Terracon Consultants Western, Inc. v. Mandalay Resort Group

206 P.3d 81 (2009)

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Nature of the Case

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Facts

Mandalay (P) managed the construction of the approximately $1 billion Mandalay Resort and Casino (the resort) in Las Vegas. P hired Terracon P who agreed to provide geotechnical engineering advice about the subsurface soil conditions and recommended a foundation design for the property. D prepared a geotechnical report with its foundation design recommendations, which P implemented as it began erecting the resort. The ultimate amount of settling exceeded D's projections. The county required P to repair and reinforce the foundation before proceeding with the construction. P sued D for damages in state court, alleging that the deficient engineering advice caused the resort's foundation problems with theories of recovery for breach of contract, breach of the covenant of good faith and fair dealing, and professional negligence. D removed the matter to the United States District Court and moved for partial summary judgment on P's professional negligence claim, arguing that the claim was barred under the economic loss doctrine. Questions were then certified. The federal court thus asked this court to address the scope of Nevada's economic loss doctrine and, in particular, whether it applies to preclude negligence-based claims against engineers, architects, or other design professionals in construction defect cases when the plaintiff seeks to recover purely economic losses.