Dr.

Jennifer Smith’s Accounting 568-01W “Business Law for Accountants”

Week 1 Homework

Case Brief: Caldwell v. Bechtel

Facts:
Circa 1972-73, Caldwell was a laborer who worked construction on a tunnel as part of the
Washington Metropolitan Area Transportation Authority (WMATA). He claimed he contracted
silicosis on the job. He sued Bechtel, a consult on the tunnel project, for damages.

Procedural History:
Judgment made by the district court was made in favor of Bechtel. Whose contractual duties
were to WMATA and not Caldwell.

Issue:
Did Bechtel breach a duty of due care owed to Caldwell? Did Bechtel exercise reasonable and
necessary care steps to protect him from any known harm?

Decisions (Holding):
The district court’s ruling was overturned and the U.S. Court of Appeals ruled in favor of
Caldwell.

Reasons:
The court found that Bechtel did not practice enough reasonable care to protect Caldwell form
harm. Bechtel’s argument was it had no contractual duty of reasonable care to protect Caldwell
from harm, however, the U.S. Court of Appeals, District of Columbia Circuit Court reversed the
decision made by the lower court on the basis that a) Caldwell did not bring an action for
breach of contract against Bechtel. And b) the duty of care owed to Caldwell is based on a
social contract, as prescribed under tort law, and not under contract law.
Case Brief: Price v. High Pointe

Facts:
In 2006 Beckie Price of Michigan came home to find out her home’s basement had been
flooded in error by High Pointe Oil Company. Price sued High Pointe for both the economic
losses of her home and contents within. She also sued for noneconomic losses, claiming
emotional distress and mental anguish due to the ill psychological effects she was inflicted with
having to move in with her parents and the loss of her home and belongings.

Procedural History:
Price was given compensation for the economic losses of her home and contents within. She
was also awarded by a jury $100,000 in damages for her noneconomic losses. High Pointe
unsuccessfully filed an appeal to the intermediate appellate court in effort not to have to pay
noneconomic damages. High Pointe next appealed to the Michigan Supreme Court.

Issue:
Are noneconomic damages recoverable for the negligent destruction of real property under
Michigan common law?

Decisions (Holding):
Ruling was made in favor of Price both in circuit court and in appeals court. However, the
Michigan Supreme reversed the lower courts decisions.

Reasons:
Michigan Supreme Court maintained that state common law allowed for only compensation
and replacement of economic/physical property damages out of a defendant’s negligence. And
that noneconomic damages such as mental anguish and emotional distress are not recoverable
in cases involving the destruction of real property caused by a nonintentional act (negligence).