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Subcontractor Permitted to Pursue Action for Negligent Misrepresentation against Architect-Engineer

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Clarifying Pennsylvania law on negligent misrepresentation claims against design professionals, the Superior Court reversed and remanded a grant of judgment on the pleadings in favor of an architect-engineer entered by the Allegheny County Court of Common Pleas. In Gongloff Contracting, L.L.C. v. L. Robert Kimball & Assoc., No. 785 WDA 2014 (Pa. Super. 2015), the Superior Court held that a subcontractor would be permitted to pursue its action against the architect-engineer on project for negligent misrepresentation, in spite of a lack of an allegation in the complain that the architect-engineer made an "express misrepresentation."

Plaintiff Gongloff Contracting ("Gongloff") was contracted as structural steel erection subcontractor for the construction of a convocation center at California University of Pennsylvania, which was designed by L. Robert Kimball & Associates ("Kimball"). The University retained Whiting-Turner Contracting as the general contractor who subsequently hired Kinsley Construction, Inc. to perform the structural steel fabrication and erection. Kinsley then subcontracted with Gongloff for the provision of all labor, materials and equipment necessary for the erection of the structural steel.

Approximately eight (8) weeks into the project, after it had completed about one-half of the structural steel work, Kimball acknowledged that the as-designed trusses would not support the construction loads. As a result, Gongloff experienced a myriad of problems on the job resulting in substantial cost increases. Gongloff submitted eighty one (81) change orders for additional work, many of which its contractor, Kinsley, refused to approve. As a result Gongloff ceased work, laid off its workers and left the site. Several Gongloff vendors and suppliers remain unpaid, and Gongloff claims that its reputation has been harmed.

Gongloff brought an action against Kimball for negligent misrepresentation based upon Section 552 of the Restatement (Second) of Torts. Gongloff essentially claimed that the as-designed drawings either explicitly or implicitly constituted (mis)representations that the structure was safe and capable of supporting all construction loads. In granting Kimball's motion for judgment on the pleading, the trial court found that the design documents themselves did not constitute an "express misrepresentation", even though they were complex, and the design required further engineering and design by Kimball.

The Superior Court reversed and remanded, holding that prior case law construing Pennsylvania law on this topic "could reasonably be understood to subject 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 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 at 13.

The Superior Court went on to hold, that contrary to Kimball's assertion, Section 552 does not require an "express misrepresentation", but merely and "actual misrepresentation", which requires a lesser degree of exactitude than an "express misrepresentation" and which the design documents fulfill. Accordingly, the Superior Court found that the amended complaint's allegations were pled with a sufficient level of specificity to state a cause of action under section 552, and that therefore the grant of a judgment on the pleadings was premature.

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