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Engineering firm designed site plans for a rain tank system to be buried under a parking lot for a new church sanctuary. As a contractor began constructing the project, it inquired of the engineer via a Request for Information (RFI) about concerns about the suitability of the tank for the location, given the high water table, and included questions about installation and performance. Without addressing the performance issues or reevaluating the choice of the tank system in light of the contractor’s concerns, the engineer referred to information in the manufacturer’s drawings to assure the contractor that their ground water concerns would not impact the functionality of the tank. Only a few months after it was installed, the tank collapsed under the parking lot. In litigation that followed, the trial court found the engineer breached its professional standard of care by (1) failing to conduct due diligence regarding the suitability of the tank, (2) incorporating a manufacturer’s specifications into its own plan without verifying them, and (3) failing to respond to appropriate questions during construction.

The suit against the engineer was found to be timely filed pursuant to the statute of limitations for breach of contract for negligent design because the limitations period did not begin to run until the plan was approved by the county, even though that was two years after the plans had been finalized by the engineer. The decision was affirmed on appeal, with the court explaining that an action for the negligence of a design professional is an action for breach of contract and therefore governed by the statute of limitations applicable to contracts instead of the statute of limitations applicable to negligence actions. William H. Gordon Associates, Inc. v. Heritage Fellowship, 291 Va. 122 (2016).

The engineering contract contained a terms and conditions rider prepared by the engineer, and it included the following standard of care provision:

“Gordon will perform its services using that degree of care and skill ordinarily exercised under similar conditions by reputable members of our professions practicing in the same or similar locality and in compliance with any applicable codes, statutes and/or regulations.” This is a fairly typical standard of care provision that tracks pretty closely with what the common law would require.

Another paragraph provided, “In performing its services, Gordon shall be entitled to rely on the accuracy and completeness of work and information supplied by third parties, the Client and his authorized representative and the public record.” It appears from the court’s discussion that the engineer sought to apply this clause to its right to rely upon the rain tank manufacturer’s information, and thereby demonstrate that it met the standard of care.

Engineer Found to have Violated Standard of Care for Design and for Construction Oversight

During the trial, competing experts testified concerning what caused the collapse. The experts for the contractor and owner both testified that the engineer’s negligent design of the rain tank caused the collapse. In contrast, the contractor’s expert testified that the tank would not have collapsed but for construction errors of the contractor and that the engineer met its standard of care “by relying on information from the rain tank manufacturer.”

After weighing all the evidence and expert testimony, the trial judge found “the sole proximate cause of the collapse of the Rain Tank stormwater management structure in the parking lot … was the failure of the civil engineer to meet its standard of care….” The court also found that “any failures by the general contractor … were not material and not a proximate cause of the collapse.”

On appeal, the appellate court sustained the finding of negligence and causation. Of particular concern of the court was what it concluded was the engineer’s failure to respond with any evaluation or analysis for the concerns raised by the contractor. The court considered the expert’s testimony that “construction oversight requires an engineer to provide quality oversight during construction to ensure that certain elements of the plans are property specified and verified in the filed.” Here, the court concluded that “Gordon’s responses would appear to have violated Gordon’s duty to provide oversight assistance … in a manner consistent with the industry’s standard of care and skill.”

In concluding that breach of the duty to provide oversight proximately caused the collapse, the court looked at the remedy for the collapse that was subsequently proposed by the engineer in which he recommended a different system better suited to the site. The court found that recommending that different system was “indicative that had Gordon reassessed the plan in response to [contractor’s] RFI, the change would have been made at that time, avoiding the collapse.”   It should be noted here that attorneys during trial make every effort to exclude from evidence the corrective actions that were later taken, so that they can’t be used to suggest that those new designs are evidence that the original design was flawed.

Contract did not shift responsibility for design failures to the Contractor

In its defense, the engineer argued that the construction contract placed liability for any failure and remediation of the tank on the contractor. The court found that the contract required the contractor to adhere to its submittals that had to be based on the prescriptive specifications provided by the engineer, and that the contractor did not deviate from its submittals. The contract left no design discretion to the contractor and even forbade the contractor from making any design changes without express written consent of the engineer. The contractor was required to supply and install the precise system as required by the plans and there was ample evidence that this is what he did.

Comments: The standard of care is well explained by the court in this decision. Of note is the fact that each party to this dispute had multiple experts to testify to the standard of care and to causation of the damages. Experts also testified to proper interpretation of the specifications with regard to whether they were prescriptive design specifications that bound the contractor to provide a tank meeting the prescribed details, or whether the contractor could have chosen to install a different tank or a tank using different methods of installation. An expert also testified concerning the contractor’s compliance with the specifications.

An aspect of the decision that engineers should pay special attention to is that in finding the engineer failed to meet the standard of care, the court quoted from one of the plaintiff’s experts who testified that the standard of care was violated by failing to respond to suitability concerns raised in the RFI and relying on information from standard manufacturing literature to respond to performance concerns, rather than conducting its own review of the product and the situation at the site. On large, complicated projects, it is quite common for engineers to incorporate and rely upon name brand or equal equipment specifications written by manufacturers of that equipment. Some projects are so large and complex that the project engineer could not reasonably be expected to know all the engineering details of all the equipment and systems being specified for the project. What the court is saying here, however, is that the engineer must do more than rely on the manufacturer’s literature, and when asked RFI questions by a contractor, must conduct its own review of the product and situation at the site.

The question about the statute of limitations presents two important points. (1) Even though the basis for the claim against the engineer is a “negligent” act, error or omission, the complaint against the engineer is actually based on breach of contract and not negligence. The contract may have been breached due to the engineer’s negligence, but that does not turn a breach of contract into a negligence cause of action. Consequently, the limitations period for breach of contract will be applied. In most states, the time limit for filing breach of contract claims is longer than it is for filing negligence claims. The other important point about the running of the statute of limitations is that the court found that the statute did not begin to run when the engineer completed its services but instead when the county finally approved the plans a couple years later.

 

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. 19, No. 1 (January 2017).

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