Legal Alert - Nevada Supreme Court Extends Design Professional Economic Loss Rule Defense to Negligent Misrepresentation Claims on Commercial Construction Projects


by Leon F. Mead II

In 2009, the Nevada Supreme Court (“NSC”) applied the economic loss rule to bar claims of professional negligence by design professionals in commercial construction projects, ruling that “[i]n the context of engineers and architects, the bar created by the economic loss doctrine applies to commercial activity for which contract law is better suited to resolve professional negligence claims.” Terracon Consultants Western, Inc. v. Mandalay Resort Grp., 125 Nev. 66, 77, 206 P.3d 81, __ (2009). While this determination effectively barred commercial professional negligence claims, it left open the idea that design professionals could be liable for damages resulting from negligent misrepresentations made within the commercial construction process. The NSC has now applied the economic loss rule to all claims against design professionals grounded in negligence, including claims for contribution, apportionment and indemnity.

[Read the full alert.]