Alternative Delivery Methods vs. Traditional Standards of Care

I was recently involved in a case that presented a set of facts that should be familiar to most construction law practitioners.  The architect prepared a set of plans and specifications.  Subcontractors bid on those plans and specs.  Later (after the subcontract had been executed), one of the subs discovered it had a bid bust---it had neglected to include the sort of equipment needed to meet code (and the design) in its bid.  Instead, it had bid presuming it could use non-code-compliant (and non-design-compliant) equipment.  The sub meets with the GC, and even though they both understand that code compliance requires a certain type of equipment, they agree that the sub should prepare a submittal for non-code-compliant equipment, submit the same to the architect, and see if they can get it approved.  The architect doesn't recognize from the submittal that the equipment is not code compliant (and not compliant with his design), and approves the submittal.  Later, the building department red-flags the equipment, the owner orders the GC to replace it, and the GC submits a claim for the increased cost of the code-compliant equipment, arguing that the architect approved the equipment installed.  The GC (and, eventually, the owner) takes the position that this is the architect's fault (should have been more careful reviewing the submittal!) and therefore, the architect ought to pay for it.

Again: this must sound common to many of you.  And, most of you probably have a good idea what you think of the merits of the claim against architect.  Now, let me add one additional fact: this was a design-build job, and the architect was under contract with the GC, not the owner.

Does that immediately change how you think about the case?  Should it?  The architect's standard of care is the same regardless of who hires him, isn't it?  Or, now that the architect is explicitly NOT acting as the owner's agent/protector, does that change the outcome of the claim?

Beyond any individual's thoughts about what the law ought to be in a situation like this, here's the stark reality: the law regarding professional liability for designers has grown out of 75+ years of traditional design-bid-build delivery.  The law has, often silently, incorporated this traditional view of the roles of the construction team.  We are far past the point where design-build can be described as a "new," or even really as an "alternative" delivery system.  It is quite commonplace nationwide.  But, as disputes grow out of those projects, they all too often encounter a legal system still utterly ignorant of how these new systems work.  When that happens, your client (or opponent) can fall through a crack in the precedent.  If I wanted to make a claim this architect, and explain why he was at fault for not catching the contractor's shenanigans, I could lay my hands on ample precedent to support my claim.  But here we have an architect actively deceived by his client, who conspired with a subcontractor to dupe the architect into approving a product both the GC and the sub knew was improper.  When the architect is acting on behalf of the owner, I know how that story ends (or I know how I could argue it should end, from both sides).  But when the architect is acting on behalf of the GC, the issue immediately gets muddy, both for me, and for the court.

It can scarcely be a surprise that the construction industry is evolving faster than the appellate courts can keep up.  This is true for many other industries as well.  The issue for we honored few, we construction lawyers, is: how to we figure out and create the new rules to govern the new industry?

2013 Public Private Partnership Conference

The 2013 P3C conference will be held on February 21-22 in Dallas.  I've never attended one of these conferences, but it looks like a meeting of major players in the public private partnership world.  More than 25 public agencies will be making presentations about upcoming projects.   You can learn about EB-5 Visa financing, the latest trends in public private partnerships, including public involvement in hospitality projects.  Public owners can learn how to attract private capital.  There will be sessions on New Market Tax Credits and lots more ....  

Check it out!