Torts Keyed to Franklin
LAN/STV v. Martin K. Eby Construction Co., Inc.
The Dallas Area Rapid Transportation Authority (DART) hired Defendant to design a light rail transit line. DART used that design to solicit bids for a contractor to build the project. Plaintiff was awarded the contract, which contained clauses regarding the means by which Plaintiff could resolve disputes with DART. Plaintiff and Defendant each had contracts with DART, but not with each other. Plaintiff discovered design defects that required 80 percent of the project’s plans to be redesigned. This delay cost Plaintiff time, materials, and labor that Plaintiff calculated was worth $14 million. Plaintiff settled its dispute over the plans with DART for $4.7 million and then brought an action for negligence and negligent misrepresentation against Defendant. The jury found for Plaintiff on the negligent misrepresentation claim, awarding $5 million. Defendant appealed, arguing that the economic loss rule barred recover. The state appellate court affirmed and the state Supreme Court granted review.
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