Can a negligence argument be created against consulting design professionals or entities that are involved in the inspection of a trade’s work? The recent opinion in Bautech USA, Inc. v. Resolve Equipment, Inc., 2023 WL 4186395 (S.D.Fla. 2023) contains an interesting fact pattern that touches upon this issue. While the case dealt with a motion to dismiss, it contains a number of issues that may be discussed in follow-up postings.
Here, a prime contractor was hired by Broward County, Florida to install offshore reef mitigation units. The contractor entered into a subcontract with a concrete fabricator to fabricate the reef mitigation units. The contractor also separately hired consultants to inspect the units. The contractor and its consultants rejected the units even after the fabricator implemented design revisions. The fabricator was then terminated and not paid for contract work plus revisions it implemented to finished units. The fabricator sued the contractor and the contractor’s consultants for non-payment under many (ten) different theories of liability claiming it was damaged to the tune of millions of dollars.
In one claim, the fabricator asserted the consultants along with the contractor’s parent entity (that had involvement in the project) were negligent in their inspection of the fabricated units. The contractor and consultants moved to dismiss the negligent inspection claim under the independent tort doctrine and because they argued they did not owe a duty of care to support a negligence claim. The trial court denied this argument. The grounds in which the trial court denied these arguments are important because these grounds create strategic considerations when asserting a negligent claim for economic damages under a negligent inspection theory or negligence theory that the supervising consultants breached their duty of care.
A. Independent Tort Doctrine
With respect to the argument the independent tort doctrine barred the negligent inspection claim, the trial court denied this argument because there wasn’t a contract between the parties, expressing:
To start, the independent tort doctrine does not bar [the fabricator’s] negligence claim against [contractor’s parent entity]. Under Florida law, “a breach of contract, alone, cannot constitute a cause of action in tort….It is only when the breach of contract is attended by some additional conductwhich amounts to an independent tort that such breach can constitute negligence.” To apply, “the [independent tort] doctrine requires contractualprivity between the parties.” Because [fabricator] does not allege that a contract exists between it and [the contractor’s parent entity], the independent tort doctrine is inapplicable and certainly does not bar a tort claim against this Defendant.
Bautech, USA, supra, at *4 (internal citations omitted).
B. Duty of Care
With respect to the argument the Defendants (contractor’s parent entity and consultants) did not owe a duty of care, the trial court denied this argument expressing:
Next, [the fabricator] has identified a source for [the contractor’s parent’s entity] duty in tort — it is the same theory as for [the contractor’s consultants]. [Fabricator] alleges [contractor’s consultants], “each acting as agent/consultants for the County, owed [Plaintiff] a duty, as subcontractorand direct manufacturer of the [u]nits, to fairly, truthfully and properly report the status of the [p]roject to the County and others, in accordance withthe requisite standard of care required by the law.” [Fabricator] then alleges that because [contractor’s parent entity] “also provided personnel forthe inspection of the [u]nits[,]” it “owed the same duties” to [Fabricator] as [the contractor’s consultants].
Bautech, USA, supra, at *5 (internal citations omitted).
Defendants argued they owe no duty of care to inspect as such duty of care is ONLY owed by supervising design professionals, which none of them are, and this duty nevertheless does not extend to subcontractors: “Defendants argue that [fabricator] cannot state of a claim for negligent inspection because Florida appellate courts have declined to extend supervising professionals’ tort duty to subcontractors.” Bautech, USA, at *5. The trial court denied this argument because the precedent relied on by Defendants was a 1993 Florida Supreme Court case that has been overruled and the other case relied on was actually consistent with Florida’s Supreme Court’s leading 1973 opinion dealing with negligence claims against supervising design professionals, A.R. Moyer, Inc. v. Graham, 285 So.2d 397 (Fla. 1973), by considering numerous factors to determine whether such a duty of care by a supervising design professional exists.
In fact, to find a duty under Moyer, “the core issue is the extent to which the Defendant[s] supervised the Plaintiff or had sufficient control over [its] work to be able to exercise ‘economic life or death’ over the Plaintiff[,]” rather than a myopic focus on an individual’s job title. Here, the Amended Complaint indicates [Defendants] had supervisory control over [fabricator] because these Defendants “unfairly and in bad faith rejected completed [u]nits that conformed entirely to the Subcontract requirements, often for noncontractual and non-material issues.” Moreover, [fabricator] alleges the three Defendants were closely involved in the manufacturing process. This is minimally sufficient to plead that [Defendants] owed a duty to [fabricator] as supervising engineers.
Bautech, USA, supra, at *6 (internal citations omitted).
If asserting a negligent inspection claim or negligence claim against design professionals / consultants, keep the A.R. Moyer case (cited above) in mind. Also, keep this opinion in mind to plead and support the negligence claim demonstrating the duty of care that must exist to support such a negligence theory.
Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.