PRECISION PIPELINE, LLC v. TRICO SURVEYING AND MAPPING, INC. et al
Filing
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ORDER denying Defendants' Motions to Dismiss (Docs. 15 & 18 ). Signed by Judge Cathy Bissoon on 9/8/14. (dcd)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
PRECISION PIPELINE, LLC,
Plaintiff,
v.
TRICO SURVEYING AND
MAPPING, INC., et al.,
Defendants.
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Civil Action No. 13-1823
Judge Cathy Bissoon
MEMORANDUM AND ORDER
I. MEMORANDUM
For the reasons that follow, the Motion to Dismiss Precision Pipeline, LLC’s Amended
Complaint (Doc. 15), filed by Defendant Trico Surveying and Mapping, Inc. (“Trico”), will be
denied, and the Motion to Dismiss Precision Pipeline, LLC’s Amended Complaint (Doc. 18),
filed by Defendant G-A-I Consultants, Inc. (“G-A-I”), will also be denied.
The parties are well-acquainted with Plaintiff’s factual averments and the law. As to
Plaintiff’s single count of negligent misrepresentation against Defendants, the Court finds that
Defendants have not shown that Plaintiff fails to state a plausible claim under Pennsylvania law
as set forth by the Pennsylvania Supreme Court in Bilt-Rite Contractors, Inc. v. The
Architectural Studio, 866 A.2d 270 (Pa. 2005). In a factual scenario somewhat similar to that in
the instant case, the plaintiff in Bilt-Rite was a contractor who allegedly incurred increased costs
on a school construction project because the defendant-architect had supplied the school district
with false and/or misleading information. See id. at 272. The questionable information
subsequently was included in construction bid documents, and relied upon by the plaintiff in
bidding and construction. See id. As in the case at bar, in Bilt-Rite, there was no contract
between the plaintiff and the defendant; rather, contracts existed between the school district and
the defendant for design services, and between the school district and the plaintiff for
construction. See id. The trial court sustained preliminary objections and dismissed the
complaint, noting that, although Pennsylvania courts had cited Section 552 of the Restatement
(Second) of Torts (1977) with approval, none had permitted a cause of action against a design
professional in those circumstances. See id. at 273-74. The Superior Court affirmed, and the
Pennsylvania Supreme Court granted further review to address the issue. See id. at 274.
In its opinion, the Bilt-Rite court reviewed several recent Pennsylvania cases addressing
the tort of negligent misrepresentation, including Bortz v. Noon, 729 A.2d 555 (Pa. 1999), which
Defendants in this case both cite in their briefs in support of their Motions to Dismiss. See
Trico’s Br. (Doc. 16) at 4-5; G-A-I’s Br. (Doc. 19) at 6. The Bilt-Rite court noted that the
elements of the common law tort of negligent misrepresentation as presented in Bortz, “would
appear to apply to any allegation of negligent misrepresentation against any individual no matter
what his occupation or relationship to the injured party.” Bilt-Rite, 866 A.2d at 280.1
The court reasoned that Section 552 of the Restatement is, however, “more specific,
appearing to apply on its face only to actions against those individuals who, in the course of their
business, profession or employment, or in any other transaction in which they have a pecuniary
interest, supply false information for the guidance of others in their business transactions.” Id.
With regard to the duty owed in such an instance, “Section 552 sets forth the parameters of a
duty owed . . . where one intends or knows that the information will be used by others in the
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The tort of negligent misrepresentation requires proof of: “(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.” Bortz,
729 A.2d at 561 (citations omitted).
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course of their own business activities.” Id. at 285-86. Specifically, Section 552 provides that
such an individual “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). The court
observed that the tort is “narrowly tailored, as it applies only to those businesses which provide
services and/or information that they know will be relied upon by third parties in their business
endeavors, and it includes a foreseeability requirement, thereby reasonably restricting the class of
potential plaintiffs.” Id. at 286.
The Bilt-Rite court adopted Section 552 “as the law in Pennsylvania 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.” Id. at 287. Regardless of lack of privity of contract, the court
stated that “Section 552 imposes a duty of reasonable care upon the supplier of professional
information for use by others.” Id. Therefore, in order for this Court to grant Defendants’
Motions to Dismiss, Defendants must demonstrate that Plaintiff has not properly alleged a
cognizable claim for negligent misrepresentation in accordance with the factors set forth by the
Pennsylvania Supreme Court in Bilt-Rite and with Section 552 of the Restatement (Second) of
Torts.
The Court finds that Plaintiff, at a minimum, alleges the following: that Defendants
“provided design information for the bidding and construction of the Project in their capacity as
parties engaged in the business of supplying design information;” that Defendants “knew or
should have known that others, specifically contractors bidding on the Project, would rely on and
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use the information . . . for their benefit during the course of their own activities relating to the
Project;” that Defendants “had a duty to exercise reasonable care and competence in obtaining or
communicating the information included in and related to the Contract Documents and Plans;”
that Defendants “failed to exercise such reasonable care by negligently, recklessly, knowingly
and/or intentionally providing inaccurate or false information relevant to Precision’s work on the
Project;” that Plaintiff “reasonably relied, to its detriment” on Defendants’ misrepresentations;
and, finally, that Plaintiff “suffered significant damages” as a result of Defendants’
misrepresentations. Am. Compl. (Doc. 14) at ¶¶ 65, 67, 69-70, 77-78.
In its Motion to Dismiss, Trico argues that it “did not have a duty to provide the
information that Plaintiff is alleging that Trico failed to provide.” Trico’s Motion to Dismiss,
¶ 2. Similarly, G-A-I asserts that it had no duty to Plaintiff with regard to various types of
information at issue in this case. See G-A-I’s Motion to Dismiss, ¶¶ 10, 31. As previously
discussed, however, the Bilt-Rite court specifically embraced the Section 552 approach to duty
in cases, such as this, wherein a supplier of professional information for use by others owes those
others a duty of reasonable care. See 866 A.2d at 285-86. Section 552 “imposes a simple
reasonable man standard upon the supplier of the information,” and “merely recognizes that it is
reasonable to hold such professionals to a traditional duty of care for foreseeable harm.” Id. at
286. Plaintiff has indeed alleged that Defendants in this case had a duty to exercise reasonable
care, and that they failed to exercise such reasonable care in the performance of their
professional duties. See discussion supra, and Am. Compl. ¶¶ 69-75. Accordingly, this portion
of Plaintiff’s claim has been sufficiently pled.
Both Trico and G-A-I have failed to establish that Plaintiff cannot state a plausible claim
for negligent misrepresentation. Trico and/or G-A-I remain free, however, to revisit their
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arguments on summary judgment, once the parties have engaged in discovery and their legal
theories are further developed.
Consistent with the foregoing, the Court hereby enters the following:
II. ORDER
Defendant Trico’s Motion to Dismiss (Doc. 15) is DENIED, and Defendant G-A-I’s
Motion to Dismiss (Doc. 18) is DENIED.
IT IS SO ORDERED.
September 8, 2014
s\Cathy Bissoon
Cathy Bissoon
United States District Judge
cc (via ECF email notification):
All Counsel of Record
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