Court Allows Lawsuit to Proceed Against Utility for its Failure to Provide Accurate Utility Relocation Information to Contractor.
Contractors often struggle to timely deal with utility relocation issues at the front end of construction projects. Often, this issues centers around lack of communication and/or execution of relocation plans.Read more
Olson Construction Law was recently involved in a matter in Federal District Court in the Southern District of Iowa concerning this specific issue. There, a local utility had provided information to a project owner, as well as the Contractor, that it did not have any utilities that required relocation in the construction site at issue. As the project progressed, the contractor realized there were utilities located in the area, and the late discovery/relocation of the utility infrastructure ended up causing significant extra costs and expenses to the project budget.
In its ruling, the Court recognized that when a utility makes negligent representations regarding its utility infrastructure, a Contractor has a right to bring a claim against the utility for any damages it might incur from the utility’s negligence. Specifically, the court stated that a utility “ha[s] a duty to use reasonable care in supplying information regarding its facilities,” to interested parties such as public agencies or contractors.
Because utilities owe this “duty of care” to these types of parties, a utility can thus be liable for damages that result from information a utility gives that it knows or should know is not accurate. This area of law is still developing, but Olson Construction Law is hopeful this leads to more proactive and cooperative utility relocation planning between all involved parties.
If you have any questions about this or other construction law related issues, please contact us at (651) 298-9884.