design professional project documentation and claims

DESIGN PROFESSIONAL PROJECT
DOCUMENTATION AND CLAIMS:
EMERGING LEGAL TRENDS
1
Brennan, Manna & Diamond, LLC
Robert A. Hager, Esq.
Oswald Insurance All Ohio Design Professional Conference
April 27, 2016
PART ONE
DISCOVERY BURDENS AND RESPONDING TO
SUBPOENAS:
JUST SAY …NO?
2
WHAT IS DISCOVERY?
Exchange of information between the parties in a
lawsuit
Includes information regarding witnesses,
documents and other evidence each party may
use to present its case at trial
Enables parties to evaluate opponents case and
prepare response prior to trial
Permits a full and fair hearing after
consideration of all the facts
Prevents “trial by ambush”
3
E-DISCOVERY
What is e-Discovery?
• e-Discovery is one of
the formal processes of
exchanging information
before trial
• Involves request,
retrieval and
production of ESI
(“Electronically Stored
Information”)
4
WHY IS IT IMPORTANT TO DISCUSS EDISCOVERY?
of information
created today
is first
generated in
digital format.
Electronic
documents and
communications
are an integral
part of most
businesses.
of corporate
records are
stored in
electronic
format.
of electronic
information is
never printed
on paper.
5
HOW DOES THE
SUBPOENA
DISCOVERY
PROCESS WORK?
Subpoenas are commonly
used in civil litigation to
obtain evidence from
individuals, corporations,
and other entities who
are not parties to a
lawsuit
6
FIRST STEPS IN RESPONDING TO A SUBPOENA
Alert key employees
(general counsel,
corporate officers,
etc.)
Calendar deadlines
Contact your
insurance
representative
Consider engaging
outside counsel
7
8
DO YOU IMMEDIATELY RESPOND TO THE
REQUEST?
o
o
Begin document collection and review?
Provide the requested documents (or testimony)?
9
OR DO YOU JUST SAY …
10
BENEFITS OF RETAINING OUTSIDE
COUNSEL
Counsel Can Help You Determine Appropriate
Response Options:
Issue a “Litigation Hold”
Serve specific written objections
Move to Quash or Modify
Move for a Protective Order
Attempt to informally resolve the issue
11
COMPLY WITH OR RESIST THE SUBPOENA?
Fed.R.Civ.P. 45 bestows “broad enforcement powers
upon the court to ensure compliance with subpoenas,
while avoiding unfair prejudice to persons who are the
subject of a subpoena's commands.”
The Rules “afford nonparties special protection against
the time and expense of complying with subpoenas.”
Rule 45(c)(1) expressly states that the court issuing the
subpoena must enforce the duty of the “party or attorney
responsible for issuing and serving a subpoena” to “take
reasonable steps to avoid imposing undue burden or
expense on a person subject to the subpoena.
12
COMPLY WITH OR RESIST THE SUBPOENA?
Does the subpoena request the production
of sensitive or proprietary information?
Courts may quash or modify a subpoena that
seeks trade secret or other confidential
commercial information
• Issues may be resolved by using a
confidentiality agreement or protective order:
•
Documents produced can only be used for the
purpose of the litigation
Limit on who can view the documents
Require the documents to be filed under seal
Prompt return or destruction of the
documents at the conclusion of the lawsuit
13
COMPLY WITH OR RESIST THE SUBPOENA?
Are large volumes of documents and/or
ESI (Electronically Stored
Information) sought?
•
•
•
Recipient must produce responsive
materials in the form in which they are
ordinarily maintained or in a reasonably
usable form
Recipient does not need to produce the
same ESI in more than one form
Recipient does not need to provide ESI
from sources that are not reasonably
accessible because of undue burden or cost,
such as electronic data stored on backup
tapes
14
COMPLY WITH OR RESIST THE
SUBPOENA?
Does the attorney-client privilege, work product
doctrine or some other recognized privilege or
protection apply?
Even potentially responsive documents may be
withheld from production based on the attorney-client
privilege, work product doctrine or some other
recognized privilege or protection
• Counsel should conduct the pre-production document
review
• Only those non-privileged documents that fall within
the scope of the subpoena should be produced
• Materials withheld on privilege grounds will require
the creation of a privilege log, absent agreement or
court order
•
15
COMPLY WITH OR RESIST THE SUBPOENA?
Grounds for Objections:
Insufficient time to comply
Seeks irrelevant evidence
Requests privileged or other protected information.
