Concrete Subcontractor Cannot Recover Near $1 Million Loss From Concrete Testing Company That Approved Nonconforming Product

The Illinois Appellate Court, First District, recently held that a concrete subcontractor could not recover economic losses from a concrete testing company for its alleged negligence.  The court found that the testing company owed no duty of care to the subcontractor as there was no contractual relationship, no special relationship giving rise to a duty absent a contractual relationship, and no basis to apply the voluntary undertaking doctrine. Rojas Concrete, Inc. v. Flood Testing Laboratories, Inc., No. 1-09-2300 (Ill. App. Ct. Dec. 15, 2010).

In Rojas Concrete, the University of Illinois at Chicago began constructing the “UIC Forum” on its campus in 2005.  UIC hired several contractors, one of whom subcontracted with Rojas Concrete, Inc. (“Rojas”) to perform the concrete work at the Forum.  UIC also contracted with Flood Testing Laboratories, Inc. (“Flood”) to test and monitor the concrete poured at the Forum to ensure that it conformed to the formula and mix design specified in project plans.  Rojas and Flood did not enter into a contractual agreement with each other, though Flood did advise Rojas whether the concrete passed the inspections.

When Rojas poured approximately 710 cubic yards of nonconforming concrete, allegedly after relying on Flood’s tests, it filed suit against Flood alleging negligence and negligent misrepresentations seeking monetary damages in excess of $950,000.  Flood moved to dismiss the complaint arguing that it owed no duty to Rojas and that the economic loss claims were not recoverable in tort.  The trial court dismissed the complaint with prejudice, finding that Flood owed no duty to Rojas, the “information-provider” exception did not apply, and the voluntary undertaking doctrine did not extend to a purely economic loss.

On appeal, the appellate court affirmed the trial court’s dismissal.  The court found that Flood’s contract with UIC did not establish that Flood owed a duty to Rojas; the contract contained explicit provisions that repudiated any contractual relationships between Flood and any subcontractor, such as Rojas, and stated that Flood’s services did not relieve any contractor of its duty to comply with the terms of its own separate contract.  Further, the court found no merit in Rojas’ argument that although there was no contractual relationship, the nature of the parties’ relationship gave rise to a duty of care.  It noted the customary practice in the construction industry for the owner of a project to hire an independent entity, such as Flood, to test and monitor the concrete used by contractors, even though there may not be a contract between the contractor and testing company.  Finally, the court found that Flood did not owe Rojas a duty under the voluntary undertaking doctrine.  Noting its narrow construction, the court reasoned that the doctrine is intended to impose liability for bodily injury when one fails to exercise due care or the competence and skills one possesses.  As Rojas did not argue any reason to extend the doctrine to what is a purely an economic loss, the court could not apply it to this case.

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