Even Subcontractors can sue other Prime Contractors Directly on State projects (Law note)

While we have previously looked at direct contractor-to-contractor lawsuits and contractor-to-design professional lawsuits, I have said very little about the role of subcontractors in the multi-prime system.

In the Bolton case addressed earlier, Bolton made a claim against another prime contractor on behalf of itself and its subcontractor.  

However, in 2004 the Court of Appeals dealt with the issue of a subcontractor making a direct claim against a prime contractor other than the contractor for which the sub performed its work.  Pompano Masonry Corporation v. HDR Architecture, Inc., 165 N.C. App. 401, 598 S.E.2d 608 (2004).

That case involved the Biological Science Research Center at UNC-CH .  HDR was the “project expeditor” under a separate contract with UNC, responsible for preparing the project schedule and coordinating work between the prime contractors.

Metric Constructors served as the prime general contractor, and Pompano Masonry was a subcontractor to Metric.  Pompano sued HDR directly as the project expeditor, and the court allowed the case to proceed, holding that subcontractors to prime contractors could sue other prime contractors directly.

The court held that HDR could be sued directly by a subcontractor to which it had no contract for economic injury resulting from its alleged negligent performance of its duties as project expediter.  Citing its earlier decision in Davidson, the court held that liability exits due to the “working relationship” and “community of interests” despite the fact there was no contractual privity between Pompano and HDR.

 Conclusion

The moral of the story with regard to this series of cases?  Never assume that you cannot be sued by someone because you don’t know them, you have no contract with them, you are a licensed professional, or they are on a different “tier” than you on the project.  You have duties to all parties on a construction project, and the multi-prime statute in North Carolina gives yet another arrow in the litigator’s arsenal which could be pointed at your chest.

Are you having fun yet?  Next blog post will be on a less “scholarly” topic, I promise!

Related posts:

1. Contractors liable to other prime contractors on state construction projects in North Carolina (Law note)
2. Statutory liability of Architects and Engineers to Contractors on State Construction projects (Law note)
3. NC State Construction projects– Privity, Multi-Prime Contracts, and the Ability to Be Sued by Parties You Don’t know (Law note)
4. What is the “Economic Loss Rule” and how does it effect me?
5. Pay When Paid Clauses in the NC Construction Contract