Construction Manager Insulated From Prime Contractor Claim
Kegler Brown Construction Newsletter May 1, 2007
A contractor on a multi-prime contractor University project sued the construction manager for (1) negligence and (2) tortious interference with his contract because of alleged scheduling shortcomings and other mismanagement. The Common Pleas Court granted the construction manager’s motion to dismiss and ruled that such claims could not survive under existing Ohio law. Wagner-Smith Co. v. Ruscilli Construction Co., Inc., 2006 WL 3114403 (Ohio Ct. Common Pleas Sept. 25, 2006).
The Court reasoned that the negligence claim was barred by the economic loss rule (requiring privity of contract) in view of the recently decided Corporex case, and said that the contractor’s sole remedy was to sue the University, who would elect whether or not to bring the construction manager into the case. As to the tortious interference claim, the Court held that the construction manager’s actions with respect to the schedule were “privileged,” as the construction manager was presumably acting for the benefit of the University, and therefore protected.
This case emphasizes the practical difficulties associated with suing parties you do not have a contract with, under existing Ohio law, even if their actions directly impacted you on a multi-prime project or otherwise.