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Hunt Construction Group, Inc. v. Brennan Beer Gorman/Architects

May 24, 2010

HUNT CONSTRUCTION GROUP, INC., PLAINTIFF-APPELLANT,
v.
BRENNAN BEER GORMAN/ARCHITECTS, P.C.; WILSON ASSOCIATES; S. DESIMONE CONSULTING ENGINEERS, LLC; COSENTINI ASSOCIATES, INC., DEFENDANTS-APPELLANTS.



SYLLABUS BY THE COURT

Plaintiff general contractor brought claims of negligence and negligent misrepresentation against Defendant design professionals, over allegedly late and erroneous delivery of professional services as part of the construction of a resort. Each party had a contract with the resort's owner, but did not contract with each other. The District Court (Murtha, Judge) dismissed the suit under Fed. R. Civ. P. 12(b)(6), holding that the claims were barred by Vermont's economic loss doctrine. Plaintiff alleges that the District Court erred in dismissing its claims because (1) its claims fall under the special relationship exception to the economic loss doctrine, and (2) the economic loss doctrine does not apply to claims for negligent misrepresentation. Because these contentions involve open questions of Vermont state law, we certify both questions to the Vermont Supreme Court.

Per curiam.

Argued: Dec. 21, 2009

Before: CALABRESI and POOLER, Circuit Judges, and KAHN, District Judge.*fn1

Plaintiff general contractor brought claims of negligence and negligent misrepresentation against Defendant design professionals, over allegedly late and erroneous delivery of professional services as part of the construction of a resort. Each party had a contract with the resort's owner, but the parties had no contract with each other. The District Court (Murtha, Judge) dismissed the suit under Fed. R. Civ. P. 12(b)(6), holding that the claims were barred by Vermont's economic loss doctrine. Plaintiff alleges that the District Court erred in dismissing its claims because (1) its claims fall under the special relationship exception to the economic loss doctrine, and (2) the economic loss doctrine does not apply to claims for negligent misrepresentation. Because these contentions involve open questions of Vermont state law, we certify two questions to the Vermont Supreme Court.

I. Background

A. Factual Background

Spruce Peak Realty, LLC ("Owner" or "Spruce Peak") planned to build a resort hotel and spa ("the Hotel"). It contracted with Plaintiff-Appellant Hunt Construction Group, Inc. ("Plaintiff" or "Hunt") as its general contractor. It contracted with the various Defendants-Appellees (collectively, "Defendants" or the "Design Team") for professional services: architectural design from Brennan Beer Gorman / Architects, P.C.; structural engineering from S. DeSimone Consulting Engineers, LLC; and mechanical, electrical, and plumbing engineering from Cosentini Associates, Inc.*fn2

Plaintiff alleges that Defendants were negligent in performing their professional services. To wit, Plaintiff claims that Defendants were late in delivering their drawings; that their drawings were incomplete and contained errors and omissions; and that they failed to respond promptly and accurately to requests for information. Based on these allegations, Plaintiff filed a complaint in the District Court for the District of Vermont alleging negligence and negligent misrepresentation on the part of each Defendant, and stating that Plaintiff had "suffered damages in excess of $75,000" as a result. J.A. 10-25.

B. Contractual Background

Plaintiff's contract with Spruce Peak (the "Construction Contract") incorporated the documents due from the Design Team as "Project Construction Documents." J.A. 2. According to Plaintiff, "[c]ontrary to the Construction Contract, the Project Construction Documents were not completed and delivered to Hunt on August 27, 2005." J.A. 3.

The Construction Contract laid out procedures for dealing with cost overruns. Specifically, the contract required Plaintiff to "notify Spruce Peak of any 'errors, omissions or discrepancies in the Plans, Specifications or other Contract Documents'" so that Plaintiff could seek a remedy from Spruce Peak. J.A. 34, 89. Plaintiff was then entitled to additional compensation, paid by Spruce Peak, for such cost overruns or delays. Plaintiff apparently took advantage of these procedures to increase the Guaranteed Maximum Price ("GMP") of the Construction Contract from just below $80 million to just below $97 million.

C. Defendants' Motion to Dismiss and Plaintiff's Response

Defendants moved to dismiss the complaint, arguing that Plaintiff's claims were barred by the economic loss doctrine. Although they did not dispute that they were licensed professionals and that they provided professional services, they contended that, under Vermont law, the professional services exception does not apply "in the absence of contractual privity between a plaintiff and defendant." Supp. A. 11.

Plaintiff responded that contractual privity is not a prerequisite of the professional services exception. Rather, it argued, "the professional licensure of the defendant . . . and the foreseeability of the plaintiff's injury" are "the only two factors" that the Vermont Supreme Court has "endorsed as determinative." Supp. A. 27. Both of these factors, Plaintiff argued, were present: Defendants were professionally licensed, and "it was foreseeable that Hunt would be injured if the Defendants did not perform their contractual duties with the degree of skill and care required of ...


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