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Architect had contracted with a College District to perform services in accordance with “all applicable … codes, laws, regulations, and professional standards, consistent with the standard of care of an architect experienced in California schools and college design.” The District sued the architect alleging that the services fell below the professional standard of care and that this also constituted breach of contract – including the alleged failure to comply with codes and laws. Summary judgment was granted and affirmed for the architect on the basis that the gravamen of the complaint was negligence which was time-barred by a two year statute of limitations. Marin Community College District v. Marcy Wong & Donn Logan Architects (Contra Costa County Superior Court, Ct. No. MSC-16-0087 unpublished decision, 8-20-19).

According to the court,

“District alleges the Architects provided “inadequate and inaccurate designs,” “late revisions to plans and design changes,” and “details that were incompletely drawn, incorrectly drawn, and/or drawn in an un-constructible manner.” The District also alleges the Architects failed to “comply with applicable codes and laws,” to perform the services “in accordance with the contractual standard of care,” and to “properly perform construction administration and observation services.” In its professional negligence cause of action, the District alleges the same conduct fell below the Architects’ professional standard of care.”

In opposition to the motion for summary judgment, the District conceded that the negligence cause of action was time-barred, but it argued that the contract cause of action was timely since it was under the four-year statute of limitations for contract actions. That was rejected by the trial court which explained,

“The gravamen of the contract breaches is negligence. Because the gravamen of the first cause of action for breach of contract arises out of the negligent manner in which the contractual duties were performed or out of a failure to perform such duties, the tort limitations period applies.”

On appeal, the court explained that a plaintiff cannot extend the statute of limitations by styling an action as a breach of contract when, in fact, its gravamen is professional negligence. As explained by the court,

“If the breach is both contractual and tortious, we must ascertain which duty is the quintessence of the action.” (citation omitted) The test is whether the defendant is sued for failure to perform a contractual promise to do a specific thing or, instead, is sued for performing negligently.”

The District alleged that the architect breached a contractual obligation to “review, update and verify all as-built information supplied by District concerning existing information supplied by District concerning existing structures, facilities, and utilities.” Specifically, the District argues that this breach occurred because the architect failed to anticipate hazardous materials abatement in walls and ceilings, which necessitated a change order and contributed to 26 days of delays and additional costs. The court stated,

“Although the District’s allegations may be mixed, we agree with the trial court that the gravamen of the District’s complaint is professional negligence. It does not allege injury based on the Architects’ failure to perform a contractual promise to do any specific thing…. The District simply alleges the Architects’ negligent performance of numerous contractual obligations caused delay and cost overruns. The trial court considered each of the alleged breaches, reviewed the evidence, and determined the District is essentially complaining about the competency of the Architects’ work. We agree.”

In conclusion, the court found:

“The District cannot circumvent the statute of limitations for professional negligence by labeling the action breach of contract. (citation omitted) Although a cause of action alleging negligent failure to perform contractual duties is hybrid in nature, California courts have routinely applied the two-year statute of limitations when negligence is the gravamen.”

Comment:

Compliance with Law. Note that the court did not address the wording of the Standard of Care provision that stated that the architect would do what some feel could be two separate obligations, the first being to “perform in accordance with all applicable codes, laws and regulations,” and the second being to perform in accordance with “professional standards, consistent with the standard of care of an architect experienced in California schools and college design.” Some would argue that by virtue of word “and” in the sentence, the architect had a contractual obligation to comply with codes and laws that went beyond its normal standard of care obligations otherwise agreed upon. This was addressed apparently because there was no specific code, regulation or law that was alleged to have been violated. The result of this decision might have otherwise been different.

Don’t Agree to Absolute Compliance with Code Requirements that are Subject to Multiple Reasonable Interpretations.

When reviewing and revising design contracts, it is important that a designer revise the contract wording concerning compliance with laws, regulations and codes so that an express and uninsurable warranty is not created. Since many codes are subject to different reasonable interpretations, the design firm should be entitled to exercise its professional opinion in deciding how to interpret and apply codes and regulations to a particular situation. That means revising the language to state something to the effect that, “The design professional will exercise the Standard of Care to comply with the applicable laws, regulations, codes, etc.”

Review of As-Builts and the Ability to Rely on Information Provided by Client

 Note that there was apparently no provision in the design firm’s contract stating that the client (college) would be required to provide all information in its possession pertinent to the project to the architect, and that the architect would be entitled to reasonably rely upon such information. Instead, the college apparently provided certain as-built documentation that was inaccurate in that it failed to show that there were hazardous materials in certain existing walls and/or ceilings of the building. Instead of the architect being entitled to stop its work until those issues were resolved, the District sought to recover delay costs and environmental remediation costs from the architect. This seems completely backward from what one would hope would happen under a well crafted design professional agreement.

 

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 ConstructionRisk 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 Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932.  This article is published in ConstructionRisk Report, Vol. 22, No. 5 (May 2020).

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