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Tuesday, October 23, 2012 05:10 am


Negligent Representation -- Economic Loss

Midwest Underground, Inc. v. Laurel Mountain Midstream Operating, LLC, 2012 U.S. Dist. Lexis 111735 (W.D. Pa. Aug. 8, 2012)

A contractor ended up covering project costs that were 300 percent higher than expected based on bid information. But the only route to recovery lies within the contract--no matter how harsh its damages provisions may be.

Laurel Mountain Midstream Operating, LLC (LMM) hired contractor Midwest Underground, Inc. (Midwest) to dig and construct a natural gas pipeline in Green County, Pennsylvania. Midwest experienced several disruptions in its progress on the project. Midwest blamed the delays on LMM's failure to adhere to its contractual obligations--duties such as obtaining necessary permits and rights-of-way, as well as providing accurate, complete construction plans. After LMM denied Midwest's requests for additional compensation, Midwest asserted claims for negligent representation and unjust enrichment. The district court dismissed both. Only Midwest's third claim for breach of contract survives.

Midwest alleged that LMM had misrepresented: what the expected time to begin, perform, and complete the project would be; that the project design was adequate; and that LMM would provide access roads. Midwest claimed it relied on these [...]

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