Economic Loss Doctrine Prevents Subcontractor from Suing Engineer

A dispute arose among a second tier-subcontractor, a first tier-subcontractor and the prime contractor on a U.S. Naval Shipyard project in Maine. It was resolved through arbitration. The second-tier sub then filed litigation in court against Stantec Consulting...

Contractor Entitled to Summary Judgment against Project Owner’s Negligence Claim where Contractor had no Design Responsibility for Disc Filter Equipment Provided by its Vendor pursuant to the Project Specifications

Where a town sued its general contractor (Penta Corporation) based on failure of its subontracted vendor/supplier’s equipment to perform as required by the project, the contractor was entitled to summary judgment because it did not design the equipment in question and...

Construction Manager Owes Independent Duty of Care to Contractor – Economic Loss Affords no Protection

A construction contractor under contract to a school district sued the project owner’s construction management firm, Jacobs Project Management Company/CSRS Consortium (“Jacobs”) alleging breach of duty to conduct constructability reviews and oversee and administer the...

Economic Loss Rule Does not Apply to Fraud Claims

The economic loss rule was applied by a trial court to bar a homeowner in a contractual relationship with a contractor from suing for fraud instead of only for breach of contract. This was reversed on appeal, with the appellate court holding that while claims for...

Economic Loss Doctrine Does Not Bar Negligent Misrepresentation Claim against Design Professional

By: Kent Holland A professional negligent misrepresentation claim was filed against a professional environmental/geotechnical firm by the project developer that was its client. The suit sought to recover economic losses the developer incurred when it discovered that a...

Economic Loss Doctrine Bars Claim against Designer by a Third Party Seeking Purely Economic Losses

By J. Kent Holland, Jr., Esq. The Maryland Court of Appeals applied the economic loss doctrine to bar a claim against an engineer by a general contractor seeking to recover economic losses based upon reliance on allegedly defective designs. In the absence of...

A Claim Under the Negligent Misrepresentation Exception to the Economic Loss Doctrine May Be Predicated on Implied Representations

This dispute concerned Pennsylvania’s application of the Economic Loss Doctrine and its interpretation of the exception allowed by Section 552 of the Restatement (Second) of Torts. Gongloff Contracting, L.L.C., (“Gongloff”) was a second-tier subcontractor on a...

Contractor’s Code Violation Does Not Create Negligence Cause of Action by Subsequent Homeowner

J. Kent Holland, Esq. A subsequent (non-original) homeowner may not bring a negligence suit against a homebuilder for economic losses arising from latent construction defects when there has been no physical injury to persons or property. The builder’s violation of a...

Economic Loss Rule Bars Concrete Supplier’s Claim Against Design Engineer

Gail S. Kelley, J.D., PE ConstructionRisk, LLC In a dispute arising from defective concrete, State Ready Mix, Inc. v. Moffatt & Nichol, 232 Cal.App.4th 1227 (2015), the Appeals court found that the economic loss doctrine barred the concrete supplier’s claim...

Condo Owners Cannot Sue Original Builder for Implied Warranty: Economic Loss Rule Applied

By: Gail S. Kelley, P.E., Esq., ConstructionRisk Counsel, PLLC Where a condominium homeowners’ association brought claims for breach of implied warranty and negligence against the general contractor that built the condominiums, but not the developer who engaged the...