A new decision issued by the California Supreme Court holds that, even in the absence of contractual privity, an architect on a residential building project owes a duty of care to future homeowners to provide design services that are free from defects. In Beacon Residential Community Association v Skidmore, Owings & Merrill, LLP, et al., 14 C.D.O.S. 7545 (2014), the plaintiff homeowners association alleged that the defendant architects, who had contracted directly with the original developer and who had not exercised ultimate control over any construction decisions, were nonetheless responsible for damages resulting from defects in their design of a 595-unit condominium project. The homeowners association alleged that the architects’ defective design resulted in extensive water infiltration, inadequate fire separations, structural cracks, inadequate ventilation and windows that at times caused units to be uninhabitable due to high temperatures. The homeowners association further alleged that, in addition to providing design services to the original developer, the architects also performed weekly site inspections, monitored contractor compliance with the design, altered design requirements as issues arose, and advised the developer of any nonconforming work – all for a fee of over $5 million. In the state Supreme Court’s view, these allegations, if proven, were sufficient to establish that the architects owed a legal duty to the future homeowners to ensure that the construction of the project proceeded in accordance with their approved design.
The Supreme Court’s ruling is based on general negligence principles, rather than the specific California statutes that relate to new residential construction (the California Right to Repair Act). Under general negligence principles, the high court weighed various factors to determine whether a duty of care exists. These factors included that the architects intended their work to benefit the homeowners; that the architects should have foreseen that the homeowners would be harmed by defects in the design; that the architects’ conduct was closely connected to the claimed damages; and that the architects were well-compensated for their work and understood that the homeowners would be relying on their specialized expertise. As the decision is based on general negligence principles, future plaintiffs may try to apply it more broadly to commercial construction projects involving non-contracting parties.
With this said, the Supreme Court clearly took the practical realities of residential construction into account in reaching this decision. The high court found it unreasonable to expect that a typical homebuyer would have the financial resources to hire his or her own architect to fully investigate the original project design. Based in part on this finding, the high court concluded that a homebuyer was justified in relying on the project architect’s specialized expertise in designing safe and habitable homes.
The Supreme Court did qualify its decision by stating that its ruling only relates to the “principal architect” on a project. It defined a “principal architect” as one who, in providing design services, is not subordinate to any other design professional.