The defendants, Scott and Christina Lees, appeal a decision of the Trial Court {Honran, J.) finding in favor of and granting damages to the plaintiff, Stephen C. Wyle, following a bench trial on his claim for negligent misrepresentation. We affirm.
The trial court found the following facts. In 2002, the defendants purchased a two-unit apartment building located at 38 Oak Street in North Conway. The defendants lived in one unit and rented the other for income. In 2002 or 2003, the defendants sought to expand the building and Scott Lees approached a contractor to add a third, larger apartment to the back of the property. This new unit was to include a two-car garage underneath it. Lees hired the contractor to accomplish all construction work, including the necessary permitting.
In August 2003, Lees and the contractor submitted a building permit application for a “28 x 28 2 car garage with upstairs apartment with a 10 x 8 breezeway attached to existing [building].” The town informed the contractor that site plan review was necessary prior to adding a third unit and issued a permit for the garage only. Conditional approval for the site plan, which provided for six parking spaces including the two-car garage underneath the unit, was granted in November 2003 and final approval was obtained in January 2004. Both notices of approval provided that a building permit and a selectman’s certificate of occupancy were required prior to any use. However, the defendants did not obtain either prior to building or occupying the unit. Additionally, because the defendants did not obtain a building permit, the town’s building inspector never inspected the unit. The contractor completed construction in the spring of 2004, at which point the defendants occupied the new unit.
In the summer of 2004, the defendants approached the contractor regarding the possibility of adding more space to the new unit. The contractor recommended transforming one of the two new garage bays into a bedroom. Lees again hired the contractor both to complete construction and obtain any necessary permitting. However, the construction methods used to complete the renovation did not meet building and life safety codes. Additionally, the defendants again failed to secure the necessary building permits and the construction reduced the number of parking spaces below the minimum required by the site plan approval.
After the completion of construction, town planning and zoning board officials
The defendants listed the property for sale in 2007. As part of the listing, they completed a property disclosure statement, which included the question, “Are you aware of any modifications or repairs made without the necessary permits?” The defendants answered, “No.” During visits to the property prior to purchase, the plaintiff met with Lees, who assured him that he had done “everything the Town asked me to do.” The plaintiff also reviewed the property tax card for the property prior to purchase.
The defendants and plaintiff executed a purchase and sale agreement on May 1, 2008. After entering into the agreement, the plaintiff had a comprehensive home inspection performed and sent a thirty-one item list of specific concerns regarding the property to the defendants. The concerns were either remedied by the defendants or waived by the plaintiff prior to closing. The defendants deeded the property to the plaintiff on July 1,2008.
Approximately six weeks after closing, the plaintiff received a letter from the town code enforcement officer raising questions regarding the legality of the removal of a garage door from the new unit. The entire property was inspected by the town building inspector and fire chief in September 2008, which revealed numerous building and life safety code violations. As a result, the plaintiff was ordered not to occupy the unit until he corrected the violations and made the site compliant with site plan regulations. After correcting the violations, the plaintiff requested a conditional occupancy permit on October 7, 2008, which was granted on October 21.
The plaintiff then brought a single claim against the defendants for negligent misrepresentation. The plaintiff based his claim upon two alleged misrepresentations: (1) statements on the defendants’ property disclosure form, which provided that all building modifications were done with the necessary permits; and (2) Lees’s verbal representation that, “I did everything the town asked.” The defendants filed a special plea asserting comparative negligence pursuant to RSA 507:7-d (2010), a DeBenedetto statement, see DeBenedetto v. CLD Consulting Eng’rs,
I
The defendants first challenge the trial court’s award of damages. Specifically, they argue that the economic loss doctrine precludes the plaintiff from recovering damages. The economic loss doctrine is a “judicially-created remedies principle that operates generally to preclude contracting parties from pursuing tort recovery for purely economic or commercial losses associated with the contract relationship.” Plourde Sand & Gravel v. JGI Eastern,
As such, the rule precludes a harmed contracting party from recovering in tort unless he is owed an independent duty of care outside the terms of the contract. Plourde Sand & Gravel,
As we explained in Plourde Sand & Gravel, many courts have expanded the doctrine to apply even in the absence of a contract between the parties. Plourde Sand & Gravel,
While we have recognized an exception to the economic loss doctrine for a negligent misrepresentation claim when the plaintiff and defendant are not parties to a contract, we have never addressed the issue presently before us — whether the economic loss doctrine bars recovery for such a claim between two contracting parties. Courts in various jurisdictions have struggled with this issue. See Barton, supra at 1814; see also Apollo Group, Inc. v. Avnet, Inc.,
Many courts have distinguished those negligent misrepresentation claims that center upon an alleged inducement to enter into a contract from those that focus upon performance of the contract. Id. at 1815; see Rich Products Corp. v. Kemutec, Inc.,
Where a negligence claim is based only on breach of a contractual duty, the law of contract rightly does not punish the breaching party, but limits the breaching party’s liability to damages that naturally flow from the breach. It is an altogether different situation where it appears two parties have in good faith entered into a contract but, in actuality, one party has deliberately made material false representations of past or present fact, has intentionally failed to disclose a material past or present fact, dr has negligently given false information with knowledge that the other party would act in reliance on that information in a business transaction with a third party. The breaching party in this latter situation also is a tortfeasor and may not utilize the law of contract to shield liability in tort for the party’s deliberate or negligent misrepresentations.