Undue burden or expense
Requests trade secret or other confidential business
information
Requests unretained expert's opinion or information
Vague or ambiguous requests
Improper service
Issued out of the wrong court
16
COMPLY WITH OR RESIST THE SUBPOENA?
Have you been adequately served?
Were witness fees required and tendered at the
time of service?
Is production required more than 100 miles from
where the subpoena recipient lives, works, or
regularly transacts business in person?
Other technical defects on the face of the
subpoena?
Does the subpoena allow reasonable time to
comply?
17
CAUTION: OBJECTIONS MAY BE WAIVED
Fed. Rule 45(c)(2)(B) provides that an entity served
with a subpoena has fourteen (14) days (or before the
time specified for compliance) to serve the party
seeking the documents with written objections.
Bailey Indus., Inc. v. CLJP, Inc., 270 F.R.D. 662
(N.D. Fla. 2010)
• Nonparty recipient of subpoena waived objection
to subpoena on basis of proprietary information or
trade secret
• E-mail from nonparty recipient's counsel to
subpoena's proponent, which indicated he might
need to redact certain information was insufficient
• Redacted documents were not themselves proper
written objection since they stated no objection
and provided no explanation for redactions
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DISCOVERY BURDENS AND RESPONDING TO
SUBPOENAS:
JUST SAY …NO?
In summary:
Counsel is available to assist
Burdensome requests may be quashed
or limited
Confidential and privileged documents
must be protected
Timely objections must be asserted or
else waived
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PART TWO
PROJECT SAFETY: A DESIGN PROFESSIONAL
RESPONSIBILITY?
20
DESIGN PROFESSIONAL LIABILITY FOR
PROJECT AND SITE SAFETY
Generally design professionals are
not liable for construction site
injuries
Limited exceptions where there is a
contractual duty to supervise work
Personal injury attorneys are now
looking at design professionals as
potential defendants
21
McKean v. Yates Eng'g Corp., No. 2013-CA-01807-COA, 2015 WL 5118062
(Miss. Ct. App. Sept. 1, 2015), reh'g denied (Mar. 1, 2016)
• Employees of subcontractor, who were injured when scaffolding
collapsed at construction site, brought negligence action against
architect, engineer, and property owner.
• Court granted summary judgment to defendants.
• The Court of Appeals held:
• Engineer's design drawings for
construction of scaffolding were not the
cause of scaffolding's collapse;
• Engineer had no duty to inspect
scaffolding;
• Architect had no duty to ensure that
scaffolding design was adequate.
22
LeBlanc v. Logan Hilton Joint Venture, 463 Mass. 316, 974
N.E.2d 34 (2012)
Estate of maintenance electrician, who was electrocuted as
he began work upon transmission equipment at hotel,
brought wrongful death action against owner, architect,
architect's consultant, electrical subcontractor, general
contractor, manufacturer of electrical switchgear
equipment, and equipment's installer.
Trial Court granted summary judgment in favor of architect
and consultant on co-defendants' cross-claims.
The Supreme Judicial Court held:
expert testimony was not required to establish professional
standard of care;
genuine issues of material fact regarding causation precluded
summary judgment for design professionals “where, as here,
there was evidence that the Design Team actually knew of the
deficiencies but failed to fulfill its contractual duty to report
the deficiencies to Hilton, and where the deficiencies presented
so obvious a risk to the safety of any person who would operate
the switchgear ...”
23
DESIGN PROFESSIONAL LIABILITY FOR
PROJECT AND SITE SAFETY
• What does your contract
say about safety?
• Safety and supervisory
responsibilities should be
clearly addressed
24
AIA DOCUMENT B101 CONTAINS THE
FOLLOWING PROVISIONS:
§ 3.6.1.2 The Architect shall advise and consult with the Owner during the
Construction Phase Services. The Architect shall have authority to act on
behalf of the Owner only to the extent provided in this Agreement. The
Architect shall not have control over, charge of, or responsibility for
the construction means, methods, techniques, sequences or procedures, or for
safety precautions and programs in connection with the Work, nor shall
the Architect be responsible for the Contractor’s failure to perform the Work in
accordance with the requirements of the Contract Documents. The Architect
shall be responsible for the Architect’s negligent acts or omissions, but shall
not have control over or charge of, and shall not be responsible for, acts or
omissions of the Contractor or of any other persons or entities performing
portions of the Work.
