Public Building Authority of the City of Huntsville v. St. Paul Fire and Marine Insurance Company; Public Building…

Summary

The court affirmed the summary judgment for St. Paul because the PBA terminated Dawson's contract for convenience before attempting to satisfy the performance bond's conditions precedent, and the contract did not permit that termination to be converted into one for cause. It also held that § 5.3 did not survive the convenience termination and that the economic-loss rule did not categorically bar the PBA's tort claims against the subcontractors in a commercial-construction dispute. The court therefore reversed and remanded only the judgments holding that § 5.3 survived the termination. Justice Murdock, dissenting, would have read the contract as preserving liability for previously undertaken obligations and would have applied the economic-loss rule to the subcontractor claims.