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A New Development in Construction Defect Liability

On July 3, 2014, the California Supreme Court issued a ruling in  Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP (2014 WL 2988058)

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The case involved a lawsuit brought by a condominium owners’ association (essentially, a HOA) against the developer of the condominium building and the architectural firms who designed the building (along with other defendants whose identities aren’t relevant to this blog discussion). In the suit, the owners’ association claimed that defects in the building design made the condominiums “unsafe and uninhabitable” in hot weather.

The claim against the architectual firms was essentially that the firms designed the homes in a negligent manner. However, the architectural firms filed a demurrer to the action, claiming that the architects did not make the final decisions regarding the construction and design of the project and therefore were not liable for any defects in the construction.

The trial court in San Francisco sustained the demurrer (which means the court agreed with the defendant architects’ claims). However, the Court of Appeal reversed this decision–and this month, the California Supreme Court  held that architects may owe a duty to homeowners when a home’s design is defective, even if the architects are not ultimately responsible for final decisions regarding design and construction of the defective homes.

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The Ruling: The California Supreme Court ruled: “[A]n architect owes a duty of care to future homeowners in the design of a residential building where, as here, the architect is a principal architect on the project—that is, the architect, in providing professional design services, is not subordinate to other design professionals. The duty of care extends to such architects even when they do not actually build the project or exercise ultimate control over construction.”

Why is this Important? Homeowners who discover significant design defects in a house or condominium may be able to recover damages against the architectural firm which designed the project as well as the contractors responsible for the construction.

A defendant must have a contractual or other legal relationship to the plaintiff, or owe the plaintiff a legally recognized duty  in order to be sued. Plaintiffs cannot simply sue other people or companies with whom no relationship exists. In the Beacon case, the architectural firms claimed they could not be sued by the owners’ association because there was no contract between the architectural firms and the plaintiff owners’ association. The defendants claimed that an architect “who makes recommendations but not final decisions on construction owes no duty of care to future homeowners with whom it has no contractual relationship.” The architects also claimed that since all final decisions regarding the construction were made by the owner/developer, not the architectural firm, that the developer–not the architects–was the one who should be liable for any defects in the building’s design.

California courts have previously recognized that architects who plan and supervise construction work have a duty to exercise ordinary care in those duties, to protect any person who might foreseeably suffer injury as a result of  the architect’s failure to exercise reasonable care, even though the injury may occur after the architect’s work is completed and to a person with whom the architect had no contractual relationship. (Montijo v. Swift (1963), 219 Cal.App,2d 351, 22 Cal. Rptr. 133.)

Beacon extends this rule to cases where the architect did not supervise the construction work, as long as the architect was the principal architect for the project and meets the other legal requirements for liability.

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If you believe your home contains defects, either in construction or design, contact an experienced attorney immediately and arrange a consultation. You may lose your rights, or your ability to recover damages if you delay.  Do not rely on this, or any other article, to evaluate your legal rights. Instead, consult an experienced attorney who specializes in property issues.

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