Opinion ID: 2760986
Heading Depth: 3
Heading Rank: 2

Heading: The Gist of the Action Doctrine in Pennsylvania

Text: Our Court has had scant occasion to opine as to how the gist of the action doctrine should be employed to ensure that a party does not bring a tort claim for what is, in actuality, a claim for a breach of contract. We have, nevertheless, rendered a number of prior decisions in which we have articulated the fundamental tenets of this doctrine and applied it to resolve other legal questions in which the distinction between the underlying action being a tort or contract claim was dispositive. We, therefore, begin with a discussion of those decisions, as they illustrate how this doctrine has been traditionally utilized by our courts to distinguish between tort and contract claims.10 As early decisions of our Court involving the gist of the action doctrine were guided by legal principles derived from the English common law, a brief history of the development of those principles thereunder is instructive. A leading authority on the law of torts, Dean William Prosser, has noted that, from its inception, and for centuries thereafter until the mid-1300s, the English common law recognized no distinction between actions in tort and actions in contract, inasmuch as the form of the action, as set forth by the parties in their writs or pleadings, was deemed controlling of how a civil case proceeded through the English court system. However, as commerce became more sophisticated, certain cases began to arise where injuries occurred during the course of business relationships between parties, such as horses being drowned during 10 Inasmuch as we accepted review only to resolve the narrow question of whether the the Brunos’ negligence claim, as pled in their complaint, was barred by the gist of the action doctrine as the lower courts found, contrary to the suggestion of amici PDI/IFP, the question of whether that claim is otherwise legally viable is not before us and, hence, does not impact our consideration of this issue. Further, we reject the proposition advanced by these amici that undertaking to clarify the application of the gist of the action doctrine in Pennsylvania constitutes a mere “intellectual exercise” in this instance. PDI/IFP Brief at 7. As part of our determination of the issue we accepted for review, we must, necessarily, explicate the governing legal principles. [J-23-2014] - 19 transportation or injured during shoeing, customers of incompetent barbers sustaining disfiguring facial injuries during shaving, patients suffering grievous bodily injury from shoddy surgical practices, and homes being rendered dangerous or uninhabitable as the result of carpenters’ lack of skill in performing construction. Prosser, Selected Topics on The Law of Torts, 381-82 (Fourth Series 1954). The theories of the various civil actions by which plaintiffs who suffered such losses sought recovery sounded in tort as they were based on the concept of a breach of the duty imposed by the law to exercise care in providing the service. Gradually, however, the English court system began to also recognize separate actions for “assumpsit” arising out of business relationships, which were based on the concept of a defendant being liable for a breach of the duty created by the defendant “undertaking” to render services to the plaintiff, in exchange for monetary consideration. These actions eventually evolved to the point that they became the exclusive vehicle for parties to pursue remedies for breaches of executory promises in their contracts. Id. at 382-84. Nonetheless, the development of these contractual actions did not extinguish a party’s right to also bring tort actions in circumstances whenever such actions had been previously recognized. Id. at 384. According to Dean Prosser, “[o]nce it was clear that assumpsit would lie for any breach of contract, but that in certain situations there might still be a remedy in tort, the English courts began to be beset with problems.” Id. at 38586. A bewildering array of decisions followed from those tribunals as they attempted to distinguish tort and contract actions, but they offered no clear principle of demarcation. Eventually, an act of the English Parliament created a division between those actions “founded upon tort” and those “founded upon contract” for purposes of determining jurisdiction of the English courts of common pleas and the costs recoverable in a particular civil action. Id. at 386-87. This compelled the English courts to, thereafter, [J-23-2014] - 20 undertake an examination of the character of each action in order to give it