Balfour Beatty Infrastructure, Inc. v. Rummel Klepper & Kahl, LLP
130 A.3d 1024
Md. Ct. Spec. App.2016Background
- BBII, a contractor, sues RK&K, a design firm, for economic losses on a public Patapsco Wastewater Treatment Plant project
- BBII and RK&K each had contracts with the City; there was no privity between them
- BBII alleged professional negligence, Restatement (Second) of Torts § 552 information tort, and negligent misrepresentation
- The circuit court dismissed the claims as barred by the economic loss doctrine in the absence of privity or other injury
- This Maryland Court of Special Appeals affirms, limiting economic damages recovery for purely economic losses in government construction cases
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty for economic loss without privity | BBII claims intimate nexus/privity-equivalent. | RK&K argues no duty without privity or injury. | Intimate nexus not extended to privity-equivalent here |
| Restatement § 552 applicability | BBII may sue under §552 for negligent information. | §552 not applicable in this construction context. | §552 not applicable; no intimate nexus established |
| Negligent misrepresentation viability | BBII relied on RK&K’s design; misrepresentation may support economic damages. | Economic loss rule bars such claims absent privity or injury. | Negligent misrepresentation claim barred by economic loss doctrine |
Key Cases Cited
- Jacques v. First Nat. Bank, 307 Md. 527 (Md. 1986) (intimate nexus and duty dependent on risk and relationship)
- Walpert, Smullian & Blumenthal, P.A. v. Katz, 361 Md. 645 (Md. 2000) (privity-equivalent test; accountant-liability to non-contractual third parties)
- Sanchez v. 100 Inv. Ltd. P'ship, 213 Md. App. 90 (Md. 2013) (Restatement § 552 as decision tool for intimate nexus; limits reliance)
- Whiting-Turner Contracting Co. v. U.S. Gypsum Co., 308 Md. 1 (Md. 1986) (economic loss doctrine presence in construction; duty limits)
- Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303 (U.S. 1927) (economic losses generally not recoverable in tort absent privity)
- Cash & Carry America, Inc. v. Roof Solutions, Inc., 223 Md. App. 451 (Md. 2015) (negligence claim by third party not barred where risk includes personal injury)
- E. Steel Constructors, Inc. v. City of Salem, 549 S.E.2d 266 (W. Va. 2001) (design professional owes duty to contractor in special relationships)