United Intern. Holdings v. Wharf (Holdings),
Here, the evidence at trial established that the defendants negligently misrepresented that the premises were licensed for immediate occupancy and that the defendants had obtained all necessary permits. The evidence further established that these representations induced the plaintiff to enter into the purchase and sale agreement and that he relied upon these representations when purchasing the unit. The plaintiff’s allegations do not merely relate to a breached promise to perform the terms of the contract or attempt to recharacterize a breach of contract claim as a negligent misrepresentation. Such allegations would be barred by the economic loss doctrine. See GBJ Corp. v. Eastern Ohio Paving Co.,
Instead, the plaintiff alleged that the defendants’ misrepresentations, unrelated to any material terms of the actual purchase and sale agreement, induced him to enter into the agreement. In other words, the plaintiff’s claim alleged “independent, affirmative misrepresentations unrelated” to the performance of the contract. Marvin Lumber and Cedar Co.,
The defendants also argue that the trial court erred by failing to address their request for apportionment of damages among all negligent parties, including the plaintiff. The defendants filed both a pre-trial DeBenedetto statement and motion in limine seeking apportionment of damages. RSA 507:7-e, 1(a) (2010) provides that “if there is no jury [the court] shall find, the amount of damages to be
Based upon this determination and the record before it, the trial court implicitly concluded that the defendants failed to prove their allegations of comparative negligence. See Demers Nursing Home, Inc. v. R. C. Foss & Son, Inc.,
II
The defendants next argue that the trial court erred in finding that the plaintiff proved the elements of a negligent misrepresentation claim, including that the defendants negligently made false representations, that the plaintiff justifiably relied upon those representations, and causation. The elements of such a claim are a negligent misrepresentation of a material fact by the defendant and justifiable reliance by the plaintiff. Snierson v. Scruton,
The defendants essentially contend that the evidence was insufficient to support the plaintiff’s claim. We review sufficiency of the evidence claims as a matter of law and uphold the findings and rulings of the trial court unless they are lacking in evidentiary support or tainted by error of law. Guyotte v. O’Neill,
When viewed in the light most favorable to the plaintiff, see id., the evidence was sufficient to support his claim. Although the defendants claim that they were not actually aware of any modifications or repairs accomplished without the required permits, the trial court found that both the conditional approval and final approval for the site plan stated that a building permit and a certificate of occupancy were required prior to any use. Thus, as the trial court found, the defendants knew or should have known of the falsity of their representations. Cf. Snierson,
The record also supports the trial court’s finding that the plaintiff justifiably relied on the misrepresentations. The plaintiff had a professional building inspection performed and also relied upon tax bills for the units, which showed that they were being taxed and occupied. Based upon this record, the trial court could reasonably have found that the plaintiff did not undertake further investigation because of the defendants’ representations, and that such reliance was justified. See Colby v. Granite State Realty, Inc.,
Finally, the defendants briefly contend that a merger clause in the purchase and sale agreement shields them from liability for any oral misrepresentations. The merger clause provided that “[a]ny verbal representation, statements and agreements are not valid unless contained herein.” We first note that even if we were to agree with the defendants, the merger clause at issue applies only to verbal representations and would not shield them from liability for their written misrepresentation. Moreover, the defendants devoted only one sentence of their brief to this argument, which we conclude is not sufficiently developed to warrant appellate review. See State v. Blackmer,
Affirmed.