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Under Louisiana law, a federal district court held that the general contractor, on a public contract to build a warehouse, could sue the owner’s project engineer for negligence based on allegations that the contractor’s ability to perform its obligations to the Owner was delayed and rendered more difficult by the engineer’s actions, including alleged “failure to develop good-quality specifications, insistence on performance of unnecessary work that delayed the construction project, and failure to approve certain payments by the Owner.”

The court explained that “The gist of the complaint is that [Engineer’s] duties as a construction manager included the obligation to manage the construction project in a way that would allow [Contractor] to perform its own contractual duties owed to the Owner.”  The court found that Louisiana recognizes an action for negligent professional undertaking, the essential elements of which are established based upon the facts alleged.  Harris Builders, LLC v. URS Corporation, 861 F.Supp. 746 (E.D. Louisiana 2012).

In denying the Engineer’s motion to dismiss the contractor’s complaint, the court looked at what it called a balancing test that courts in Louisiana had previously established for determining whether third parties not in privity of contract may sue an architect.  In doing so, the court noted that previous cases had dealt with architects and the present case concerns an engineer, but that for purposes of the law, engineers would be considered the same as architects.    The balancing test is as follows:

“[T]he extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant’s conduct and the injury suffered, the moral blame attached to defendant’s conduct, and the policy of preventing future harm.”

 The court concluded that the contractor’s complaint passes muster under the balancing test for the following reasons:

 “URS’s construction plan preparations and instructions to Harris to redo certain work were acts that URS had to have known would directly affect Harris. It was foreseeable and fairly certain that Harris would suffer economic harm if URS managed the project poorly, and URS’s development of project specifications directly affected the work Harris performed. In short, Harris asserts a high degree of economic control by URS that was the purpose recognized in Colbert as supporting a cause of action.”

 An unjust enrichment claim by the contractor against the Engineer was dismissed, however, because the court found that so long as there was a viable way to recover under the negligence count of the complaint there was no basis for recovery under an unjust enrichment theory.  Unjust enrichment is only applicable to fill a gap in the law where no other remedy is provided for by law.

 

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. 4 (April 2013).

Copyright 2013, ConstructionRisk, LLC