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A court dismissed a developer’s suit for fraud, negligent misrepresentation, and breach of warranty against the design firm (A/E) that provided engineering and surveying services for the development of a residential community.  The developer argued that the A/E was negligent in failing to perform various tests to determine the extent to which the land was within the 100-year flood plain, and either intentionally or negligently misrepresented the actual status of the land.

The court concluded that the negligent misrepresentation claim had to be dismissed because the plaintiff failed to present expert testimony showing that the A/E had not complied with the proper standard of care.  Since the claim was based on the tort of negligence and not breach of contract, the court held that the breach of warranty claim also had to be dismissed.  And finally, because there had been no showing that the A/E made representations knowing them to be false or with reckless disregard of whether they were true or false, the fraud count was also dismissed.

The plaintiff, developer, began developing 31 acres that had at one time been designated by the Federal Emergency Management Agency (FEMA) as within the 100-year flood plain.  That designation had been recently revised so that only a small portion was within the flood plain according to the most current FEMA map.   The developer asked it’s A/E how many of the proposed building lots would be within the flood plain, and, according to the developer, the A/E advised that “three or four” would be in the flood plain.

The A/E testified that he told them that  “Five or more” lots would be in the flood plain.   After the project began, the flood administrator for the area determined that a total of thirteen lots were within the flood plain and would, therefore, require flood insurance.  In response to the developer’s appeal of that decision, FEMA concluded that all the land was in the flood plain.  The developer then sued the A/E for all the reasons stated above, and the trial court dismissed the case.

On appeal, the developer argued that the trial court erred by rejecting the negligence claim and negligent misrepresentation claim on the basis that it had failed to present expert testimony regarding what tests or investigations a reasonably prudent civil engineer and land surveyor in the A/E’s position would have performed in order to determine the true location of the 100-year flood plain.

It’s theory for why expert testimony was not required was that it believed that the A/E’s failure to perform simple tests could be understood by a lay person without the aid of expert testimony regarding the proper standard of care.  This was rejected by the court, which stated that proof of the standard of care and competence that a business or profession requires must necessarily be provided through expert testimony unless the lack of skill or care is so apparent as to be within the comprehension of laymen and requires only common knowledge and experience to understand and judge it.

In rejecting the plaintiff’s claim that the A/E had breached an express warranty of fitness of the lots for sale, the court held that even if the plaintiff’s testimony were accepted as true concerning what was said to him by the A/E concerning the number of lots that might or might not be able to be developed, the statements by the A/E fell short of being a warranty.  But even if the statement had risen to such a level, the court held that because the defendant merely made representations to the plaintiff in the course of his professional dealings concerning the development of the subdivision and was not selling something, this could not be a warranty case.  It must properly be viewed as sounding in tort (negligence), rather than contract.

For these, and other reasons, the appellate court affirmed the trial court’s decision dismissing the case.  Dickerson Internationale, Inc. v. Richard W. Klockner, 2000 WL 1513920 (Ohio App. 2 Dist, Oct. 13, 2000)

Copyright 2001, ConstructionRisk.com, LLC – Virginia

About the author: Article written by J. Kent Holland, Jr.,  a construction lawyer located in Tysons Corner, Virginia,  with a national practice (formerly with Wickwire Gavin, P.C. and now with Construction Risk Counsel, PLLC) representing design professionals, contractors and project owners.  He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects.  He is publisher of ConstructionRisk.com Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932.  This article is published in ConstructionRisk.com Report, Vol. 3, No. 2 (Mar/Apr 2001).