Presnell Construction Managers, Inc. v. EH Construction, LLC

Summary

The Kentucky Supreme Court adopted Restatement (Second) of Torts § 552 as the standard for negligent misrepresentation claims in Kentucky. It held that a contractor could pursue a tort claim for economic losses based on alleged faulty information and guidance supplied by a construction manager, despite the absence of contractual privity. The court upheld dismissal of the negligent supervision claim because it was not independent of the construction manager's contractual duties.

Holdings

1. Kentucky adopts Restatement (Second) of Torts § 552 as the governing standard for negligent misrepresentation claims.
2. Lack of contractual privity did not bar EH's tort claim because negligent misrepresentation under § 552 imposes an independent duty separate from contractual duties.
3. EH's allegation that Presnell supplied faulty information and guidance to project contractors was sufficient at the pleading stage to state a negligent misrepresentation claim.
4. EH's negligent supervision claim did not articulate a duty independent of Presnell's contractual duties and was properly dismissed.

Questions Presented

1. Whether a party lacking contractual privity may maintain a tort action against a construction manager for purely economic losses when the alleged tort is based on an independent duty.
2. Whether Kentucky should adopt Restatement (Second) of Torts § 552 as the governing standard for negligent misrepresentation.
3. Whether EH's allegations that Presnell supplied faulty information and guidance sufficiently stated a negligent misrepresentation claim.
4. Whether EH's negligent supervision claim articulated a duty independent of Presnell's contractual duties.

Disposition

vacated