actually entered into the contract. That
is, without the contract, the Andersons would have no claims. See,
e.g., W. Cities Broad., Inc. v. Schueller, 830 P.2d 1074, 1077 (Colo.
App. 1991) (“Actual damage is an essential element” of a fraudulent
inducement claim, and to recover, a plaintiff “must prove both the
value of the consideration he actually received under the
fraudulently induced contract and the value that consideration
would have had if the representations had been true.”), aff’d, 849
11
96 (Colo. App. 2011).
¶ 26 We are similarly unconvinced by the Andersons’ argument
that the district court improperly “conflated” Mr. Scanlan and
Raptor because Mr. Scanlan was not a party to the contract and
because the contract did not bar the Andersons from asserting
claims against Mr. Scanlan. This appears to be a variation of the
Andersons’ argument — rejected above — that the court should not
have considered the contract because it is not central to their
claims. In any event, to the extent this argument is different, we
note that many allegations in the complaint tie Mr. Scanlan and
Raptor together. For example, the complaint alleges that
• “Scanlan communicated frequently with the Andersons for
the purpose of inducing [them] to enter the [c]ontract with
Raptor”;
• the Andersons “reasonably and justifiably relied on” Mr.
Scanlan’s representations, “and, in reliance on Scanlan’s
representations, entered the [c]ontract with Raptor to their
detriment”;
12
• “without Scanlan’s representations that Raptor could and
would build the [h]ome” within the Andersons’ budget, they
would have stopped discussing the contract with Mr.
Scanlan; and
• Raptor’s claimed total cost of $3.1 million far exceeded “the
amount for which Scanlan represented Raptor could and
would build the [h]ome.”
¶ 27 Again, we do not see how a court could compare Mr. Scanlan’s
precontract representations to what Raptor promised to deliver
under the contract without looking at the agreement itself.
¶ 28 Thus, we conclude that the district court properly considered
the parties’ contract in resolving the motion to dismiss.
D. By the Plain Terms of the Contract, the Andersons Cannot
Show Justifiable Reliance on Scanlan’s Precontract
Statements as a Matter of Law
¶ 29 As their final contention, the Andersons argue that the district
court incorrectly determined that, under the terms of the executed
contract, they could not show justifiable reliance as a matter of law.
We disagree.
¶ 30 Claims for fraudulent misrepresentation, negligent
misrepresentation, and nondisclosure or concealment share a
13
common element — proof of plaintiff’s justifiable reliance on those
representations or omissions. See, e.g., Allen v. Steele, 252 P.3d
476, 482 (Colo. 2011) (negligent misrepresentation); Barnes v. State
Farm Mut. Auto. Ins. Co., 2021 COA 89, ¶ 28 (fraudulent
misrepresentation); CJI-Civ. 19:2 (2024) (nondisclosure or
concealment). “Reliance is not justifiable if another person of
similar intelligence, education, or experience would not have relied
on the alleged representation.” J.A. Walker Co. v. Cambria Corp.,
159 P.3d 126, 132 (Colo. 2007) (Hobbs, J., dissenting).
¶ 31 Accordingly, contract language that “clearly and specifically”
disclaims precontract representations or omissions may preempt
tort claims based on those statements or omissions. Keller v. A.O.
Smith Harvestore Prods., Inc., 819 P.2d 69, 74 (Colo. 1991)
(negligent misrepresentation); see, e.g., Colo. Coffee Bean, LLC v.
Peaberry Coffee Inc., 251 P.3d 9, 17-21 (Colo. App. 2010)
(fraudulent disclosure and negligent misrepresentation). However,
14
a “general integration clause” will not suffice;
5
rather, a
“non-reliance” provision, to be effective, “must be couched in clear
and specific language.”
6
Keller, 819 P.2d at 73-74; accord Colo.
