Court Opinion

ID: 9528529
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:41:49.065451+00
Date Added: 2024-06-11T13:26:57.099837
License: Public Domain

URBIGKIT, Chief Justice,
specially concurring and dissenting.
I concur with the reasoning and disposition of the majority in affirming summary judgment in the claims presented against the Campbell County School District and against the architects, Rundquist & Hard, P.C., and Chris Hard, individually. However, I conclude that summary judgment was inappropriately granted to Tom Barker, d/b/a Cooper Engineering & Material Testing, a soils and material testing lab *803service, which on this record negligently started the entire process causing appellant to lose its contract and consequently sustain significant damages.
To that extent, with application of Restatement (Second) of Torts § 552 (1977), which does provide a proper basis for liability, I respectfully dissent. Furthermore, this is another case of the court functioning as a fact finder in order to justify summary judgment, which is inappropriate because it contravenes established and broadly applied legal principles.
I.
INTRODUCTION
My dissent is confined to the portion of the majority opinion that determines the testing lab cannot be held liable to Century Ready-Mix, a concrete supplier, on a theory of negligence. The majority concludes that Cooper Engineering & Material Testing’s communication of test results to the School Board was not the proximate cause of Century Ready-Mix’s injuries. The majority correctly states that “ ‘[pjroximate cause is normally a question of fact unless the evidence is such that reasonable minds could not disagree.’ ” Stephenson v. Pacific Power & Light Co., 779 P.2d 1169, 1178 (Wyo.1989).
However, I disagree with the majority’s proposition that “[i]n this case the evidence * * * is such that reasonable minds could not disagree.” Unless this court would be willing to reverse a jury’s finding of negligence on the basis of insufficiency of evidence 1 had this case gone to trial, summary judgment is inappropriate. Therefore, I conclude that summary judgment was improper on the issue of Cooper Engineering & Material Testing’s negligence,
II.
ISSUE PRESENTED
Century Ready-Mix seeks to impose liability upon Cooper Engineering & Material Testing for negligently performing and reporting the testing of concrete poured by Century Ready-Mix. It claims that negligence caused Lower & Company, the general contractor, to breach its contract with Century Ready-Mix, resulting in damages to Century Ready-Mix. Cooper Engineering & Material Testing maintains that even assuming that they were negligent, Century Ready-Mix cannot recover for pecuniary harm not deriving from physical harm if that harm results from negligently causing a third person (Lower & Company) to breach its contract with Century Ready-Mix. See Champion Well Service, Inc. v. NL Industries, 769 P.2d 382 (Wyo.1989).
The majority distinguishes Champion and disagrees with the proposition that Champion precludes all economic damages for pecuniary harm in the absence of physical harm. It then affirms summary judgment on proximate cause grounds. I agree that a proper basis for liability was pleaded and shown in summary judgment evidence. Unfortunately, the majority assumes a fact finding responsibility and misapplies summary judgment precepts in determining proximate cause did not exist as a matter of law. See England v. Simmons, 728 P.2d 1137, 1150 (Wyo.1986), Urbigkit, J., dissenting.
*804III.
ANALYSIS
Traditionally, attempts by injured third parties to recover for damages arising out of the negligent performance of a contractual duty fail because of lack of privity. See Ultramares Corporation v. Touche, 255 N.Y. 170, 174 N.E. 441 (1931) and see generally 57A Am.Jur.2d Negligence, § 123 (1989). Courts first discarded the requirement of privity in product liability cases based on negligence. See MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (1916). The basis of liability may be negligent misrepresentation. Martin v. Bengue, Inc., 25 N.J. 359, 136 A.2d 626 (1957). Damages in product liability suits have not been limited to physical injury; recovery has also been permitted for economic loss. See Santor v. A & M Karagheusian, Inc., 44 N.J. 52, 207 A.2d 305 (1965). An exhaustive review of economic loss damages is provided in Continental Ins. v. Page Engineering Co., 783 P.2d 641, 666-82 (Wyo.1989), Urbigkit, J., dissenting.
