Current State of Design Professional Liability
The Texas Supreme Court stands to greatly alter the construction landscape with regard to duties that architects and engineers owe their clients, construction partners, and the general public. As Texas law currently stands, architects and engineers generally only owe a duty to people with whom they contract during the construction process (e.g., contracting with individuals to design their home). This case will determine whether an architect is liable to third parties for its failure to make known (and correct) defects witnessed during the construction process that did not comply with the architect’s plans and specifications. More specifically, this case will answer the question whether the contractual duty that architects owe to homeowners extends to guests of the homeowners for injuries sustained when a balcony collapsed.
What Creates Duties?
In a typical construction project, architects contract directly with the owner using standard construction agreements created by the American Institute of Architects (“AIA") that can be tailored to most construction projects. Given their name, AIA documents are drafted in favor of architects to limit their role during the construction phase and protect the architect from liability. In doing so, AIA documents generally exclude the architect from participating in the following activities during the construction phase: 1) controlling the contractor’s means, methods, techniques, procedures, and safety programs; 2) stopping the contractor’s work to ensure safety precautions are implemented; and 3) supervising construction.
However, the architect is obligated under AIA construction documents to reasonably perform the following services: 1) visit the construction site at appropriate intervals through construction; 2) generally determine if the construction work observed during such visits will be in accordance with the construction plans and specifications upon completion; 3) report any known deviations from the construction plans and specifications and any defects observed in the construction work; and 4) issue certificates that the quality of the contractor’s work is in compliance with the construction plans and specifications. Through these obligations, a contractual duty is created between the architect and owner. Barring one exception, this duty does not extend toward any other person in the construction process, or third parties (e.g., members of the general public) unless provided for in the construction contract documents between the architect and owner.
The recognized exception comes by way of negligent misrepresentation when a third party justifiably relies (to its detriment) on a negligent misrepresentation by the architect. By way of example, an owner’s lender justifiably relies on an architect’s certificate for payment that the construction work is complete and free of defects. If the work is later deemed to be incomplete or defective, the lender may be able to seek recourse for construction payments made in reliance to the architect’s representation to the contrary.
Will the Landscape Change?
The case in front of the Texas Supreme Court is neither a case of direct contractual duty nor negligent misrepresentation. The plaintiffs in the case were guests of the homeowner who contracted with the architect to design a vacation home. The architect provided plans and specifications that were not followed during construction. The architect took photos during construction that evidenced defects that were not in compliance with the plans and specifications, but failed to identify the defects or bring them to the homeowner’s attention, which arguably breached the duty the architect owed to the homeowner (see above). The defects resulted in a weakly supported balcony that collapsed and caused injuries to the plaintiffs. Initially the trial court allowed plaintiffs to recover from the architect, homeowner, and construction contractor that deviated from the plans and specifications. However, on appeal the court held the architect did not owe a duty to the plaintiffs because there was no contractual privity that created a duty.
If the Texas Supreme Court reverses this decision and holds the architect liable to the plaintiffs, a new legal duty for design professionals will be created despite contractual privity. Please contact me if you would like to know more about design professional liability or how this case could affect your business in the construction industry.