935 F. Supp. 2d 796
D.N.J.2013Background
- In late 2001 ACHA awarded SRC a lump-sum contract to build the John P. Whittington Senior Living Center; in April 2002 SRC became the general contractor under a construction contract.
- Lindemon was the project architect with a contract to ACHA, but no contract with SRC.
- SRC alleges delays were caused by Lindemon due to permitting failures, repeated non-code-compliant drawings, untimely information responses, and defective verbal change-order approvals.
- SRC claims the delays caused “additional costs” for the project and total damages exceed $3 million when combined with other delays attributed to the Housing Authority.
- Lindemon moved for summary judgment arguing SRC’s claims are barred by New Jersey’s economic loss doctrine.
- The court denied Lindemon’s motion as to negligence and breaches of express/implied warranties, and proceeding to address the remaining claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the economic loss doctrine bar SRC’s negligence claim against Lindemon? | SRC lacks direct contract with Lindemon; but Juliano favors tort recovery. | SRC seeks to siphon benefit of contract with ACHA via tort claim against Lindemon. | No, negligence claim not barred by the economic loss doctrine. |
| Are SRC’s breach of express and implied warranty claims barred? | Warranties arise from contract; damages linked to delays. | No contract between SRC and Lindemon, making warranty claims unclear or improper. | Summary judgment denied for both warranty claims pending briefing. |
Key Cases Cited
- Saltiel v. GSI Consultants, Inc., 170 N.J. 297 (N.J. 2002) (economic loss doctrine requires independent duty of care; governs contract-versus-tort distinctions)
- People Express Airlines, Inc. v. Consolidated Rail Corp., 100 N.J. 246 (N.J. 1985) (negligence damages may be recoverable absent physical injury or property damage)
- New Mea Construction Corp. v. Harper, 203 N.J. Super. 486 (App.Div. 1985) (negligent supervision claims resemble contract between builder and homeowners; not directly controlling here but cited for distinction)
- Juliano v. Gaston, 187 N.J. Super. 491 (App.Div. 1982) (no direct contractual relationship; negligent workmanship recoverable in tort against subcontractor)
- Dynalectric Co. v. Westinghouse Electric Corp., 803 F. Supp. 985 (D.N.J. 1992) (distinguishes contract incorporation and arbitration context; relevance to economic loss doctrine analysis)