Superior Court Holds “Express” Misrepresentations are not Required in Bilt-Rite Pleadings
The Pennsylvania Superior Court recently held that a negligent misrepresentation claim may be based on an architect’s faulty design, even absent allegations of an express misrepresentation by the architect. Gongloff Contracting, L.L.C. v. L. Robert Kimball & Associates, Architects & Engineers, Inc., 2015 PA Super 149, — A.3d —-, 2015 WL 4112446 (July 8, 2015). Although Pennsylvania law generally bars claims brought in negligence that result solely in economic loss, a narrow exception is found in Section 552 of the Restatement (Second) of Torts entitled, “Information Negligently Supplied for the Guidance of Others.” In Bilt-Rite Contractors, Inc. v. The Architectural Studio, 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 270 (Pa. 2005).
In Gongloff, a subcontractor (Gongloff Contracting, L.L.C.) sued the architect (L. Robert Kimball & Associates, Architects and Engineers, Inc.) that designed the project for negligent misrepresentation, alleging that Kimball negligently misrepresented, either explicitly or implicitly, that the design of the structure would allow it to bear all required loads. Kimball moved for judgment on the pleadings, and the trial court granted the motion, ruling that a negligent misrepresentation claim requires an express misrepresentation, which Gongloff had not alleged in its complaint.
The Superior Court reversed, holding Bilt–Rite subjects architects to liability for Section 522 negligent misrepresentation claims when it is alleged that those professionals negligently included faulty information in their design documents.
The court stated: “The design itself can be construed as a representation by the architect that the plans and specifications, if followed, will result in a successful project. If, however, construction in accordance with the design is either impossible or increases the contractor’s costs beyond those anticipated because of defects or false information included in the design, the specter of liability is raised against the design professional.” Gongloff, 2015 WL 4112446, at *6.
In reaching its conclusion, the Superior Court distinguished the “actual misrepresentation” requirement under Bilt-Rite from the trial court’s decision to require an “express misrepresentation.” Acknowledging that courts have required plaintiffs to assert “an actual misrepresentation as opposed to assumptions on the part of the recipient,” id. (citing State College Area School District v. Royal Bank of Canada, 825 F.Supp.2d 573, 584 (M.D. Pa. 2011)), the Superior Court rejected the notion that a plaintiff must also identify some particular communication that was expressly false. The plaintiff’s use of the tangible design documents containing the allegedly faulty design was sufficient to allege an “actual misrepresentation” under Bilt-Rite. Id.
The court also pointed out Bilt–Rite does not require that a plaintiff precisely identify the misrepresentation in the design documents. Id. at *7. Although the court in Bilt-Rite mentioned that the design professional therein “expressly represented” that its aluminum curtain wall “could be installed and constructed through the use of normal and reasonable means and methods, using standard construction design tables,” the court did not include an “express representation” as an element of a Section 552 negligent misrepresentation claim. Id. (citing Bilt-Rite, 866 A.2d at 272). Instead, Bilt–Rite only requires “that information, a rather general term, be negligently supplied by the design professional.” Id.
Although a defendant may still defend against a Bilt-Rite claim by showing the plaintiff’s misrepresentation allegations are not substantiated, Gongloff makes it more difficult for a design professional to get the case dismissed on this basis at the pleadings stage.