an appropriate classification. American courts, following the English decisions in this area, also adopted this approach by focusing on the substance, i.e., the gist, of a cause of action, in order to determine whether it stated a claim in tort or in contract. Id. The seminal decisions from our Court articulating and applying the gist of the action doctrine were rendered in the 1800s, and the doctrine was utilized in those cases to distinguish a breach of contract claim from a tort claim for purposes of ascertaining which court had jurisdiction over a particular action, due to the fact the law at that time gave jurisdiction over contract claims valued at less than $100.00 to justices of the peace, as opposed to courts of common pleas which had jurisdiction over all tort claims irrespective of the dollar value of the injury. The first of these cases is Zell, which was decided in 1830. In Zell, the plaintiff owned a particular piece of land and entered into a contract with the defendant — a millwright — to construct a clover mill and, also, to dig a channel in the bed of a stream running across the plaintiff’s land, so that it would divert the stream’s current to flow to the mill, and, additionally, would bring the elevation of the stream’s waterflow level with the top of a dam across the stream. The defendant built the mill and dug a channel in the streambed; however, the manner in which the defendant constructed the channel inhibited the stream’s water from flowing to the mill and, also, created a 16-inch grade between the bottom of the stream and the top of the dam. Because both of these conditions rendered the mill nonfunctional and, hence, useless to the plaintiff, plaintiff brought suit against defendant. In his pleading, plaintiff asserted the existence of the contract with defendant and its aforementioned terms, and also alleged that the defendant “negligently, carelessly, and unskillfully, graded and laid off said race and water-course, and built said mills; and [J-23-2014] - 21 so inaccurately and erroneously governed himself therein, and for want of due care and skill” such that it deprived plaintiff of the use of the improvements and the land. Zell, 1830 WL 3261 at . After a jury verdict for the plaintiff in the amount of 6 cents, the trial court awarded costs which, under the extant law, it was not empowered to do for a verdict of that sum if the action was in assumpsit, i.e. breach of contract, which defendant contended the suit, in actuality, was. On appeal, in order to determine whether the trial court properly had jurisdiction over the matter, our Court considered the question of the true nature of the suit and found that, while the suit may have arisen because of the existence of the contract between the parties, this fact, in and of itself, did not render it an action for breach of contract. Our Court noted that the true subject matter of the allegations in the complaint did not relate to the defendant’s failure to perform his contractual obligations, but, rather, were allegations that he had performed those obligations in a negligent or careless manner. We explained: The gist of an action on the case[11] like the present, is not a failure to perform, but a failure to perform in a workmanly manner, which is a tort. . . . An undertaking for skill and diligence is implied no further than to raise a duty, the BREACH of which is the gravamen and meritorious cause of the action. The difference between assumpsit which is an action directly on the contract, and case which is collateral to it, is shewn by the pleadings . . . These are sometimes concurrent remedies; as in an action against a carrier who may be made to respond either immediately on the contract which affords a specific ground of action, or on the custom which raises a duty to carry the goods safely; and as the one or the other form is adopted, so may the count be joined with other counts sounding in contract or tort. In all cases where the action is not on the contract, but for the breach of a 11 An action in “case” was, under the common law of the era, considered an action sounding in tort. Krum v. Anthony, 8 A. 598, 600 (Pa. 1887). [J-23-2014] - 22 collateral duty, the gist is a personal tort; as where a smith pricks a horse in shoeing, or a farrier kills him by bad medicines or neglect: and it is emphatically the gravamen in an action against a barber for barbering his customer negligenter et inartificialiter. That the defendant’s liability arose remotely out of a contract, therefore, is by no means decisive of the question. Zell, 1830 WL 3261 at  (emphasis original, citations omitted). Consequently, with