Wednesday, July 15, 2015

consumer - negligent misrepresentation


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.

 

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