Courts, upon abandonment of the privity requirement, expanded tort liability by holding that a third party, not in privity of contract with a professional person or entity, may recover for negligence which proximately causes a foreseeable economic injury to him.2 The general principle is delineated in Restatement (Second) Torts, supra, *805§ 552 (Topic 3. Negligent Misrepresentation).3
The case of Howell v. Fisher, 49 N.C.App. 488, 272 S.E.2d 19 (1980) is illustrative of this line of cases. A corporation engaged in mineral exploration entered into a contract with a geological engineering firm to perform a geological feasibility study on tracts of land the corporation had leased. The engineering firm’s favorable report was given to potential investors who invested in the corporation and became shareholders. Shortly after the corporation started mining the tract, it was discovered that the quality, quantity and value of the minerals in the tract did not conform to the engineering firm’s representations in its report. The corporation subsequently became insolvent.
The shareholders sued the geological engineering firm for negligent preparation of the soil testing report. The North Carolina court held that the shareholders’ claim was a proper action for negligent misrepresentation which could be brought absent privity of contract to recover pecuniary loss where damages to identified third parties were reasonably foreseeable by the defendant.
In determining that negligence liability should be imposed to protect the foreseeable interests of third parties not in privity of contract, the Howell court relied on Prosser:
“[B]y entering into a contract with A, the defendant may place himself in such a relation toward B that the law will impose upon him an obligation, sounding in tort and not in contract, to act in such a way that B will not be injured. The incidental fact of the existence of the contract with A does not negative the responsibility of the actor when he enters upon a course of affirmative conduct which may be expected to affect the interests of another person.”
Howell, 272 S.E.2d at 23 (quoting Prosser, Handbook of the Law of Torts § 93 at 622 (4th ed. 1971)).
In the instant case, Century Ready-Mix is seeking to recover pecuniary loss it suffered as a result of Cooper Engineering & Material Testing’s negligence in the absence of privity of contract. If Century Ready-Mix’s damages were reasonably foreseeable by Cooper Engineering & Material Testing, Century Ready-Mix’s cause of action is proper under this line of cases.
By affirming summary judgment on proximate cause grounds, the majority has gone half way by abandoning the privity requirement to now recognize that a third party, not in privity of contract with a professional person or entity, may recover for negligence which proximately causes a foreseeable economic injury to him. I believe this expansion of tort liability is the correct approach as the duty is defined by reasonably foreseeable consequences and parties.
To reach the issue of proximate cause, the majority has recognized that Cooper Engineering & Material Testing owed a duty of care in performing and reporting the compression strength test not only to the School Board that had hired it, but also to Century Ready-Mix. The majority also necessarily assumed that Cooper Engineering & Material Testing breached its duty to Century Ready-Mix, a conclusion that is adequately supported by the record. The remaining elements of a cause of action for negligence are proximate cause and injury. MacKrell v. Bell H2S Safety, 795 P.2d 776, 779 (Wyo.1990).
*806IY.
PROXIMATE CAUSE
Proximate cause means the accident or injury must be the natural and probable cause of the act of negligence. Fiedler v. Steger, 718 P.2d 773 (Wyo.1986); McClellan v. Tottenhoff, 666 P.2d 408 (Wyo.1983). As cited earlier, “ ‘[pjroximate cause is normally a question of fact unless the evidence is such that reasonable minds could not disagree.’ ” Stephenson, 779 P.2d at 1178. Support for this position can be found in Prosser and Keeton, The Law of Torts, § 45 at 321 (5th ed. 1984) (quoting Healy v. Hoy, 115 Minn. 321, 132 N.W. 208 (1911)):
[I]n any case where there might be reasonable difference of opinion as to the foreseeability of a particular risk, the reasonableness of the defendant's conduct with respect to it, or the normal character of an intervening cause, the question is for the jury, subject of course to suitable instructions from the court as to the legal conclusion to be drawn as the issue is determined either way. By far the greater number of the cases which have arisen have been of this description; and to this extent it may properly be said that “proximate cause is ordinarily a question of fact for the jury, to be solved by the exercise of good common sense in the consideration of the evidence of each particular case.”
