45 Mass. App. Ct. 15 | Mass. App. Ct. | 1998
The plaintiff (Nota), a subcontractor, filed an action in the Superior Court against the defendant (Keyes), an architectural firm, for deceit, negligent misrepresentation, and violation of G. L. c. 93A, based upon alleged misrepresentations made by Keyes in the plans and specifications for the construction of an elementary school for the Blackstone-Millville Regional School District in which Nota was the site subcontractor and Keyes the school’s architect. Keyes filed a motion for summary judgment on the grounds that (1) the claim of deceit should be dismissed because Nota failed to plead the elements
1. Deceit claim. Under Mass.R.Civ.P. 9(b), 365 Mass. 751 (1974), circumstances constituting fraud must be stated with particularity. We believe the allegations of the complaint were sufficient to meet the requirements of the rale.
The complaint alleged that Keyes was hired by the school district to prepare plans and specifications for solicitation of bids for the construction of a new school; that Keyes in preparing the plans and specifications knowingly and intentionally misrepresented the location and depth of the ledge to be encountered in the septic system area, and the amount and location of subsurface ledge to be anticipated on the site work portion of the project, in particular by stating that the contractor should anticipate some 12,000 cubic yards of ledge when it had information in its possession which demonstrated the presence of at least 24,000 cubic yards of ledge; and that Keyes’s failure to disclose subsurface information in its possession concerning the “North Parking Lot” also constituted a knowing and intentional misrepresentation. The complaint further alleged that Keyes should have known that Nota would rely on its representations in bidding on the project and that Nota did rely upon those representations resulting in financial losses as a direct result thereof. Based on those allegations, there is no question that Nota’s allegations of deceit were stated with sufficient particularity, adequately warning Keyes of the circumstances giving rise to Nota’s claim of deceit. See Friedman v. Jablonski, 371 Mass. 482, 488-489 (1976); Schinkel v. Maxi-Holding, Inc., 30 Mass. App. Ct. 41, 48 (1991).
Keyes also claims that the representations made do not give rise to a cognizable cause of action. In order to support an action for deceit, Nota had to establish that Keyes made a misstatement of a material fact. Kozdras v. Land/Vest Properties,
(a) Quantity of ledge. The only reference to the amount of the ledge to be encountered was contained in paragraph 3.1 B of the allowance section of Addendum No. 4, Section 01020 of the specifications, which reads as follows:
“Allowance No. 2. Allow for the removal of 12,000 cubic yards of rock excavation. . . . The actual contract sum shall be adjusted at the completion of the project by the unit prices established for an Add/Deduct in the General Bid Form, Section 00300(M). For the purposes of this section, any deduct amount to the contract sum will be determined based on the open rock excavation unit costs in the General Bid Form. For the purposes of this section, any additions to the contract sum will be based on the open/trench excavation unit costs in the General Bid Form.”
Nota argues that the statement is actionable as a “material fact” because an opinion expressed as an opinion which the declarant knows to be false is a misstatement of the declarant’s state of mind. Briggs v. Carol Cars, Inc., 407 Mass. at 396. See Nolan & Sartorio, Tort Law § 142 (2d ed. 1989); Restatement (Second) of Torts § 539 (1977). In addition, Nota argues that, in any event, a statement of opinion as to future events may be actionable where one possesses superior knowledge concerning the matter to which the misrepresentation relates. Gopen v. American Supply Co., 10 Mass. App. Ct. 342, 345 (1980).
We reject Nota’s arguments as to this statement in the addendum. While it is true that a statement in the form of an opinion may be actionable as a statement of material fact if the representation is false and the subject matter is one susceptible of actual knowledge, Briggs v. Carol Cars, Inc., 407 Mass. at 396; Zimmerman v. Kent, 31 Mass. App. Ct. at 79, here the amount of subsurface ledge was a matter not susceptible of actual knowledge or one over which Keyes had control. Contrast Gopen v. American Supply Co., 10 Mass. App. Ct. at 345 (false
(b) Septic system area. While liability may not be predicated on the representation set forth in the allowance addendum, we are of opinion that this is not true with respect to Nota’s assertion that Keyes knowingly and intentionally misstated the location and depth of the ledge in the septic system area. Certainly, this statement is one of fact susceptible of actual knowledge and one in which Keyes had superior knowledge based on the results of test borings in its possession showing the exact location and depth of the ledge. Compare Chatham Furnace Co. v. Moffatt, 147 Mass. 403, 406 (1888).
(c) North parking lot. Finally, we believe that whether Keyes’s failure to disclose the ledge in the North parking lot may give rise to a cognizable cause of action presents a disputed factual issue. Although Keyes does not dispute that it withheld this information, it argues that it owed Nota no duty to disclose, and did not conceal or take affirmative steps to prevent Nota
“(1) One who fails to disclose to another a fact that he knows may justifiably induce the other to act or refrain from acting in a business transaction is subject to the same liability to the other as though he had represented the nonexistence of the matter that he has failed to disclose, if, but only if, he is under a duty to the other to exercise reasonable care to disclose the matter in question.
