By James R. Keller
This article originally appeared as "Free Concrete Strength Test May Cause Costly Liability," St. Louis Construction News & Review, p. 22, March-April 2000.
The Missouri Court of Appeals for the Eastern District (St. Louis) decided on January 11, 2000, that those who tested the strength of a concrete foundation might be liable to the owners of the house. The court reached this result even though the owners were not the ones to hire the testers, they did the work without charge, and they unknowingly based the results on inaccurate information provided to them about the concrete's age.
The case is Darrin Miller and Mary Miller v. Big River Concrete, Jefferson County Ready-Mix, Inc., John Wolf and W. R. Grace and Co. (E.D. 75917). This decision increases potential liability for anyone who supplies information for a construction project. In the future, those who supply information would be wise to include in their reports appropriate disclaimers and qualifiers. Those who are extremely (and perhaps overly) cautious may decide not to offer any information or advice, at least in certain cases or for certain projects.
The Appeals Court, reversing a trial court, concluded that the plaintiff homeowners could proceed to trial under a theory of negligent misrepresentation against the testers, W.R. Grace and Co. and John Wolf. Wolf was a concrete salesman for Grace and a civil engineer with a degree from the University of Missouri at Rolla.
Negligent misrepresentation requires a showing that (1) defendant supplied information in the course of his business or because of some other pecuniary interest; (2) due to defendant's failure to exercise reasonable care or competence in obtaining or communicating this information, the information was false; (3) defendant intentionally provided the information for the guidance of a limited number of persons in a particular business transaction (in this case construction of the house); (4) plaintiff justifiably relied on the information; and (5) as a result of plaintiff's reliance, he suffered a pecuniary loss.
The plaintiff homeowners initially went to trial in Jefferson County against the two companies that ordered the concrete, Big River and Ready Mix, under theories of breach of implied warranties of fitness and merchantability. The jury awarded plaintiffs $50,000 against Big River but nothing against Ready Mix.
Plaintiffs also had sued Grace and Wolf, the testers, claiming they negligently supplied information about the concrete's strength based on the "Swiss Hammer Test". This test, using a spring-loaded hammer, is designed to measure in the field the strength of the concrete in a nondestructive and relatively simple way.
The problems started after plaintiffs bought a lot and decided to build a house. One of the plaintiffs, Darrin Miller, had experience in the construction field; thus, he acted as his own general contractor on the house. Plaintiffs hired ET Concrete to pour the foundation. ET ordered the concrete from Big River and Ready Mix.
During the pour, ET noticed the concrete was not of the proper consistency and it contained significant amounts of debris. Big River and Ready Mix assured ET that the concrete was correct. Based on this assurance, ET completed the foundation, but then noticed that portions of the foundation had begun to crumble and disintegrate.
Plaintiffs, Big River and Ready Mix agreed the concrete should be tested. That prompted Big River to ask Wolf, a salesman for Grace, to perform the Swiss Hammer Test. Since Big River was a customer of Grace, Wolf did the test without any charge, as a customer service.
Wolf knew the test was for plaintiffs' foundation and that they wanted to be present. Big River informed Wolf that the foundation was ten days old, when in reality it was twenty days old. (While the case does not state, this difference probably threw off the calculation.)
Wolf told Big River that the Swiss Hammer Test was most accurate after twenty-eight days, the cure time for concrete and that this particular test was not all that accurate, no matter when used. Even plaintiff Darrin Miller, who had poured three to five foundations himself, questioned the test's accuracy.
Nevertheless, Wolf performed the test at six locations on the foundation. Plaintiffs were not present. Defendants projected the concrete's strength at twenty-eight days, which had to be at least 2500 PSI, per the BOCA and building code requirements applicable in Jefferson County. Wolf sent a letter report to Big River and Ready Mix stating that the test results projected that the concrete's strength would exceed the requirements. Apparently, the report did not contain any caution as to the test's accuracy.
After receiving the letter report and talking to Big River, plaintiffs resumed construction. They added a sub-floor, exterior walls and some interior walls. Concerned again about the concrete's strength, plaintiffs then hired another company, SCI, to retest the foundation using a more comprehensive and reliable test. The test results showed that the foundation was inadequate and below the BOCA requirements.
The trial court, concluding that Wolf and Grace were not liable as a matter of law, dismissed them without a trial. The Eastern District reversed this decision, deciding that enough evidence existed to merit trial. The appeals court stated that neither a contract nor a direct relationship with the homeowners was necessary to be liable. The court held that a company and an individual might be responsible to "third parties" for negligence in a professional opinion.
Further, the court applied the doctrine of negligent misrepresentation even though plaintiffs' losses were only "economic", meaning business and not personal injury. The appeals court stated that plaintiffs had a recognized property interest and thus the doctrine applied. Extending liability to these defendants, the court reasoned, would not subject them to "unlimited liability", as plaintiffs' injuries were foreseeable and thus fit the definition for negligent misrepresentation.
Jim Keller is a partner at Herzog, Crebs & McGhee, LLP, St. Louis, Missouri, where he concentrates on construction law, real estate and business litigation. He also is a panelist with the American Arbitration Association.