Joe Ciampoli obtained summary judgment in favor of an engineering firm client facing a malpractice claim arising from the design and construction of an athletic field. The successful motion was premised on a broad application of the Economic Loss Doctrine, which precludes claimants from initiating tort claims for the recovery of an economic loss where a contractual relationship supplies a remedy for the same loss.
The plaintiff in this matter was a contractor retained by a public body to construct an athletic field. The firm’s professional engineering client contracted with the same public body to both design the athletic field and to provide administration services during construction. The plaintiff contractor asserted the engineer’s design plans were negligently prepared and lacked the requisite level of detail to guide the contractor’s services. The contractor further alleged the construction administration services provided by the engineer failed to direct the contractor’s services in a manner consistent with achieving a favorable work product. As a result of the engineer’s allegedly negligent services, the contractor asserted that its work was negatively impacted causing the contractor to sustain an economic loss of approximately $400,000. The lawsuit initiated by the contractor did not include claims against its public body contract partner. Rather, the contractor pursued claims exclusively against the professional engineer.
At the very outset of the litigation, Ciampoli filed a motion in lieu of answer seeking the dismissal of the contractor’s claim pursuant to the Economic Loss Doctrine. Ciampoli argued that the contractor was precluded from pursuing a direct claim against the engineer in the absence of a contractual relationship with the engineer as the contractor had the ability to pursue a breach of contract claim against the public body for the same economic loss. In opposition, the contractor argued that the interpretation of the Economic Loss Doctrine advocated on behalf of the engineer was overly-broad and that application of the Economic Loss Doctrine should be limited to the scenarios where privity of contract exists between the claimant and defendant. Drawing on a series of unpublished and out-of-jurisdiction cases, Ciampoli was able to convince the Court that the contractor’s professional negligence claim against the engineer was precluded and that the contractor was obligated to pursue a claim against its public body contract partner to the extent the contractor sought relief for its alleged economic loss.
Practice Point: Never underestimate the significance of contractual relationships and/or the absence thereof on claim management and mitigation.
Thompson Becker, LLC provides a wide range of both transactional and litigation services for the construction related professionals and their businesses. We have successfully prosecuted and defended various types of construction related claims. Contact us at (856) 616-8886 to see how we can help you with your construction law needs.
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