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Excavation Technologies, Inc. v. Columbia Gas Company of Pennsylvania

December 29, 2009

EXCAVATION TECHNOLOGIES, INC., APPELLANT
v.
COLUMBIA GAS COMPANY OF PENNSYLVANIA, APPELLEE



Appeal from the Order of the Superior Court entered November 7, 2007 at No. 1237 WDA 2005, affirming the Order of the Court of Common Pleas of Washington County entered June 29, 2005 at No. 2004-5279.

The opinion of the court was delivered by: Mr. Justice Eakin

CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, GREENSPAN, JJ.

ARGUED: September 9, 2008

OPINION

Before performing excavation work for a waterline extension project, appellant requested appellee mark the locations of gas lines around the work sites pursuant to the One Call Act (Act).*fn1 Appellee improperly marked some lines and failed to mark others. As a result, appellant struck various gas lines, which hampered its work, resulting in economic damages of $74,502.06; appellant did not any sustain physical injury or property damage.

Appellant sued appellee on a theory of negligent misrepresentation under § 552 of the Restatement (Second) of Torts,*fn2 claiming appellee failed to comply with its statutory duties under the Act. Appellee filed preliminary objections in the nature of a demurrer, arguing the economic loss doctrine precluded liability.*fn3 The trial court sustained the objections; appellant appealed.

The Superior Court affirmed, recognizing the economic loss doctrine generally precludes recovery in negligence actions for injuries which are solely economic. The court noted an exception for claims of negligent misrepresentation under § 552, which allows such claims to evade dismissal even if they assert purely economic losses. Excavation Technologies, Inc. v. Columbia Gas Company of Pennsylvania, 936 A.2d 111, 115-16 (Pa. Super. 2007) (en banc) (citing Bilt-Rite Contractors, Inc. v. Architectural Studio, 866 A.2d 270 (Pa. 2005) (finding negligent misrepresentation claim against architect for economic loss viable under § 552)). However, the court concluded § 552(1) and (2) did not apply because, unlike the architect in Bilt-Rite, appellee was not in the business of supplying information for pecuniary gain. Id., at 116-17.

Further, the Superior Court declined to adopt § 552(3), reasoning the legislature did not intend to impose liability on utility companies for economic harm occasioned by an inaccurate response under the Act. The court noted the legislature did not provide a private cause of action for economic loss under the Act. Since the economic loss doctrine was well-established when the Act was enacted, the court found the legislature did not intend to impose liability under these circumstances. Id., at 119 (citing Commonwealth v. Miller, 364 A.2d 886, 887 (Pa. 1976) (statutes not presumed to make changes in rules and principles of common or prior existing law beyond what is expressly declared in provisions)).

We granted allowance of appeal to determine whether § 552 of the Restatement (Second) of Torts imposes liability for economic losses to a contractor caused when a gas utility company fails to mark or improperly marks the location of gas lines. This is a pure question of law and, thus, our review is plenary. Bilt-Rite, at 274.

Further, "the standard of review for preliminary objections in the nature of a demurrer is limited; the question presented by the demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible.

Where a doubt exists as to whether a demurrer should be sustained, this doubt should be resolved in favor of overruling it."

Id. (citations omitted).

Appellant argues appellee should be liable for economic losses under § 552(1) and (2), asserting that like the architectural firm in Bilt-Rite, appellee enjoys an economic benefit from providing accurate information about the location of its underground lines. Applying § 552 to this case, according to appellant, will serve the overall public interest by discouraging negligence among underground utility owners. Alternatively, appellant maintains appellee should be liable under § 552(3) because appellee is under a public duty to provide information about the location of its underground lines; when appellee supplies inaccurate or no information in response to a request under the Act, it violates that duty.

Appellee argues utility companies should not be equated with design professionals who are hired to prepare plans, drawings, and specifications for pecuniary gain. It asserts Bilt-Rite only carved out a narrow exception to the economic loss doctrine for design professionals. In response to appellant's alternative argument, appellee urges this Court should ...


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