Florham Park partner Ronald Giller and associate Sarah Wieselgren recently obtained the complete dismissal of an engineering malpractice subrogation action filed against their client, an engineering firm, on a motion for summary judgment. The plaintiff insurance company, as subrogee of the owner of a commercial property, claimed over $1 million in damages as a result of a flood of the property for which the engineering firm had previously conducted an assessment for a nonparty. At the time of the assessment, the property was going to be purchased by a different entity, and plaintiff’s subrogor was the subsequent purchaser. The plaintiff claimed that its subrogor had been given a copy of the engineering firm’s assessment from the seller of the property, that the assessment improperly failed to disclose that the property lacked a shut off valve, and that it had relied upon the assessment when it purchased the property. The plaintiff asserted that the engineering firm owed plaintiff’s subrogor a duty because the defendant knew that the prior owner of the property was going to resell the property shortly after its purchase.
The New Jersey Superior Court rejected the plaintiff’s contention that the engineering firm owed plaintiff’s subrogor a duty of care. The court agreed with Gordon & Rees and found that the imposition of a duty was not warranted since the engineering firm’s contract specifically stated that its authorization was needed for reuse of its assessment by another. The court further determined that it would be unreasonable to impose a duty upon the engineering firm when the firm had never authorized reuse of its assessment by the subrogor owner, and the owner had the opportunity to conduct its own full inspection prior to purchasing the property but instead chose to rely upon the engineering firm’s assessment, which had been prepared for another entity. The court granted the motion for summary judgment and dismissed the complaint against the engineering firm.