The Design and Construction Management Professional Reporter: July 2005

Inside this Issue

Donovan Hatem LLP Earns Summary Judgment in Defense of Architect Accused of Fraud

In a multiple count misrepresentation case against an architect, a Massachusetts Superior Court judge awarded the architect summary judgment after Donovan Hatem LLP lawyers established that the alleged representation could not be attributed to the architect. The plaintiffs were purchasers of a high-end condominium unit and claimed that the architect misrepresented to them the square footage of the unit they purchased. Although the architect never communicated with the plaintiffs or provided any materials to them, the plaintiffs nevertheless asserted claims against the architect for fraud, fraudulent inducement, breach of contract, deceit and violations of M.G.L., c. 93A for unfair and deceptive practices. The plaintiffs’ misrepresentation theory was based entirely on a conversation between the architect and the plaintiffs’ friend, in which the architect allegedly confirmed the size of the plaintiffs’ unit. The friend relayed that information to the plaintiffs, who claimed to have relied on it. Consequently, the plaintiffs contended that the architect “indirectly” represented the size of their unit.

Engineer Avoids $6 Million Property Damage Claim on the Grounds that it Did Not Owe a Duty of Care to the Owner or the General Contractor

In a recent decision, Weseloh Family LP v. Wessel Const. Co., Inc., 125 Cal. App. 4th 152., the Fourth District of the California Court of Appeals affirmed a Superior Court’s ruling on summary judgment in favor of an engineer. In the decision, the court concluded that the engineer did not, as a matter of law, owe a duty of care to the owner or the general contractor and, therefore, could not have been negligent in exercising their duty.

Partial Summary Judgment Granted to Engineer Affirming Application of Contractual Limitation of Liability Clause and Dismissing Extraneous Warranty and Contract Claims

In a case in which Donovan Hatem LLP represented the Engineer, the Massachusetts Superior Court recently issued a summary judgment ruling that a limitation of liability clause in an Owner-Engineer Agreement was enforceable. Although all liability and damages were denied, this ruling was of great importance because it limited the Owner’s claimed damages by approximately $450,000. Additionally, the Court ruled that the Owner’s contract and warranty claims were duplicative of its negligence claims and dismissed those counts.

Court Finds No Duty to Follow Owner- Recommended Designs for Over- Excavation

In the recent decision, Record Steel and Construction, Inc. v. United States, 62 Fed. Cl. 508 (Oct. 19, 2004), the United States Court of Federal Claims found that a design professional is not required to follow an owner-recommended design for overexcavation on a design-build project where the owner’s recommendations were based on off-site studies inconsistent with the design professional’s on-site findings, over-excavation was a “recommendation” and not a “requirement” and the construction contract was latently ambiguous.

Supreme Court of New Jersey Affirms that Affidavit of Merit is not Required in Architect’s Third-Party Complaint Against Engineer

The Supreme Court of New Jersey recently affirmed a trial court decision that an architect’s third-party claim for contribution and indemnification from an engineer as a joint tortfeasor, does not require an additional affidavit of merit. In Diocese of Metuchen v. Prisco & Edwards, AIA, 374 N.J. Super. LEXIS 29 (N.J. Super. Ct. App. Div. 2005), the Supreme Court of New Jersey examined whether an architect who was sued for professional malpractice was entitled to assert a third-party claim against an engineer without providing an affidavit of merit pursuant to state law.

New York Court of Appeals Limits Purported Contract Claim to Shorter Malpractice Statute of Limitations

By Brian C. Newberry, Esq.

In the recent decision R.M. Kliment and Frances Halsband Architects v. McKinsey & Company, Inc., 821 N.E. 2nd 952 (N.Y. 2004), the New York Court of Appeals found that the plaintiff’s purported breach of contract claim was actually a claim for professional malpractice against the defendant’s architectural firm and thus barred by a shorter statute of limitations. Under New York law, a breach of contract claim is governed by a six year statute of limitations while, since 1996, a non-medical malpractice claim has been governed by a three year statute. This case clarified the distinction between the two statutes.

Architect Cannot Be Held Liable Under Minnesota Competitive Bidding Statute

Recently, a Minnesota court has held that Minnesota’s bidding statute does not provide a private cause of action allowing a supplier to sue an architect for negligently choosing one supplier over another. Major Industries, Inc. v. Krech, 2004 Minn. App. LEXIS 1416 (Minn. Ct. App. 2004) aff’d 2005 Minn. LEXIS (Minn. 2005). This is a noteworthy decision that narrows the class of parties to whom an architect can be construed as owing a duty.

Massachusetts Appeals Court Holds that Statute Permitting Reimbursement Under Underground Storage Tank Cleanup Fund Does Not Bar Claims Against Licensed Site Professionals

In Williams Auto Electric Services, Inc. v. Sandra M. Herbert, No. 04-P-232 slip op. (Mass. App.Ct. Mar 24, 2005) (Greenberg, J.), the Massachusetts Appeals Court decided whether a provision within the governing statutes of the Underground Storage Tank Cleanup Fund (the “Fund”), M.G.L.c. 21J, §3, bars a party who sought reimbursement from bringing claims for negligence and breach of contract against a licensed site professional who allegedly failed to timely file documents necessary for the owner to obtain reimbursements from the Fund. Significantly, the Court held that M.G.L.c. 21J, §3, which precludes claims and defenses arising from “failures or delays of reimbursement,” does not bar claims against licensed site professionals when their negligence effects the rights of storage tank owners to claim reimbursements from the Fund.

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