THICK TECH SYSTEMS INC v. METHUEN CONSTRUCTION CO INC et al

Filing 129

ORDER ON MOTION FOR RECONSIDERATION - denying 127 Motion for Reconsideration re 125 DECISION AND ORDER ON STANTEC CONSULTING SERVICES, INC.'S RENEWED MOTION TO DISMISS THIRD-PARTY COMPLAINT. By JUDGE D. BROCK HORNBY. (mnw)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE

FLETCH’S SANDBLASTING &
PAINTING, INC.,
THIRD-PARTY PLAINTIFF
V.

FAY, SPOFFORD, AND THORNDIKE,
LLC AND THORNDIKE, INC. D/B/A
STANTEC CONSULTING SERVICES,
INC.,
THIRD-PARTY DEFENDANT

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CIVIL NO. 2:15-CV-76-DBH

ORDER ON MOTION FOR RECONSIDERATION
Subcontractor Fletch’s has asked me to reconsider my ruling dismissing—
because of the economic loss doctrine—its claim against Stantec, the project
engineering and design firm in this case. See Mot. at 2 (ECF No. 127). Fletch’s
says that my ruling ignored the Maine Law Court’s decision in Chapman v.
Rideout, 568 A.2d 829, 830 (Me. 1990), adopting Restatement (Second) of Torts
§ 552(1) (1977) and Illustration 9 to that Restatement.

Illustration 9 does

support recognition of a cause of action in a case like this by a subcontractor
against a project engineer. But the Law Court first recognized the economic loss
doctrine defense in Oceanside at Pine Point Condo. Owners Ass’n v. Peachtree
Doors, Inc., 659 A.2d 267 (Me. 1995), a decision issued after both Chapman
(1990) and the relevant provision of the Restatement (Second) (1977). Peachtree,
659 A.2d at 270. I have tried to apply Peachtree and its reasoning faithfully.
Certainly, there is room for disagreement over applying the economic loss
doctrine defense to cases like this.

According to “Tort Liability of Project

Architect or Engineer for Economic Damages Suffered by Contractor or
Subcontractor,” “[a]lthough most courts have long held that lack of privity is not
a bar to a negligence claim, they are deeply divided on whether the claim should
be barred under the economic loss rule, which broadly prohibits the recovery of
solely pecuniary losses under a theory of nonintentional tort.” 61 A.L.R. 6th 445
(2017, originally published 2011). In my Order of February 21, 2019, I referred
to “the 24 years since the Law Court last spoke on the topic [i.e., Peachtree] and
the difficulties this court and the Maine Superior Court have had in defining the
doctrine’s scope.” Decision and Order at 7 n.9 (ECF No.125).
What the Law Court might do with the economic loss doctrine is even
murkier today. Just last year, the American Law Institute adopted Restatement
(Third) of Torts: Liability for Economic Harm (2018).1 That new Restatement
describes the economic loss doctrine controversy, but narrows the defense so
that “[i]t is limited to parties who have contracts.” Id. § 3, cmt. a. What used to
be Illustration 9 to Restatement (Second) § 552 is now (with a minor
modification2) Illustration 8 to Restatement (Third) § 3.3 The comment states:
The new Restatement is not yet published in hard copy and is subject to editorial revision, but
the ALI says that in the interim we may cite “this and previous Tentative Drafts approved by ALI’s
membership” as “the official position of ALI.” American Law Institute, “The American Law
Institute Membership Approves Restatement of the Law Third, Torts: Liability for Economic
Harm” (May 21, 2018), available at https://www.ali.org/news/articles/american-law-institutemembership-approves-restatement-law-third-torts-liability-economic-harm/
(last visited Apr. 17, 2019).
2 The Reporter’s Note says: “Illustration 8 is the same in substance as Illustration 9 to § 552 of
the Second Restatement. It is condensed here, with an additional party removed for clarity’s
sake and language added to emphasize the significance for this Section.” Restatement (Third) of
Torts: Liab. for Econ. Harm § 3, Reporter’s Note cmt. f.
3 “City hires Engineer to test soil conditions at a site where it plans to erect a large building. City
explains that Engineer's report will be distributed to prospective building contractors for use in
estimating their costs. Engineer negligently submits an inaccurate report. Contractor wins the
right to perform the construction, having relied on Engineer's report in preparing its bid.
Engineer's errors cause Contractor to suffer losses in performing its contract with City. The
1

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Sometimes a plaintiff and defendant who had no contract
with each other both had contracts with the same third
party. In some cases of this type, it would have been possible
for the plaintiff and defendant to work out their obligations
to each other in advance by carefully writing their contracts
with the party who stood between them. This Section does
not extend its rule to those cases, however; it does not
foreclose claims between plaintiffs and defendants who are
only indirectly linked by contract.

Id. § 3 cmt. f (emphasis added).4 But the Reporter’s Note to Illustration 8 also
recognizes a “leading case for the minority view, denying recovery on the facts of
Illustration 8.” Id. § 3, Reporter’s Note cmt. f (citing Berschauer/Phillips Const.
Co. v. Seattle Sch. Dist., 881 P.2d 986 (Wash. 1994)).5
With all the uncertainty, I suggested in my February 21, 2019 Order that
certification to the Maine Law Court would be the best way to clear up the
confusion, but the parties have declined to pursue that option. Decision and
Order at 7 n.9. Since all I have for controlling Maine law, therefore, is Peachtree,
I DENY the motion to reconsider.
SO ORDERED.
DATED THIS 17TH DAY OF APRIL, 2019
/S/D. BROCK HORNBY
D. BROCK HORNBY
UNITED STATES DISTRICT JUDGE

contracts between Contractor and City, and between City and Engineer, do not preclude a claim
by Contractor against Engineer under § 5 or § 6 of this Chapter. Engineer remains potentially
liable to Contractor under either of those Sections.” Id. § 3, Illustration 8 (2012).
4 See also id. § 6 cmt. b regarding “[t]hree-cornered construction disputes.”
5 Illustration 1 in § 2 is also close to Peachtree, and the Reporter’s Note cites Peachtree.
Reporter’s Note cmt. b. In the Restatement (Third) of Torts: Products Liability (1998), the ALI
recognized the economic loss doctrine and cited Peachtree. Restatement (Third) of Torts: Prod.
Liab. § 21, Reporter’s Note cmt. d (1998).
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