Chameleon Engineering Corp. v. Air Dynamics, Inc.

Appellant, Chameleon Engineering Corporation (hereinafter Chameleon), appeals from a judgment of dismissal entered after sustaining the demurrer of respondent, Air Dynamics, Inc. The issue is whether a supplier to a subcontractor of a general contractor who has entered into a construction contract requiring the completion of the work of construction within time limits may be held liable in tort for liquidated damages assessed against the general contractor when the supplier negligently fails to supply essential components necessary to the timely completion of the contract. We hold that under such allegations a cause of action may be stated for negligent interference with prospective economic advantage. Accordingly, we will reverse the judgment of dismissal.

Appellant, Chameleon, is a general contractor which entered into a contract with the United States Army Corps of Engineers for construction of certain military facilities. Chameleon entered into a subcontract with Davis Air Conditioning, ínc. (hereinafter Davis) which called for Davis to supply and install all the air conditioning fixtures for the facilities being built. Respondent Air Dynamics entered into a purchase…