Who Sues the Architect?
On a typical project, the architect’s only contract is with the owner. This defined relationship makes it obvious to whom the architect owes an obligation, and when drafted well, defines the scope of those obligations. Because of the contractual relationship, the alleged duty owed by the architect and the party to whom that duty is owed is seldom in dispute. The nature of breach of contract claims depend on the language of the document and can cover a wide range of disputes from the payment for the architect’s design services to the timing for the delivery of design documents. As mentioned above, the manner in which the architect carries out the obligations of the contract is often governed by the standard of care. Some of the most common claims that owners bring against architects are based on the architect’s obligations on the project as the work is completed by the contractor. Several are listed below.
i. Payment Certifications
The AIA documents require, and design professionals routinely certify the contractor’s requests for progress payments. The primary purpose of the certification is to confirm that the contractor has not billed for more work than it has actually performed. If the design professional approves draw requests that result in overpayments to the contractor for work in place, the overpayment may result in losses to the owner if the costs to complete the project exceed the remaining budget. Even where the contract is silent with regard to the certification of payments, courts have found that architect certifications are for the benefit of the owner, and it is foreseeable that a dereliction of the architect’s duty to certify the payments would harm the owner.
ii. Contractor “front loads” Payment Applications
During the early stages of a project, it may be difficult for a design professional to accurately quantify the work in place. Site-preparation work, materials costs, equipment issues, and unforeseen conditions may conspire to deplete contract funds faster than anticipated. But not every instance in which the expenditure of contract funds substantially outpaces the work in place is the result of changes, overruns, or unforeseen conditions.
In order to reduce the expense of borrowing funds to “carry” a project, some contractors may submit pay requests beyond what the work in place will allow. These front-loaded payments may enable a contractor to buy a piece of equipment, stockpile materials, or forego expensive financing for the project. In some cases, the contractor’s motives are less pure. Contractors in desperate straits may front-load pay requests on a current project to complete prior projects. This practice of “robbing Peter to pay Paul” can eventually catch up with the ever-optimistic contractor, sometimes resulting in default on the project. Unfortunately, the owner frequently looks to the design professional responsible for certifying pay requests if the prematurely-expended contract funds bear little relation to the work in place and the owner suffers a loss as a result.
iii. Errors in contract observation or inspection
The duties imposed on design professionals to observe or inspect construction progress may arise out of custom and practice, the architect’s knowledge and expertise, or the contract itself. Courts have recognized the owner’s right to sue the design professional where it is alleged that the design professional failed to adequately observe the work, failed to make an adequate number of inspections, and improperly authorized payment for defective work.
In most cases, the design professional’s duties—or lack thereof—are specifically described in the contract with the owner. Some of the language from the AIA documents attempt to limit the design professional’s exposure. For instance, A201-2007, section 4.2.2 says, with regard to the Architect’s Administration of the Contract, the architect will become “generally familiar” with the work, but the architect will not make “exhaustive or continuous on-site inspections to check the quality or quantity of the Work.” In the current standard form, the only “inspections” required are the architect’s inspections to determine dates of substantial completion and of final completion. Still, many lawyers argue over the degrees of differences in words like observation, supervision, and inspection.
Despite intentionally limiting the extent of their inspection services by contract, design professionals may still find themselves in court because courts do not always honor the contract language intended to limit the architect’s responsibility. Two Texas cases provide a good comparison and highlight the distinctions based on the party bringing the claim against the architect. In Hunt v. Ellisor & Tanner, Inc, the court ignored the contract language requiring the architect to make only periodic site visits and held the design professional liable to the owner for failing to discover construction defects where the architect’s contract required the architect to “endeavor to guard the owner” against defects and deficiencies.” In Black + Vernooy Architects v. Smith, an intermediate appellate court reversed itself in finding that an architect owed no duty to the owners’ guests that were injured when a residential balcony collapsed. The court recognized that neither the architect’s contract with the owner nor the common law imposed a duty upon architects to third parties. That the architect had the ability to reject the contractor’s work did not amount to the right to control the work. Though a detailed written description of the design professional’s observation and inspection obligations is best, courts may find a duty owed by the design professional even where only a general description is included in the contract.