§ 3.6.4.2 In accordance with the Architect-approved submittal schedule, the
Architect shall review and approve or take other appropriate action upon the
Contractor’s submittals such as Shop Drawings, Product Data and Samples,
but only for the limited purpose of checking for conformance with information
given and the design concept expressed in the Contract Documents. Review of
such submittals is not for the purpose of determining the accuracy and
completeness of other information such as dimensions, quantities, and
installation or performance of equipment or systems, which are the
Contractor’s responsibility. The Architect’s review shall not constitute
approval of safety precautions or, unless otherwise specifically stated by
the Architect, of any construction means, methods, techniques, sequences or
procedures. The Architect’s approval of a specific item shall not indicate
approval of an assembly of which the item is a component.
25
Yow v. Hussey, Gay, Bell & Deyoung Int'l, Inc., 201 Ga. App.
857, 412 S.E.2d 565 (1991)
Worker brought action against architect/engineer for
personal injuries sustained at construction site when he
stepped into uncovered storm drain.
Yow court held that in the face of these AIA contract
provisions, the “architect/engineer did not expressly or
impliedly have control over or assume any responsibility
for construction site supervision or safety, including
alerting construction workers and others affected by the
construction of potential hazards at the site.”
Under this circumstance of a total absence of contractual
responsibility for site supervision and safety, [the
architect/engineer] could not be held liable in tort for
claims of common law simple negligence regarding site
safety.”
26
DESIGN PROFESSIONAL LIABILITY FOR
PROJECT AND SITE SAFETY
Ohio courts have similarly held that an
architectural/engineering firm is not
liable in tort for construction site
injuries unless it actively participates
in construction work or explicitly
assumes responsibility for project
safety. See, e.g., Nicholson v.
Turner/Cargile, 107 Ohio App. 3d 797,
806 (10th Dist.1995).
In Nicholson, the survivors of a group of
ironworkers killed in a structural steel
collapse alleged that the defendant
architectural/engineering firm failed to
stop or prevent workers from installing
cantilevered beams with an unsafe
leveling procedure.
27
DESIGN PROFESSIONAL LIABILITY FOR
PROJECT AND SITE SAFETY
In affirming summary judgment granted in favor of the
design firm, the Nicholson court explained:
“an architect or engineer generally has no duty to the employees
of independent subcontractors, unless the architect or engineer
actually participates in subcontractors’ work or explicitly
contracts for safety responsibilities.” Id. at 805.
Provisions to those similar in Yow shielded the
architectural/engineering firm from liability from the negligent
construction procedure that was employed. Id. at 802-804.
The Nicholson court held that because “on-site inspections
were for the purpose of insuring that the construction met
with the architect’s design specifications, [the
architectural/engineering firm] did not have a contractual
duty to make the construction site safe for the general
construction workers.” Id. at 803.
28
DESIGN PROFESSIONAL LIABILITY FOR
PROJECT AND SITE SAFETY
Lack of safety responsibility may
permit early dismissal
Design professionals should not
actively participate in contractor
work, including project safety
Limit contract responsibilities to
supervise work
Read your contract and confirm
no responsibility for site safety
29
PART THREE
WHAT IS THE ECONOMIC LOSS
DOCTRINE AND HOW CAN IT BE USED
TO RESOLVE CLAIMS EFFECTIVELY?
30
31
ECONOMIC LOSS DOCTRINE
Court-developed doctrine adopted by a majority
of U.S. states and jurisdictions
Prohibits a tort recovery (negligence, strict
liability, etc.) when damage results in economic
loss, but does not cause personal injury or
damage to any other property
Precludes contracting parties from asserting tort
causes of action as a means to recover economic
or commercial losses arising out of a contract
32
WHAT ARE “ECONOMIC LOSSES” IN THE
CONTEXT OF CONSTRUCTION?
Cost to repair
or replace
defective
materials
Lost profits,
revenue, and
costs
Cost to repair
damage to a
structure
Economic
Losses
Loss of use or
delay in
utilization of
property for
its intended
purpose
Diminution in
value of a
damaged
structure not
repaired
6 Bruner & O'Connor Construction Law § 19:10.
33
ECONOMIC LOSS DOCTRINE
Owner
Contractor
Subcontractor
#1
Subcontractor
#2
Architect
Consultant
34
HOW DOES THE ECONOMIC LOSS
DOCTRINE WORK IN OHIO ?
Floor Craft Floor Covering, Inc. v. Parma Cmty. Gen.
