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Brock Bridge Limited Partnership Inc. v. Development Facilitators Inc.2/26/1997
nvestigation, and planning. Estimating the costs of construction is integral to all of these activities.
Thus, if appellants had argued their claim against DFI instead of against Streib, we would conclude that a cause of action lies against DFI for the representations it made in the June 5, 1991 contract. Present in this case are the twin requirements, outlined in Jacques, of contractual privity and a professional relationship. Jacques, 307 Md. at 535, 541.
Nevertheless, because appellants only argue that Streib, not DFI, was negligent, we must examine whether the record demonstrates that appellants may pursue a negligence claim against Streib. Streib did not sign the contract in his own capacity, but as president of DFI -- thus, the parties to the contract were DFI and BBLP, and BBLP had no relationship with Streib sufficient to sustain the negligence claim. Furthermore, appellees continue, Streib never dealt with BBLP at all until the day he signed for DFI as president. Therefore, say appellees, there is no contractual privity or special relationship that would impose a duty of due care on Streib when making representations in the scope of his performance.
Adherence to corporate form is usually appropriate while analyzing the terms of a contract. If the president of a company signs a contract as the president, intending to bind only the company, then the foundation of contract law -- to divine the intent of the parties to the contract -- dictates that only the company be bound. Hall v. Barlow, 260 Md. 327, 346, 272 A.2d 386 (1971). In such a case, the parties did not bargain for the individual to be bound.
Streib's potential liability, however, is founded in tort rather than contract. It is well settled that an agent may be liable for his own acts of negligence performed within the scope of employment by his principal. See, e.g., E. G. Rock, Inc. v. Danly, 98 Md. App. 411, 430, 633 A.2d 485 (1993). Nevertheless, the Court of Appeals in Jacques noted that an inverse correlation exists between the nature of the risk involved on the one hand, and the relationship of the parties on the other. 307 Md. at 537. The Court said that "if the risk created by negligent conduct is not greater than one of economic loss, generally no tort duty will be found absent a showing of privity or its equivalent." Id. The Court of Appeals thus made contractual privity, or its equivalent, a necessary element of the duty of care required by Martens, 292 Md. at 337.
The Court of Appeals addressed the issue of whether corporate officers are liable for the torts of the corporation in Tedrow v. Deskin, 265 Md. 546, 290 A.2d 799 (1972). In that case, the appellant had purchased an automobile from a Tom and Martin Ford, Inc. The appellant alleged that the odometer had been rolled back when he bought the car, and named the corporation and several officers and stockholders as defendants in a lawsuit for tortious fraud. Id. at 547-48. The appellant alleged no physical injury , claiming only that he had "expended large sums of money for repairs," id. at 551, an injury later characterized by the Court of Appeals as purely economic. See Decoster, 333 Md. at 250 (economic losses include the cost to repair or replace the product).
The individual appellees (officers of the corporation) argued that the circuit court's dismissal was proper because the contract of sale was between the appellant and the corporation, not between the appellant and the individual appellees. Tedrow, 265 Md. at 548. Thus, the individual appellees could not be held responsible for the acts of the corporation. Id. at 550. The Court of Appeals sided with the appellant, however, and remanded to the circuit cour
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