By J. Kent Holland, Esq.
ConstructionRisk Counsel, PLLC
Where a project owner filed suit against both the engineering firm, and the individual engineer that designed a post foundation for a fabric-roofed farm building, the negligence action against the individual engineer was dismissed based on the economic loss doctrine as applied under Virginia law. The plaintiff asserted claims against the engineer individually for breach of professional standard of care and breach of implied warranty – contending that he was personally liable because he attached his engineer’s seal to the design plans and failed to comply with the standard of care for licensed professionals. In addition to applying the economic loss rule, the court dismissed the implied warranty claim because there was no privity of contract between the plaintiff and engineer that could give rise to a warranty. McConnell v. Servinsky Engineering, 2014 WL 2094131 (W.D. Va. 2014).
The court began its analysis by noting that the economic loss rule holds that when the bargained-for-level of quality in a contract is not met, “the law of contracts provides the sole remedy.” The court noted “Tort recovery is not available because the contract defines the breach and the damages. Additionally, the harm causing economic loss is not one that traditionally sounds in tort.” Further, concluded the court, “Because the law of contracts provides the sole remedy for economic loss under Virginia law, privity is an indispensable requirement for a viable claim.”
In this case, because there was no privity of contract between the plaintiff and the individual engineer who had merely executed the contract as principle of the engineering company, the plaintiff could not recover economic loss from the individual. The outcome remains the same even if the individual engineer performed the design services because Virginia Supreme precedent holds that “in the absence of privity, a person cannot be held liable for economic damages caused by his negligence in the performance of a contract.”
The court also rejected plaintiff’s argument that the engineer assumed legal duties beyond the contract by affixing his professional engineering seal to the plans. No such independent tort duty was created by affixing the seal or providing professional service. In this regard, the court stated that the supreme court of Virginia “has repeatedly held that a claim for breach of professional duties is properly brought as breach of contract claim.”
On the question of whether there could be a viable claim for breach of implied warranty, the court concluded that such a claim is not distinct from a claim for breach of contract, because any implied warranties must arise out of the contract. Since the plaintiff lacks privity of contract with the engineer, there can be no breach of contract or breach of implied warranty under a contract.
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. 16, No. 10 (December 2014).
Copyright 2014, ConstructionRisk, LLC