Business 8th Edition by Marianne Jennings

تمرين 6

The Glowing Letter of Recommendation That Forgot to Mention Sexual Misconduct with Minors
Facts
Randi W. (plaintiff) is a thirteen-year-old minor who attended the Livingston Middle School where Robert Gadams served as vice principal. On February 1, 1992, while Randi was in Mr. Gadams's office, Mr. Gadams molested and sexually touched Randi.
Mr. Gadams had previously been employed at the Mendota Unified School District (from 1985 to 1988). During his time of employment there, Mr. Gadams had been investigated and reprimanded for improper conduct with female junior high students, including giving them back massages, making sexual remarks to them, and being involved in "sexual situations" with them.
Gilbert Rossette, an official with Mendota, provided a letter of recommendation for Mr. Gadams in May 1990. The letter was part of Mr. Gadams's placement file at Fresno Pacific College, where he had received his teaching credentials. The recommendation was extensive and referred to Mr. Gadams's "genuine concern" for students, his "outstanding rapport" with everyone, and concluded, "I wouldn't hesitate to recommend Mr. Gadams for any position"
Mr. Gadams had also previously been employed at the Tranquility High School District and Golden Plains Unified District (1987-1990). Richard Cole, an administrator at Golden Plains, also provided a letter of recommendation for the Fresno placement file that listed Mr. Gadams's "favorable" qualities and concluded that he "would recommend him for almost any administrative position he wishes to pursue." Mr. Cole knew, at the time he provided the recommendation, that Mr. Gadams had been the subject of various parents' complaints, including that he "led a panty raid, made sexual overtures to students, sexual remarks to students." Mr. Cole also knew that Mr. Gadams had resigned under pressure because of these sexual misconduct charges.
Mr. Gadams's last place of employment (1990-1991) before Livingston was Muroc Unified School District, where disciplinary actions were taken against him for sexual harassment. When allegations of "sexual touching" of female students were made, Mr. Gadams was forced to resign from Muroc. Nonetheless, Gary Rice and David Malcolm, officials at Muroc, provided a letter of recommendation for Mr. Gadams that described him as "an upbeat, enthusiastic administrator who relates well to the students," and who was responsible "in large part," for making Boron Junior High School (located in Muroc) "a safe, orderly and clean environment for students and staff." The letter concluded that they recommended Mr. Gadams "for an assistant principalship or equivalent position without reservation."
All of the letters provided by previous administrators of Mr. Gadams were sent in on forms that included a disclosure that the information provided "will be sent to prospective employers."
Through her guardian, Randi W. filed suit against the districts, alleging that her injuries from Mr. Gadams's sexual touching were proximately caused by their failure to provide full and accurate information about Mr. Gadams to the placement service. The trial court dismissed the case, and the Court of Appeals reversed. The districts appealed.
Judicial Opinion
CHIN, Associate Justice
In finding plaintiff's complaint stated a cause of action against defendants for fraud and negligent misrepresentation, the Court of Appeal majority relied primarily on sections 310 and 311 of the Restatement Second of Torts.
Section 310 involves intentional conduct and provides that "[a]n actor who makes a misrepresentation is subject to liability to another for physical harm which results from an act done by the other or a third person in reliance upon the truth of the representation, if the actor (a) intends his statement to induce or should realize that it is likely to induce action by the other, or a third person, which involves an unreasonable risk of physical harm to the other, and (b) knows (i) that the statement is false, or (ii) that he has not the knowledge which he professes" [italics added].
Section 311 of the Restatement Second of Torts, involving negligent conduct, provides that: "(1) One who negligently gives false information to another is subject to liability for physical harm caused by action taken by the other in reasonable reliance upon such information, where such harm results (a) to the other, or (b) to such third persons as the actor should expect to be put in peril by the action taken. (2) Such negligence may consist of a failure to exercise reasonable care (a) in ascertaining the accuracy of the information, or (b) in the manner in which it is communicated" [italics added].
Although ordinarily a duty of care analysis is unnecessary in determining liability for intentional misrepresentation or fraud, here we consider liability to a third person injured as a result of the alleged fraud, an extension of ordinary tort liability based on fraud. Accordingly, in deciding whether to adopt the two Restatement provisions in the circumstances of this case, we consider whether plaintiff has sufficiently pleaded that defendants owed her a duty of care, that they breached that duty by making misrepresentations or giving false information, and that Livingston's reasonable reliance on their statements proximately caused plaintiff's injury.
Did defendants owe plaintiff a duty of care? In defendants' view, absent some special relationship between the parties, or some specific and known threat of harm to plaintiff, defendants had no duty of care toward her, and no obligation to disclose in their letters any facts regarding the charges against Gadams.
Plaintiff does not argue that a special relationship existed between defendants and her or Gadams. [U]nder section 311 of the Restatement Second of Torts, a parole officer had a duty to exercise reasonable care in giving the victim information regarding the parolee who ultimately killed her. [Although the parole officer had no duty to volunteer information regarding the released criminals he supervised, "... the absence of a duty to speak does not entitle one to speak falsely" [T]he parole officer, "having chosen to communicate information about [the parolee] to [the victim], had a duty to use reasonable care in doing so," and that the officer either knew or should have known that the victim's safety might depend on the accuracy of the information imparted.
