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On a design-build project involving MCAS Camp Pendleton, a subcontractor filed suit against Balfour Beatty Construction (“BBC”), the design-build contractor. This was under the Miller Act and alleged breach of contract and breach of implied warranty of specifications (Spearin Doctrine claim). The sub filed a motion for partial summary judgment asking the court to find that the design-builder could not shift legal responsibility for defective plans and specs onto its subcontractor/engineer. Its argument was that a construction contractor can seek relief under the Spearin Doctrine line of cases for extra work necessitated by defects in plans and specs that were provided to the contractor for bidding its work.

The design-builder argued that the Spearin doctrine does not apply here due to the design-build process where plans and specifications provided to subcontractors are expressly incomplete when the initial agreements are signed. In response, the sub argued that although it assumed the risk that the plans and specs would be “refined,” it did not assume the risk that they would be “defective.” The court concluded that (1) The Spearin doctrine may apply to design-build projects, but (2) the record in the case was not sufficiently developed to determine whether the doctrine applies to the facts in this case. U.S. for benefit of Bonita Pipeline, Inc. v. Balfour Beatty Construction LLC, et. al., 2017 WL 2869721 (U.S. District Ct., S.D. California).

According to BBC, the Spearin doctrine cannot be applied to the Subcontract because, by the very nature of the contract, the plans were not complete when the parties reached agreement. In support of its argument, BBC points to the provision of the Subcontract in which Bonita “knowingly assume[d] the risk of further refinement of the plans and specifications associated with the design build process.”

The sub counter-argued that it assumed the risk that the plans and specifications would be refined, not the risk that they would be defective. And it argued that the Spearin doctrine focuses on whether plans are correct, not on whether they are complete.

As stated by the District Court, In Spearin, the Supreme Court explained that contractors can recover for extra work due to “defects in the plans and specifications.” Spearin, 248 U.S. at 136. The “critical factor” in applying Spearin is to determine whether the “specifications [are] deficient.” The California Supreme Court has stated that contractors can recover when plans or specifications are “incorrect.” Coleman, 65 Cal. 2d at 404.

“Under Spearin, the responsibility to provide correct plans and specifications “is not overcome by the general clauses requiring the contractor, to examine the site, to check up the plans, and to assume responsibility for the work.” [citations omitted] But at this time, the record is not sufficiently developed for the Court to determine whether Spearin applies to this case. There are disputed issues of material fact regarding whether Bonita’s extra work was due to errors in the plans and specifications or whether the extra work was due to the expected design refinements provided for in the Subcontract.”

 

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. 20, No. 3 (Mar 2018).

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