785 F. Supp. 2d 1258
M.D. Ala.2011Background
- Glenn Construction sued Bell Aero and BWSC over a $6,000,000 helicopter-hangar project in Ozark, Alabama, alleging breach of contract, negligence, wantonness, fraud, and intentional interference.
- BWSC served as project engineer and Bell Aero owned the project; Glenn was the general contractor.
- Contract allowed BWSC to supervise, interpret, and decide disputes, approve payments, and issue change orders; Glenn bid in 2007 and work commenced February 2007 with a 226-day window.
- Project issues centered on an underground stream, miscalculated foundation loads, obsolete drawings posted online, and revised pedestal designs that affected construction timing and costs.
- Plaintiff asserted BWSC knew of problems (underground stream, loads, drawings) and acted to delay or frustrate Glenn’s performance; Glenn sought damages and final payment under the contract terms.
- The court granted in part and denied in part the motions for summary judgment, including determining agency relationships and various fraud and negligence claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraudulent suppression of underground stream existence | Glenn shows BWSC had actual knowledge via prior site work and geotechnical reports. | BWSC did not have preexisting knowledge; suppression claim fails on knowledge element. | Denied summary judgment on suppression claim; genuine factual issue exists. |
| Promissory fraud regarding pre-bid on-site structural engineer | BWSC promised to send a structural engineer on site to review submittals. | Promise to perform future act lacks misrepresentation of existing fact; no intent evidence. | BWSC entitled to judgment as a matter of law; promissory fraud claim granted for pre-bid promise. |
| Fraudulent misrepresentation regarding adequacy of designs (hangar and foundation) | BWSC knew or should have known designs were inadequate and misrepresented adequacy. | No proof BWSC knew designs were inadequate; misrepresentation of existing facts. | Denied summary judgment; jury could find misrepresentation regarding adequacy. |
| Intentional interference with Glenn Construction’s contract with Bell Aero (tri-partite relationship) | BWSC interfered beyond its rights, affecting Glenn’s contract with Bell Aero. | BWSC was not a stranger to the contract; actions within its role. | BWSC not a stranger; granted summary judgment for this interference claim. |
| Agency/respondeat superior liability of Bell Aero for BWSC's actions | Bell Aero should be liable under agency or respondeat superior theory for BWSC’s conduct. | No controlling agency or master-servant relationship shown; no liability. | BWSC not Bell Aero’s agent; Bell Aero not liable on agency theory; upheld for Bell Aero on this point. |
Key Cases Cited
- State Farm Fire & Cas. Co. v. Slade, 747 So.2d 293 (Ala. 1999) (fraud elements and suppression burden)
- Green Tree Acceptance, Inc. v. Doan, 529 So.2d 201 (Ala. 1988) (elements of fraud and reliance)
- AmerUs Life Ins. Co. v. Smith, 5 So.3d 1200 (Ala. 2008) (misrepresentation of material fact; no intent required)
- Collins Co. v. Decatur, 533 So.2d 1127 (Ala. 1988) (engineer not always agent; peculiarity of agency in tri-party relations)
- Waddell & Reed, Inc. v. United Investors Life Ins. Co., 875 So.2d 1143 (Ala. 2003) (agency/partnership considerations in tort interference)
- MAC East, LLC v. Shoney's, 535 F.3d 1293 (11th Cir. 2008) (multifactor tests for whether defendant is a stranger to contract)
- Edwards v. Prime, Inc., 602 F.3d 1276 (11th Cir. 2010) (tri-party relationships and agency concepts in contract context)