The owners of a home under construction were sued by an architect whose copyrighted plans were used without permission in the design and construction of their new house. This architect (Mr. Page) sued the owners (Mr. and Ms. Gunthrop) for copyright infringement. A court granted a temporary injunction preventing the owners from completing the construction. In order to resolve the matter and continue with the construction, the Gunthrops paid $55,000 to the architect for infringing upon his drawings. They also agreed to change some features of the design.
The Gunthrops then entered into a change order with their builder authorizing changes to the design pursuant to their settlement agreement with the architect. Included in the change order language was a release, typed in all capital letters, reading as follows: “The homeowners authorize the above changes to be incorporated in their structure and accept all responsibility for errors resulting from the 9/13/94 plan. The homeowners also recognize that these changes are made as an accommodation to the homeowners and agree that C.E. Russell & Associates, Ltd., its agents and subcontractors, are hereby released and held harmless from all liability arising from said changes and any claim arising out of the facts and circumstances which gave rise to, and resulted in such changes.”
Although the owners signed the release, they apparently later became unsatisfied with having paid damages to the original architect without having recovered any portion of those damages from others. They attempted to recover their damages by suing the architect that provided the infringing design services to their builder, C.E. Russell. They sued the subcontractor instead of the builder/general contractor. Their apparent theory for suing the subcontractor instead of the contractor, was based on a fine, technical interpretation of the change order language. Specifically, they argued that the release applied only the builder and not to the architect. In support of their argument, they asserted that the release language was contained in change order that had been issued under the “Construction Contract.” Only the owner and builder were parties to that contract. And the architect did not provide any subcontract services to the builder under that contract.
All services of the architect were provided to the builder pursuant to a subcontract that was under a separate contract entitled “Architectural Agreement” which had been executed between the owner and builder. The essence of the owner’s argument was that although the architect was a subcontractor to the builder, he was not one of the builders “agent and subcontractors” under the Construction Contract. That being the case, the owners argued that the release under the Construction Contract could not apply to the architect.
In rejecting the owner’s argument and granting judgment in favor of the architect, the court stated that it made no difference whether the architect was a subcontractor under the Construction Contract or the Architectural Agreement. So long as he was a subcontractor under either contract, he was indisputably a subcontractor to the builder. Having unambiguously stated in the language of the release that liability was released as to the general contractor and all his subcontractors, the court found that this meant all subcontractors – regardless of which contract applied.
John Gunthrop v. Mark Golan, et. al., 184 Ill. 2d 432; 704 N.E.2d 370 (1998).
Article Copyright ã 1999, ConstructionRisk.com, LLC
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. 1, No. 3 (June 1999).