this decision, our Court endorsed the principle that merely because a cause of action between two parties to a contract is based on the actions of the defendant undertaken while performing his contractual duties, this fact, alone, does not automatically characterize the action as one for breach of contract. To the contrary, Zell established that the nature of the duty breached, as alleged in the plaintiff's pleadings, is determinative of the gist of the action; hence, actions arising “directly” from an alleged breach of a contractual duty were to be regarded as being in contract; whereas, those actions based on an alleged breach of a contracting party’s separate “collateral” duty to perform a contractual obligation with skill and diligence were to be considered as being in tort. In the subsequent case of McCahan v. Hirst, 7 Watts 175, 1838 WL 3224 (Pa. 1838), also involving a question of jurisdiction, our Court elaborated on the character of the alleged breach of duty which would render a particular cause of action a breach of contract — “nonfeasance” — or a tort — “misfeasance.” In that case, the plaintiff alleged in his complaint that the defendant “carelessly, negligently and improperly” stored and handled five bushels of cloverseed which the plaintiff delivered to the defendant to store pursuant to a contract of bailment, and which was later lost by the defendant while in his custody. 1838 WL 3224, at . Despite the fact that these claims [J-23-2014] - 23 sounded in negligence, our Court explained that the true nature of the action was based on an alleged breach of the specific duty imposed by the bailment contract, rather than, as in Zell, an alleged breach of the general duty to perform the contractual obligations of the construction contract in a non-negligent fashion: [T]he cause of action [in Zell] was considered substantially a misfeasance; but here it cannot, at most, be made to amount to more than a nonfeasance; which latter, properly speaking, is the non-performance of a duty; and whenever such duty arises, as it does here, out of a contract, the non- performance of it becomes, and in reality is, nothing more or less than a non-performance or breach of the contract imposing the duty. Hence the contract is the real foundation of the cause of action, which must be considered as arising immediately from the breach of it. But a misfeasance is a trespass or wrong committed, which, in contemplation of law, has no relation to a contract in any case. McCahan, at 3 (emphasis original). McCahan therefore established that, whenever a plaintiff’s complaint sets forth allegations which substantially constitute assertions of a defendant’s complete failure to perform duties originating from a contract — a nonfeasance — the plaintiff’s action will be deemed to be a breach of contract; whereas, if the allegations substantially concern the defendant’s negligent breach of a duty which exists independently and regardless of the contract — a misfeasance — then the action will be regarded as one in tort.12 12 As a leading treatise on the law of torts, coauthored by Dean Prosser, observes, this nonfeasance/misfeasance distinction was the earliest line of division developed by American courts to differentiate between tort and contract actions. Used in this context, misfeasance means more than complete non-performance of a contractual duty, and thus encompasses situations where a party attempts performance of a contractual obligation, but does so improperly or without reasonable care. W. Page Keeton, Prosser and Keeton on Torts 659-60 (5th ed. 1984) (hereinafter “Prosser and Keeton”). [J-23-2014] - 24 Thereafter, our Court employed the gist of the action doctrine to differentiate between contract and tort actions for purposes other than determining jurisdiction, but, again, we utilized the nature of the duty alleged to have been breached as the basis for classifying the particular action at issue. In the first such case, Cook v. Haggarty, 36 Pa. 67, 1859 WL 8877 (Pa. 1859), we were asked to ascertain whether a type of responsive pleading, typically filed in contract actions, was permitted in response to plaintiff’s complaint which sounded in tort. The foundation of the controversy in that matter was a contract between the parties which obligated the defendant to “safely keep, pasture, and specially care for, and attend to” plaintiff’s horses. 