Procedural Posture

Procedural Posture

Appellant developer challenged a judgment of the Superior Court of Marin County, California, in favor of respondent contractor in the developer’s suit that sought damages from the contractor for breach of contract (as a third party beneficiary), negligence, and negligent interference with prospective economic advantage. Among other things, the developer sought $ 50 million in damages due to loss of a sale of the project property to a third party.

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Overview

The contractor was hired by a county to complete an environmental impact report (EIR) for the developer’s proposed mixed land use development. The court held that where a developer submitted a development application to a county, and the county hired a consultant to prepare an EIR, the consultant was not liable to the developer for damages due to the consultant’s failure to prepare the EIR in a timely fashion. The complaint failed to state a cause of action for breach of contract. The provisions of the contract between the county and the contractor referring to the developer and requiring that the developer receive a copy of the EIR were insufficient to demonstrate an intent that the contractor be liable to the developer in the event of a breach. The developer failed to establish a basis for liability as a creditor beneficiary, and a direct action against the contractor was not consistent with CEQA. The complaint also failed to state causes of action for negligence. Suits such as the developer’s would be likely to compromise the independence and objectivity of environmental consultants by exposing them to substantial liability.

Outcome

The court affirmed the judgment.