Hoyt Properties, Inc. v. Production Resource Group, L.L.C.

736 N.W.2d 313 (2007)

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Nature of the Case

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Facts

Steve Hoyt is an attorney who owns and operates P. In 2001, the parties executed a multimillion dollar lease whereby P leased office and warehouse space to Haas. Before Haas took possession of the leased space, Haas assigned the lease to its successor corporation, Entolo, and P subsequently assigned the lease to Hoyt/Winnetka. Entolo eventually defaulted on the lease and P filed an unlawful detainer action. P and Entolo reached a settlement under which P agreed to allow Entolo to continue occupying a portion of the leased premises for about two months in exchange for payment of approximately $104,000 in rent. P retained the right to sue Entolo for the remaining unpaid balance due under the lease. Hoyt agreed to a provision releasing Entolo's parent corporation, D, and its other affiliates from liability. Steve Hoyt alleges that P agreed to release D from liability because of representations made to him by D's attorney on the day of the eviction hearing. Steve Hoyt was told that D wanted the release because it did not want to be sued after the fact. One of D's attorneys made the representation that D and Entolo are totally separate. Relying on the statement made by D's attorney, Steve Hoyt authorized the release. Steve Hoyt then learned of a lawsuit brought by a third party against Entolo that alleged breach of contract by Entolo but sought to hold its parent company, D, liable by piercing the corporate veil. P filed suit against Ds, seeking to rescind the settlement agreement and to pierce the corporate veil to hold D liable for Entolo's breach of the lease. P alleged that the representations D's attorney made to Steve Hoyt were false and that the attorney either knew or should have known that the representations were false. The district court found that the alleged representations at issue constituted a nonactionable legal opinion, they were not false, and that P failed to assert any facts demonstrating that any reliance on the alleged representations was reasonable. The court of appeals reversed holding they implied and directly asserted facts and as such whether P reasonably relied on the representations was a genuine issue of material fact for trial. Ds appealed.