In Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP (--- Cal.Rptr.3d ----, Cal.App. 1 Dist., December 13, 2012), a California court of appeal found that a homeowners association could seek damages from design professionals for construction defects they alleged rendered the units uninhabitable. The court ruled that Senate Bill 800, the “Right to Repair Act” enacted by the Legislature in 2002, allows lawsuits against design professionals for negligence in new residential developments. The ruling is a departure from pre-SB 800 law under which courts have found that only design professionals who had “control” in the construction process could be directly liable to property owners.
Skidmore, Owings & Merrill LLP and HKS, Inc. provided architectural and engineering services for Beacon Residential Condominiums, a condominium complex under construction in San Francisco. After the complex was completed, the Beacon Residential Community Association (“HOA”), the homeowners association that managed the condominiums, sued the architects and engineers for construction defects. The HOA’s lawsuit alleged that the units were uninhabitable due to excessively high temperatures resulting from negligence by the architect and engineers in solar heat accumulation, substandard windows, and inadequate ventilation. The trial court ruled that the architect and engineers were not liable because the final decision for construction design was with the project owners, not the design professionals. The HOA appealed.
The court ruled that the trial court erred by solely relying on prior case law without considering the effect of SB 800. That prior case law held that design professionals owed no duty of care directly to owners except in certain circumstances, including having control over the construction process. The court found that prior case law did not preclude liability of design professionals to third parties, but just defined the scope of that duty.
Whether or not design professionals are liable under common law, the court ruled that the statutory language of SB 800 clearly holds design professionals accountable for negligence. It provides that in any action seeking recovery of damages for deficiencies in construction that a list of various construction specialists - specifically including design professionals - shall be held liable for violations of standards in SB 800. The language also states that each and every provision of the law applied to each category of construction specialist - again, specifically including design professionals on the list - for “a violation of a particular standard as the result of a negligent act or omission or a breach of contract.” That language specifically includes design professionals as those who can be held liable to future owners for construction defects caused by their negligence, the court said.
Therefore, the court concluded, “The plain language of Senate Bill No. 800 provides that a design professional who ‘as a result of a negligent act or omission’ causes, in whole or in part a violation of the standards set forth ... for residential housing may be liable to the ultimate purchasers for damages.” That language empowers the HOA to make its case against the architects and engineers. The trial court judgment in favor of the architect and engineers was reversed.