AFFILIATED FM v. LTK Consulting Services
243 P.3d 521
Wash.2010Background
- Fire on Seattle Monorail blue train in May 2004 caused multi-million dollar damage to trains and safety risk to passengers.
- SMS operated monorail under a concession agreement with the City; SMS insured by AFM, which paid damages and subrogated to SMS's rights.
- LTK, contracted by the City to examine and recommend repairs, allegedly suggested changes to the grounding system later implicated in the fire.
- AFM, standing in SMS's shoes, sued LTK for negligent engineering, arguing independent tort duty despite lack of privity.
- District court granted summary judgment for LTK; Ninth Circuit certified whether SMS may pursue tort claims against a non-contracting engineer.
- Washington Supreme Court answers yes: engineers owe an independent duty of reasonable care extending to property interests affected by the engineer’s work.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does an engineer undertaking engineering services owe an independent tort duty? | SMS/AFM: yes, safety risks from engineering work create independent duty. | LTK: no independent duty; economic losses excluded. | Yes, independent duty exists. |
| What is the proper measure of an engineer's duty of care? | Duty should be reasonable care appropriate for engineers. | Ordinary care suffices; utmost care would be excessive. | Reasonable care standard for engineers. |
| Does the scope of duty extend to SMS's property interests and resulting harms? | Duty protects SMS’s property interests and safety. | Scope limited by contractual boundaries. | Duty extends to SMS's property interests. |
| Is the economic loss rule applicable where there is no contract between SMS and LTK? | Economic loss rule not triggered without contract between the parties. | Rule bars tort recovery for economic losses in some contexts. | Economic loss rule not implicated; not barred. |
| Can AFM, subrogated to SMS, pursue tort claims against LTK? | AFM may pursue independently owed duty against LTK. | LTK not liable absent independent duty. | AFM may pursue tort claims. |
Key Cases Cited
- Berschauer-Phillips Constr. Co. v. Seattle Sch. Dist. No. 1, 124 Wash.2d 816 (1994) (economic loss rule preserves contract remedies in construction context)
- Eastwood v. Horse Harbor Found., 241 P.3d 1256 (Wash. 2010) (independent duty doctrine; economic loss rule clarification)
- G.W. Construction Corp. v. Prof'l Service Indus., Inc., 70 Wash.App. 360 (1993) (independent duty to exercise reasonable engineering skill and judgment)
- Alejandre v. Bull, 159 Wash.2d 674 (2007) (economic loss rule discussion; contract vs tort remedies)
- BRW, Inc. v. Dufficy & Sons, Inc., 99 P.3d 66 (Colo. 2004) (economic loss rule in construction networks; interrelated contracts)