The natural give and take between contractors and the design professionals sometimes gives way to litigation revolving around the contractor’s ability to rely on the design professional’s actions. A recent Massachusetts appellate court decision, available here (once posted) has clarified and limited the extent of that reliance.
Meridian was a subdivision developer in North Attleborough, Massachusetts. The town hired Earth Tech to monitor the work and report to the town on the developer’s (and its contractor’s) compliance with the town standards. The town’s contract with Meridian stated that the town would require Meridian to redo any work found defective by Earth Tech. On its part, Earth Tech provided a memo to Meridian stating that Earth Tech would conduct visits as requested by the town, and would note anything that was defective or not per the town’s standards, but that Meridian would remain responsible for correcting any deficiencies.
Meridian’s contractor didn’t do all the work correctly. Earth Tech, on occasions that it visited the site, failed to make note of the improper work, and there was no directive at the time to redo it. The contractor went out of business, and the town later required Meridian to correct multiple items of work. So Meridian sued Earth Tech, arguing that Earth Tech was liable to it for failing to timely note the improper work so that Meridian could require its contractor to take corrective action.
The Appeals Court noted prior case law allowing a contractor to sue an engineer with whom it had no contractual relationship. But the court distinguished the present situation from the prior cases. Based on (a) the lack of any duty in Earth Tech’s contract to provide information to Meridian, and (b) Earth Tech’s memo that specifically reminded the contractor that it was the contractor, and not Earth Tech, who would be responsible for deficiencies, the court held that there was no duty of Earth Tech to notify Meridian of improper work. In the absence of any duty, there would be no liability to the developer for the failure to note the deficiencies.