Gerald M. Moore and Son, Inc. v. Drewry

• Decision Date: 01 March 1996
• Docket Number: No. 951365,951365
• Citation: 467 S.E.2d 811,251 Va. 277
• Court: Virginia Supreme Court
• Parties: GERALD M. MOORE AND SON, INCORPORATED v. Joseph S. DREWRY, Jr., and Drewry and Associates, Incorporated. Record

Page 811

467 S.E.2d 811

251 Va. 277

GERALD M. MOORE AND SON, INCORPORATED v. Joseph S. DREWRY, Jr., and Drewry and Associates, Incorporated.

Record No. 951365.

Supreme Court of Virginia.

March 1, 1996.

Upon a question of law certified by the United States Court of Appeals for the Fourth Circuit.

Brian N. Casey, Norfolk (Taylor & Walker, on briefs), for defendant-appellant and defendant.

John S. Wilson, Norfolk (Walter D. Kelly, Jr.; Willcox & Savage, on brief), for plaintiff-appellee.

Present: All the Justices.

LACY, Justice.

Pursuant to our Rule 5:42, the United States Court of Appeals for the Fourth Circuit certified a question of Virginia law to this Court which we accepted by order entered September 22, 1995. The question involves the application of the economic loss doctrine to an award of damages for negligent performance of a contract in the absence of privity.

The following facts are set forth in the Court of Appeals' order of certification. Gerald M. Moore and Son, Inc. (Moore) owns and operates an industrial plant in Nassawadox, Virginia. In 1990, Moore entered into a contract with an engineering firm, Drewry and Associates, Inc. (D & A), to engineer, design, and furnish a reduction furnace for Moore's use in the process of thermal remediation of petroleum contaminated soil. The contract was signed by Joseph S. Drewry, Jr., as president of D & A. Drewry performed all the engineering work required by the contract.

The reduction furnace provided by D & A did not work properly because of design and engineering defects. Moore filed suit against D & A alleging breach of contract, breach of warranties, and negligence. By amended complaint, Moore added Drewry as a defendant in the negligence count. D & A was found liable for breach of contract, and both D & A and Drewry were found liable for negligence. Moore was awarded damages of $107,182.70, based entirely on its economic loss. D & A and Drewry were held jointly and severally liable for the judgment amount.

In considering Drewry's appeal, the Court of Appeals certified the following question to us and stated that the resolution of the issue will be determinative of the proceeding in that court:

Whether Drewry, the president of D & A, as the engineer who performed the work for which the contract between D & A and Moore called, is liable for the purely economic losses resulting from the negligent performance of that contract.

The Court of Appeals also suggested that in answering the question we may need to consider the following issues:

A. Does the economic loss doctrine bar recovery for negligence where the defendant, Drewry, was not a party to the contract?

B. Under Miller v. Quarles, 242 Va. 343, 410 S.E.2d 639 (1991), did Drewry's position as D & A's licensed engineer on the project create a liability for negligent acts performed as an agent for D & A, even though solely economic loss was involved?

Although not specifically stated in the certified question, the issues suggested by the Court of Appeals indicate that Drewry was not a party to the contract between Moore and D & A. Therefore, our response to the certified question assumes that there is no privity between Drewry and Moore.

As recognized by the Court of Appeals, under Virginia law, an agent can be held liable for negligent performance of a contract to which he is not a...