Hosp. Ass'n, 54 Ohio St. 3d 1, 560 N.E.2d 206 (1990)
• Flooring contractor sued hospital and
architect to recover damages caused by
defect in flooring
• Court dismissed claim against
architect for failure to state claim
• Court of Appeals affirmed
• Ohio Supreme Court held that flooring
contractor could not sue architect for
economic injury due to allegedly
defective plans and specifications in
absence of direct contractual
relationship between contractor and
architect
35
HOW DOES THE ECONOMIC LOSS
DOCTRINE WORK IN OHIO ?
Internatl. Fid. Ins. Co. v. TC Architects, Inc., 2006Ohio-4869
Surety and assignee of construction contractor
brought action against architects on construction
project alleging architects caused delays that led
contractor to default on contract with property
owner
Architects moved for summary judgment.
Court granted the motion
Court of Appeals held architects had no
contractual privity with contractor and could not
be liable to contractor for negligence
36
HOW DOES THE ECONOMIC LOSS
DOCTRINE WORK IN OHIO ?
The exception:
Clevecon, Inc. v. Ne. Ohio Reg'l Sewer Dist., 90 Ohio
App. 3d 215, 628 N.E.2d 143 (1993)
Contractor which constructed sewer project asserted
malpractice claims to recover delay damages from
architect
Court denied architect's motion for summary
judgment and for directed verdict
Court of Appeals held:
lack of privity between contractor and architect was not
absolute bar to malpractice action seeking economic loss
damages;
whether architect's control over project was sufficient
nexus to substitute for privity of contract was fact question
precluding summary judgment.
37
HOW DOES THE DOCTRINE WORK IN
OHIO?
Life Time Fitness, Inc. v. Chagrin Valley Eng'g, Ltd., No. 1:13CV566, 2014
WL 6879082, at *1 (N.D. Ohio Dec. 4, 2014)
Design of the parking area of a Life Time Fitness health-club
facility
Chagrin Valley provided civil engineering services
Plaintiffs filed lawsuit seeking to hold Chagrin Valley
liable for alleged damages related to the deterioration, reengineering, and remediation of the parking lot
Plaintiffs claimed Chagrin Valley failed to meet standard of
care
Negligence claims and breach-of-contract claim premised
upon the same facts and circumstances
38
HOW DOES THE DOCTRINE WORK IN
OHIO?
Judge Christopher Boyko held:
Plaintiffs’ negligence claims are also barred by the
“economic loss” rule since they allege only “monetary
damages incurred in remediating the damage to the
parking surface.”
Plaintiffs would be bound to recover only for injuries
contemplated by the original agreement.
LTF Real
Estate
Company
FCA
Construction
Company, Ltd.
H.C. Nutting
Chagrin Valley
Engineering,
Ltd.
39
HOW DOES THE DOCTRINE WORK IN
OTHER JURISDICTIONS?
In Bilt–Rite Contractors, Inc. v. Architectural Studio, 581 Pa. 454,
866 A.2d 270, 287 (Pa.2005), the Pennsylvania Supreme Court held
that a building contractor can maintain a claim for negligent
misrepresentation against a design professional without privity of
contract, stating:
[W]e hereby adopt Section 552 [of
the Restatement (Second) of Torts]
as the law in Pennsylvania in cases
where information is negligently
supplied by one in the business of
supplying information, such as an
architect or design professional, and
where it is foreseeable that the
information will be used and relied
upon by third persons, even if the
third parties have no direct
contractual relationship with the
supplier of information.
40
HOW DOES THE DOCTRINE WORK IN
OTHER JURISDICTIONS?
Trinity Contracting, Inc. v. Mun. Sewage Auth. of Twp. of Sewickley, No. 523
C.D. 2015, 2015 WL 8776568 (Pa. Commw. Ct. Dec. 15, 2015)
Contractor filed suit against township's
municipal sewage authority and design
professional for breach of contract and negligent
misrepresentation relating to construction of
sewage treatment plant
Court entered judgment in favor of contractor.
Parties appealed
41
HOW DOES THE DOCTRINE WORK IN
OTHER JURISDICTIONS?
Appeals court cited Bilt–Rite Contractors, Inc. and held
that design professional negligently misrepresented
geotechnical information to contractor where:
Design professional had actual notice of geotechnical
data 14 months before bid solicitation but failed to
revise project design in light of that data
Design professional represented to contractor that
project could be constructed as originally designed
despite knowing that geotechnical report showed
otherwise
Court determined it was not contractor's burden to
independently verify representations that township and
design professional made to contractor during bidding
process
42
HOW DOES THE DOCTRINE WORK IN
OTHER JURISDICTIONS?
