Where a General Contractor that entered into a contract with a nursing home was required to have a performance bond from a surety company (Safeco) and was default terminated by the project owner, the surety completed the project and sued the “obliges” under the bond, and the project architect to recover the cost of approved change orders. As basis for the claim against the architect, the surety claimed common law indemnity rights based on the architect having a “special relationship”, with the contractor and surety – and therefore commensurate responsibilities. The court dismissed the architect’s motion for summary judgment, concluding that the surety can maintain a claim against the architect where the allegations are that the architect’s professional negligence caused or contributed to the loss.
For a party to succeed on a claim of common law indemnity, the court explained that the party must satisfy a two-prong test. First, the party seeking indemnification must be without fault, and its liability must be vicarious and solely for the wrong of another. Second, indemnification can only come from a party who was at fault. Safeco alleged that as a professional architect, the architect in question here supervised the project and had a special relationship with the contractor and with Safeco as a surety for the contractor and owed them both a duty of care in the design of the project and in contract administration. Safeco Insurance Company of America v. Victoria Management, LLC, 2012 WL 1606101 (S.D. Fla. 2012).
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. 14, No. 10 (Nov 2012).
Copyright 2012, ConstructionRisk.com, LLC