{"id":896148,"date":"2019-07-11T10:51:47","date_gmt":"2019-07-11T16:51:47","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=896148"},"modified":"2019-07-09T10:56:41","modified_gmt":"2019-07-09T16:56:41","slug":"defective-construction-claim-dismissed-due-to-lack-of-contract-economic-loss-rule","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/defective-construction-claim-dismissed-due-to-lack-of-contract-economic-loss-rule\/","title":{"rendered":"Utah Appellate Court: Homeowners&#8217; Claim for Defective Construction Against Geotechnical Engineer Dismissed Due to Lack of Contract and the Economic Loss Rule"},"content":{"rendered":"\n<p>Patrick Johnson | <a href=\"https:\/\/www.saul.com\/blogs\/construction-industry-counselor\/utah-appellate-court-homeowners%E2%80%99-claim-defective-construction\">Construction Industry Counselor<\/a> | July 8, 2019<\/p>\n\n\n\n<p>A recent Utah Appellate Court upheld the dismissal of a homeowners&#8217; claims against a geotechnical engineer because the homeowners did not have a contract with the geotechnical engineer and therefore their claims were barred by the economic loss rule.&nbsp;<em>See Hayes v. Intermountain Geoenvironmental Services<\/em>, Inc., 2019 UT App 112, 2019 WL 2621931.&nbsp; In Utah, the economic loss rule only allows lawsuits for defective design or construction to be based on a breach of contract.&nbsp; Such a claim cannot be brought under a general negligence or tort theory where there is no contract.&nbsp; Many states have a similar, but often not identical, economic loss rule.<\/p>\n\n\n\n<p>In this case, the plaintiff homeowners purchased land from a developer and constructed a home.&nbsp; &nbsp;The defendant geotechnical engineer prepared a report for the developer &nbsp;concluding that the parcel of land was stable and suitable for development.&nbsp; Fourteen months after construction had concluded, cracks were observed in the foundation of the home and the home began to settle rendering it unlivable.&nbsp; Because the homeowners did not have a contract with the geotechnical engineer, they could not file a breach of contract claim against the geotechnical engineer. As a result, the homeowners tried to bring a claim under a general negligence theory against the geotechnical engineer for their damages.&nbsp; The trial court and appellate court agreed that the homeowners were barred from asserting a negligence claim due to the economic loss rule.&nbsp;<\/p>\n\n\n\n<p>This case serves as a reminder that, in many states, recovery of purely economic losses based on theories of tort are generally not recoverable. Developers and parties to a construction project should&nbsp; document their agreements in writing.&nbsp; Likewise, a purchaser of a construction project should receive assignments of the developer\u2019s and\/or seller\u2019s written contracts with third-parties involved in the development.&nbsp; &nbsp;<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Patrick Johnson | Construction Industry Counselor | July 8, 2019 A recent Utah Appellate Court upheld the dismissal of a homeowners&#8217; claims against a geotechnical engineer because the homeowners did not have a contract with the geotechnical engineer and therefore their claims were barred by the economic loss rule.&nbsp;See Hayes v. Intermountain Geoenvironmental Services, Inc.,&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/defective-construction-claim-dismissed-due-to-lack-of-contract-economic-loss-rule\/\">Continue reading <span class=\"screen-reader-text\">Utah Appellate Court: Homeowners&#8217; Claim for Defective Construction Against Geotechnical Engineer Dismissed Due to Lack of Contract and the Economic Loss Rule<\/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":[4],"tags":[9895,24,319,75],"class_list":["post-896148","post","type-post","status-publish","format-standard","hentry","category-construction-defects","tag-advise-consult","tag-construction-defect","tag-economic-loss-rule","tag-engineer","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Utah Appellate Court: Homeowners&#039; 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