1859 WL 8877 at . When the horses sustained injury during defendant’s care, the plaintiff brought an action alleging that the defendant “conducted himself so carelessly, negligently and improperly . . . in and about the keeping and pasturing, caring for, and attending to the horses.” Id. at . Though the plaintiff characterized this action as one in tort, the trial court permitted the defendant to raise contractual defenses on the grounds that the plaintiff’s complaint was not an action in tort, but rather for an alleged breach of the contract of bailment. Our Court found that, because the duty the plaintiff alleged the defendant to have breached was the very same as that described by the contract, the contract was the origin of the duty alleged to have been breached, and we concluded there was no error in treating it as a breach of contract for purposes of allowing the responsive pleading. Next, in Krum, supra, we applied the gist of the action doctrine to overturn a judge’s instruction to the jury which was based on his misapprehension of the nature of the underlying action. In that case, the parties had a contract which required the defendants to maintain a fence between their property and the plaintiff’s adjoining lands, but the defendants neglected to perform any upkeep and permitted the fence to fall [J-23-2014] - 25 down, and they also removed a portion of the fence in conjunction with quarrying activities which encroached on the border of the plaintiff’s lands. One night, the plaintiff put his horse out to pasture on his lands, but, because of the absence of fencing, the horse wandered onto the defendants’ land and tumbled to its death in the quarry. The plaintiff commenced an action to recover the value of the loss of the horse, which he asserted resulted from the defendants’ negligence. The trial court refused to charge the jury on the issue of contributory negligence because, in its view, it was the contractual duty of the defendants to maintain the fence, and it informed the jury that the defendants’ liability to the plaintiff, if any, was premised on their failure to perform this contractual duty. Our Court reversed. We found the mere existence of a contract between the parties, which obligated the defendants only to maintain the fence, did not preclude a tort action based on the defendants’ negligence, generally, in creating the dangerous condition (the open quarry pit) which was the true nature of the action. See id. at 600 (“The action was not brought to recover damages for the breach of a contract to maintain a fence. On the contrary, it was an action of case sounding in tort to recover damages for the loss of a horse resulting from the negligence of the defendants. This negligence is the very gist of the action.”). Thereafter, in the Twentieth Century, our Court applied the gist of the action doctrine to determine whether a plaintiff could seek a tort remedy for actions taken by a party with whom he or she contracted, or whether the plaintiff was limited to seeking redress through a breach of contract action. In Horney, a decision rendered in 1905, our Court, while not expressly characterizing it as such, employed a gist of the action analysis to determine whether the plaintiff could maintain a tort action for “inconvenience and annoyance and mortification and indignity and humiliation suffered” against the defendants who were managers of a theater, as the result of their failure to [J-23-2014] - 26 provide the specific seats for which the plaintiff had purchased tickets. 61 A. at 1089. In affirming the trial court’s entry of a directed verdict for the defendants on the basis of its determination that the plaintiff could not recover in tort for the defendants’ failure to honor the original tickets, as issued, we noted that, as a general matter, a purchase of a theater ticket merely creates a contractual duty on the part of the seller for the seller to furnish the purchaser a particular seat. Consequently, we found that the defendants, as sellers of the tickets, had only the contractual duty to the plaintiff, as purchaser, to give him the promised seats, and so the plaintiff’s remedy was limited to seeking damages for breach of that duty. We specifically contrasted this limited duty created by the parties’ contractual relationship with the general duty of service owed by a “common carrier,” such as a railroad or bus company, to the public, which duty “is implied by law by reason of the relation of the parties.” Id. We observed that, because of the general nature of that duty, a tort recovery would be available to anyone aggrieved by the common carrier’s breach thereof, in addition to a recovery on the carriage contract. Thus, Horney is notable for establishing that, as a matter of law, a negligence suit may not be brought for breaches of what are purely contractual duties, but also for