Moreover, some courts have found that the design professional’s duty arises out of industry custom, independent of any contract. New Jersey’s Superior Court found persuasive an expert’s testimony that an architect was negligent in not calling in engineers to evaluate structural failure and settlement. According to the testifying expert in that case, architects were “generalists” and industry customs and standards require an architect to call in other experts (in that case structural or soil engineers) when necessary. A federal district court in Ohio found that an architect may be liable where he failed to notice and correct obvious departures from good construction practices that also violated contract-based supervisory requirements. As odd as these manufactured descriptions of duties may sound, the concept is not far from the standard of care familiar to design professionals in most every state.
iv. Failure to Report Construction Defects and Require Correction of Defective Work
A design professional sometimes contracts with the owner to make site observations and confirm the adequacy of the work in place. Under these circumstances, the design professional’s duty to report defective work is axiomatic. But some courts hold that the design professional is bound to report defective work and see that it is corrected even when there is no contractual obligation. It may not matter that the architect’s contract explicitly states that the architect is not responsible for construction means, methods, techniques, sequences, or procedures.
For example, in a New York case, the owner sued the project architect over a defective roof. Even though the architect’s contract with the owner provided that the architect was not responsible for the contractor’s work, it did obligate the architect to keep the owner informed of the progress of the work. The court found the architect liable to the owner because the architect knew of the roofing contractor’s defective work but did not tell the owner of the defective work when the architect reported on the work’s progress.
v. Deficient Design Documents
Where the architect’s design is flawed or specifications are in error, the owner may have a claim against the architect for breach of contract, negligence, or a hybrid of the two. As mentioned above, these claims are governed by the standard of care familiar to most architects. When a design professional’s “actions meet the standard of those skilled and experienced in that profession,” the design professional has met his responsibility. Unfortunately because questions of duty and breach are typically treated as questions of fact, a design professional may have little success in obtaining an early dismissal of claims based on allegations of deficient design documents even where the claims lack merit.
Additional traps await when contract documents require the architect to deliver drawings, plans, specifications, or buildings that are compliant with every conceivable rule-making authority. In a recent example, the project owner sued the architect when numerous change orders for alterations to the original design were required to comply with building codes. According to the parties’ agreement, the architect agreed to provide plans and specifications that complied with all applicable laws, statutes, rules and regulations. In doing so, the court found that the architect committed himself to a higher duty than that required by the traditional standard of care and his plans fell short of that elevated duty. In other states, the contract between the owner and the architect includes an “implied agreement” that (1) the plans are suitable for the purposes for which they were prepared, and (2) that the architect has a duty to draw plans and specifications that are compliant with building codes, zoning codes, and other local ordinances. Though it is certainly common for architects to agree to contractual provisions promising adherence to building codes, agreements to comply with all laws, statutes, rules, and regulations can be problematic where architects are ill-equipped or ill-advised to know what all of those requirements might be.
B. Subsequent Property Owners
A number of jurisdictions—whether by judicial decision, legislative action, or both—recognize a duty owed by design professionals to subsequent homeowners. One example is the California case Beacon Residential Community Association v. Skidmore, Owings and Merrill LLP. In that case, the homeowners’ association, on its behalf and on behalf of future residents, sued the architects that provided architectural and engineering services as well as construction administration and construction contract management services. The contract between the architects and the owner specifically provided that only the parties to the agreement could enforce the agreement’s obligations. Despite the contractual language, the California intermediate appellate court framed the question not whether the architects owed a duty of care to future residents, but rather the scope of the duty owed. The California Supreme Court affirmed the lower court’s ruling in finding that the architects owed future homeowners a duty of care even where the architects do not build the project or exercise ultimate control over construction.
Since an architect and contractor do not typically have a contractual relationship, most claims asserted by a contractor against an architect are based on either a third-party beneficiary theory or tort theory. Third-party beneficiary claims have only limited success, mostly because of contract language. Tort claims, on the other hand, have proven viable in a number of states. Depending on which state’s law governs the claims, the economic loss doctrine may provide the architect with a successful defense.
i. Third-Party Contract Beneficiary
Contractors without a contractual relationship with the architect argue that they are an intended beneficiary of the architect’s contract with the owner. To succeed on a third-party beneficiary claim, the contractor must prove (1) that there is a valid contract between the owner and the architect and (2) that the clear intent of that contract is to benefit the contractor. The second element sinks many claims because many form contracts—including the AIA Standard Form—explicitly disclaim any intent to benefit any third-party. Even where the contract is silent regarding the benefits, many courts reject the theory where the facts suggest that the contractor is merely an incidental beneficiary rather than an intended beneficiary. Accordingly, the third-party beneficiary theory often receives hostile treatment from the majority of courts when asserted by contractors against design professionals.
ii. Tort Theories
For a contractor to maintain a tort action against an architect there must be a duty owed by the architect to the contractor. Because a contractual duty seldom exists, the contractor argues that because it is—or at least should be—foreseeable that the contractor would rely on the architect’s professional services, that a duty should be implied. Those professional services may include the architect’s actions during contract bidding, the architect’s design, or the architect’s conduct during construction, especially with respect to payment certifications.
