Gongloff
Contracting v. Kimball & Associates –
Pa. Super. – July 8, 2015
The elements of a common law claim for negligent misrepresentation
are:
“(1) a misrepresentation of a material fact; (2) made under
circumstances in
which the misrepresenter ought to have known its falsity; (3) with an
intent
to induce another to act on it; and (4) which results in injury to a
party
acting in justifiable reliance on the misrepresentation.” Bilt-Rite, 866
A.2d
at 277 (quoting Bortz
v. Noon, 729 A.2d 555, 561 (Pa. 1999)). Negligent
misrepresentation differs from intentional misrepresentation “in that
the
misrepresentation must concern a material fact and the speaker need
not
know his or her words are untrue, but must have failed to make a
reasonable investigation of the truth of these words.” Bortz, 729
A.2d at
561.
Pennsylvania law generally bars claims brought in negligence that
result solely in economic loss. David
Pflumm Paving & Excavating, Inc.
v. Foundation Services Company, 816 A.2d 1164, 1168 (Pa. Super.
2003) (“This Court has consistently denied negligence claims that
cause only
economic loss”). However, a narrow exception is found in Section 552
of the
Restatement (Second) of Torts entitled, “Information Negligently
Supplied
for the Guidance of Others,” and provides:
(1) One who, in the course of his business,
profession or
employment, or in any other transaction in which
he has a
pecuniary interest, supplies false information
for the guidance of
others in their business transactions, is subject
to liability for
pecuniary loss caused to them by their
justifiable reliance upon
the information, if he fails to exercise
reasonable care or
competence in obtaining or communicating the
information.
Restatement (Second) of Torts § 552(1).
In Bilt-Rite, the Pennsylvania Supreme Court adopted Section 552
and held that it applied in:
cases where information is negligently supplied
by one in the
business of supplying information, such as an
architect or design
professional, and where it is foreseeable that the
information will
be used and relied upon by third persons, even if
the third
parties have no direct contractual relationship
with the supplier
of information.
866 A.2d at 287. The adoption of Section 552 was not meant to
“supplant[]
the common law tort of negligent misrepresentation, but rather, [to]
clarify[]
the contours of the tort as it applies to those in the business of
providing
information to others.” Id.