embracing the corollary principle that a claim may be brought against a party for actions taken in performance of contractual duties, if those actions constitute a breach of a general duty of care created by law and owed to all the public. Over sixty years later, in Reitmeyer v. Sprecher, 243 A.2d 395 (Pa. 1968), our Court specifically recognized a cause of action in tort based on a party’s violation of a duty owed to the public at large, by failing to fulfill a promise which was contractual in nature. In that case, a landlord promised his tenant, during lease negotiations, that he would repair a defective porch after the tenant took possession and repeated this [J-23-2014] - 27 promise once the lease was executed. The landlord failed to fulfill this promise, however, and the tenant was subsequently injured when the porch collapsed. She then filed a complaint seeking recovery in tort from the landlord for her injuries, but the trial court sustained the landlord’s demurrer to the complaint on the basis that Pennsylvania had, heretofore, only permitted an action for breach of contract in such situations. Our Court reversed and recognized the right of the tenant to proceed with her tort claim, based on our conclusion that the gist of that claim was the landlord’s negligence for breaching a general legal duty by failing to fulfill his promise to repair, not for a breach of the contract created by the promise itself. We explained: Under the instant circumstances, a duty on the part of the landlord arose to repair and render safe the defective condition of the premises and if, as alleged, physical harm was caused to the tenant, by a breach of the landlord's promise to repair, liability in tort on the part of the landlord should arise. As we said in Evans v. Otis Elevator Co., 403 Pa. 13, 18, 168 A.2d 573, 575 (1961):[13] ‘It is not the contract per se which creates the duty; it is the law which imposes the duty because of the nature of the undertaking in the contract.’ Id. at 398. As the parties have discussed in their briefs, the Superior Court has fully embraced the gist of the action doctrine as a means of determining whether a putative tort claim is barred because its substance is, in actuality, a claim for breach of contract. That tribunal has also employed a source of duty analysis similar to that described in our cases discussed above as the basis for differentiating between tort and contract 13 In Evans, our Court found that the defendant, an elevator repair company, had a general duty of care, imposed by law, “to perform his contractual undertaking in such manner that third persons — strangers to the contract — will not be injured thereby.” 168 A.2d at 575 (citing Prosser and Keeton, 514-519 (2d ed. 1955)). [J-23-2014] - 28 actions, with some variation. In the leading case by that tribunal in this area, Bash, supra, the plaintiff — a dentist — contracted with the publisher of a “yellow pages” telephone directory to place an advertisement therein, but the publisher failed to include the ad when the directory was printed. The plaintiff sued the publisher, inter alia, for both breach of contract and in tort seeking damages for “emotional distress, mental anguish, embarrassment and depression” based upon the publisher’s failure to perform the agreed upon contractual terms. 601 A.2d at 829. The trial court dismissed the tort claim and permitted only the contract claim to proceed, and the Superior Court affirmed. In its opinion, the court adopted the reasoning of two Pennsylvania federal district court decisions, first noting: [I]t is possible that a breach of contract also gives rise to an actionable tort. . . . ‘To be construed as in tort, however, the wrong ascribed to defendant must be the gist of the action, the contract being collateral.’ . . . A claim [in contract] cannot be converted to one in tort simply by alleging that the conduct in question was wantonly done. Bash, 601 A.2d at 829 (quoting Closed Circuit Corp. of Am. v. Jerrold Electronics, 426 F. Supp. 361 (E.D. Pa. 1977)). The court then endorsed a duty-based differentiation between tort and contract actions: Tort actions lie for breaches of duties imposed by law as a matter of social policy, while contract actions lie only for breaches of duties imposed by mutual consensus agreements between particular individuals. Bash, 601 A.2d at 829 (quoting Iron Mountain v. American Specialty Foods, 457 F. Supp. 1158 (E.D. Pa. 1978) (internal citations and quotations omitted)). Applying these principles, the court deemed the obligations of the parties to be “defined by the terms of the contract, and not by the larger social policies embodied in the law of torts.” Id. at [J-23-2014] - 29 830, and, hence, ruled that the plaintiff was limited to seeking recovery of damages arising out of the breach of that contract. Subsequently, in eToll, supra, the Superior Court seemingly added an extra consideration to the Bash analysis by utilizing an additional criteria to differentiate between contract and tort claims brought in the same action — i.e., whether they are “inextricably intertwined.” 