In 2005 the Pennsylvania Supreme Court recognized Section 552 of the Restatement (Second) of Torts as the law of the commonwealth in Bilt-Rite Contractors v. The Architectural Studio, 866 A.2d 270 (Pa. 2005). Section 552 describes the duty owed when one party supplies information to others, for one’s own pecuniary gain, where one intends or knows the information will be used by others. The tort allows a recipient of the information to sue the supplier for purely economic damages, even though there is not a contract between the supplier and recipient. Bilt-Rite represents an exception to the economic loss rule, which bars negligence actions for pure economic damages where there is no property damage or personal injury at issue.
Bilt-Rite involved a dispute between an architect and a contractor who relied on the architect’s plans. The contractor alleged that the plans contained negligent misrepresentations about the construction techniques required to build the project, which caused the contractor to underestimate its costs and sustain a financial loss. As Bilt-Rite involved architecture and construction, a common misconception is that its holding is limited to design professionals. Indeed, as late as 12 years after Bilt-Rite was decided, litigants argued that Pennsylvania’s recognition of Section 552 was confined to architects and engineers. See Fulton Bank v. Sandquist, No. 2306 EDA 2016, 2017 WL 4284923 (Pa. Super. Ct. 2017). However, Bilt-Rite is routinely applied to a wide range of “information supplying” businesses in the financial, insurance, real estate and legal sectors. Yet, there are circumstances where courts decline to apply Bilt-Rite despite the presence of a transfer of information accompanied by a pecuniary gain. Who, then, qualifies as a supplier of information to others for pecuniary gain subject to Section 552 liability? After nearly 20 years, a fresh look is justified.
