{"id":887485,"date":"2016-03-08T16:32:34","date_gmt":"2016-03-08T23:32:34","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=887485"},"modified":"2016-03-07T17:16:52","modified_gmt":"2016-03-08T00:16:52","slug":"contractors-beware-marylands-economic-loss-doctrine-is-alive-and-well","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/contractors-beware-marylands-economic-loss-doctrine-is-alive-and-well\/","title":{"rendered":"Contractors Beware – Maryland’s Economic Loss Doctrine is Alive and Well"},"content":{"rendered":"

Saul Ewing | February 23, 2016<\/p>\n

Summary<\/strong><\/p>\n

Maryland recently reaffirmed application of the \u201ceconomic loss doctrine\u201d to damages sought in construction disputes in Balfour Beatty Infrastructure, Inc. v. Rummel Klepper & Kahl, LLP<\/em>, No. 496, Sept. Term 2014, 2016 WL 360875 (Md. Ct. Spec. App. Jan. 28, 2016). \u00a0Thus, while some jurisdictions permit a contractor\u2019s cause of action against a design professional\/engineer for negligence arising from defective plans and specifications, even in the absence of contractual privity, Maryland is not one of them. \u00a0Maryland steadfastly holds to the economic loss rule, which does not permit a cause of action for purely economic losses (such as delays or problems caused by defective plans) in the absence of direct contractual privity or its equivalent between the construction contractor and the design professional.<\/strong><\/p>\n

In Beatty<\/em>, a contractor on a public construction project brought an action against an engineering firm for professional negligence. The contractor incurred costly delays and complications in reliance on allegedly defective designs and negligent misrepresentations concerning project timeline projections. In this design-bid-build project, there was no contract between the engineer and the contractor, both of which contracted directly with the public entity. \u00a0The complaint sounded in tort, supported by the theory that the engineer owed the contractor a duty based on an \u201cintimate nexus.\u201d \u00a0The trial court granted the engineering firm\u2019s motion to dismiss pursuant to the economic loss doctrine<\/a>, and the Court of Special Appeals affirmed.<\/p>\n

In a comprehensive analysis of the doctrine, the Court held that there \u201ccan be no negligence where there is no duty that is due; for negligence is the breach of some duty that one person owes to another….\u201d \u00a0Moreover, the general rule is that a party cannot recover against another in tort where the resulting harm is purely economic loss<\/a> and the parties have no contract between them.<\/p>\n

The Court noted that the Spearin<\/em> doctrine permits the contractor to rely on the plans, and thereby have a cause of action against the public entity with which it contracted, but that absent a direct contract between the contractor and the engineer, no cause of action may be brought against the engineer. \u00a0See United States v. Spearin<\/em>, 248 U.S. 132, 136, 54 Ct. Cl. 187, 39 S.Ct. 59, 63 L.Ed. 166 (1918).<\/p>\n

Although the Court recognized that states are divided on the doctrine\u2019s application to professional design<\/a> plans, it nevertheless held that the \u201crecovery of purely economic, benefit-of-the-bargain-type damages has long been limited in the United States.\u201d \u00a0Thus, a \u201cconstruction contractor\u2019s ability to recover for economic losses against a design professional where there is no contractual privity is generally limited to situations involving death, personal injury, property damage, or the risk of death or serious personal injury.\u201d<\/p>\n

Lessons Learned:…<\/h2>\n

To finish reading this article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Saul Ewing | February 23, 2016 Summary Maryland recently reaffirmed application of the \u201ceconomic loss doctrine\u201d to damages sought in construction disputes in Balfour Beatty Infrastructure, Inc. v. Rummel Klepper & Kahl, LLP, No. 496, Sept. Term 2014, 2016 WL 360875 (Md. Ct. Spec. App. Jan. 28, 2016). \u00a0Thus, while some jurisdictions permit a contractor\u2019s… Continue reading Contractors Beware – Maryland’s Economic Loss Doctrine is Alive and Well<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[164,9009],"tags":[204,284,269],"class_list":["post-887485","post","type-post","status-publish","format-standard","hentry","category-construction-dispute","category-design-professionals","tag-construction-disputes","tag-design-professionals","tag-economic-loss-doctrine","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nContractors Beware - 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