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Gongloff Contr., L.L.C. v. L. Robert Kimball & Associates, Architects and Engineers, Inc.

Superior Court of Pennsylvania

July 8, 2015

GONGLOFF CONTRACTING, L.L.C., Appellant
v.
L. ROBERT KIMBALL & ASSOCIATES, ARCHITECTS AND ENGINEERS, INC., Appellee

Argued: April 28, 2015.

Page 1071

Appeal from the Order Dated May 5, 2014 of the Court of Common Pleas, Allegheny County, Civil Division at No(s): GD-12-013865. Before JAMES, J.

David L. Fuchs, Pittsburgh, for appellant.

Danielle K. Mechling, Pittsburgh, for appellee.

BEFORE: PANELLA, SHOGAN, and OTT, JJ.

OPINION

Page 1072

SHOGAN, J.

Appellant, Gongloff Contracting, L.L.C., (" Gongloff" ) appeals from orders entered on April 18, 2013, and May 5, 2014, in the Court of Common Pleas of Allegheny County. The order entered on April 18, 2013, granted the motion for judgment on the pleadings of Appellee, L. Robert Kimball & Associates, Architects and Engineers, Inc.'s (" Kimball" ). That order was made final on May 5, 2014, by an order on a stipulation to dismiss fewer than all defendants pursuant to Pa.R.C.P. 229(b)(1). After careful consideration, we reverse and remand for further proceedings.

Because this Court sits in review of the trial court's grant of Kimball's motion for judgment on the pleadings, all well-pleaded statements of fact, admissions, and any documents properly attached to the pleadings presented by the party against whom the motion is filed, are considered as true. Citicorp North America, Inc. v. Thornton, 707 A.2d 536, 538 (Pa. Super. 1998). The facts, then, are gleaned from Gongloff's amended complaint and, to a limited extent, its response to allegations raised in Kimball's new matter. See Altoona Regional Health System v. Schutt, 2014 PA Super 191, 100 A.3d 260, 265 (Pa. Super. 2014); Swift v. Milner, 371 Pa.Super. 302, 538 A.2d 28, 31 (Pa. Super. 1988) (in determining propriety of trial court's award of judgment on the pleadings, we accept as true all well-pleaded statements of fact of non-moving party and " against that party only those facts specifically admitted." ).

In 2009, California University of Pennsylvania (the " University" ) engaged Kimball as the architect-engineer for the construction of a convocation center. After Kimball completed the design, the University hired Whiting-Turner Contracting Company (" Whiting-Turner" ) as the general contractor. Whiting-Turner then entered into a contract with Kinsley Construction, Inc. (" Kinsley" ) to do the structural steel fabrication and erection. On January 18, 2010, Kinsley entered into a subcontract agreement with Gongloff, under which Gongloff agreed to provide all labor, materials, and equipment to erect the structural steel for $990,230.00. Am. Compl. at ¶ ¶ 9-12. Kinsley also entered into a subcontract with Vulcraft Inc. (" Vulcraft" ) to detail and fabricate the long-span steel trusses, which would then be delivered to the site and erected by Gongloff. In addition, Kinsley hired Josh Carney of Carney Engineering (" Carney" ), a registered professional engineer, to assist in the detailed design of the structural steel. Id. at ¶ ¶ 15-16. Kimball's design of the steel structure was supplied to all of the aforementioned parties. Id. at ¶ 49.

In January and February of 2010, both Vulcraft and Carney raised concerns about Kimball's roof design for the convocation center. During preconstruction meetings,

Page 1073

they repeatedly opined that the entire design of the roof system was faulty. " In particular, they warned that the header beams that supported the roof trusses were drastically undersized." Am. Compl. ¶ at 17. Despite these concerns, on March 17, 2010, Gongloff began to erect the steel structure that Kimball had designed. While Gongloff had to address some design problems, work proceeded relatively smoothly for about eight weeks. Id. at ¶ 20. However, at about mid-point in this eight-week period, Vulcraft issued a letter maintaining that the Kimball-designed roof system " was not adequate to bear the construction loads." Id. at ¶ 21. Kimball denied that the roof design was faulty. Id. at ¶ 22.

Shortly after Kimball's assurances about the soundness of the design, Kimball rejected Gongloff's proposed erection procedure, even though it had been approved by Carney, the structural engineer. At this point, Kimball acknowledged that the as-designed trusses could not accommodate the construction loads. Am. Compl. at ¶ 23. On May 3, 2010, Carney confirmed that Kimball's roof was " grossly inadequate." Id. at ¶ 25.