Coffee Bean, 251 P.3d at 19 (observing that Keller “left open the
possibility that a clause ‘couched in clear and specific language’
could protect a party” (quoting Keller, 819 P.2d at 74)); see also
Student Mktg. Grp., Inc. v. Coll. P’Ship, Inc., 247 F. App’x 90, 99
(10th Cir. 2007) (applying Keller to conclude that contract contained
“the kind of ‘specific language’ necessary to preempt” negligent
misrepresentation claim); Steak n Shake Enters., Inc. v. Globex Co.,
110 F. Supp. 3d 1057, 1082-83 (D. Colo. 2015) (applying Keller and
other Colorado and Indiana law to conclude that contract’s
language “specifically and clearly” barred fraudulent inducement
claim), aff’d on other grounds, 659 F. App’x 506 (10th Cir. 2016).
5
An integration clause, sometimes called a merger clause, states
that a contract is the complete and final agreement between the
parties, thus limiting future disputes to the express terms of the
contract. E.g., Keller v. A.O. Smith Harvestore Prods., Inc., 819 P.2d
69, 73 (Colo. 1991).
6
The Andersons direct us to no requirement that a non-reliance
provision must take a certain form, whether that be an integration
clause or something else, other than that it must be “couched in
clear and specific language.” Id. at 74.
15
¶ 32 As relevant here, the parties’ contract contains a “Cost of the
Work” clause that provides:
The term “Cost of the Work” shall mean costs
necessarily incurred by the Contractor in the
proper performance of the Work, excluding the
Contractor’s Fee. . . . Contractor represents
that all rates applied to determine the Cost of
the Work, including all labor, materials,
overhead and fee rates, shall be consistent
with the then-current market rates applicable
to projects of the same general scope and
quality in the region where the Site is located.
The Contractor’s Estimate of the Cost of the
Work is included in Exhibit A, which is based
on bids/proposals Contractor has obtained
from its sub-contractors and on Contractor’s
reasonable estimates of certain items.
Contractor represents and warrants that all
Work necessary to complete the Project is
included in Exhibit A. While Contractor has
made good faith efforts to assure the accuracy
of its estimate of the Cost of the Work,
Contractor does not guarantee that its estimate
will actually be the Cost of the Work. Owner
recognizes that the actual Cost of the Work
could exceed Contractor’s estimate included in
Exhibit A.
(Italicized emphasis added.)
¶ 33 The contract also contains an “Other Conditions or Provisions”
clause that states:
This Contract may be executed in
counterparts, each of which shall be combined
to form one Contract. . . . The terms and
16
conditions set forth herein shall constitute a
solicitation from Contractor to Owner for an
offer to perform the Work as described
above. . . . No enforceable agreement, contract,
or promise to perform shall be formed between
the Parties unless and until an authorized
representative of Contractor executes this
contract.
(Emphasis added.)
¶ 34 In its order, the district court acknowledged that the contract
does not contain a “release of liability and waiver provision, an
integration clause, or an exculpatory agreement.” However, citing
the Cost of the Work clause, the court observed that the contract’s
“non-reliance provision concerns precisely what [the Andersons]
claim [Mr. Scanlan] misrepresented: the cost of building their
home.” The court also noted that the Other Conditions or
Provisions clause, which it described as “akin to an integration
clause,” “further undermines [the Andersons] claim that they
reasonably relied upon [Mr. Scanlan’s] pre-contractual budget
estimate as the actual cost of building their home.”
7
Finally, the
7
In critiquing the district court’s reasoning, the Andersons assert
that the court mischaracterized the Other Conditions or Provisions
clause as “akin to an integration clause.” They also point out that
the Other Conditions or Provisions clause “contains no disclaimer,
17
court took judicial notice that Mr. Anderson is a Colorado
bar-certified attorney to highlight that he was a “sophisticated
party” when he entered into the contract. Given this, the court
concluded that the contract’s clear and specific non-reliance
provision “preempts [the Andersons’] reasonable reliance on the
budget for the cost of building their home.”
