Monday, July 7, 2014
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Justices Extend Architects’ Liability to Homebuyers
By a MetNews Staff Writer
A “principal” architect on a housing project—one who is not subordinate to other design professionals working on the project—owes a duty of care to the future home buyers, even if the final decisions on construction are made by somebody else, the state Supreme Court ruled Thursday.
Unanimously affirming the judgment of the First District Court of Appeal, the high court said it was error to sustain a demurrer by two architectural firms that whose negligence was an alleged cause of defects that rendered a San Francisco condominium development uninhabitable during the warmer months of the year.
The Beacon Residential Community Association, representing buyers who spent $500,000 to $1 million each to live in a 595-unit condominium complex across from AT&T Park, says design flaws caused “solar heat gain,” cracks and other structural defects, the state Supreme Court ruled Thursday. The defendants, Skidmore, Owings & Merrill LLP and HKS, Inc. are accused of approving substandard windows and a design that lacked adequate ventilation.
A developer hires an architect “in order to rely on the architect’s specialized training, technical expertise, and professional judgment,” Justice Goodwin Liu wrote for the court. The homeowner, on the other hand, “has no architect or professional adviser” and “relies on the skill of the developer and on its implied representation that the house will be reasonably fit for habitation,” Liu said.
Distinguishing cases limiting auditors’ liability to third parties who rely on their opinions, Liu cited the “close connection” between the architects’ role and the injuries alleged by the plaintiffs. While third party investors who claim to have been misled by auditors’ reports may suffer losses for reasons that have little to do with those reports, “the connection between defendants’ unique role as the design professionals on the Project and plaintiff’s damages resulting from negligent design is far more direct and immediate.”
Liu noted that the defendants were paid more than $5 million not merely to design the project but for bringing “their specialized skill and professional judgment throughout the construction process to ensure that it would proceed according to approved designs,” through weekly inspections at the site, monitoring the construction for compliance with the design plans, altering the design as issues arose, and advising the owner to reject work the architects deemed non-conforming.
The justice rejected the argument that the architects should be let off the hook because the developer didn’t sell the units until two years after they were built, by which time the developer was aware of the defects. That argument goes to causation, rather than duty, and may give the defendants an equitable indemnity claim against the developer, Liu said.
“But because the developer’s alleged misdeeds are themselves derivative of defendants’ allegedly negligent conduct, they do not diminish the closeness of the connection between defendants’ conduct and plaintiff’s injury for purposes of determining the existence of a duty of care,” the justice wrote.
The case is Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP, 14 S.O.S. 3404.
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