Pretzel & Stouffer

$4,500 Contractual Limitation of Liability Upheld on Behalf of Engineering Firm in $6 Million Building Facade Litigation

Pretzel & Stouffer attorneys Stephen C. Veltman and Scott Anderson successfully defended an engineering firm that had inspected the facade of a downtown Chicago high rise building in litigation brought by an assignee bank after the borrowers defaulted on an $11 million loan. The plaintiff sought $6 million from the engineering firm on a theory that it would not have purchased the loan if the true condition of the facade was known.

Following a four-week jury trial in Cook County Circuit Court, where evidence was introduced that the borrower had withheld critical information from both the original lender and the engineering firm hired to conduct the inspection, the jury returned a verdict of not guilty on the fraud count. The court ruled as a matter of law that any liability for negligence was limited to $4,500 (the cost of the inspection), pursuant to the limitation clause contained in the contract entered into between the engineering company and the original lending bank.

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