¶ 35 In challenging the ruling on its merits, the Andersons’ main
contention appears to be that the non-reliance language in the Cost
of the Work provision does not clearly and specifically disclaim their
reliance on Mr. Scanlan’s representations. In that regard, the
Andersons stress that the “fulcrum” of their complaint “is not that
there was a guaranteed price under the [c]ontract but rather that
waiver, or anti-reliance language of any kind” that would preempt
their reasonable reliance on Scanlan’s representations. It remains,
however, that the court, for the most part, did not disagree with the
Andersons’ characterization of the Other Conditions or Provisions
clause and based its ruling on the non-reliance language in the
Cost of the Work provisions. Thus, whether the Other Conditions
or Provision clause is or is not an effective integration clause, and
whether it is sufficient, standing alone, to limit the Andersons’
reliance, is of little consequence here. Cf. Student Mktg. Grp., Inc. v.
Coll. P’Ship, Inc., 247 F. App’x 90, 99 n.9 (10th Cir. 2007) (analyzing
Keller “to mean that a general integration clause is not sufficient to
bar a claim for negligent misrepresentation” but that an additional
disclaimer “could suffice”).
18
Mr. Scanlan created a superficial budget of made-up numbers
unsupported by bids from subcontractors that could not be relied
on, and he knew it.” That is, according to the Andersons, during
precontract discussions, Mr. Scanlan fraudulently and negligently
misrepresented or failed to disclose that he did not have a firm and
reliable basis for his cost estimates.
¶ 36 However, assuming as we must that Mr. Scanlan’s precontract
statements were false or unsupported, we conclude as a matter of
law that it was unreasonable for the Andersons to rely on Mr.
Scanlan’s unsupported cost estimates considering the clear and
specific language in the Cost of the Work clause. Indeed, by its
plain terms, the clause set forth a cost estimate, attached as
Exhibit A, explaining that the estimate was “based on
bids/proposals Contractor has obtained from its sub-contractors
and on Contractor’s reasonable estimates.”
8
The provision then
clearly and specifically stated that “Contractor does not guarantee
8
We are unable to review Exhibit A, which includes the estimated
costs to build the Andersons’ home, because it is not a part of the
record. We therefore presume Exhibit A would support the district
court’s judgment. See Marchant v. Boulder Cmty. Health, Inc., 2018
COA 126M, ¶ 18 n.2.
19
that its estimate will actually be the Cost of the Work” and that the
Andersons “recognize[] that the actual Cost of the Work could
exceed Contractor’s estimate.” Moreover, to the extent the
Andersons allege they were misled by representations or omissions
concerning the “methodology, reliability, accuracy and control” over
costs, the contract outlines a specific methodology to be used for
calculating how the costs were to be computed — namely, that they
would be based on “then-current market rates” for “labor,
materials, overhead and fee rates.” Further, and more to that point,
how Mr. Scanlan reached the cost estimate ultimately does not
mean much considering that the contract set forth an estimate and,
in no uncertain terms, provided a disclaimer that the estimate was
not fixed and could change.
¶ 37 In addition, it is undisputed that Mr. Anderson — a licensed
attorney — drove most (if not all) of the precontract discussions
between the Andersons and Mr. Scanlan. Thus, we agree with the
district court that, between the contract’s clear and specific
language and Mr. Anderson’s sophisticated status as an attorney, it
was unreasonable as a matter of law for the Andersons to rely on
20
Mr. Scanlan’s precontract budget representations.
9
See J.A.
Walker, 159 P.3d at 132-33 (Hobbs, J., dissenting) (emphasizing
contracting party’s “sophistication” in concluding that reliance was
not justifiable); Steak n Shake, 110 F. Supp. 3d at 1082-83 (noting
contracting party’s “sophisticated” nature in concluding that the
parties’ agreements barred fraudulent inducement claim); see also
Colo. Coffee Bean, 251 P.3d at 19 (“[I]t is simply unreasonable to
continue to rely on representations after stating in writing that you
are not so relying.”) (citation omitted).
