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C-Note: "One Step Beyond"

Older readers may recall the TV show One Step Beyond, which purported to explore paranormal events and logic defying situations. All readers can agree that some legal opinions seem paranormal and logic defying, including recently Black + Vernooy v. Smith (Austin Court of Appeals 2010)(2 to 1 decision). It found that an A/E may be held liable to personally injured third parties (i.e., not a party to the design contract), such as guests of the owner/client, for not identifying during CA services the contractor errors that caused the injury. The decision has been broadly criticized as an unwarranted judicial expansion of A/E liability. In allowing this claim did the court go one step beyond current law, or was this merely the first-time application of firmly established law?

The majority opinion relied significantly on the 1987 Hunt v. Ellisor and Tanner decision. Both the Black + Vernooy and the Ellisor and Tanner decisions: concerned AIA contract language that said (i) the architect is not responsible for contractor errors and (ii) the architect will endeavor to guard the owner by CA services; involved claims based upon alleged substandard CA services by not identifying contractor errors; and were tried to a jury that found the architect partially liable (10% and 5% responsibility, respectively). The differences are also noteworthy. Ellisor and Tanner was a breach of contract lawsuit by the owner/client for economic loss, but Black + Vernooy was a negligence lawsuit by a third party for personal injury. Big difference!

The relationship of the parties and the type of damages sought usually establish the type of claim allowed against the A/E. Texas law draws a line between claims for economic loss damages and claims for personal injury damages. The former generally sets up a breach of contract claim, which can only be brought by a party to or beneficiary of the design contract. The latter generally sets up a claim for negligence, which can be brought by anyone claiming the A/E’s negligence caused personal injury. In Black + Vernooy the architect was held liable for negligently failing to guard the owner against the contractor’s “open and obvious” defects that caused personal injuries. Design professionals have, of course, always been subject to liability for allegedly negligent designs that cause harm to the public. Is treating CA services the same paranormal or logic defying? One court of appeals answered no. Time will tell whether others disagree.

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The C-Note is a practical guide to and commentary on topical legal issues affecting design professionals.  It is written by John Hawkins, AIA, who is a 20-year lawyer in the Litigation Practice Group of Houston-based Porter Hedges LLP.

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