Hayes v. Intermountain GeoEnvironmental Services, 498 P.3d 435

Kim and Nancy Hayes bought and built a home in Layton, Utah; within 14 months the house developed foundation and wall cracks.
More than a decade earlier, developer Halls Construction contracted geotechnical firm IGES to prepare a site report; IGES conducted borings and opined the site was suitable for residential construction if its recommendations were followed.
After cracking appeared, a second firm (CMT) found failure surfaces extending about 65 feet below the house, indicating subsurface instability IGES had not identified.
The Hayeses sued IGES for negligence, negligent misrepresentation, and negligent infliction of emotional distress, alleging the erroneous geotechnical report caused the damage.
The district court dismissed the tort claims under Utah’s economic loss rule and statutory Economic Loss Statute; the court of appeals affirmed, holding the claims were an “action for defective design or construction.”
The Utah Supreme Court granted certiorari and affirmed: a geotechnical report is integral to structural design, so the Hayeses’ tort claims are governed (and limited) by the Economic Loss Statute, and no common-law independent-duty exception applies.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Hayeses' negligence claims are an "action for defective design or construction" under Utah Code § 78B-4-513	Hayes: IGES did not perform "design"—it merely issued an opinion/report and negligently failed to detect subsurface fracture; thus tort claims should proceed	IGES: The geotechnical report is part of the design process; claims alleging the report was erroneous are claims for defective design and thus fall under the statute	Held: Yes. The geotechnical report is integral to foundation design; the claims are in substance for defective design and are subject to the Economic Loss Statute (bar to tort recovery except as statutorily allowed).
Whether a common-law independent-duty exception permits tort claims despite the Economic Loss Statute	Hayes: Even if the statute applies, IGES owed an independent duty to subsequent homebuyers that would allow tort recovery	IGES: The statutory scheme controls in the design/construction context and contains no independent-duty exception for non-privity plaintiffs	Held: No. The statute governs actions for defective design/construction; it does not include a common-law independent-duty exception applicable here, and the only statutory exception (intentional/willful breach for parties in privity) does not apply.

Hayes v. Intermountain GeoEnvironmental Servs. Inc., 446 P.3d 594 (Utah Ct. App. 2019) (court of appeals’ analysis that geotechnical recommendations are part of design)
Gables at Sterling Vill. Homeowners Ass’n, Inc. v. Castlewood-Sterling Vill. I, LLC, 417 P.3d 95 (Utah 2018) (discussing the economic loss rule and boundary between contract and tort)
American Towers Owners Ass’n, Inc. v. CCI Mechanical, Inc., 930 P.2d 1182 (Utah 1996) (adoption of the common-law economic loss rule in construction context)
Hermansen v. Tasulis, 48 P.3d 235 (Utah 2002) (recognition of independent-duty exception to the common-law economic loss rule)
Davencourt at Pilgrims Landing Homeowners Ass’n v. Davencourt at Pilgrims Landing, LC, 221 P.3d 234 (Utah 2009) (noting statutory duties supplanting common-law exceptions and deferring to legislature for changes)
Gilger v. Hernandez, 997 P.2d 305 (Utah 2000) (statute intended to occupy a field supersedes common-law doctrines)