¶ 38 Nor are we persuaded, as the Andersons suggest, that the
supreme court’s opinion in Keller requires a different result. In
Keller, the plaintiffs were ranchers who purchased grain storage
silos from the defendant. 918 P.2d at 70. The silos were designed
9
To the extent the Andersons suggest that a non-reliance provision
cannot bar fraud claims, we disagree. See Colo. Coffee Bean, LLC v.
Peaberry Coffee Inc., 251 P.3d 9, 19 (Colo. App. 2010) (concluding
contract barred intentional fraud by nondisclosure claim); Steak n
Shake Enters., Inc. v. Globex Co., 110 F. Supp. 3d 1057, 1082-83
(D. Colo. 2015) (concluding contract barred fraudulent inducement
claim), aff’d on other grounds, 659 F. App’x 506 (10th Cir. 2016).
Likewise, given the “specificity” of the language in the Cost of the
Work clause, we reject the Andersons’ contention that the
non-reliance provision is unenforceable on grounds of public policy.
Colo. Coffee Bean, 251 P.3d at 19.
21
to be airtight, enabling ranchers to store feed indefinitely and cut
losses. Id. at 70-71. Based on representations contained in video
tapes, brochures, and literature prepared by the defendant, the
plaintiffs believed the storage silos would reduce or eliminate the
use of protein supplements in feeding their dairy herd. Id. at 71.
After the plaintiffs began to use the grain silos, however, their
herd’s milk production dropped, and some of the herd became sick
or died. Id. Further, the silos failed to produce the quality of silage
that the defendant had promised. Id. The plaintiffs sued, asserting
a claim for negligent misrepresentation. Id. The defendant moved
to dismiss the claim, asserting that language in the parties’
purchase agreements barred such a claim. Id. at 72.
¶ 39 The purchase agreements in question provided the following:
Buyer recognizes that any advertisements,
brochures, and other written statements which
he may have read . . . as well as any oral
statement which may have been made to him,
concerning the potential of the [silos] . . . are
not guarantees and he has not relied upon
them as such.
. . . .
[Buyer has] read and understood the terms
and conditions of this purchase order
including the warranties, disclaimers and
22
terms and conditions herein given to me,
either by the manufacturer or the seller.
[Buyer relies] on no other promises or
conditions and regards that as reasonable
because these are fully acceptable to [Buyer].
Id. at 74. Rejecting the defendant’s argument, the supreme court
concluded that these non-reliance provisions “simply state that the
[plaintiffs] recognize that certain oral and written statements were
not ‘guarantees’ and that the [plaintiffs] did not rely upon those
statements ‘as such.’” Id. In other words, “[t]he language of those
provisions does not clearly and specifically disclaim reliance by the
[plaintiffs] on all representations made by [the defendant] prior to
the execution of the contract.” Id.
¶ 40 But the alleged misrepresentations and non-reliance language
in Keller are very different from those at issue here. As we read
Keller, the plaintiffs claimed that the defendant misrepresented that
the silos would enable them to store grain indefinitely and reduce or
eliminate the use of protein supplements in feeding their herd. See
id. at 70-71. It makes sense, then, that the purchase agreements’
generic language disclaiming unidentified statements regarding the
guaranteed “potential” of the silos fell short of the “clear and
specific language” required to bar a misrepresentation claim. Id. at
23
74. Here, however, the Andersons’ numerous allegations all relate
to one thing — that Mr. Scanlan misrepresented the estimated cost
of building their home. And, tracking that specific claim, the
contract language here clearly “does not guarantee” that the
estimated cost “will actually be the Cost of the Work” and that the
Andersons “recognize[] that the actual Cost of the Work could
exceed” the estimated cost. Given that this is precisely the kind of
clear and specific non-reliance language that Keller contemplates, it
was unreasonable for the Andersons to rely on Mr. Scanlan’s
precontract cost estimates.
¶ 41 Thus, like the district court, based on the clear and specific
language in the contract, we conclude that the Andersons cannot
show reasonable reliance as a matter of law.
III. Disposition
¶ 42 We affirm the judgment.
JUDGE YUN and JUDGE MOULTRIE concur.
