Court of Appeals holds landowner can't sue county for faulty advice

The Oregon Court of Appeals issued its second opinion this month addressing the so-called economic loss doctrine, holding that a resident can't sue the county government for damages resulting from a land use planner's erroneous advice.  In Wild Rose Ranch Enterprises LLC v. Benton County, plaintiffs had sought to use their property as a quarry.  In response to an inquiry, the county's land use planner told the proposed quarry operator that a conditional use permit was not necessary.  Months later, the same county official informed plaintiff that a conditional use permit was required for the quarry after all.  The county denied plaintiff's subsequent application for such a permit. 

Plaintiffs sued the county for amounts spent on developing the quarry, and for their anticipated profits.  Plaintiffs pursued claims for negligence and negligent misrepresentation, due to their reliance on the initial, erroneous advice.  Plaintiffs acknowledged that, because of the economic loss doctrine, damages for negligence would be available only if the county had a "special relationship" with plaintiffs which gave rise to a duty to protect plaintiffs from economic harm.  Judge Haselton, writing for the court, agreed with the county that its development code was not intended to create tort liability in situations where the planning official's interpretation proved to be faulty.  The claims were dismissed.

See the Oregon Business Litigation Blog's discussion of Harris v. Suniga, the economic loss case decided earlier this month, here.