Opinion ID: 1267560
Heading Depth: 2
Heading Rank: 2

Heading: Defendants' Counterclaim in Tort

Text: Gilliland moved for summary judgment on Elmwood's counterclaim for negligence on the grounds that the breach of contract is not actionable as a tort and on the further grounds that there was no duty on the part of the plaintiff, aside from the contract, to perform ... [the acts complained of by Elmwood]. (Tr.49). The trial court ruled, and the Court of Appeals agreed, that [a] mere breach of contract is not actionable as a tort, no matter what the intent of the breaching party was. No relationship [giving rise to a tort duty] beyond the contract has been demonstrated or discerned and consequently Plaintiff's Motion for Summary Judgment on this issue is granted. (Tr. 131). Elmwood's counterclaim contained allegations that, as mentioned above, Gilliland was negligent in making certain representations which induced Elmwood to contract, and that Gilliland negligently designed the project, negligently estimated construction costs, and negligently failed to obtain certain necessary governmental approvals. We disagree with the Court of Appeals' holding that Elmwood has failed to plead and/or demonstrate facts showing a tort duty existing independent of the contract. We do adhere to the Court of Appeals' ruling insofar as Elmwood's claims of architect malpractice are concerned. The well known rule still exists that generally, in a malpractice case, there can be no finding of negligence in the absence of expert testimony to support it. D. DOBBS, R. KEETON, & D. OWEN, PROSSER AND KEETON ON TORTS, 188 (5th ed. 1984) ( citing, inter alia, 530 East 89 Corp. v. Unger , 43 N.Y. (2d) 776, 402 N.Y.S. (2d) 382, 373 N.E. (2d) 276 (1977) (dealing with architects)). The claimant in a malpractice claim must, through expert testimony, establish both the standard of care and the deviation by the defendant from such standard. Id . at n. 49. Here, Elmwood presented no evidence from an expert that Gilliland had committed malpractice. Thus, summary judgment was, in this respect, proper. However, this does not end the inquiry. In South Carolina, one may bring an action sounding in tort for negligent misrepresentation. A duty to exercise reasonable care in giving information exists when the defendant has a pecuniary interest in the transaction. Winburn v. Insurance Co. , 287 S.C. 435, 441, 339 S.E. (2d) 142, 146 (Ct. App. 1985). The recovery of damages may be predicted upon a negligently made false statement where a party suffers either injury or loss as a consequence of relying upon the misrepresentation. Id . These general rules have been applied, in every case this Court has located, to support the recognition of a negligent misrepresentation claim where the misrepresented fact(s) induced the plaintiff to enter a contract or business transaction. See, e.g., Winburn, supra (recognizing that under appropriate facts, negligent representations inducing the signing of an endorsement could be actionable); Pittman v. Galloway , 281 S.C. 70, 313 S.E. (2d) 632 (Ct. App. 1984) (negligent representation inducing the plaintiff's purchase of land is actionable); and First Federal Sav. Bank v. Knauss , 296 S.C. 136, 370 S.E. (2d) 906 (Ct. App. 1988) (recognizing that under appropriate facts, negligent representations inducing property purchase could be actionable). Gilliland argues that either the parol evidence rule or the merger clause in the parties' contract precludes Elmwood's negligent misrepresentation claim. We do not agree. We have previously held that parol evidence is generally admissible to show fraud in the inducement of a writing. See Bradley v. Hullander , 272 S.C. 6, 249 S.E. (2d) 486 (1978) appeal after remand , 277 S.C. 327, 287 S.E. (2d) 140 (1982). In Bradley we did not decide whether this is true for negligent misrepresentation as such was not alleged or proved in that case. The applicability of the parol evidence rule to a cause of action for negligent misrepresentation is apparently a novel issue in this state. In a majority of jurisdictions the parol evidence rule bars oral testimony in certain contract cases, but is not applicable in misrepresentation cases. Rempel v. Nationwide Life Ins. Co. , 471 Pa. 404, 370 A. (2d) 366, 370 (1977). The parol evidence rule has been held inapplicable to tort causes of action (including negligent misrepresentation) since the rule is one of substantive contract law. Formento v. Encanto Business Park , 154 Ariz. App. 495, 744 P. (2d) 22 (App. 1987). Furthermore, it has been held that a seller should not be allowed to hide behind an integration clause to avoid the consequences of a misrepresentation, whether fraudulent or negligent. Id . 744 P. (2d) at 26. We follow the reasoning of the Formento court and hold that neither the parol evidence rule nor the merger or integration clause in the parties' contract prevents Elmwood from proceeding on its negligent misrepresentation theory.