Construction Manager and Architect Not Liable for Construction Defects Where There is No Contractual Relationship with Plaintiff

Oates v. Larkin, 2007 WL 4442361 (Mass. Super. Ct. Dec. 5, 2007)

In this case, the Superior Court considered motions to dismiss brought by multiple defendants.  The case arose out of a large-scale condominium construction project.  Plaintiff was president of the association of unit owners and the defendants bringing motions to dismiss were the developer, its board of managers, the construction manager and the architect (who sought to join the motion to dismiss filed by the construction manager).  The developers’ and managers’ motions to dismiss were denied, provided that plaintiff complied with an order to amend the complaint.  The motion to dismiss by the construction manager was allowed in part, denied in part and the architect’s motion to join was allowed.

The construction project involved two high-rise condominiums.  Plaintiff brought suit based on defects in the construction.  The developer and its board of managers argued that the plaintiff, as president of the condominium association, did not have standing to bring a derivative suit on behalf of the association.  The Superior Court agreed, and found that the plaintiff was not a real party in interest and that the association itself should be the named plaintiff.  Rather than dismiss, the court permitted the plaintiff to amend the complaint within thirty (30) days and substitute the name of the association as plaintiff.  The developers’ and board of managers’ motions to dismiss were denied contingent on plaintiff amending the complaint to reflect the court’s ruling.

The construction manager moved to dismiss on the grounds that there was no contractual relationship between the association and the construction manager, the statute of limitation barred suit, the negligence claim failed to state a claim because it only alleged economic loss, and that the derivative action was improper.  The court agreed that there was no contractual relationship between the association and the construction manager and held that the express language of the contract barred a third-party claim.  Therefore, the court dismissed the contract claim for failure to state a claim without addressing the statute of limitations defense.  As to the negligence claim, the court noted that the economic loss doctrine bars recovering on a negligence claim in the absence of personal injury or physical damage to property, other than the property alleged to have been negligently constructed.  The court found there was no personal injury but there was a question as to other property damage, thus dismissal was improper.  The court also determined that there was a question of disputed fact which precluded dismissal on the statute of limitations grounds as to the negligence claim.  The court also denied the construction managers’ motion to dismiss on the grounds that the plaintiff failed to meet the requirements of a derivative action.  Finally, the court allowed the architects’ motion to join the motion to dismiss filed by the construction manager, and having done so, dismissed the contract claim against the architect.