Massachusetts Supreme Court Holds Economic Loss Rule No Bar to Condo Trustees’ Claim for Damages to Common Areas Caused By Building Defects

Wyman v. Ayer Properties, LLC, 469 Mass. 64,  2014 Mass. LEXIS 524 (July 10, 2014)

The Massachusetts Supreme Court ruled that the economic loss rule, which bars recovery of tort damages from the negligent supplier of a defective product when there is no claim of personal injury or damage to other property, does not apply to claims asserted by a condominium association or similar condominium organization seeking compensation for damage to common areas of a condominium building caused by defective construction.

This case arises out of a dispute between the Market Gallery Condominium Trust, the trustees responsible for management of a condo building, and Ayer Properties, the developer and builder of the condo building, after the trustees observed that Ayer had negligently constructed the window frames, the exterior brick masonry, and the roof of the building. The trustees commenced an action alleging that the negligent construction caused damage to both the common areas and the residential units in the building.

Continue reading “Massachusetts Supreme Court Holds Economic Loss Rule No Bar to Condo Trustees’ Claim for Damages to Common Areas Caused By Building Defects”

Connecticut Supreme Court Construes “Active Interference” Exception to “No-Damage-for-Delay” Clause

C&H Electric, Inc. v. Town of Bethel, 312 Conn. 843, 2014 Conn. LEXIS 263 (Aug. 5, 2014)

This dispute arose out of a project to renovate and build an addition at a high school in the Town of Bethel, Connecticut.  The plaintiff, C&H Electric, entered into a contract with the defendant, the Town of Bethel, to perform the electrical work on the project.  The parties’ contract included a “no damages for delay” clause, limiting the defendant’s liability for delays it caused on the project.  The no damages for delay clause specified that an extension of time would be plaintiff’s “sole remedy” for “(1) delays in the commencement, prosecution or completion of the work, (2) hindrance or obstruction in the performance of the work, (3) loss of productivity, or (4) other similar claims whether or not such delays are foreseeable, contemplated, or uncontemplated . . .”  The contract included a single exception to the no damages for delay clause, which allowed the plaintiff to recover for delays caused by acts of the defendant “constituting active interference with [the plaintiff’s] performance of the work.”  While the contract did not define “active interference,” it did specify that the defendant’s exercise of its contractual rights, including its right to suspend, reschedule or change the work, would not constitute “active interference.”

Continue reading “Connecticut Supreme Court Construes “Active Interference” Exception to “No-Damage-for-Delay” Clause”

U.S. District Court in Kentucky Holds that Contractor Which Proposed Design Solution During Construction Might Be Liable for Failure Notwithstanding Owner’s Obligation to Provide Designs and Instructions

American Towers LLC v. BPI, Inc., 2014 U.S. Dist. LEXIS 106724 (E.D. Ky. Aug. 4, 2014)

American Towers LLC (“American Towers”), which operates wireless and broadcast communications towers, undertook a project to construct a cell tower in Prestonburg, KY, along with a tower compound and access road.  American Towers selected BPI, Inc. (“BPI”) as general contractor for the project, and the parties executed a contract.

The contract contained a number of provisions that allocated the parties’ responsibilities with respect to design and construction.  In particular, the contract provided that American Towers was to provide BPI with drawings, specifications, and instructions.  BPI, for its part, was responsible for “all construction means, methods, techniques, sequences, and procedures[.]”  Moreover, BPI was to complete its work in a “workmanlike manner and with the highest degree of skill and care exercised by reputable contractors performing the same or similar services[.]” In performing its work, if BPI recognized any problems with American Towers’ design, the contract provided that BPI was to stop work and inform American Towers of the problem.  American Towers would then “issue written instructions” to BPI about how BPI should proceed.

Continue reading “U.S. District Court in Kentucky Holds that Contractor Which Proposed Design Solution During Construction Might Be Liable for Failure Notwithstanding Owner’s Obligation to Provide Designs and Instructions”