Gongloff continued to experience a myriad of problems, including three shut-downs of the steel erection project, traceable to Kimball's " never-before-utilized" defective design. Am. Compl. at ¶ ¶ 24-26, 30, 34. Attempts to redesign the structure and address its structural inadequacies substantially increased Gongloff's costs. Id. at ¶ ¶ 27, 32, and 39. To address the required adjustments, Gongloff submitted eighty-one change order requests for the amount of additional work that was beyond the scope of its original bid. Id. at ¶ ¶ 39-40. While some of the change orders were initially approved and paid for by Kinsley, eventually Kinsley ceased making payments. Id. at ¶ ¶ 41-42. In mid-February, 2011, Gongloff laid off its crew and left the job-site. Id. at ¶ 42. Gongloff has been unable to fully pay its vendors and suppliers on the project, and its overall reputation has been significantly harmed. Id. at ¶ ¶ 43-44. Although the convocation center is now complete and standing, Gongloff denies that the structural system is the same as originally designed by Kimball. Gongloff's Ans. to Kimball's New Matter at ¶ 68.

On August 6, 2012, Gongloff initiated this action against Kimball and two of its engineers for negligent misrepresentation. Because Gongloff sued the wrong Kimball entity, it filed an amended complaint on December 31, 2012, naming the correct party and dismissing the original individual engineers. In response, Kimball filed an answer, new matter, and an amended joinder complaint to join Whiting-Turner, Kinsley, and Carney. Whiting-Turner and Kinsley filed preliminary objections to Kimball's amended joinder complaint.

After the pleadings closed, Kimball filed a motion for judgment on the pleadings asserting that Gongloff's claims were barred by both the statute of limitations[1] and application of the " economic loss doctrine." [2] Regarding the latter argument, Gongloff disputed that the economic loss doctrine was applicable, contending instead

Page 1074

that its claim against Kimball was governed by an explicit exception to the doctrine, i.e., an action for negligent misrepresentation set forth in Section 552 of the Restatement (Second) of Torts and adopted by the Pennsylvania Supreme Court in Bilt-Rite Contractors, Inc. v. The Architectural Studio, 581 Pa. 454, 866 A.2d 270 (Pa. 2005). Gongloff contended that the factual allegations of the amended complaint asserted that Kimball: 1) either explicitly or implicitly represented that the structure could safely sustain all required construction loads and in situ [3] loads; 2) either explicitly or implicitly represented that normal construction methods could be employed to erect the structure; and 3) supplied false information, in the form of its structural design of the project. According to Gongloff, these assertions were sufficient to survive Kimball's motion for judgment on the pleadings.

On April 18, 2013, the trial court decided that Gongloff could not pursue its negligent misrepresentation claim and granted Kimball's motion for judgment on the pleadings. The trial court explained its ruling, as follows:

[Kimball's] second argument deals with the economic loss doctrine as it applies to the facts of the case. The economic loss rule is that tort law is not intended to compensate parties for losses suffered as a result of a breach of duties assumed only by agreement. To recover in negligence there must be a showing of harm above and beyond disappointed expectations evolving solely from a prior agreement. Bilt-Rite v. The Architectural Studio, 581 Pa. 454, 866 A.2d 270, 283 (Pa. 2005). The Bilt-Rite [] decision adopted Section 552 of the Restatement ([S]econd) of Torts entitled Information Supplied for the Guidance of Others. The Supreme Court went on to recognize that a design professional's liability for economic damages to third parties cannot be without limits. Id. 286.
The language of Section 552 requires that the design professional make a negligent representation that is relied upon by the third party and causes the third party economic harm. [Gongloff] alleges that Kimball either " expressly or impliedly" represented that the structure could safely sustain all required construction loads and in situ loads. No representation to that effect is shown. [Gongloff] may have suffered economic loss but cannot point to the negligent misrepresentation by Kimball that led to the loss. The fact that the design was complex and required further engineering and design by the contractor cannot be attributed to any representation by Kimball.
Finally, [Gongloff] contends that Kimball explicitly or impliedly represented that normal construction methods could be employed to erect the structural steel. There is no express representation concerning means and methods of construction. In fact, Kimball required that the structural steel erector have special credentials issued by the American Institute of Steel Construction.
[Gongloff] did not have said credentials, although subcontractor Kinsley did. The requirement of special qualifications for the steel erectors undermines [Gongloff's] position that Kimball implied that normal ...

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