When certain flooring features of a condominium project failed, the condominium homeowners association sued the project developer and the general contractor who were responsible for construction. The parties settled on a remedy for the deteriorating concrete subfloor, which involved the application of a material called Ardex K-15 over the surface of the concrete to remedy the situation. Architect did not make any representation concerning the suitability of the remedy but agreed to pay $15,000 towards the cost of the remedy in exchange for a release of all claims against them arising out of the design, installation and maintenance of the concrete.
The remedy failed to solve the problem, and the general contractor apparently corrected the problem at its cost and then filed suit against the architect to recover its costs. The contractor alleged that the architect breached its duty of professional care, and breached express and implied warranties concerning the materials selected for the repair. It also raised various other tort claims on both its behalf and on behalf of the Overlake Condominium Homeowners Association (OCHA).
Architect responded to the complaint by arguing that there was no contract between the architect and the Homeowner association, or between the architect and contractor, upon which a breach of warranty could be based. The lower court found that the facts did not indicate there was any misrepresentation by architects to Homeowners, any express warranty, or any basis for finding an implied warranty, because implied warranties are applicable only to the business of selling and not to the business of manufacture. Further, “there was no contractual basis for finding a breach of warranty because it was undisputed that there was no contractual relationship between architects and OCHA.”
On appeal, the court found the lower court’s decision to be correct with regard to rejecting the breach of warranty claim. As argued by the architect, there could be no implied warranties between architects and OCHA because implied warranties “arise from the business of selling rather than the business of manufacture.” As stated by the court, “plaintiffs relied on the UCC statutory provisions [for their argument in the lower court]. These provisions are limited in their application to the sale of goods by contract, and thus the trial court correctly ruled that these statutory sections would not apply to the provision of architectural design services.” The court also cited a case stating the “Implied warranties to not apply to architects because they provide services rather than goods. ”
On the issue whether the release that was executed by the parties barred the current claim against the architect for breach of a duty of professional care or for misrepresentation, determined that the release was somewhat ambiguous concerning its intent and did not clearly release the architect from all liability. What the plaintiffs argued was the trial court erred in concluding that the release barrier any claims based on the failure of the Ardex K-15 remedy. The release provided as follows:
“For and in consideration of the payment to Investment Properties, Inc. of $5,000 by Lyttle and Keefe Architects, Inc. and $10,000 by General Accident Insurance Company, Inc., Investment Properties, Inc. hereby releases and forever discharges Lyttle and Keefe Architects, Inc. and General Accident Insurance Company, Inc. of and from any and all claims, demands, damages, actions or causes of action related to the design, installation and maintenance of a lightweight concrete underlayment for carpeting in the Overlake Condominium project in Burlington, Vermont. It is understood and agree that this is a full and final release of all claims of every nature and kind whatsoever, and release claims that are known and unknown, suspected and unsuspected regarding the deterioration of said lightweight concrete as an underlayment for carpeting. ”
Plaintiffs assert that the effect of the release is limited to “design, installation and maintenance” and that the Ardex K-15 remedy does not fall within this limited scope. They also argue that the provision of a suitable remedy for the problem was part of the consideration for the release and, because the remedy failed, consideration for the release failed as well. They also argued that they were induced to sign the release by the architects representation that the Ardex remedy would solve the problem. In contrast, the architects point to the fact that the release applies to “any and all claims” related to the concrete problem. In this case, the court concluded that the language of the release along does not clearly reveal the precise scope of the release. Consequently, the scope of the release and whether it barred the complaint, would properly have to be decided by a jury after hearing all the evidence, rather than by a judge on a motion for summary judgment.
Investment Properties, Inc. James B. Foster, and Pizzagalli Construction Company v. Lyttle & Keefe Architects, inc. (No. 98-050 Sup. Ct. Vermont) (1999 Vt. Lexis 234).
About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with Construction Risk Counsel, PLLC) representing design professionals, contractors and project owners. He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects. He is publisher of ConstructionRisk.com Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932. This article is published in ConstructionRisk.com Report, Vol. 2, No. 1 (Jan 2000).