811 A.2d at 21. In that case, the plaintiff — an email provider — filed suit for breach of contract and for the tort of fraud against an advertiser, with which it had contracted to perform marketing and advertising services, for stealing money by making unauthorized and excessive contracts for goods and services with third party vendors, and accepting payments for services which were not performed. The Superior Court, while reiterating the above referenced considerations relied on in the Bash decision, also recognized, from federal district court opinions, four situations under which those courts found the gist of the action doctrine bars a putative tort claim: (1) where the tort claim “aris[es] solely from a contract between the parties”; (2) where “the duties allegedly breached were created and grounded in the contract itself”; (3) where “the liability stems from a contract”; or (4) where the tort claim “essentially duplicates a breach of contract claim or the success of which is wholly dependent on the terms of a contract.” eToll, 811 A.2d at 19 (citations omitted). The court ultimately found that the plaintiff’s fraud claims arose “in the course of the parties’ contractual relationship,” “[defendants]’ duties regarding billing and performance were created and grounded in the parties’ contract,” and the damages sought were “the types of damages which would be compensable in an ordinary contract action.” Consequently, the court held that the claims were barred because they were “not so tangential to the parties' relationship so as to make fraud the gist of the action,” but, rather, were “inextricably intertwined with the contract claims.” Id. at 20-21. [J-23-2014] - 30 Subsequent decisions of the Superior Court assessing whether a particular tort claim between contracting parties is barred by the gist of the action doctrine have taken varied approaches. In some cases, the court has used the more straightforward analysis set forth in Bash and examined whether the duty allegedly breached was created by the contract itself, or, instead, is in the nature of a broader duty owed to others imposed as a result of the social policy reflected in the law of torts. See, e.g., Reed v. Dupuis, 920 A.2d 861, 866 (Pa. Super. 2007) (finding landlord had a legal duty to exercise reasonable care to fulfill her promise to correct a water infiltration problem which is “separate and distinct from her contractual duty”). In other cases, the court has followed the eToll approach and also examined whether putative tort claims are “inextricably intertwined” with breach of contract claims which the plaintiff also brought in the same action. See, e.g., Pittsburgh Const. Co. v. Griffith, 834 A.2d 572, 584 (Pa. Super. 2003) (holding tort claim for conversion by commercial homebuilder against homeowners for their failure to release payment pursuant to construction contract was barred, since homebuilder had also filed a breach of contract claim, and such claims were “inextricably intertwined [with] the success of the conversion claim depending entirely on the obligations as defined by the contract.”).14 The Commonwealth Court follows a different analysis, which rests on the same nonfeasance/misfeasance distinction our Court articulated in McCahan: If there is ‘misfeasance,’ there is an improper performance of the contract in the course of which breaches a duty imposed 14 Both the Third Circuit Court of Appeals, as well as some federal district courts, have looked to eToll as the controlling statement of Pennsylvania law in this area and have, in their analysis, found putative tort claims barred because they were “inextricably entwined” with breach of contract claims based upon the same conduct. See, e.g., Addie v. Kjaer, 737 F.3d. 854 (3d Cir. 2013); Bancorp Bank v. Lawyers Title Ins. Corp., 2014 WL 3325861 (E.D. Pa. filed July 8, 2014). [J-23-2014] - 31 by law as a matter of social policy. In such instances, the ‘gist’ of the plaintiff's action sounds in tort and the contract itself is collateral to the cause of action. On the other hand, if there is ‘nonfeasance,’ the wrong attributed to the defendant is solely a breach of the defendant's duty to perform under the terms of the contract. In such instances, the ‘gist’ of the plaintiff's action sounds in contract, and the plaintiff would not have a cause of action but for the contract. Harleysville Homestead Inc. v. Lower Salford Twp. Auth., 980 A.2d 749 (Pa. Cmwlth. 