(1) During bidding
In the bidding process, unsuccessful contractors have alleged intentional torts—like defamation and intentional interference with contracts—against architects who either control the bidding process or make recommendations regarding bidders to the owner. For example, in Chaves v. Johnson, the plaintiff (an architect) won a bid for architectural services in connection with a city project. The defendant, another architect, submitted a lower bid and was annoyed that the project was awarded to the plaintiff. He sent a letter to the city council with his opinions disparaging the plaintiff’s experience and fee schedule. The city council later terminated the plaintiff’s contract and he filed suit alleging defamation and tortious interference with contract rights. The trial court disregarded the jury’s verdict and found for the defendant on both counts.
The appellate court affirmed the ruling that dispensed with the defamation claim finding the statements in the defendant’s letter to be opinion. But the appellate court reversed the dismissal of the tortious interference claim. According to the court, the jury found that the defendant’s letter caused or induced the city council’s decision to terminate the plaintiff’s contract in violation of Virginia law. The decision has been criticized in other jurisdictions as penalizing an individual for speaking the truth on a matter of public importance, but remains viable. Several states have enacted statutes giving the architect partial or qualified immunity except where the architect’s actions are either self-benefitting or intended to harm the bidding contractor.
(2) Deficient Design Documents
Contractors have also asserted claims against architects alleging that deficient design documents increased the cost of a project and led to the contractor–owner dispute. Again, the contractor and architect are generally not in contractual privity, but some courts have refused to let that stand in the way of the contractor’s negligence claim. The foreseeability that the contractor would rely on the architect’s design in performing the work enabled several courts to ignore the economic loss doctrine and permit the claims against the architect. As explained by the court in A.R. Moyer, Inc. v. Graham, where the contractor was totally dependent upon the architect’s plans and could not take steps to protect itself against the consequences of the negligence of the architect or engineer, a cause of action for negligence may proceed despite absence of privity.
(3) Contract Administration
Few of the architect’s contractual duties create more opportunities for litigation than the architect’s contract administration responsibilities. Where the architect is responsible for certifying work in place or observing the contractor’s work, any delays, errors, or omissions can land the architect in court. Some courts have permitted a contractor’s claim that the architect intentionally interfered with the contractor’s contract with the owner. Of course, some courts still require a showing of privity or economic loss before allowing these types of claims to proceed, but the number of jurisdictions is shrinking. Through careful and clear contract drafting specifically delineating scope of contract administration responsibilities, the architect may deflect these types of claims. An example of the pitfalls of imprecise descriptions of a design professional’s contract administration responsibilities and possible ways to avoid them is included in the Case Illustration below.
Generally speaking, the further a party to a construction project is from the contractual relationship with the architect, the more difficult it will be for a court to find a duty owed by the architect to that party. With this precept in mind, the cases dealing with a subcontractor’s direct claim against an architect are relatively sparse. The usual scenario involves a subcontractor’s suit against its contractor or a third-party complaint (or cross-claim) when the owner sues the contractor and subcontractor. The same analysis concerning foreseeability applies to the subcontractor’s claims against the architect. Subcontractors have succeeded in recovering damages where an architect’s delays were found to delay the project; where the architect failed to notice a design defect that caused the subcontractor to incur additional expense; and where allegedly defective design specifications caused delays.
Many of the causes of actions asserted by owners against architects can also be asserted by the surety who completes the project following the contractor’s termination. Of course, the privity, economic-loss, and misrepresentation theories, and defenses thereto, figure prominently in these claims because the surety is effectively a stranger to the project up until the contractor’s termination. Still, many courts have permitted the surety’s claims on the theory that it is foreseeable that the completing surety would rely on the architect’s certification of progress payments, release of retainage, errors in contract administration, and deficient design documents.
 Westerbold v. Carroll, 419 S.W.2d 73 (Mo. 1967).
 A201-2007, § 4.2.9; Jonathan J. Sweet, Sweet on Construction Industry Contracts: Major AIA Documents: § 12.02 (5th ed. 2009).
 Hunt v. Ellisor & Tanner, Inc. Hunt v. Ellisor & Tanner, Inc., 739 S.W.2d 933 (Tex. App. 1987).
 Id. See also Watson, Watson, Rutland/Architects, Inc. v. Montgomery County Bd. of Educ., 559 So. 2d 168, 174 (Ala. 1990).