Gongloff Contracting, L.L.C. v. L. Robert Kimball & Associates,
Architects & Engineers, Inc., 2015 PA Super 149, 119 A.3d 1070
(2015)
Steel subcontractor brought action against architect for
negligent misrepresentation, alleging it incurred numerous
problems on construction project due to improper roof design
Architect filed motion for judgment on the pleadings based on
the economic loss doctrine
Court granted the motion
Appeals Court reversed and held architects are potentially
subject to liability for negligent misrepresentation claims
when it is alleged that those professionals negligently
included faulty information in their design documents
43
WHAT SHOULD THE ECONOMIC LOSS
DOCTRINE MEAN TO YOU?
Although exceptions may apply, the Economic Loss
Doctrine is a powerful tool which may be used to avoid or
limit claims by third parties
44
PART FOUR
STATUTES OF LIMITATION: AM I
PROTECTED?
45
STATUTE OF LIMITATIONS
What are statutes of
limitation?
Statutes of limitations
are laws passed by a
legislative body to set the
maximum time after an
event when legal
proceedings may begin.
Represents a filing
deadline after which all
claims are barred.
46
RATIONALE
The statutes reflect the general idea that as more
time passes after an event, the more likely it is
that evidence will be lost, destroyed, or forgotten
Bring claims within a “reasonable” amount of
time – i.e. within a short enough time period to
avoid the problems of defective memory, lost
evidence, lost witnesses, or other similar
problems
47
HOW DO STATUTES OF LIMITATIONS
WORK?
For the most part, each state’s statute has the
same function:
The statutes serve as a defense when a
lawsuit is filed.
If you are sued after the period of time
specified in the statute of limitations for a
claim passes, the court will dismiss the claim
against you.
However, the statutes vary by state in two
ways:
1. By time period; and
2. By what act or event sets the statute in
motion
48
STATUTES VARY BY WHAT ACT OR EVENT
SETS THE STATUTE IN MOTION
Some statutes state, or have been interpreted
by state courts to mean, that the statute of
limitations begins to “run” or start from the
time of the negligent act.
Other statutes state, or have been interpreted
by state courts to mean, that the statute of
limitations begins to “run” or accrues when the
party discovered, or should have discovered,
the damage or injury giving rise to the claim.
49
OHIO STATUTE OF LIMITATIONS FOR
PROFESSIONAL NEGLIGENCE
The applicable statute of limitations in
Ohio for a claim of professional negligence
against architects and engineers is R.C.
2305.09 (D)
The statute provides that claimants have
four years to bring their claims, but the
statute does not explicitly indicate when
the four year period begins to run
50
OHIO CASES
Life Time Fitness, Inc. v. Chagrin Valley Engineering, LTD, 2014
U.S. Dist. LEXIS 168216 (N.D. Ohio Dec. 4, 2014)
Plaintiff asserted a professional negligence claim
based on the alleged failure “to design the parking lot
in a manner which complied with the highest
industry standards and in a manner demonstrating
good professional skill and judgment.”
Claimed Chagrin's negligent design caused them to
suffer “monetary damages incurred in remediating
the damage to the parking surface.”
Chagrin responded that the statute of limitations has
expired on negligence claims.
51
Chagrin argued that the negligence claims accrued at the
time the design was completed, which was on April 8, 2008
or when the “when the act is committed” based on Flagstar
Bank, F.S.B. v. Airline Union's Mtge. Co., 128 Ohio St.3d
529, 536, 947 N.E.2d 672 (2011).
Plaintiffs argued that their negligence claims accrued at the
time of injury based on a “delayed-damages” rule from Kunz
v. Buckeye Union Ins. Co., 1 Ohio St.3d 79, 81, 437 N.E.2d
1194 (1982).
Plaintiffs suggested they were not injured until the parking
lot failed in January 2010.
The Court held that claims for professional negligence
against engineers for design services accrue at the time the
engineering design was complete.
Plaintiffs had until April 8, 2012 to bring the cause of action
and were barred from bringing their claims for professional
negligence.
52
CONCLUSION FROM OHIO CASE LAW
The four year period in R.C. 2305.09 (D) accrues
when the architect or engineer committed the
negligent act – i.e. when the architect or engineer
finished its design and turned it over to the owner.
53
COMPARE OHIO TO WISCONSIN
In Crawford v. Shepherd, a Wisconsin court applied
Wis. Stat. § 893.19(5) in determining whether a
plaintiff’s claim of negligence in construction against
an architect was time-barred.
The statute provided that claimants had 6 years to
bring their claims.
