Public Construction Claims: When the “Third Party” Isn’t One

Allegheny Construction Company, Inc. v. Town of Christiansburg, Virginia, et al., 86 Va. App. 321 (2025).

McCormick Taylor, Inc. v. Allegheny Construction Company, Inc., 86 Va. App. 321 (2025).

Kleinfelder, Inc., f/k/a Century Eng’g, Inc., d/b/a NXL Constr. v. Allegheny Constr. Co. Inc., 86 Va. App. 321 (2025).

A recent decision from the Court of Appeals of Virginia emphasizes legal principles that apply to owners, contractors, and the design and inspection teams who support public projects. It reiterates that project participants working for the same owner—including consultants and their employees—generally can’t be sued for tort claims based on their work on the project.

In three consolidated interlocutory appeals, the Court of Appeals held that tortious interference and conspiracy claims against consultants and individual employees were rightly dismissed because, as a matter of law, agents acting within their scope could not interfere with their own principal’s contracts or conspire with their principals or one another.

Allegheny Construction contracted with the Town of Christiansburg to perform roadway improvements. The Town separately hired McCormick Taylor as design engineer and NXL Construction Services as construction engineer and inspector. Disputes arose about the quality of the project designs and who was to blame for project delays. When these disputes led to litigation, Allegheny alleged that the other consultants, the Town, three individual employees, and the Town’s project manager had tortiously interfered with the contract between the Town and Allegheny and conspired with one another to deny Allegheny’s claims for additional payment due to the alleged design defects.

The defendants challenged the legal validity of Allegheny’s tortious interference and conspiracy claims, both as to the defendant entities and their individual defendant employees. The circuit court overruled several demurrers as to the defendant entities, but agreed that Allegheny had no claim against the individuals. The parties elevated these decisions to the Court of Appeals with several interlocutory cross-appeals.

The Court focused on the contractual scope of the duties the defendants owed Allegheny and each other. First, the law viewed the Town, its consultants, the individual employees and their employees as a single entity for purposes of the Town’s contract with Allegheny because the conduct alleged as the basis for the tort claims was within the scope of the agency relationships. That single entity could not interfere with its own contract, nor could it be a third-party interferer for purposes of the tortious-interference claims. For the same reasons, Allegheny’s conspiracy claims also failed. The intracorporate immunity doctrine applied to the consultants because they all acted as the Town’s agents and the single entity they formed could not conspire with itself.

In sum, Allegheny alleged no independent duty apart from those arising from its contract with the Town. The Court affirmed the circuit court’s dismissal of the claims against the individual employees, but reversed and remanded with instructions for the circuit court to dismiss the tortious interference and conspiracy claims as to all defendants—not just the individual employees. The Supreme Court of Virginia later denied Allegheny Construction’s petition for appeal, leaving the Court of Appeals’ decision in place.

So what can participants in the Virginia construction industry learn? As a practical matter, expect contract-based remedies to drive project disputes, even where there appear to be third-party relationships at play. Where the alleged misconduct is tied to contract administration and performed within an agency role (e.g., owner’s engineer/inspector), tort claims like interference and conspiracy may be hard to sustain without an independent legal duty outside the contract.

Parties should anticipate these issues by defining roles and decision paths early—and document them. Clear scopes of work, authority limits, and written issue-resolution procedures can help teams manage disputes over delays or design defects and reduce the risk and added expense of misdirected claims against individuals.

Contact Gentry Locke to learn more about how our experienced team of construction attorneys can help you navigate projects in the Commonwealth at each stage—planning, litigation, or appeals.