[N]o California case has yet held that one who intentionally or negligently provides false information to another owes a duty of care to a third person who did not receive the information and who has no special relationship with the provider. Accordingly, the issue before us is one of first impression, and we apply the general analytical principles used to determine the existence of duty in particular cases.
In this state, the general rule is that all persons have a duty to use ordinary care to prevent others from being injured as the result of their conduct.
The major [ considerations] are the foreseeability of harm to the plaintiff, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant ' s conduct and the injury suffered, the moral blame attached to the defendant ' s conduct, the policy of preventing future harm, the extent of the burden to the defendant and consequences to the community of imposing a duty to exercise care with resulting liability for breach, and the availability, cost, and prevalence of insurance for the risk involved.
The foreseeability of a particular kind of harm plays a very significant role in this calculus, but a court ' s task - in determining ' duty '- is not to decide whether a particular plaintiff ' s injury was reasonably foreseeable in light of a particular defendant ' s conduct, but rather to evaluate more generally whether the category of negligent conduct at issue is sufficiently likely to result in the kind of harm experienced that liability may appropriately be imposed on the negligent party.
Applying these factors here, we first examine whether plaintiff's injuries were a foreseeable result of defendants' representations regarding Gadams's qualifications and character, coupled with their failure to disclose to the Fresno Pacific College placement office information regarding charges or complaints of Gadams's sexual misconduct. Could defendants reasonably have foreseen that the representations and omissions in their reference letters would result in physical injury to someone? Although the chain of causation leading from defendants' statements and omissions to Gadams's alleged assault on plaintiff is somewhat attenuated, we think the assault was reasonably foreseeable. Based on the facts alleged in the complaint, defendants could foresee that Livingston's officers would read and rely on defendants' letters in deciding to hire Gadams. Likewise, defendants could foresee that, had they not unqualifiedly recommended Gadams, Livingston would not have hired him. And, finally, defendants could foresee that Gadams, after being hired by Livingston, might molest or injure a Livingston student such as plaintiff. We must assume, for purposes of demurrer, that plaintiff was indeed injured in the manner she alleges, and that a causal connection exists between defendants ' conduct and the injury suffered. As plaintiff's complaint alleges, her injury was a "direct and proximate result" of defendants' fraud and misrepresentations.
Whether defendants were guilty of any moral blame would depend on the proof adduced at trial, although it is certainly arguable that their unreserved recommendations of Gadams, together with their failure to disclose facts reasonably necessary to avoid or minimize the risk of further child molestations or abuse, could be characterized as morally blameworthy.
As for public policy, the law certainly recognizes a policy of preventing future harm of the kind alleged here. One of society's highest priorities is to protect children from sexual or physical abuse.
Defendants urge that competing social or economic policies may disfavor the imposition of liability for misrepresentation or nondisclosure in employment references. They observe that a rule imposing liability in these situations could greatly inhibit the preparation and distribution of reference letters, to the general detriment of employers and employees alike.
We have recently stated that" [w]hen deciding whether to expand a tort duty of care, courts must consider the potential social and economic consequences." Defendants argue that a rule imposing tort liability on writers of recommendation letters could have one very predictable consequence: employers would seldom write such letters, even in praise of exceptionally qualified employees.
In defendants' view, rather than prepare a recommendation letter stating all "material" facts, positive and negative, an employer would be better advised to decline to write a reference letter or, at most, merely to confirm the former employee's position, salary, and dates of employment. According to defendants, apart from the former employer's difficulty in deciding how much "negative" information to divulge, an employer who disclosed more than minimal employment data would risk a defamation, breach of privacy, or wrongful interference suit from a rejected job seeker. [C]ases involving only economic loss are subject to a more restrictive rule.
The Court of Appeal thus concluded that it was unnecessary under section 311 of the Restatement Second of Torts for plaintiff to plead her own reliance on defendants' misrepresentations, as long as the recipient of those misrepresentations (ultimately, Livingston) reasonably relied on them in hiring Gadams, as plaintiff alleged here. Citing a comment to section 311, the court observed that "The Restatement, however, makes it clear that the plaintiff need not rely on the misrepresentation and may, indeed, not even know that it was made."
We agree with the Court of Appeal's reliance analysis. Under the Restatement provisions, plaintiff need only allege that her injury resulted from action that the recipient of defendants' misrepresentations took in reliance on them. In a case involving false or fraudulent letters of recommendation sent to prospective employers regarding a potentially dangerous employee, it would be unusual for the person ultimately injured by the employee actually to "rely" on such letters, much less even be aware of them.
Based on the facts alleged in the complaint, plaintiff's injury foreseeably and proximately resulted from Livingston's decision to hire Gadams in reliance on defendants' unqualified recommendation of him.
The judgment of the Court of Appeal is affirmed as to counts three and four (negligent misrepresentation and fraud), but reversed as to count five (negligence per se).
What issues should employers address, in light of this case, in providing letters of reference and recommendation?