Eastwood v. Horse Harbor Foundation, Inc., 241 P.3d 1256 (2010)

Citation: Eastwood v. Horse Harbor Foundation, Inc., 241 P.3d 1256 (2010)
Parent Document: Eastwood v. Horse Harbor Foundation, Inc., 241 P.3d 1256 (2010)
Jurisdiction: Washington (state)
Effective Date: 2010-11-04
Original Source: https://www.courtlistener.com/opinion/2372386/eastwood-v-horse-harbor-foundation-inc/ ↗

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¶ 18 In Berschauer/Phillips Construction Co. v. Seattle School District No. 1, 124 Wash.2d 816, 819-20, 881 P.2d 986 (1994), the general contractor for a school construction project sued the architect, structural engineering company, and construction inspector for negligence. As a result of the defendants' inadequate design plans and faulty inspection work, the contractor claimed that it spent more money than expected and also endured delays in construction, with $3.8 million in losses. Id. at 819, 881 P.2d 986. The contractor conceded these were economic losses. Id. But we did not automatically dismiss the contractor's claims. Rather, we carefully weighed the public policy considerations to decide whether the defendants owed an independent tort duty to avoid the contractor's risk of economic loss. See id. at 826-28, 881 P.2d 986. We held that the general contractor could not sue in tort to recover damages for lost profits. Id. at 826, 881 P.2d 986. The contractor's losses were the increased costs of doing business. We reasoned, as a policy matter, that if design professionals were under a tort duty to avoid a risk of increased business costs, the construction industry could not rely on the risk allocations in their contracts and would have an insufficient incentive to negotiate risk. The case might have been different if a structure had collapsed.

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