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Inside this issue:
Recent CA Jury Verdict May Heighten Duty for Design Professionals
By Carrie G. Strasser, Esq.
In December, a California jury awarded the City of Victorville $52.1 million against an engineering firm the City hired to design and build a new power plant. The jury in Riverside County Superior Court found that the engineer negligently misrepresented key facts to City officials that led them to invest in the Foxborough Cogeneration Power Plant.
Comparative Analysis of Architect's Duty to Guard against Construction Defects which Threaten Public Safety
By Kristina S. Raevska, Esq.
A RECENT TEXAS COURT OF APPEALS (AUSTIN) DECISION imposed a duty on an architect to identify significant deviations from its design that implicate structural safety concerns; a duty owed not only to the residents of the home but to their guests as well. See Black + Vernooy Architects v. Smith, --- S.W.3d ---, 2010 WL 5019659 (Tex. App. - Austin, Dec 8, 2010). The plaintiffs in the case, guests of the owners, asserted a claim for negligence against the architect, the contractor, and a subcontractor, as a result of physical injuries sustained when the balcony the plaintiffs were standing on collapsed. The contractor and subcontractor settled prior to trial. The trial against the architect was focused on negligently performed architectural services, specifically, negligent construction administration. The plaintiffs prevailed and the architect appealed.
Wyoming Court Adheres to the Economic Loss Doctrine to Bar Negligent Misrepresentation Claims
By Luke R. Conrad, Esq.
IN A POSITIVE DEVELOPMENT FOR DESIGN PROFESSIONALS, the Wyoming Supreme Court has reaffirmed its strict adherence to the Economic Loss Doctrine to bar claims for negligent misrepresentation where no contractual privity exists. This decision represents a divergence from recent trends whereby courts have permitted parties to assert negligent misrepresentation claims for recovery of purely economic loss against third parties and thereby avoid the effects of the Economic Loss Doctrine.
Florida Courts Bars Limitation of Liability Provisions in Professional Negligence Cases against Individual Professionals
By Kristen R. Ragosta, Esq.
A FLORIDA APPELLATE COURT HAS HELD THAT CONTRACTUAL LIMITATION of liability provisions are invalid and unenforceable, as a matter of law, with respect to malpractice claims against individual professionals.
United States Court of Appeals for the Ninth Circuit Recognizes Exception to Economic Loss Doctrine in Washington State
By Daniel C. Poteet, Esq.
THIS CASE, AFFILIATED FM INSURANCE COMPANY V. LTK CONSULTING Services Inc., No. 07-35696; D.C. No. CV-06-01750-JLR, arises out of a fire that occurred on the Seattle Monorail, a monorail system that runs between Seattle Center and downtown Seattle, in 2004. The case involves an engineer that was hired by the City of Seattle to design certain elements of the monorail (“Engineer”), a company that the City of Seattle hired by virtue of a concession agreement to operate and perform certain types of maintenance of the monorail (“Operator”), and an insurer of the Operator (“Insurer”). After the fire that occurred on the monorail, the Operator became subject to the expenses in repairing the damages caused by the fire, as well as alleged losses in revenue attributable to the inoperability of the monorail because of the fire. The Insurer ultimately paid these damages and, through a process known as subrogation, was able to “stand in the shoes” of the Operator and file suits as if the Insurer were in the position of the Operator. By virtue of its subrogation rights, the Insurer filed suit against the Engineer alleging that the Engineer’s negligence caused the fire and, accordingly, the resultant damages. The ruling in this case may result in a significant expansion in the scope of claims that could be filed against design professionals that will be able to survive early resolution in litigation.
Mechanic's Liens for Design Professionals in Massachusetts: A New Frontier
By Luke R. Conrad, Esq.
MASSACHUSETTS RECENTLY JOINED THE MAJORITY OF STATES by extending Mechanic’s Lien rights to design professionals, thereby allowing them to secure property as collateral for non-payment of fees for professional services. The Massachusetts legislature amended the existing Mechanic’s Lien statute, G.L. c. 254 (“Statute”), to encompass lien rights for professional services, in legislation signed into law on January 5, 2011, effective July 1, 2011 (“Amendment”). Prior to the Amendment, design professionals could not seek the protection of the Statute because their services were not deemed to provide the necessary “improvement” to real property. 1996 amendments to the Statute opened the door for lien rights to those who provided general contractor, construction management and rental equipment to a construction project, but still did not include design professionals. Mitchell v. Packard, 168 Mass. 467 (1897).
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