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Lathan Co. v. State, No. 2016-CA-0913, 2017 La. App. LEXIS 2277 (La. App. 1st Cir. Dec. 6, 2017)

 
On December 6, 2017, the Louisiana Court of Appeals, First Circuit, reversed and remanded the trial court’s decision to grant the appellee’s, Jacobs Project Management Co./CRSS Consortium (“Jacobs”), motion for summary judgment.  In its opinion, the court of appeals held that a project manager owed a general contractor a duty of professional care and thus, could be held liable to a general contractor under Louisiana law, even if the project manager was not in direct privity with the general contractor.

On August 13, 2010, the appellant, The Lathan Company, Inc. (“Lathan”), entered into a public works contract with the State of Louisiana, Department of Education, Recovery School District (“Owner”) to renovate the William Frantz School in New Orleans.  Jacobs, through its contract with the Owner, served as project manager on behalf of the Owner.  Four years later, in August 2014, after filing an original lawsuit against the Owner in 2012 for payment of undisputed amounts due, Lathan filed an amended pleading that alleged inter alia Lathan was entitled to damages from Jacobs under general tort law for negligent professional undertaking and under Louisiana’s Unfair Trade Practices Act.  According to Lathan, Jacobs owed Lathan a duty of conduct in accordance with a standard of care similar to professionals in the industry and that Jacobs breached its duty of care by failing to (i) disclose mold conditions and the existence of an underground fuel tank at the outset of the project; (ii) timely respond to Lathan’s 400+ requests for information; (iii) perform inspections consistent with industry standards; and (iv) review, certify, and/or approve amounts due to Lathan.Continue Reading No Privity, No Problem: Louisiana Court of Appeals Holds That Project Manager Owes a Duty of Professional Care to General Contractor Despite a Lack of Privity

Fogelson v. Bozzone, 2017 N.M. App. LEXIS 58 (July 26, 2017)

In May of 2008, Wallen Development, LLC (“Wallen”) entered into a written agreement to construct and sell a new home to David and Corinne Fogelson (“Fogelson”).  But, after Fogelson paid Wallen in excess of $165,111 under the agreement, Wallen went out of business as a result of financial difficulties.
Fogelson filed an arbitration action against Wallen and ultimately obtained a default judgment after Wallen failed to appear.  Thereafter, Fogelson filed a complaint in court against various individuals affiliated with Wallen.  As relevant here, Fogelson asserted a claim under New Mexico’s Unfair Practices Act, NMSA 1978 §§ 57-12-1 to -26 against one of Wallen’s owners, Mark Bozzone (“Bozzone”).  Bozzone filed a motion to dismiss on the basis that “construction services”, such as those provided by Wallen, do not fall within the scope of the Unfair Practices Act.  The trial court granted Bozzone’s motion.

The major issue on appeal was whether the doctrine of res judicata applied to an arbitration proceeding.  After a very lengthy discussion covering over half of the opinion, the Court of Appeals ruled the res judicata did apply to the arbitration result against Wallen.Continue Reading Appellate Court Holds That the New Mexico Unfair Practices Act Applies to a “Services” Contract for the Construction of a Home, But Does Not Apply to a “Sales” Contract for the Sale of a Completed Home