“(2) One party to a business transaction is under a duty to exercise reasonable care to disclose to the other before the transaction is consummated . . .
(b) matters known to him that he knows to be necessary to prevent his partial or ambiguous statement of the facts from being misleading; and . . .
(e) facts basic to the transaction, if he knows that the other is about to enter into it under a mistake as to them, and that the other, because of the relationship between them, the customs of the trade or other objective circumstances, would reasonably expect a disclosure of those facts.”
Where Keyes knew or should have known that potential bidders on the project would indeed rely on the plans and specifications for preparation of their bids and, at least in the septic system area, disclosed information although it was inaccurate as to the presence of ledge, we cannot say that a jury could not find sufficient facts in those circumstances creating a duty to disclose this information to prospective bidders such as Nota. See Restatement (Second) of Torts § 551 comment m, at 126 (1977).
2. Negligent misrepresentation. In order to recover for negligent misrepresentation a plaintiff must prove that the defendant (1) in the course of his business, (2) supplies false
Notwithstanding the presence of disputed facts, Keyes argues Nota’s claim is barred because the economic loss doctrine, Bay State-Spray & Provincetown S.S., Inc. v. Caterpillar Tractor Co., 404 Mass. 103, 107 (1989), prohibits Nota’s recovery for its purely pecuniary losses. This argument is without merit. An exception to the doctrine permits recovery for economic losses resulting from negligent misrepresentation.
Keyes also argues that design professionals such as architects
Summary judgment should not have been allowed on the claim for negligent misrepresentation.
3. Claim pursuant to G. L. c. 93A; §§ 2(a) and 11. Where we hold that at least two of the representations made by Keyes in the plans and specifications set forth potentially viable claims for deceit and negligent misrepresentation, Nota’s c. 93A claim based on those representations remains viable. McEvoy Travel Bureau, Inc. v. Norton Co., 408 Mass. 704, 714 (1990). Glickman v. Brown, 21 Mass. App. Ct. 229, 234-235 (1985).
Keyes argues that it was entitled to quasi-judicial immunity in its role as contract administrator, but cites no case in support of this proposition. In Comins v. Sharkansky, 38 Mass. App. Ct. 37, 39 (1995), we observed that immunity may extend beyond judges to others who “are involved in an integral part of the judicial process” such as arbitrators. However, Keyes’s functions were not integral to the judicial process because its contractual claim-resolution functions are distinct from the contract’s arbitration terms, which provide, for arbitration through the American Arbitration Association of disputes which the parties have not been able to satisfactorily resolve with the architect. Accordingly, this argument also fails.
Judgment reversed.
We note that, according to Nota’s representations at oral argument, it has already recovered at least part of its damages at an earlier stage of this litigation. In the event Nota recovers on the instant claim, it would be entitled to recover all of its pecuniary loss incurred as a result of an actionable misrepresentation. However, if Nota has recouped those same losses from others, those sums would be deducted because it cannot recover twice. Danca v. Taunton Sav. Bank, 385 Mass. 1, 10 (1982). See Restatement (Second) of Torts § 552B (1977), which provides as follows:
“ (1) The damages recoverable for a negligent misrepresentation are those necessary to compensate the plaintiff for the pecuniary loss to him of which the misrepresentation is a legal cause, including
(a) the difference between the value of what he has received in the transaction and its purchase price or other value given for it; and
(b) pecuniary loss suffered otherwise as a consequence of the*21 plaintiffs reliance upon the misrepresentation.
“(2) the damages recoverable for a negligent misrepresentation do not include the benefit of the plaintiffs contract with the defendant.”
Accord Donnelly Constr. Co. v. Oberg/Hunt/Gilleland, 139 Ariz. 184 (1984); A.R. Moyer, Inc. v. Graham, 285 So. 2d 397 (Fla. 1973); Rozny v. Marnul, 43 Ill. 2d 54, 62-68 (1969); Jim’s Excavating Serv., Inc. v. HKM Assocs., 265 Mont. 494, 501-506 (1994); Davidson & Jones, Inc. v. County of New Hanover, 41 N.C. App. 661 (1979). Contra Fleischer v. Hellmuth, Obata & Kassabaum, Inc., 870 S.W.2d 832, 834-837 (Mo. Ct. App. 1993); Floor Craft Floor Covering, Inc. v. Parma Community Gen. Hosp. Assn., 54 Ohio St. 3d 1 (1990); Sensenbrenner v. Rust, Orling & Neale, Architects, Inc., 236 Va. 419 (1988). See generally Annot., Tort Liability of Project Architect for Economic Damages Suffered by Contractor, 65 A.L.R. 3d 249 (1975).