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Lake Almanor Assocs., LLP v. Huffman-Broadway Group, Inc.

Citation: 39 ELR 20247
No. No. A12263, (Cal. App. 1st Dist., 10/30/2009)

A California appellate court held that a consultant hired by a county to prepare an environmental impact report (EIR) for development project is not liable to the developer for failing to prepare the EIR in a timely fashion. When the EIR was not submitted on time, the county terminated its contract with the consultant. The consultant then submitted invoices to the county seeking payment for its services. The county then demanded reimbursement from the developer. The developer also had to reimburse the county for the services of a second consultant to prepare the EIR. The developer then filed suit seeking damages from the consultant for breach of the contract, negligence, and negligent interference with prospective economic advantage. The developer also sought $50 million in damages due to loss of a sale of the project property to a third party. The lower court properly dismissed the developer's contract claims. The developer argued that it is a third-party beneficiary to the developer's and county's contract because the county owed it a legal duty to complete the EIR in a timely fashion. But the county owed the developer no such legal duty. Prior case law holds that a county, as lead agency on a project, owes its duty to the public to release a proper EIR. The developer's negligence claims also fail. The balance of the factors militates against a conclusion that a consultant owes a duty of care to a project applicant in the timely completion of a draft EIR.