When a project owner (YMCA) sued a developer (Bovis Lend Lease) for breach of contract for approving a defective design proposed by the Architect and also for approving inferior or improper construction materials, Bovis could not legally maintain a common law indemnity claim against the Architect who was under separate contract to the project owner. This is because, as explained by the court, “Since the predicate of common-law indemnity is vicarious liability without actual fault on the part of the proposed Indemnitee, it follows that a party who has itself actually participated to some degree in the wrongdoing cannot receive the benefit of the doctrine.” Here, the court concluded that the Owner’s complaint against Bovis was not limited to vicarious liability issues. The complaint contained allegations that Bovis itself failed to perform some of its own contractual obligations. The common law indemnity claim, therefore, had to be dismissed as a matter of law.
A second issue in the case, however, was decided in favor of Bovis, with the court dismissing the Owner’s claim of “unjust enrichment” against Bovis for fees previously paid for allegedly defective services. The court explained that this claim must be dismissed because “Recovery for unjust enrichment is barred by the existence of a valid and enforceable contract….” Genesse/Wyoming YMCA v. Bovis Lend Lease, 951 N.Y.S. 2d 768 (NY 2012).
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. 15, No. 3 (Mar 2013).
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