The majority concludes that Lower & Company’s actions (termination of Century Ready-Mix from the project) were not the “natural and foreseeable consequences of Tom Barker’s reports to the board or of any faulty concrete tests” and that such actions were an “independent, intervening cause of Century’s harm.”
The majority then quotes Buckley v. Bell, 703 P.2d 1089, 1092 (Wyo.1985) (emphasis added) to support its conclusion:
“An intervening cause is one that comes into being after defendant’s negligent act has occurred, and if it is not a foreseeable event it will insulate the defendant from liability. It is reasonably foreseeable if it is a probable consequence of defendant’s wrongful act or is a normal response to the stimulus of the situation created thereby.”
It is reasonable to conclude that the normal, usual and expected response to the communication of the unfavorable test results would be that the concrete supplier would be terminated and another obtained. It was a probable consequence that the School Board, upon receiving the report, would request that the contractor cease pouring more concrete and just as probable for the contractor, in response, to immediately hire a new concrete subcontractor. Therefore, I conclude that Lower Company’s intervening actions were reasonably foreseeable as a normal response to the stimulus Cooper Engineering & Material Testing created by negligently testing the concrete and reporting erroneous test results to the School Board.
In a Wyoming case addressing the issue of proximate cause, Justice Blume quoted Prosser on Torts at 324 on the subject of intervening cause:
“If the defendant’s conduct was a substantial factor in causing the plaintiff’s loss, it follows that he will not be absolved from responsibility merely because other causes, such as the negligence of other persons, have contributed to the result.”
He continued:
If the original wrongdoer “could have anticipated that the intervening act of negligence might, in a natural and ordinary sequence, follow the original act of negligence, the person first in fault is not released from liability by reason of intervening negligence of another.” Shear-man & Redfield on Negligence, Rev.Ed., Section 38.
Phelps v. Woodward Const. Co., 66 Wyo. 33, 204 P.2d 179, 187 (1949). See also Chandler v. Dugan, 70 Wyo. 439, 251 P.2d 580 (1952).
I dissent from the majority’s absolution of liability in favor of the negligent concrete tester in its performance of contractual responsibilities for three reasons. First, the School Board, for its benefit and use by other participants, employed Cooper Engineering & Material Testing to be accurate, not erroneous. Services required of a *807testing lab are physically capable of accuracy and, thus, it is appropriate to expect accuracy.
Starting first with the notion that an accurate test was anticipated, I would question the conclusion that termination of the concrete supplier following test result failure was unusual, unexpected or inflicted by intervening cause. No one in the construction business can afford to gamble on bad concrete in building construction. If the concrete supplier fails to meet test requirements, termination of the concrete supplier from the job site is clearly inevitable. Quality is of the essence of the product and service to be provided by the concrete supplier.
Second, the majority unduly interjects intervening cause into its analysis where composite factors create the result. The decision almost reaches back to the now forsaken days when any contributory negligence foreclosed total recovery. Borzea v. Anselmi, 71 Wyo. 348, 258 P.2d 796 (1952); Johnston v. Vukelic, 67 Wyo. 1, 213 P.2d 925 (1950). See Wyo.Sess.Laws ch. 28 (1973) and in present form W.S. 1-1-109, comparative negligence. The “any degree of fault and you get nothing” concept was abolished by legislative adoption of the comparative negligence statute, but that thesis now seems to achieve a rebirth by a similar application of intervening cause. Obviously the bad test results, negligently provided, caused the termination of Century Ready-Mix as the supplier. Any other analysis only achieves a play on words. Whether we pursue proximate cause and intervening cause in terms of “legal cause” or “foreseeability”, England, 728 P.2d at 1150, the conduct of the testing lab fails a liability standard under any one. See Restatement (Second) of Torts, supra, § 430 (Necessity of Adequate Casual Relation); § 431 (What Constitutes Legal Cause); and § 435 (Foreseeability of Harm or Manner of Its Occurrence).
