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NOTICE: This opinion is subject to motions for rehearing under Rule 22 as well as formal revision before publication in the New Hampshire Reports. Readers are requested to notify the Reporter, Supreme Court of New Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any editorial errors in order that corrections may be made before the opinion goes to press. Errors may be reported by E-mail at the following address: reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 a.m. on the morning of their release. The direct address of the court's home page is: http://www.courts.state.nh.us/supreme. THE SUPREME COURT OF NEW HAMPSHIRE ___________________________ Hooksett District Court No. 2005-912 PLOURDE SAND & GRAVEL CO. v. JGI EASTERN, INC. f/k/a JAWORSKI GEOTECH, INC. Argued: October 18, 2006 Opinion Issued: February 16, 2007 Hall, Morse, Anderson, Miller & Spinella, P.C., of Concord (Frank P. Spinella, Jr. on the brief and orally), for the plaintiff. Donovan Hatem LLP, of Boston, Massachusetts (Jeffrey L. Alitz and Adam M. Nee on the brief, and Mr. Alitz orally), for the defendant. HICKS, J. The plaintiff, Plourde Sand & Gravel Co., appeals the decision of the Hooksett District Court (LaPointe, J.) dismissing its writ. We affirm. The plaintiff's writ alleges the following facts. Hiltz Construction, Inc. (Hiltz), a subcontractor for a private construction project in Pembroke, hired the plaintiff to supply gravel for purposes of constructing the base for a roadway. After the plaintiff supplied the gravel, Keach Nordstrom & Associates (Keach), engineers hired by the Town of Pembroke, hired the defendant, JGI Eastern, Inc., to test the gravel to determine whether it met town specifications. The defendant tested the gravel, and reported to Keach that it contained "insufficient stone content and excessive fines." As a result, Hiltz required the

plaintiff to remove and replace the gravel at its own expense with material that met town specifications. After doing so, the plaintiff tested the gravel and found that it did in fact meet town specifications. The plaintiff sued the defendant in tort. Specifically, the plaintiff claimed: [T]hat defendant's negligence foreseeably injured plaintiff in that defendant knew or should have known that the town's engineer would rely upon results provided by defendant and would, if those results showed that applicable tests were not passed, require removal of the roadway and replacement of the base materials; that defendant's negligence was a proximate cause of the harm to plaintiff, who is entitled to recover same [sic]. The defendant moved to dismiss, arguing that the damages sought are purely economic losses which are not recoverable in tort. Recognizing that it was undisputed that the plaintiff's writ alleged only economic loss damages and that there was no contractual privity between the plaintiff and the defendant, the court granted the defendant's motion to dismiss. The plaintiff appeals, arguing: (1) the economic loss doctrine does not apply since there is no contractual privity with the defendant; or (2) section 552 of the Restatement (Second) of Torts affords an exception to the economic loss doctrine, permitting recovery because the defendant made a negligent misrepresentation. The defendant responds that the negligent misrepresentation exception is not properly before us because it was not pled in the plaintiff's writ and was not raised in the notice of appeal. In reviewing the trial court's grant of a motion to dismiss, our task is to ascertain whether the allegations [pled] in the plaintiff's writ are reasonably susceptible of a construction that would permit recovery. We assume all facts [pled] in the plaintiff's writ are true, and we construe all reasonable inferences drawn from those facts in the plaintiff's favor. We then engage in a threshold inquiry that tests the facts in the complaint against the applicable law. Berry v. Watchtower Bible & Tract Soc., 152 N.H. 407, 410 (2005) (quotations and citations omitted).

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I.

The Economic Loss Doctrine

The economic loss doctrine is a common law rule that emerged with the advent of products liability. Farmers Alliance Mut. Ins. Co. v. Naylor, 452 F. Supp. 2d 1167, 1172 (D.N.M. 2006). While some states generally limit its application to products liability cases, Moransais v. Heathman, 744 So. 2d 973, 983 (Fla. 1999), many other states, including New Hampshire, have expanded its application to other tort cases. Lempke v. Dagenais, 130 N.H. 782, 792 (1988); Farmers Alliance, 452 F. Supp. 2d at 1172-73. The doctrine is a "judicially-created remedies principle that operates generally to preclude contracting parties from pursuing tort recovery for purely economic or commercial losses associated with the contract relationship." Tietsworth v. Harley-Davidson, Inc., 677 N.W.2d 233, 241 (Wis. 2004). The economic loss doctrine is based on an understanding that contract law and the law of warranty, in particular, is better suited than tort law for dealing with purely economic loss in the commercial arena. If a contracting party is permitted to sue in tort when a transaction does not work out as expected, that party is in effect rewriting the agreement to obtain a benefit that was not part of the bargain. Id. at 242 (quotations, citation and brackets omitted). Thus, where a plaintiff may recover economic loss under a contract, generally a cause of action in tort for purely economic loss will not lie. Cf. Ellis v. Robert C. Morris, Inc., 128 N.H. 358, 363 (1986), overruled on other grounds by Lempke, 130 N.H. 782. However, where a duty that lies outside the terms of the contract is owed, many states allow a plaintiff to recover economic loss in tort against the defendant contracting party. Ellis, 128 N.H. at 363; see also Griffin Plumbing & Heating v. Jordan, 463 S.E.2d 85, 88 (S.C. 1995); Congregation of the Passion v. Touche Ross, 636 N.E.2d 503, 514 (Ill.), cert. denied, 513 U.S. 947 (1994). "[W]hen an independent duty exists, the economic loss rule does not bar a tort claim because the claim is based on a recognized independent duty of care and thus does not fall within the scope of the rule." Farmers Alliance, 452 F. Supp. 2d at 1174 (quotations omitted). In such a case, there is privity among the parties, yet an independent duty in tort owed by the defendant. The analysis becomes more complicated in claims between a plaintiff and a defendant who have no contractual relationship and hence no privity between them. A few courts hold that since the principle behind the economic loss doctrine is to prevent tort law's unreasonable interference with principles of contract law, the economic loss doctrine does not apply where there is no 3

contractual relationship, and thus no privity between the parties. See Trinity Lutheran v. Dorschner Excavating, 710 N.W.2d 680, 683 (Wis. Ct. App. 2006); Indemnity Ins. Co. v. American Aviation, 891 So. 2d 532, 534 (Fla. 2004). Many courts, however, have expanded the economic loss doctrine to bar economic recovery in tort cases where there is no contract and thus no privity. See, e.g., Anderson Elec. v. Ledbetter Erection Corp., 503 N.E.2d 246, 249 (Ill. 1986) ("A plaintiff seeking to recover purely economic losses due to defeated expectations of a commercial bargain cannot recover in tort, regardless of the plaintiff's inability to recover under an action in contract."). The policy behind this principle is to prevent potentially limitless liability for economic losses: "[While] [t]he physical consequences of negligence usually have been limited, . . . the indirect economic repercussions of negligence may be far wider, indeed virtually open-ended." 4 F. Harper et al., The Law of Torts

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