44 Pa. D. & C.5th 343
Pennsylvania Court of Common P...2015Background
- In Sept. 2010 the Litwacks contracted for a home remodel using a standard form agreement; Centaur was the contractor and Dreamline (Norleys) the construction managers.
- Contract price ~ $100,060 plus $17,000 roof allowance; project remained incomplete and supplier threatened lien for nonpayment.
- Centaur alleges Dreamline/Norleys misappropriated payments and used funds for their own benefit, causing nonpayment to Centaur.
- Centaur sued Norleys/Dreamline for conversion/misappropriation and sued the Litwacks for negligent supervision (Count III) claiming the owners failed to supervise their construction manager so payments reached Centaur.
- Litwacks moved for summary judgment arguing Count III is barred by the "gist of the action" doctrine and, alternatively, the economic loss doctrine.
- The court held the negligent-supervision claim is not barred by the gist doctrine but is precluded by the economic loss doctrine; summary judgment granted for defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether negligent-supervision claim is barred by the gist of the action doctrine | Centaur: Litwacks had an independent duty to investigate/supervise Dreamline outside the contract and their failure is a tort owed to Centaur | Litwacks: Claim merely repackages a contract dispute as tort and is barred by gist of the action | Not barred — court finds the duty alleged is a tort duty arising outside specific contractual promises |
| Whether negligent-supervision claim is barred by the economic loss doctrine | Centaur: Because gist does not bar the tort claim, economic loss doctrine should not apply | Litwacks: Economic loss doctrine bars recovery of purely economic damages in tort absent physical injury or property damage | Barred — court holds economic loss doctrine precludes Centaur's tort recovery of purely economic losses |
| Whether Centaur pleads recoverable damages in tort | Centaur: Seeks $13,881.56 for work and alleged $209,842 lost property value | Litwacks: Damages are purely economic, no personal injury or property damage alleged | Court: Damages are economic only; no physical injury or property damage shown, so tort recovery barred |
| Appropriateness of summary judgment procedural standard | Centaur: Opposition argued merits but made no showing to defeat summary judgment on economic loss ground | Litwacks: Entitled to judgment as a matter of law if legal doctrines bar claim | Court: Summary judgment appropriate where doctrine disposes of claim as matter of law |
Key Cases Cited
- Abbott v. Schnader, Harrison, Segal & Lewis, LLP, 805 A.2d 547 (Pa. Super. 2002) (summary-judgment standard and procedural principles)
- Young v. Pennsylvania Dept. of Transportation, 744 A.2d 1276 (Pa. 2000) (nonmoving party must adduce evidence on issues on which it bears the burden)
- Pennsylvania State Univ. v. County of Centre, 615 A.2d 303 (Pa. 1992) (summary-judgment standard and viewing record for nonmoving party)
- Aikens v. Baltimore & Ohio R. Co., 501 A.2d 277 (Pa. Super. 1985) (economic-loss rule: no recovery in negligence for pure economic loss absent physical injury or property damage)
- Bash v. Bell Tel. Co., 601 A.2d 825 (Pa. Super. 1992) (articulation of gist of the action doctrine distinguishing contract and tort claims)