The third problem presented by the majority is the generic effect of using proximate cause to not so discreetly destroy the entire principle of recovery provided by Restatement (Second) of Torts, supra, § 552. In this context, the majority disregards a singular volume of cases, only a few of which I have provided in footnote two of this dissent. Countervailing authority, which clarifies that action of the contracting principal does not manufacture an intervening cause, is obvious within the volume of cases cited under Restatement (Second) of Torts, supra, § 552 and, additionally, those addressing the general subject of third party reliance on negligently furnished information. See Allen, Liabilities of Architects and Engineers to Third Parties, 22 Ark.L.Rev. 454 (1968); Boston, Liability of Attorneys to Nonclients in Michigan: A Re-examination of Friedman v. Dozorc and a Rule of Limited Liability, 68 U.Det.L.Rev. 307 (1991); Prosser, Misrepresentation and Third Persons, 19 Vand.L.Rev. 231 (1966); Pros-ser, Handbook of the Law of Torts, § 93 at 622 (4th ed. 1971); Annotation, What Constitutes Negligence Sufficient to Render Attorney Liable to Person Other Than Immediate Client, 61 A.L.R.4th 464 (1988); Annotation, Negligence in Preparing Abstract of Title as Ground of Liability to One Other Than Person Ordering Abstract, 50 A.L.R.4th 314 (1986); and Annotation, Tort Liability of Project Architect for Economic Damages Suffered by Contractor, 65 A.L.R.3d 249 (1975). See also Survey, 1990 Survey of Florida Law, 15 Nova L.Rev. 1285 (1991).
V.
CONCLUSION
Cooper Engineering & Material Testing’s testing of the concrete and reporting the results created the situation that served as the stimulus for the actions of the School Board and Lower & Company. Thus, Cooper Engineering & Material Testing’s conduct was the motivating factor, if not the predominate cause, in contract termination and consequent loss sustained by Century Ready-Mix. I conclude that a reasonable difference of opinion exists as to the foreseeability of harm to Century Ready-Mix and the effect of the intervening actions of the contractor who was faced with a job shutdown when the concrete tested bad. *808Both issues of actual negligence and proximate cause should have been jury questions. Consequently, I respectfully dissent from this summary judgment of liability when negligent performance clearly caused the damages sustained.

. The standard of review applied by this Court when [following trial] the sufficiency of the evidence is at issue is well settled. [At that juncture], [w]e assume that the evidence of the prevailing party is true, leaving out of consideration the evidence presented by the other party in conflict therewith, and giving every favorable inference to the evidence of the successful party that may fairly and reasonably be drawn from it. Harmon v. Town of Afton, 745 P.2d 889 (Wyo.1987); M & M Welding, Inc. v. Pavlicek, 713 P.2d 236 (Wyo.1986). The findings of the trial court are presumed to be correct and will not be disturbed by this Court unless they are clearly erroneous, inconsistent with the evidence, or contrary to the great weight of the evidence. Eddy v. First Wyoming Bank, N.A.—Lander, 750 P.2d 294 (Wyo.1988); Pancratz Company, Inc. v. Kloefkorn-Ballard Construction/Development, Inc., 720 P.2d 906 (Wyo.1986).
O’s Gold Seed Co. v. United Agri-Products Financial Services, Inc., 761 P.2d 673, 676 (Wyo.1988).
The test for entry of summary judgment when factual issues are presented is singularly different. Davenport v. Epperly, 744 P.2d 1110 (Wyo.1987); Cordova v. Gosar, 719 P.2d 625 (Wyo.1986).