2009). See also Pratter v. Penn Treaty American Corp., 11 A.3d 550 (Pa. Cmwlth. 2010). As the foregoing discussion indicates, the fundamental principles comprising the gist of the action doctrine have long been an integral part of our Court’s jurisprudence and have, at least in two cases — Horney and Reitmeyer — been employed by our Court for the purpose of determining whether a plaintiff may, as a matter of law, bring an action in tort for a defendant’s alleged negligent acts committed during the existence of their contractual relationship. Likewise, the Superior and Commonwealth Courts have used this doctrine for the same purpose in their consideration of specific questions such as that presented by the case at bar — namely, whether a purported tort claim was properly dismissed by a trial court because the true gist or gravamen of the claim was for breach of a contract which existed between the parties. The general governing principle which can be derived from our prior cases is that our Court has consistently regarded the nature of the duty alleged to have been breached, as established by the underlying averments supporting the claim in a plaintiff’s complaint,15 to be the critical determinative factor in determining whether the 15 The facts that a court examines in this determination are necessarily dependent on when, procedurally, this inquiry is undertaken. Where, as here, the question is presented in a pretrial motion for a demurrer, the court considers only the well-pleaded facts in the parties’ complaint. See MacElree, supra. However, if the question is (continuedT) [J-23-2014] - 32 claim is truly one in tort, or for breach of contract. In this regard, the substance of the allegations comprising a claim in a plaintiff’s complaint are of paramount importance, and, thus, the mere labeling by the plaintiff of a claim as being in tort, e.g., for negligence, is not controlling. If the facts of a particular claim establish that the duty breached is one created by the parties by the terms of their contract — i.e., a specific promise to do something that a party would not ordinarily have been obligated to do but for the existence of the contract — then the claim is to be viewed as one for breach of contract. See McCahan; Cook; Horney. If, however, the facts establish that the claim involves the defendant’s violation of a broader social duty owed to all individuals, which is imposed by the law of torts and, hence, exists regardless of the contract, then it must be regarded as a tort. See Zell; Krum; Reitmeyer; Ash v. Cont’l. Ins. Co., 932 A.2d 877, 885 (Pa. 2007) (holding that action against insurer for bad faith conduct pursuant to 42 Pa.C.S.A. § 8371 is for breach of a duty “imposed by law as a matter of social policy, rather than one imposed by mutual consensus”; thus, action is in tort); see also Prosser and Keeton at 656 (reviewing extant case law, and noting the division therein between actions in tort and contract based on the nature of the obligation involved, observing that “[t]ort obligations are in general obligations that are imposed by law on policy considerations to avoid some kind of loss to others . . . [which are] independent of promises made and therefore apart from any manifested intention of parties to a contract, or other bargaining transaction.”); Tameny v. Atl. Richfield, 610 P.2d 1330, 1335 (Cal. 1980) (“Whereas contract actions are created to protect the interest in having promises performed, tort actions are created to protect the interest in freedom from (Tcontinued) presented in subsequent contexts, such as in a motion for a directed verdict, which is what transpired in Horney, then the facts, of course, should be viewed in accordance with the applicable standard of review. [J-23-2014] - 33 various kinds of harm. The duties of conduct which give rise to them are imposed by law, and are based primarily upon social policy.” (quoting Prosser, Law of Torts 613 (4th ed. 1971)). Although this duty-based demarcation was first recognized by our Court over a century and a half ago, it remains sound, as evidenced by the fact that it is currently employed by the high Courts of the majority of our sister jurisdictions to differentiate between tort and contract actions.16 We, therefore, reaffirm its applicability as the touchstone standard for ascertaining the true gist or gravamen of