How Does California Supreme Court Beacon Ruling Affect Architects?

July 14, 2014

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The following is an excerpt from a recent Gordon & Rees LLP article entitled California Supreme Court Holds Principal Architects Owe Duty of Care to Future Homeowners:

On July 3, the Supreme Court of California published its decision in Beacon Residential Community Assn. v. Skidmore, Owings & Merrill. In short, the court concluded that prime architects designing residential buildings owe a duty of care to future homeowners even though they do not actually build the projects themselves or exercise ultimate control over their construction.

Of importance, Beacon involved a demurrer at the trial court level meaning that, on appeal, the Supreme Court was required to accept the facts pled in the plaintiff’s amended complaint as true. This included the allegation that the Beacon project’s designers provided their services “knowing that the finished construction would be sold as condominiums.” It also was claimed that the defendants played an active role throughout the construction process, including coordinating efforts of the design and construction teams, conducting weekly site visits and inspections, recommending design revisions as needed, and monitoring compliance with design plans. For their various services, the designers were reportedly paid $5 million. The plaintiff alleged that negligent design work resulted in several defects, including extensive water infiltration, inadequate fire separations, excessive solar heat gain, structural cracks, and other safety hazards…

Although not a total loss for the design community, Beacon will have the effect of expanding architects and engineers (A&E) liability to a broader spectrum of claimants and generally keep A&E defendants in lawsuits for longer periods of time.

For an explanation of the court’s decision, including a concise summary of the affects of the ruling on Architects and Engineers, visit the original Gordon & Rees post by attorney Dion N. Cominos.

Complex precedents like this are just one of the reasons why A&Es are best served by consulting specialist brokers about their Professional Liability insurance needs. Does your current professional liability insurance policy include pre-claims assistance? How about the latitude to choose your own council in the event of of a claim? Call your local a/e ProNet Broker and get answers to these questions today.

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