United States District Court, D. Maine
TETRA TECH CONSTRUCTION INC., Plaintiff, Counterclaim Defendant, and Third-Party Plaintiff
SUMMIT NATURAL GAS OF MAINE INC., Defendant and Counterclaim Plaintiff
JM CABLE CORP AND FIBER NET INC, Third Party Defendants
RECOMMENDED DECISION ON DEFENDANT’S MOTION TO
C. Nivison U.S. Magistrate Judge
matter is before the Court on Defendant Summit Natural Gas of
Maine’s Motion to Dismiss Counts IV and V of Plaintiff
Tetra Tech Construction’s Second Amended Complaint.
(Motion to Dismiss, ECF No. 63.) Through its motion,
Defendant argues that Plaintiff’s claims for
intentional/fraudulent misrepresentation and negligent
misrepresentation are barred by the economic loss doctrine.
(Id. at 1.) Defendant also argues that Plaintiff has
not plead its fraud claim with sufficient particularity.
response to the motion, Plaintiff represents that it will
voluntarily dismiss its fraud claim without prejudice with
the understanding that it might reassert the claim based on
the results of anticipated discovery. Plaintiff objects to
the dismissal of the negligent misrepresentation claim.
(Pl.’s Response in Opposition at 3, ECF No. 71.)
following facts are drawn from Plaintiff’s second
amended complaint. (ECF No. 62.) Plaintiff’s
allegations are accepted as true for purposes of reviewing
Defendant’s motion to dismiss.
successfully bid on a project to serve as the prime
contractor for the installation of the Kennebec Valley
Pipeline, a natural gas pipeline project for which Defendant
Summit Natural Gas of Maine, Inc. was responsible. (Sec. Am.
Compl. ¶ 1, ECF No. 62.) The contract covered the
installation of miles of underground pipe and several service
installations for customers. (Id. ¶ 7.) In the
bidding process, Defendant made certain representations to
Plaintiff regarding the location of the line. Specifically,
Plaintiff alleges that Defendant represented the pipeline
would run “off the curb, ” which means the
pipeline would not run directly beneath the roadway. Based on
this representation, Plaintiff concluded that the trench
would not have to run down paved streets. (Id.
to Plaintiff, after Plaintiff submitted its bid, Defendant
“changed the trench line location such that a
significant portion of the trench line would be in the
roadways.” (Id. ¶ 9.) The changes caused
Plaintiff “to incur additional costs, to perform
additional Work and services that were compensable under the
Contract, and caused [Plaintiff’s] Work to be more
difficult, expensive and time-consuming.” (Id.
¶ 13.) Principally, the trench work under the roadway
resulted in costs for hauling trenched material and
replacement fill, and for a traffic control subcontractor.
(Id. ¶ 18.)
notified Defendant of the additional costs and work, and
continued its work on the project with the understanding that
Defendant would compensate it for the increased costs and
work. (Id. ¶ 14.) According to Plaintiff,
“[t]he changes in the scope of [Plaintiff’s] Work
and additional obligations and directions of [Defendant]
and/or local authorities caused [Plaintiff] to incur
additional costs, to perform additional Work and services
that were compensable under the Contract, and caused
[Plaintiff’s] Work to be more difficult, expensive, and
time-consuming.” (Id. ¶ 13.) When
Plaintiff presented Defendant with a change order and
supporting invoices to recoup the money expended on its
additional costs, Defendant told Plaintiff that it did not
intend to pay or even review the hauling and traffic control
invoices, “despite the fact that [Plaintiff] met all
the terms and conditions of the Contract, provided invoices,
reformatted the invoices at Defendant’s request a
number of times and requested payment.” (Id.
¶¶ 15, 18, 21.)
filed a second amended complaint in which Plaintiff asserted
two additional causes of action: a claim of fraudulent
misrepresentation / fraud in the inducement (Count IV) and a
claim of negligent misrepresentation (also titled Count
(Id. ¶¶ 40 - 50.) Plaintiff alleges that
Defendant misrepresented the nature of the work on the
project for which Plaintiff was the successful bidder.
Plaintiff alleges that it was harmed because the work was
“more difficult, expensive, and time-consuming”
than anticipated and required Plaintiff to assume additional
and unexpected costs. (Id. ¶¶ 11, 13.)
to Federal Rule of Civil Procedure 12(b)(6), a party may seek
dismissal of “a claim for relief in any pleading”
if that party believes that the pleading fails “to
state a claim upon which relief can be granted.” In its
assessment of the motion, a court must “assume the
truth of all well-plead facts and give the plaintiff the
benefit of all reasonable inferences therefrom.”
Blanco v. Bath Iron Works Corp., 802 F.Supp.2d 215,
221 (D. Me. 2011) (quoting Genzyme Corp. v. Fed.
Ins. Co., 622 F.3d 62, 68 (1st Cir. 2010)). To overcome
the motion, the plaintiff must establish that its allegations
raise a plausible basis for a fact finder to conclude that
the defendant is legally responsible for the claim(s) at
Defendant argues that the economic loss doctrine requires the
dismissal of Plaintiff’s negligent misrepresentation
claim. Defendant maintains Plaintiff cannot assert a claim
for negligent misrepresentation because the parties’
relationship is defined by a contract and thus
Plaintiff’s damages, if any, are contractually-based
and are not tort-based. (Motion at 1.) More particularly,
Defendant characterizes Plaintiff’s claim as involving
the “value and quality” of its bargain with
Defendant, and argues that relevant case law precludes
Plaintiff’s recovery for negligent misrepresentation.
(Id. at 8 - 12, discussing cases.) Plaintiff
contends dismissal is not appropriate because the claim is
not about “value and quality, ” but is about a
“bait and switch” whereby Plaintiff was induced
or required to perform work outside the scope of the
contract. (Response at 4 - 6.)
Negligent Misrepresentation and the ...