a claim pled by a plaintiff in a civil complaint.17 16 See Locke v. Ozark City Bd. Of Educ., 910 So.2d 1247 (Ala. 2005); Thomas v. Cleary, 768 P.2d 1090 (Alaska 1989); Barmat v. John and Jane Doe Partners A-D, 747 P.2d 1218 (Ariz. 1987); Tameny, supra; A.C. Excavating v. Yacht Club II Homeowners Ass'n, Inc., 114 P.3d 862, 866 (Colo. 2005); Gazo v. City of Stamford, 765 A.2d 505 (Conn. 2001); Bishop v. Owens, 272 P.3d 1247 (Idaho 2012); Armstrong v. Guigler, 673 N.E.2d 290 (Ill. 1996); Cross v. Lightolier Inc., 395 N.W.2d 844 (Iowa 1986); Brueck v. Krings, 638 P.2d 904 (Kan. 1982); Roger v. Dufrene, 613 So.2d 947 (La. 1993); Anthony's Pier Four, Inc. v. Crandall Dry Dock Eng’rs, Inc., 489 N.E.2d 172 (Mass. 1986); Fultz v. Union-Commerce Assocs., 683 N.W.2d 587 (Mich. 2004); Wild v. Rarig, 234 N.W.2d 775 (Minn. 1975); Billings Clinic v. Peat Marwick Main & Co., 797 P.2d 899 (Mont. 1990); Zawaideh v. Nebraska Dep’t. of Health and Human Servs., 825 N.W.2d 204, 213 (Neb. 2013); Bernalillo Cnty. Deputy Sheriffs Ass'n v. Cnty. of Bernalillo, 845 P.2d 789, 793 (N.M. 1992); New York Univ. v. Continental Ins. Co., 662 N.E.2d 763 (N.Y. 1995); Toone v. Adams, 137 S.E.2d 132 (N.C. 1964); St. Paul Fire & Marine Ins. Co. v. Amerada Hess Corp., 275 N.W.2d 304 (N.D. 1979); Finnell v. Seismic, 67 P.3d 339, 344 (Okla. 2003); Conway v. Pac. Univ., 924 P.2d 818 (Or. 1996); Schipporeit v. Khan, 775 N.W.2d 503 (S.D. 2009); Abi-Najm v. Concord Condominium, LLC, 699 S.E.2d 483 (Va. 2010); Bank of America NT & SA v. Hubert, 101 P.3d 409 (Wash. 2004); Gaddy Engineering Co. v. Bowles, et.al., LLP, 746 S.E.2d 568 (W.Va. 2013); Ferguson v. Coronado Oil Co., 884 P.2d 971 (Wyo. 1994). 17 With respect to the Superior Court’s eToll decision, we note that, because that court acknowledged in its opinion this source of duty distinction and incorporated it into its analysis, its consideration of whether tort and contract claims brought together in the same action are “inextricably intertwined” should be viewed in this context, i.e., as a determination of whether the nature of the duty upon which the breach of contract claims rest is the same as that which forms the basis of the tort claims. [J-23-2014] - 34 Notably, and of relevance to the case at bar, our prior decisions in Zell and Krum underscore that the mere existence of a contract between two parties does not, ipso facto, classify a claim by a contracting party for injury or loss suffered as the result of actions of the other party in performing the contract as one for breach of contract. Indeed, our Court has long recognized that a party to a contract may be found liable in tort for negligently performing contractual obligations and thereby causing injury or other harm to another contracting party, see, e.g., Bloomsburg Mills v. Sordoni, 164 A.2d 201 (Pa. 1960) (finding evidence sufficient for jury to have concluded architect was negligent in failing to exercise reasonable care in performance of duties imposed by design contract), or to a third person, see, e.g., Evans, supra (elevator repair company liable for injuries to user of the elevator caused by its negligent performance of service contract with building owner); Farabaugh v. Pa. Turnpike Comm’n, 911 A.2d 1264 (Pa. 2006) (recognizing claim for negligence against construction company for injuries to a third person caused by company’s allegedly deficient performance of its contractual duty of inspection). Consequently, a negligence claim based on the actions of a contracting party in performing contractual obligations is not viewed as an action on the underlying contract itself, since it is not founded on the breach of any of the specific executory promises which comprise the contract. Instead, the contract is regarded merely as the vehicle, or mechanism, which established the relationship between the parties, during which the tort of negligence was committed. See Zell, 1830 WL 3261, at  (considering action to be in tort since it was for breach of the defendant’s duty to perform, in a “workmanly manner,” construction activities specified by the construction contract); Evans, 168 A.2d at 575 (“It is not the contract per se which creates the duty [to avoid causing injury to third parties]; it is the law which imposes the duty because of the nature of the [J-23-2014] - 35 undertaking in the contract.”); Reitmeyer (negligence action was based on landlord’s alleged breach of his independent duty of care imposed by law, which arose because of the parties’ establishment of a contractual relationship through the formation of the lease agreement, not for a breach of a duty created by the agreement itself).