DESIGN PROFESSIONAL NEEDS A LICENSE TO BE SUED FOR PROFESSIONAL NEGLIGENCE

imagesWith regard to claims for professional negligence, the Florida Supreme Court has explained that ‘where the negligent party is a professional, the law imposes a duty to perform the requested services in accordance with the standard of care used by similar professionals in the community under similar circumstances.’” Sunset Beach Investments, LLC v. Kimley-Horn and Associates, 42 Fla. L. Weekly D130a (Fla. 4th DCA 2017) quoting Moransais v. Heathman, 744 So.2d 973, 975-76 (Fla. 1999).

 

When it comes to professional negligence, two things are important:

 

1)  the person being sued is a professional under the law (person has special education, training, experience, and skill) and

2)   the standard of care for that professional (e.g, licensed, professional engineer).

  

In a recent case, an engineering intern—not, a licensed, professional engineer–was sued for professional negligence.   The Fourth District Court of Appeal held that an engineering intern is not a person that can be sued for professional negligence, unlike a licensed, professional engineer. Sunset Beach Investments, supra.

  

The Fourth District explained that an engineering intern, by way of example, is not a professional because an engineering intern does not maintain a license.  If the court treated an engineering intern as a professional than it would be walking down a slippery slope when it came to who is a professional and who is not.   Instead of walking down that slippery slope, the court stated: “At a minimum, in a profession where a license exists, the existence of a license is a valid barometer for determining whether a person is classified as a professional. “ Sunset Beach Investments, supra.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

 

 

 

 

DESIGN PROFESSIONAL’S STANDARD OF CARE AND THE FIRST COST DEFENSE

imagesCAH5G0ZTDesign professionals entering into contracts need to absolutely understand the standard of care they are agreeing to in the contract. The reason being is that a design professional can agree to a heightened standard of care making them contractually liable for breaches based on an ultra-technical standard of care that cannot realistically be met.

 

Typically, the standard of care of a design professional is: “[P]rofessionals rendering professional services are to perform such services in accordance with the standard of care used by similar professionals in the community under similar circumstances.” Trikon Sunrise Assocs., LLC v. Brice Bldg. Co., 41 So.3d 315, 318 (Fla. 4th DCA 2010). Yet, “if the professional contracts to perform duties beyond those required by ordinary standards of care, the quality of that performance must comport with the contractual terms.” CH2M Hill Se., Inc. v. Pinellas County, 698 So.2d 1238, 1240 (Fla. 2d DCA 1997).

 

The School Board of Broward County, Florida v. Pierce Goodwin Alexander & Linville, 39 Fla. L. Weekly D590a (Fla. 4th DCA 2014), is a new case that discusses the significance of the standard of care the architect agrees to in conjunction with another concept known as “the first cost” defense. Both the standard of care and the first cost defense are terms and concepts that design professionals need to be familiar with!

 

imagesCAOQQVFHIn this case, the architect was retained to design changes to existing buildings and design new buildings for a public school. The public owner retained the services of a separate peer reviewer to monitor and offer opinions on the design. The architect’s initial phase was to prepare preliminary designs for bidding purposes. The peer reviewer commented on the design including that a third floor balcony needed a staircase as an emergency fire exit in order to be code-compliant. The architect disagreed and suggested an alternate fire code solution. The architect thought that the public owner, which had final authority to determine the correct interpretation of the code, orally agreed with its alternate solution and the plans were submitted for bidding.

 

After construction commenced, the public owner determined that the architect’s alternate solution was not code-compliant and that the staircase suggested by the peer reviewer needed to be constructed. This resulted in a revision to the plans and a significant change order. As with any change order, this change resulted in the owner paying more for the construction. Other change orders due to design changes also increased construction costs. The public owner sued the architect to recoup these costs.

 

Two important issues were raised. The first issue was the appropriate standard of care of the architect–did the architect breach its standard of care by preparing a design that required changes to make it code-compliant. The second issue is the defense known as the first cost defense, meaning that the architect is not responsible for the costs of items left out of its original design since the owner should always be responsible for that cost based on the cost of that item if that item were included in the original design. If the cost of that item (i.e., steel or concrete) increased from the time of the original design, then the architect could be responsible only for the price increase (but not the cost of the item at the time of its original design). Or, if the omission of that item resulted in a delay, the architect could be responsible for the delay.

 

1) Standard of Care

 

The architect in this case wanted the typical standard of care jury instruction that would state that the architect is liable if it failed to perform services in accordance with the standard of care used by similar professionals under similar circumstances. The public owner, however, wanted a breach of contract jury instruction that would make the architect liable for breaching a contractual standard of care provision, in this case, for preparing a design that was not code-compliant. The public owner wanted this because this is what the architect agreed to. The contract provided:

 

“2.1.3 As to all services provided to this Agreement, the Project Consultant [the architect] shall furnish services by experienced personnel and under the supervision of experienced professionals licensed in Florida and shall exercise a degree of care and diligence in the performance of these services in accordance with the customary professional standards currently practiced by firms in Florida and in compliance with any and all applicable codes, laws, ordinances, etc. . . .