The Wisconsin court determined that the 6 period in
the statute began to run when the claimant
discovered, or should have discovered, his damage or
injury.
•
Crawford v. Shepherd, 86 Wis.2d 362, 272 N.W.2d 401 (App.1978).
54
STATUTES VARY BY TIME PERIOD
55
State
Statute
Language of Statute
Washington
RCWA
4.16.326(1)(g)
The applicable “statute of limitations expires,
regardless of discovery…six years after the
termination of the [design] services.”
Pennsylvania
42 Pa.C.S.A. §
5536
An action “brought against any person lawfully
performing or furnishing the design, planning,
supervision or observation of construction…must
be commenced within 12 years after completion
of construction…”
West Virginia
W. Va. Code § 552-12
Claims in tort for professional negligence “shall
be brought…within two years…”
Illinois
Michigan
ILCS CH 735 5/13- Actions against “any person for an act or omission
214
of such person in the design, planning,
supervision, observation or management of
construction…shall be commenced within 4
years…”
M.C.L.A. 600.5839
“A person shall not maintain an action…against
any state licensed architect or professional
engineer
performing
or
furnishing
the
design…unless the action is commenced
within…six years…”
WHAT SHOULD THE STATUTE OF
LIMITATIONS MEAN TO YOU?
Which state statutes
of limitation may
apply to your project?
When does the
statute begin to run?
56
THE STATUTE OF LIMITATIONS TIES INTO
DISCOVERY
Among other things, the statutes affect how long
you should retain your records or documents in
connection with a project.
The amount of time you must retain documents
can vary widely amongst the states; therefore, it
is important to fully understand how the statute
of limitations may apply when creating a
document retention policy.
57
CONCLUSION
58
QUESTIONS?
Contact Information:
Robert A. Hager
Brennan, Manna & Diamond, LLC
75 E. Market Street
Akron, Ohio 44308
(330) 253-4925
[email protected]
PART FIVE
WARRANTY CLAIMS
60
IMPLIED WARRANTIES
What is an Implied Warranty?
Implied warranties are warranties that the law
presumes you have given to the other party.
Even if you never make any written warranty or
guaranty, some state courts will find you liable for
certain, implied warranties unless you explicitly
disclaim them.
61
HOW DO IMPLIED WARRANTIES WORK?
Implied warranties are not uniformly applied in
different jurisdictions.
Just as with the economic loss doctrine, whether
implied warranties apply may have a great
impact upon the ultimate success of parties to
litigation, so it is important to recognize when
and how an implied warranty may apply to your
project based on state law.
62
OHIO’S TAKE ON IMPLIED WARRANTIES
Ohio law does not recognize the existence of any
implied warranties by architects.
To the contrary, Ohio law is clear that an
architect’s undertaking does not imply any
warranties or guarantee a perfect plan or
satisfactory result.
•
•
See Craft Gen. Contractors, Inc. v. City of Urbana, 10th Dist.
No. 81AP-346, 1982 WL 3960 at *4 (Feb. 2, 1982)
See also Menifee v. Ohio Welding Products, Inc., 1st Dist.
Hamilton No. A-7903209, 1984 WL 4171, *4 (Jan. 4, 1984)
aff'd, 15 Ohio St.3d 75, 472 N.E.2d 707 (1984)
63
COMPARE OHIO TO ARIZONA
In North Peak Construction, LLC v. Architecture Plus, Ltd, a general
contractor sued an architect for breach of implied warranty and
negligence. 254 P.3d 404 (Ariz. Ct. App. 2011).
The plaintiff, a general contractor, sued the architect after plaintiff
was required to demolish construction work built pursuant to the
Architect’s plans.
The architect’s plans built plaintiff’s home facing an unfavorable
direction. The demolition and reorientation increased the cost of the
project by approximately $160,000.00.
Plaintiff alleged the Architect “breached the implied warranty by
providing deficient and substandard workmanship in designing and
orienting the custom home on the lot without maximizing the views of
the city.”
The court held that even without privity of contract, “breach of
implied warranty is a valid cause of action against a design
professional and can be brought in addition to a claim for negligence.”
64
WHAT SHOULD IMPLIED WARRANTIES
MEAN TO YOU?
Just as design professionals must be aware and
attentive of whether the economic loss doctrine
may apply, and what statute of limitations
applies to a project, design professionals must be
aware and attentive of what implied warranties
may apply to a project.
States vary in recognizing whether implied
warranties apply to design professionals; thus, it
is recommended that you consult your attorney in
determining what warranties may apply.
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