 The contract between the owner and the architect in this case contained language requiring the architect to “endeavor to guard the Owner against defects and deficiencies.” That language has been deleted in the current AIA B101-2007 in favor of a subjective standard requiring the architect to visit the site and report to the owner known deviations from the Contract Documents and defects and deficiencies observed in the Work. See § 184.108.40.206.
 Vitale v. Seibert, 2009 WL 4724861 (N.J. Dec. 11, 2009).
 First Nat’l Bank of Akron v. Cann, 503 F. Supp. 419 (N.D. Ohio 1980).
 See Berkel & Co. Contractors v. Providence Hosp., 454 So. 2d 496, 502 (Ala. 1984) (finding that architects bear responsibility to act in situations where they are the only party in a position to prevent a loss); Kleb v. Wendling, 385 N.E.2d 346 (Ill. 1978) (“Mere detection of defective workmanship does not relieve an architect of its duty to prevent defects.”).
 U.R.S. Co. v. Gulfport–Biloxi Regional Airport Auth., 544 So. 2d 824 (Miss. 1989).
 Bd. of Educ. V. Sargent, Webster, Crenshaw & Folley, 146 A.D.2d 190, appeal denied, 551 N.E.2d 107 (1989).
 Lowes Home Centers, Inc. v. Laxson, 655 So. 2d 933, 945 (Ala. 1994); Greenhouse v. C.F. Kenner Assocs. Ltd. P’ship, 723 So. 2d 1004 (La. Ct. App. 1998); Clark v. City of Seward, 659 P.2d 1227 (Alaska 1983).
 The Collins Co. Inc. v. City of Decatur, 533 So. 2d 1127, 1134 (Ala. 1988).
 School Bd. of Broward County v. Pierce Goodwin Alexander & Linville, 137 So. 3d 1059 (Fla. 4th DCA 2014).
 Greehaven Corp. v. Hutchcraft & Assocs., Inc., 463 N.E. 2d 283, 285 (Ind. Ct. App. 1984).
 Id.; see also Himmel Corp. v. Stade, 367 N.E.2d 411, 415 (Ill. App. Ct. 1977).
 327 P.3d 850 (Cal. 2014).
 See Bernals, Inc. v. Kessler-Greystone, LLC, 70 So. 3d 315, 320 (Ala. 2011).
 Chaves v. Johnson, 335 S.E.2d 97 (Va. 1985).
 See, e.g. Murphy v. Prosum, Inc., 2002 WL 1453645 (Cal. App. 2d Dist. July 2, 2002) (unpublished).
 See Donnelly Constr. Co. v. Oberg/Hunt/Gilleland, 677, P.2d 1291 (Ariz. 1984).
 A.R. Moyer, Inc. v. Graham, 285 So. 2d 397 (Fla. 1973).
 See, e.g., Davidson and Jones, Inc. v. New Hanover County, 255 S.E.2d 580 (N.C. App. 1979) (recognizing that in the absence of contractual privity, architect may be sued by subcontractors for economic loss foreseeably resulting from breach of architect’s common-law duty of due care in the performance of his contract with the owner, but subcontractor may not impose contractual duties on architects not expressly assumed in the contract).
 Westerbold v. Carroll, 419 S.W.2d 73 (Mo. 1967).
 State ex rel. Nat’l Sur. Co. v. Malvaney, 72 So. 2d 424 (Miss. 1954)
 Calandra Development, Inc. v. R.M. Butler Contractors, Inc., 249 So. 2d 254 (La. Ct. App. 1971) (recognizing right of surety, but denying recovery on the facts), failure to report and correct defective work See Berkel & Co. Contractors v. Providence Hosp., 454 So. 2d 496, 502 (Ala. 1984) (finding that architects bear responsibility to act in situations where they are the only party in a position to prevent a loss); Kleb v. Wendling, 385 N.E.2d 346 (Ill. 1978) (“Mere detection of defective workmanship does not relieve an architect of its duty to prevent defects.”). It may not matter that the architect’s contract explicitly states that the architect is not responsible for construction means, methods, techniques, sequences, or procedures. U.R.S. Co. v. Gulfport–Biloxi Regional Airport Auth., 544 So. 2d 824 (Miss. 1989)
 See Travelers Cas. & Surety Co. v. Dormitory Authority–State of New York, 734 F. Supp.2d 368, 376-85 and n.23 (S.D. N.Y. 2010) (collecting cases finding no “functional equivalent of privity” and no basis for departure from economic loss doctrine on surety’s claim against architect). For additional discussion of several of these circumstances, see Michael Chapman, The Liability of Design Professionals to the Surety, 20 Forum 591 (1985).