. See Donnelly Const. Co. v. Oberg/Hunt/Gilleland, 139 Ariz. 184, 677 P.2d 1292 (1984) (architect liable on negligence theory to contractor for increased cost of construction due to error in plans and specifications); Guardian Const. Co. v. Tetra Tech Richardson, Inc., 583 A.2d 1378 (Del.Super.1990) (lack of contractual privity between design engineer and general contractor and subcontractor was not fatal to negligence and negligent misrepresentation claims against design engineer, notwithstanding fact that contractor and subcontractor were seeking purely economic damages); Hodges v. Smith, 517 A.2d 299 (Del.Super.1986) (surveyor had duty to anyone who might foreseeably rely on survey to conduct survey with reasonable care); Calandro Development, Inc. v. R.M. Butler Contr., Inc., 249 So.2d 254 (La.App.1971) (engineer or architect must be deemed to know that his services are for protection not only of owner's interest but also surety on contractor’s performance bond); Williams v. Polgar, 391 Mich. 6, 215 N.W.2d 149 (1974) (abstractor of title liable to foreseeable third parties not in privity of contract who relied on the abstract); Aluma Kraft Mfg. Co. v. Elmer Fox & Co., 493 S.W.2d 378 (Mo.App.1973) (third party, not in privity of contract with a public accountant, has a claim against the accountant for alleged negligent audit opinion relied upon by the third party to its damage); Davidson and Jones, Inc. v. New Hanover County, 41 N.C.App. 661, 255 S.E.2d 580 (1979) (lack of privity of contract does not render engineering firm immune from liability to general contractor or subcontractor for damages proximately resulting from submitting bid or conducting work in reliance on negligently prepared soil test reports. Architect, in absence of privity of contract, may be sued by general contractor or subcontractor for economic loss foreseeably resulting from architect’s breach of duty of due care in performance of contract with owner); Tartera v. Palumbo, 224 Tenn. 262, 453 S.W.2d 780 (1970) (surveyor hired by purchaser of property may be liable to third person for economic losses arising out of negligent survey); Milliner v. Elmer Fox & Co., 529 P.2d 806 (Utah 1974) (lack of privity between an accountant and a relying third party is not a defense to the accountant's negligence where the accountant is aware of the fact that his work will be relied on by parties who may extend credit to his client or assume his client’s obligations); Costa v. Neimon, 123 Wis.2d 410, 366 N.W.2d 896, 899 (1985) (real estate appraiser hired by lender should have foreseen that prospective buyer was " ‘within the ambit' ” of harm which could result from carelessly done appraisal and thus purchasers could recover from appraiser for negligent appraisal); and A.E. Inv. Corp. v. Link Builders, Inc., 62 Wis.2d 479, 214 N.W.2d 764 (1974) (architect's failure to properly consider subsoil condition is negligence rendering architect liable to tenants notwithstanding lack of privity).
Additionally, there has been a significant increase in the number and types of cases where attorneys have been found liable to third parties for malpractice. See Annotation, What Constitutes Negligence Sufficient to Render Attorney Liable to Person Other Than Immediate Client, 61 A.L.R.4th 464 (1988). See also Licata v. Spector, 26 Conn.Supp. 378, 225 A.2d 28 (1966) and Security Nat. Bank v. Lish, 311 A.2d 833 (D.C.App.1973).
Two very well reasoned cases are found from Florida law: First Florida Bank, N.A. v. Maximum Mitchell & Co., 558 So.2d 9 (Fla.1990) (involving an accountant) and A.R. Moyer, Inc. v. Graham, 285 So.2d 397 (Fla.1973) (involving an architect or engineer).

. This case fits closely within Restatement (Second) Torts, supra, § 552, illustration 9:
The City of A is about to ask for bids for work on a sewer tunnel. It hires B Company, a firm of engineers, to make boring tests and provide a report showing the rock and soil conditions to be encountered. It notifies B Company that the report will be made available to bidders as a basis for their bids and that it is expected to be used by the successful bidder in doing the work. Without knowing the identity of any of the contractors bidding on the work, B Company negligently prepares and delivers to the City an inaccurate report, containing false and misleading information. On the basis of the report C makes a successful bid, and also on the basis of the report D, a subcontractor, contracts with C to do a part of the work. By reason of the inaccuracy of the report, C and D suffer pecuniary loss in performing their contracts. B Company is subject to liability to B and to D.
See M. Miller Co. v. Central Contra Costa Sanitary Dist., 198 Cal.App.2d 305, 18 Cal.Rptr. 13 (1961).