Robert & Co. Associates v. Rhodes-Haverty Partnership
| Decision Date | 09 March 1983 |
| Docket Number | No. 39121,RHODES-HAVERTY,39121 |
| Citation | 300 S.E.2d 503,250 Ga. 680 |
| Court | Georgia Supreme Court |
| Parties | ROBERT & COMPANY ASSOCIATES v.PARTNERSHIP, et al. |
David A. Handley, James C. Huckaby, Jr., Atlanta, for Robert & Company Associates.
Terrence L. Croft, Kutak, Rock & Huie, Michael E. Utley, Curtis W. Martin, Harry L. Griffin, Jr., Atlanta, for Rhodes-Haverty Partnership, et al.
We granted certiorari to consider the reversal by the Court of Appeals of the trial court's grant of summary judgment to Robert & Company. Rhodes-Haverty Partnership v. Robert & Co. Associates, 163 Ga.App. 310, 293 S.E.2d 876 (1982).
The trial court had concluded that an engineer who issues a report on the condition of a building is liable only to the party to whom the report was made. The Court of Appeals reversed and held that where the engineer knows that prospective purchasers could rely on its report, a lack of privity will not shield the engineer from liability to a limited class of third parties. That class is the foreseeable prospective purchasers. We agree with this holding and affirm.
The facts of the case are clearly reported in the Court of Appeals opinion and will not be restated here. In agreeing with the Court of Appeals opinion we acknowledge that some authorities have distinguished between cases of negligent misrepresentation and cases of intentionally false representation. This case offers an opportunity to clear that distinction as it relates to a liability to parties with whom there is no privity.
A wilful misrepresentation of a material fact made to induce another to act and upon which the other acts creates a cause of action in the injured party. Where the misrepresentation is wilfully made, privity is not necessary to give rise to the cause of action. OCGA § 51-6-2 (Code Ann. § 105-302).
In this case there is no allegation of wilfulness. It is, rather, alleged that Robert & Company was negligent in making a representation of false facts. Courts have been reluctant to extend liability in negligent misrepresentation cases where no privity appears and where the loss was merely economic and involving neither physical harm nor injury to property. An exception has been carved out in those cases where a known third party's reliance was the desired result of the representation. Ultramares Corp. v. Touche, 255 N.Y. 170, 174 N.E. 441 (1931); Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275 (1922).
In this case the damage is in the nature of economic loss rather than physical harm or property damage, and the particular party which ultimately relied on the representation was not known to Robert & Company at the time the representation was made. On the other hand, Robert & Company was aware that the report would be utilized to encourage prospective purchasers to buy the building. Therefore, while the specific future purchaser was not known to Robert & Company, the fact that the report would be used by a limited class was known. We think the best rule for resolution of this type dispute is the one enunciated in the Restatement of Torts 2d, § 552 (1977). 1 Under this standard, one who supplies information during the course of his business, profession, employment, or in any transaction in which he has a pecuniary...
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...Inc ., 912 S.W.2d 128 (Tenn. 1995), §22:16 Roach v. Hughes, 2016 WL 9460306, §21:36 Robert & Co. Assoc. v. Rhodes-Haverty Partnership , 300 S.E.2d 503 (Ga. 1983), §22:16 Robins Dry Dock & Repair Co. v. Flint , 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290 (1927), §22:05 Robinson v. GEICO General......
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