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Gist of the Action Redux
Jack W. Plowman*
The topic of the doctrine of “gist of the action” has been commented
on earlier in the Construction News, namely May, 2003. The matter
continues to arise, however, and the Superior Court continues to apply
the doctrine, most recently in Pittsburgh Construction Co. v.
Griffith, 2003 Pa. Super 374, 834 A.2d 572 (2003).
In the Pittsburgh Construction case, the contractor
asserted a claim against owners of a residence built for their use.
The contractor filed suit to recover, in conversion, and breach of
contract, for unreleased payments due under the contract. The trial
court held that the claim for conversion could go to the jury, which
held in the contractor’s favor. This was in addition to the jury’s
finding in favor of the contractor for the breach of contract claim.
The Superior Court, in an opinion by Kelly, J., held that the gist of
the action doctrine precluded Pittsburgh Construction from recovering
for conversion, by “recasting ordinary breach of contract claims into
tort claims.” A tort action would be permissible when the wrongful
act itself is the gist of the action, the contract being only
collateral. The Court summarized the law as follows:
…a claim should be limited to a contract when the parties’ obligations
are defined by the terms of the contract, and not by the larger social
policies embodied by the law of torts.”
Why is it that a tort claim will be asserted when a breach of contract
claim would suffice? Two of the reasons may be as follows:
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Insurance. While a liability policy may provide
coverage for torts, it will not ordinarily provide coverage for
breach of contract. If the insured is financially unable to respond
to a breach of contract judgment, an insurer may indemnify the
insured for a tort liability. Further, it is generally believed
that an insured claim can be more readily settled than a breach of
contract claim.
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Bankruptcy. A judgment debtor liable for a breach of
contract will be discharged of liability in bankruptcy, but may not
be discharged of liability for a tort.
As pointed out in the May, 2003 Construction News, where the
litigation is with a design professional, still other reasons may
exist for assertion of a negligence (tort) claim.
The Superior Court has spoken so forcefully on the gist of the action
doctrine, consistently rejecting tort claims for breach of contract,
that we should anticipate fewer cases in the future. But where the
financial wherewithal to satisfy a judgment is questionable, efforts
will still be made to recast breach of contract claims as tort claims.
*Of counsel, Bentz Law Firm, P.C.; fellow, American
College of Trial Lawyers; member, American Bar Association Forum on
the Construction Industry; member, American Bar Association Fidelity
and Surety Committee; Member, National Bond Claims Association;
Adjunct Professor, Emeritus, Duquesne University School of Law,
Author, Pennsylvania Mechanics’ Liens (Professional Education Systems,
1989); Author, with K.W. Lee, Construction Contracting for Public
Entities in Pennsylvania (Lorman Education Services, 2002).
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