Construction Law

Idaho Court denies GC's claim against project engineer

By Brett Hill

The project involved the development of an area of downtown Pocatello and the scope of work for Beco Construction, the general contractor, included street and sidewalk improvements as well as installation of utilities.  The contract was awarded to Beco by the City of Pocatello.  The City also hired J-U-B Engineers to serve as the project engineer.  J-U-B was also tasked with administering the City's contract with Beco, and J-U-B's role was described in the City/Beco contract.

During the course of the project, Beco alleged that J-U-B improperly tested asphalt with the intent of promoting failed tests, unreasonably shut down the project causing delays to Beco, and unreasonably delayed the commencement of the project.  Beco alleged breach of contract, negligence, and intentional interference with contract claims against J-U-B.  Beco's breach of contract claim and negligence claims against Beco were dismissed early in the case and the only issue on appeal was whether Beco could make a claim for intentional interference against J-U-B.

The Idaho Supreme Court reasoned that Beco could not make a claim against J-U-B for intentional interference.  In Idaho, a party cannot make a claim for intentional interference against another party to the same contract.  The cause of action is only applicable when a third party interferes with one party's contract with another.  In this case, J-U-B was acting as an agent of the City on the project because it was designated as the owner's representative and tasked with administering the general contract.  The Court reasoned that because J-U-B was the City's agent, and the actions that were the basis of Beco's claims occurred during J-U-B's adminstration of the contract, J-U-B was not a third party to the general contract and therefore Beco could not make a claim against J-U-B for intentional interference. 

The case represents the difficult task that general contractors have in making claims against the design professionals on projects.  Because the contractor does not have a contract with the design professional it cannot allege breach of contract against the design professional.  In this case, Beco's sole remedy was to sue the City for breach of contract due to the actions caused by its agent, J-U-B. 

Court opinion:  Beco Constr. Co. v. J-U-B Engineers, Inc.

Full post as published by Construction Law Blog on May 06, 2008 (boomark / email).