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State v. United States Steel Corp.6/24/1996
hat reflected an insufficient amount of concrete to construct the project's superstructure to the specified elevation. On summary judgment, the defendant construction manager argued that the economic loss rule precluded the plaintiff's action, and the trial court granted the motion. The court of appeals reversed, and the Supreme Court of Tennessee affirmed, noting:
The defendant's principal argument is that the plaintiff cannot recover on a theory of negligence because any losses were purely commercial in nature. It contends that principles of negligence should not be applied to contract-based interests. . . .
This is not a products liability case. In this instance, the theory of recovery is that the defendant negligently supplied information intended for the guidance of others; the plaintiff relied upon the misrepresentation in the performance of his contracted service and experienced business losses as a result. Many of those cases relied upon by the defendant involve claims of product liability in respect to design defects; the losses suffered were caused by defective products, not misguidance or misdirection in the performance of services. See, e.g., MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (1916). The question here is not one of harm to person or property, but of economic loss.
Id. at 430-31 (emphasis added). Similarly, in the present case, as to the negligent misrepresentation claim, the state does not seek to recover economic losses stemming from a claim that USX was negligent in designing or manufacturing the steel. Rather, the recovery sought stems from a claim that USX did not exercise reasonable care or competence in obtaining or communicating information for the guidance of the state in its decision regarding the steel to be used in the construction of the stadium, namely, that weathering steel was appropriate for use in the stadium project, given the proposed location for the stadium and the weather conditions of the proposed location. In other words, relative to the negligent misrepresentation claim, the state seeks damages not for USX's acts or omissions in its design or manufacture of weathering steel, but for USX's actions and/or omissions in its promotions, recommendations, investigations and/or opinions regarding the use of weathering steel.
Second, both section 552, and this court in Chun, recognize that pecuniary losses are recoverable in a claim for negligent misrepresentation. Section 552(1) expressly states that liability will attach "for pecuniary loss caused . . . by [plaintiff's] justifiable reliance upon the information[.]" See also Restatement (Second) of Torts § 311, comment a (1965) (distinguishing section 552, noting that "the rule stated in this Section represents a somewhat broader liability than the rules stated as to liability for pecuniary loss resulting from negligent misrepresentation, stated in 552, to which reference should be made for comparison" (emphasis added)). Citing section 552, the Chun court affirmed the award of "out-of-pocket expenses," including the purchasers' cash down payment, mortgage payments, financing charges, real property and gross income taxes, insurance expenses, and the expenses associated with obtaining plans, specifications, and a permit for a new building.
These points have also been recognized in other jurisdictions. For example, in McCarthy, Lebit, Crystal & Haiman Co., L.P.A. v. First Union Management, 87 Ohio App. 3d 613, 622 N.E.2d 1093 (Ohio Ct. App. 1993), the Ohio Court of Appeals noted:
Those courts which apply the economic loss rule to bar recovery in tort claims for negligent misrepresentation fail to take into account the express wording of S
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