2.1.5 All professional design services and associated products or instruments of those services provided by the Project Consultant shall: .1 Be in accordance with all applicable codes, laws, and regulations of any governmental entity, including, but not limited to, [list of regulatory entities] with the Owner serving as the interpreter of the intent and meaning of . . . any other applicable code.”
The School Board of Broward County, supra.

 

Thus, the public owner wanted a jury instruction that would render the architect liable if its initial plans were not code compliant because the contract provided that the architect’s standard of care is to ensure its drawings comply with all codes, etc.

 

The Fourth District agreed with the owner and maintained:

 

Where an express provision within a professional services contract provides for a heightened standard of care, however, the professional must perform in accordance with the terms of the contract….In other words, an architect can contractually commit to perform under a standard of care higher than the common law standard.
***
We are satisfied that the parties unambiguously allocated to the architect the risk for costs and expenses attributable to design plans that were not code-compliant.”
The School Board of Broward County, supra.

 

*The lesson is that design professionals need to be careful and truly consider what they agree to as they can impose duties upon themselves that are more stringent than what the law otherwise imposes. This risk needs to be appreciated because more often than not architect / design professional do agree to perform a service (prepare a design) that is code-compliant.

 

2) First Cost Defense

 

Again, under the first cost defense, the architect is not responsible for the costs of items left out of its original design since the owner should always be responsible for that cost based on the cost of that item if that item were included in the original design. As the Fourth District explains:

 

For example, if the school board would have paid a cost for construction in accordance with the code-compliant final design plans, an award of a COI [change order item] expense against the architect attributable to a change in the initial design plans for the same cost would put the school board in a better position than if the design services had been performed as agreed. Stated another way, if there had been no change between the initial plans drawn for bidding by contractors and the final construction plans, the school board would have been solely responsible for paying all construction expenses incurred for the renovation.” The School Board of Broward County, supra.

 

The Fourth District relied on and references a hypothetical stated by the Fifth District in Lochrane Engineering, Inc. v. Willingham Realgrowth Inv. Fund. Ltd., 552 So.2d 228 (Fla. 5th DCA 1989) to explain the first cost defense:

 

“[I]f an engineer negligently designed a 1000 square feet drain field, and it was subsequently determined that an adequate design required a 1200 square feet drain field, the owner, not the engineer, should pay for the additional 200 square feet of drain field because the necessity for the additional 200 square feet of drain field was caused by the owner’s need to dispose of the sewerage produced. However, the court then observed that this does not mean an engineer is never liable for damages that properly flow from his professional negligence. The court went on to say, if the cost of later installing the additional 200 feet of drain field costs more than it would have cost if installed as part of the original undertaking, the engineer would be liable for the difference as well as any other consequential damages. The School Board of Broward County, Florida, supra (internal quotations and citations omitted).

 

*The lesson is that even if an architect erred, the owner cannot obtain a windfall by virtue of that error and be placed in a better position because of that error.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

A GENERAL CONTRACTOR NEEDS TO UNDERSTAND CERTAIN LEGAL DOCTRINES BEFORE SUING A STATE (INCLUDING AGENCY OR SUBDIVISION) AND DESIGN PROFESSIONAL THAT IT DID NOT HIRE

HIGHWAY-CONSTRUCTION-1The recent Florida district court case, Posen Construction, Inc. v. Lee County, et al., 2013 WL 375430 (M.D.Fla. 2013), ruling on various motions to dismiss, is an interesting case that discusses two important doctrines. In this case, a roadway contractor constructing a road project for Lee County sued Lee County and Lee County’s design professionals (hired by the County) for delays and additional costs it incurred in the performance of its work. This case, among other things, discusses a state’s (inclusive of a state agency or subdivision) sovereign immunity for claims for additional work (absent a change order) and the duty of care for purposes of a negligence claim that a design professional owes to a general contractor (when the general contractor did not hire the design professional).

