Delaware Business Litigation Report

Superior Court Declines To Expand Economic-Loss Doctrine in Dismissing Negligent Mispresentation Claim

Millsboro Fire Company v. Construction Management Service, Inc., C.A. No. 05-06-137 MMJ, 2006 WL 1867705 (Del. Super. Ct. June 7, 2006). Plaintiff fire company sued its contractor on a significant renovation and improvement project, alleging numerous design and workmanship defects. The defendant contractor in turn filed a third-party complaint against several parties hired by plaintiff who were involved in the design and management of the project, alleging negligence, breach of contract, and negligent misrepresentation. The third-party defendants subsequently filed a motion for summary judgment, which was granted. The court dismissed defendant's negligent misrepresentation claim, finding that the third-party defendants were not businesses falling within Delaware's narrow application and strict construction of the Economic Loss Doctrine, because the provision of plans and design drawings used to construct the project do not constitute the business of supplying information. The court also rejected defendant's claim that it detrimentally relied on the information provided by the third-party defendants, stating that defendant would not be held accountable for any defect resulting from defective plans provided by plaintiff or at plaintiff's request. The court further rejected defendant's claim that plaintiff's refusal to join the third-party defendants to the underlying breach of contract suit constituted unjust enrichment to those parties. Share