199 A.3d 1034
R.I.2019Background
- In 2006 Hexagon contracted with general contractor A/Z to build a facility; A/Z subcontracted roofing work to McKenna, which installed a Carlisle roofing system. Hexagon later alleged the roof leaked starting in 2006.
- Hexagon sued McKenna and Carlisle in 2015 asserting breach of contract, breach of express and implied warranties, misrepresentation (dismissed below), and negligence; Hexagon did not sue A/Z.
- McKenna moved for summary judgment, submitting an undisputed-statement-of-facts that Hexagon accepted; Hexagon did not submit the A/Z–McKenna subcontract or the Hexagon–A/Z general contract.
- McKenna argued (1) no contract between Hexagon and McKenna (so no breach absent third-party beneficiary status), (2) Hexagon failed to plead intended third-party beneficiary status, and (3) the economic-loss doctrine bars Hexagon’s negligence claim.
- The Superior Court granted summary judgment, finding Hexagon was only an incidental beneficiary of the subcontract and that the economic-loss doctrine barred the negligence claim; the Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hexagon can sue McKenna for breach of contract/warranty as an intended third-party beneficiary of the A/Z–McKenna subcontract | Hexagon: acceptance of McKenna’s undisputed facts suffices to create a triable issue that McKenna intended to benefit Hexagon, allowing breach-of-contract/ warranty claims | McKenna: no privity; Hexagon is at best an incidental beneficiary and submitted no subcontract or evidence of intent | Court: Affirmed summary judgment — Hexagon failed to present evidence that the subcontract intended to benefit Hexagon; owner was incidental beneficiary as a matter of record evidence presented |
| Whether Hexagon’s failure to expressly plead third‑party beneficiary status precludes the claim | Hexagon: Rule 8 notice pleading satisfied; claim reasonably encompassed by pleadings and facts | McKenna: Hexagon did not specifically plead intended-beneficiary status as required | Court: Pleading was adequate; issue properly before court, but Hexagon still lacked evidence to create a factual dispute |
| Whether the economic-loss doctrine bars Hexagon’s negligence claim against McKenna | Hexagon: absence of privity with McKenna means economic-loss doctrine should not apply | McKenna: commercial-transaction case; economic-loss doctrine bars recovery of purely economic damages—Hexagon must pursue contract remedies | Court: Affirmed summary judgment — economic-loss doctrine bars tort recovery for purely economic losses between commercial entities; Hexagon cannot evade doctrine by suing subcontractor instead of general contractor |
Key Cases Cited
- Glassie v. Doucette, 157 A.3d 1092 (R.I. 2017) (third‑party beneficiary standard and Restatement §302 guidance)
- Davis v. New England Pest Control Co., 576 A.2d 1240 (R.I. 1990) (inspector liable to third‑party purchaser where contract contemplated benefit to third party)
- Credit Union Central Falls v. Groff, 966 A.2d 1262 (R.I. 2009) (attorney’s services intended to benefit third party created third‑party beneficiary status)
- E.W. Burman, Inc. v. [unnamed], 658 A.2d 515 (R.I. 1995) (economic‑loss doctrine bars tort recovery for purely economic loss in commercial construction context)
- Franklin Grove Corp. v. Drexel, 936 A.2d 1272 (R.I. 2007) (reaffirming economic‑loss doctrine principles in commercial transactions)
- Spring Motors Distributors, Inc. v. Ford Motor Co., 489 A.2d 660 (N.J. 1985) (policy basis distinguishing tort duties from contractual allocation of economic risk)