 

The first doctrine is known as the Miorelli doctrine which refers to a state’s (or its agencies or subdivisions) soverign immunity for extra-contractual work claims that arise on a construction project. The Miorelli doctrine is based on the Florida Supreme Court case, County of Brevard v. Miorelli Engineering, Inc., 703 So.2d 1049 (1998). The Miorelli doctrine, as maintained by the Posen court, has evolved into the following doctrine: “A claim for damages predicated on work ‘totally outside the terms of the contract’ is barred by the doctrine of sovereign immunity [unless memorialized in a written executed change order], whereas damages caused by extra work done at the state’s behest and in furtherance of contractual covenants (express or implied) are potentially recoverable.” Posen Construction, supra at *3 citing Miorelli, 703 So.2d at 1051. In applying the Miorelli doctrine, the Posen court expressed:

 

“To be clear, if Posen’s [contractor] claim is predicated on work ‘totally outside the terms of the contract’ it will fail by application of the Miorelli decision. On the other hand, claims for damages caused by additional work performed in furtherance of either express or implied covenants of the written contract  fall within Florida’s implied waiver of sovereign immunity…”

 

If a contractor is suing a state (or a state agency or subdivision) for additional costs that are not memorialized in a written executed change order, it is important that the contractor is aware of the Miorelli doctrine in order to best craft arguments to potentially recover the additional costs. The reason being is that the contractor can almost be certain that the state will raise the Miorelli doctrine through the motion to dismiss and/or summary judgment stages to establish that the state has sovereign immunity for such claims and damages. The key is that the argument should center on the additional costs being covered by the expansive scope of work set forth in the contractor’s contract with the state versus constituting work that is materially different than what the contractor bargained for.

 

The second doctrine is known as the A.R. Moyer doctrine which refers to a design professional’s duty of care to a general contractor on a construction project (when there is no contractual privity between the contractor and design professional). The A.R. Moyer doctrine is based on the Florida Supreme Court case, A.R. Moyer v. Graham, 285 So.2d 397 (Fla. 1973). In A.R. Moyer, a contractor sued a supervising architect in negligence. The Florida Supreme Court in A.R. Moyer maintained:

 

Each of the [following] conditions would present a cause of action [in negligence against a supervising architect or engineer]: (a) supervising architect or engineer is negligent is preparation of plans and specifications; (b) the supervising architect or engineer negligently causes delays in preparation of corrected plans and specifications; (c) the supervising architect or engineer negligently prepared and negligently supervised corrected plans and specifications; (d) the supervising architect or engineer failed to award an architect’s certificate of completion of the project; (e) the architect or engineer was negligent in exercise of supervision and control of contractor…” Posen Construction, supra, citing A.R. Moyer, 285 So.2d at 402.

 

Stated differently, the design professional must have a supervisory role or element of control (also referred to as a close nexus to the contractor) in order for the design professional to owe a legal duty to the contractor. The Posen court clarified that “supervising architects and engineers are liable for the foreseeable injuries to general contractors proximately caused by their negligent conduct even where there is an absence of contractual privity, whereas nonsupervising engineers and architects—irrespective of when they are hired—will not be.” Posen Construction, supra, at *12.

 

If a contractor is suing a design professional in negligence, it is important for the contractor to understand the A.R. Moyer doctrine and that the required legal element of “duty” is based on the supervisory status of the architect or engineer. This will allow the contractor to best phrase legal theories knowing that the design professional will raise this doctrine at the motion to dismiss and/or motion for summary judgment stages. However, absent this supervisory status or close nexus between the design professional and general contractor, the design professional will not be deemed to owe a legal duty to the contractor.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

A CONSULTING ENGINEER / ARCHITECT’S PROTECTION FROM A NEGLIGENCE CLAIM BY A CONTRACTOR

imagesThe case of Recreational Design & Construction, Inc. v. Wiss, Janney Elstner & Associates, Inc., 2011 WL 5117163 (S.D.Fla. 2011), is a recent case discussing whether an independent engineering firm hired as a consultant by an owner can be liable to the general contractor for professional negligence under Florida law.  In this case, the City of North Miami Beach (“City”) hired a contractor to perform all design and construction services for a water slide project (“Contractor”).  The City also hired a separate engineering firm to evaluate and perform inspections of the contractor’s work (“Engineer”).  The engineering firm hired another engineering firm as a subconsultant to perform the engineering inspections (“Subconsultant”).

 

 

The Subconsultant issued a report to the Engineer that was provided to the City explaining that the water slide the Contractor designed and started to construct was structurally unsafe.  The report recommended repairs to be implemented on the slide.  The City rejected the Contractor’s work based on the Subconsultant’s recommendation and required the Contractor to implement the repairs before completing the work.

 

 

The Contractor, instead of suing the City, sued the Engineer and Subconsultant for professional negligence (also known as professional malpractice) to recover its costs in reconstructing the slide and implementing the repairs recommended to the City.  Both the Engineer and Subconsultant moved to dismiss the Contractor’s complaint arguing that they did not owe a duty of care to the Contractor; therefore, they could not be liable in negligence to the Contractor under the law.  The Southern District of Florida agreed with the Engineer and Subconsultant and dismissed the Contractor’s complaint with prejudice.

