Ric-Man Construction Inc v. Neyer Tiseo & Hindo Ltd, 329159

Background

OMIDDD contracted NTH to design the rehabilitation of the Oakland–Macomb Interceptor, including Control Structure 6 (CS-6); Ric‑Man won the construction contract and NTH acted as owner’s representative during construction.
Ric‑Man alleges NTH negligently designed the temporary earth retention system (TERS) and negligently reported subsurface soil conditions, causing emergency remedial work, expense, and denied time extensions.
Ric‑Man previously arbitrated claims against OMIDDD and later sued NTH asserting professional negligence, negligent misrepresentation, tortious interference, intentional misrepresentation (dismissed), and defamation.
Trial court mostly denied NTH’s summary-disposition motion but barred Ric‑Man from recovering lost profits belonging to Mancini Enterprises; NTH appealed and Ric‑Man cross-appealed.
Court of Appeals: affirmed in part, reversed in part, and remanded—key holdings: professional negligence claim barred (no duty separate from contract), negligent misrepresentation survives, exculpatory clause limited to construction-phase duties, certain contract provisions limit damages for differing site conditions and Claims procedure does not apply to suits versus NTH, and Ric‑Man lacks standing to recover Mancini’s lost profits.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether NTH owed a duty in tort separate from its contract (professional negligence)	NTH’s design and site reports were negligent and caused economic loss to Ric‑Man	Any duty arises solely from NTH’s contract with OMIDDD; Fultz/Loweke bar tort claims absent a separate duty	Professional negligence claim barred—no separate tort duty for alleged economic losses absent physical harm
Viability of negligent misrepresentation claim	Ric‑Man (a bidder/contractor) justifiably relied on NTH’s technical data and suffered pecuniary loss	Misrepresentation claim is contract‑based and barred by Fultz/Loweke	Negligent misrepresentation survives under Restatement §552 because NTH supplied technical information intended for bidders
Effect/scope of exculpatory clause in Prime Contract	Clause bars NTH’s liability generally	Clause only shields NTH for duties exercised as owner’s representative during construction	Exculpatory clause limited to NTH’s construction‑phase authority; it does not bar claims based on preconstruction design errors; “good faith” qualifier applies only to certain decision‑making language
Recoverability of lost profits (other projects and Mancini Enterprises)	Ric‑Man seeks consequential lost profits (projects it couldn’t bid and Mancini’s Florida real‑estate profits)	Contract clauses (differing site conditions and Claim limits) and collateral estoppel preclude such consequential damages; Mancini’s losses aren’t Ric‑Man’s to recover	Paragraph 4.03(C)(3) bars recovery of lost profits for "other projects" arising from differing site conditions; Claim/10.06 limits are inapplicable to suits against NTH; collateral estoppel does not bar seeking the same damages in tort; Ric‑Man lacks standing to recover Mancini’s lost profits (different legal entity)

Key Cases Cited

Fultz v. Union-Commerce Assoc, 470 Mich 460 (Mich. 2004) (directs analysis whether a tort duty exists separate and distinct from contractual obligations)
Loweke v. Ann Arbor Ceiling & Partition Co., 489 Mich 157 (Mich. 2011) (clarifies and limits the Fultz separate‑and‑distinct duty test; recognizes common‑law duties that can give rise to tort claims)
Rinaldo’s Const. Corp. v. Mich. Bell Tel. Co., 454 Mich 65 (Mich. 1997) (distinguishes economic losses from tort duties to prevent recovery in negligence absent physical harm)
Klapp v. United Ins. Group Agency, Inc., 468 Mich 459 (Mich. 2003) (contract interpretation principle: avoid readings that render provisions nugatory)
Monat v. State Farm Ins. Co., 469 Mich 679 (Mich. 2004) (elements and strict application of collateral estoppel)