 

 

In order to be liable for professional negligence, a plaintiff must prove the following elements against the defendant-professional: 1) the defendant owed a duty of care to the plaintiff; 2) the defendant breached its duty of care; and 3) the breach of the duty of care proximately caused damages to the plaintiffSee Recreational Design & Construction, 2011 WL at *2 citing Moransis v. Heathman, 744 So.2d 973, 975 n.3 (Fla. 1999).   The element of duty, however, is a question of law in Florida and must be determined by the court before a negligence case proceeds to the jury or trier of factSee Wallace v. Dean, 3 So.3d 1035, 1046 (Fla. 2009).

 

The Contractor relied on the Florida Supreme Court’s ruling in A.R. Moyer, Inc. v. Graham, 285 So.2d 397 (Fla. 1973), in arguing that the Engineer and Subconsultant owed the Contractor a duty to perform its work and issue recommendations to the City with reasonable care and due diligence.  In A.R. Moyer, the Florida Supreme Court held that a general contractor can maintain a cause of action against a supervising architect for the architect’s negligent performance of a contractual duty (even though the contractor has no contractual privity with the architect).  Particularly, the Florida Supreme Court found that the following circumstances would present a professional negligence cause of action by the contractor against a supervising architect or engineer:

 

“(a) supervising architect or engineer is negligent in preparation of plans and specifications; (b) the supervising architect or engineer negligently causes delays in preparation of corrected plans and specifications; (c) the supervising architect or engineer negligently prepared and negligently supervised corrected plans and specifications; (d) the supervising architect or engineer negligently failed to award an architect’s certificate upon completion of the project; (e) the architect or engineer was negligent in exercise of supervision and control of contractor.”  A.R. Moyer, 285 So.2d at 402.

 

 

Of importance, the “professional defendant [in A.R. Moyer] was an architect whose responsibilities on the relevant project were to prepare the designs and plans for the project, approve the overall structural components or framework for the project, and supervise the general contractor’s execution of those plans, including having the authority to halt the contractor’s work.”   Recreational Design & Construction, 2011 WL at *4.   In other words, A.R. Moyer dealt with more of a traditional architect or engineer that, among other things, served as the architect / engineer-of-record for the project and had detailed contract administration services that enabled them to make decisions that could effect the contractor, which is why the Court described the professional as a supervisory architect or engineer.

 

 

But, in Recreational Design & Construction, the Engineer and Subconsultant, were really nothing more than a consultant providing expert-related services issuing recommendations, advice, or suggestions to the City in which the City could accept or reject.  The Engineer and Subconsultant did not serve as the engineer-of-record.  They did not design the plans for the City’s project. They did not issue specifications for the project.  They were not performing supervision to ensure that the Contractor’s construction complied with their design (since they were not the designer).  And, they did not have authority to halt the construction of the project or issue corrective details directly to the Contractor.  Instead, as previously mentioned, their services were truly within the realm of consulting services in which it was up to the City to determine how it wanted to utilize any suggestions, advice, or recommendations.   For these reasons, and because the role of the Engineer and Subconsultant in this case was substantially different than the role of the architect in A.R. Moyer, the Southern District held they did not owe a duty of care to the Contractor.  See also McElvy, Jennewein, Stefany, Howard, Inc. v. Arlington, Elec., Inc., 582 So.2d 47 (Fla. 2d DCA 1991) (finding that architect did not owe duty to subcontractor because architect was required to issue advice to owner regarding interpretation of architect’s design, but it was the owner responsible for making the ultimate decision based on the advice of the architect).

 

 

An architect or engineer that is serving as the architect / engineer-of-record for a construction project may want to implement certain language in their contract with the owner that while it will render certain advise, recommendations, or suggestions to the owner regarding its design and specifications and interpretations thereof, it is the owner that is required to render the ultimate decision regarding the advice, suggestions, and recommendations.  This way, if the contractor does pursue a professional negligence claim against them, they can argue they were not a supervisory architect or engineer and should not be deemed to owe a duty to the contractor because it was the owner that made the ultimate decision that affected the contractor.

 

 

Also, owners on construction projects sometimes hire other consultants or experts to assist in the construction of their project.  For instance, sometimes owners hire a building envelope consultant or a glazing consultant, etc.  These consultants sometimes worry about the contractor asserting a negligence claim against them based on their advice, suggestions, and recommendations made to the owner.  These consultants, however, should be able to rely on the arguments in Recreational Design & Construction to support they do not owe a duty to the contractor.  These consultants can also employ the same contractual language suggestions above so that their contract specifically expresses that it is the owner that is required to act on the advice, suggestions, and recommendations of the consultant so that it remains understood that the owner, and not the consultant, has ultimate control over the contractor’s work.

 

 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.