There is before the California Supreme Court an issue of great – if not grave – importance for design professionals. And depending on how the court rules, its decision could reverse many protections architects have come to enjoy, such as privity of contract, and not owing a duty to anyone other than their client.
Beacon v. SOM is not so much about what SOM did or did not do, but rather that of resolving a policy matter between two lower courts. Here the California Supreme Court must determine if the appellate court erroneously ruled when it reversed the trial court decision to uphold that SOM owed no duty to Beacon. The appellate court, relying on the Right to Repair Act of SB 800, expanded the interpretation of the Repair Act to conclude it imposed a duty of care on design professionals in every such case. SB 800 established construction standards for residential housing.
The case: SOM designed a condominium project for a developer client in San Francisco, California. Due to the mild Bay Area climate, the project did not include providing an air conditioning system for the individual condominium units in the design. The allegation: glazing specified by the architect resulted in an extremely high solar heat gain, rendering some of the condominium units uninhabitable during days of higher than normal temperatures. It is SOM’s claim that the installed glazing was the result of a developer-led value engineering decision which led to the installation of improper glazing.
However, glazing is not the issue. As a result of the original lawsuit in which Beacon sued SOM in the lower court, (even though SOM had no contract with Beacon, and SOM prevailed at trial, but then lost on appeal in the appellate court), the matter is now before the California State Supreme Court for determination as to whether an architect can be liable for claims from a third party with whom they did not have a contract. Simply stated, this case will determine: are architects accountable to third party purchasers of property for negligent design?
From a legal perspective, the issues trace to a line of cases which states professionals do not owe a duty to those with whom they are not in contract, starting with Bily v. Arthur Young & Co., a 1992 decision by the California Supreme Court that held that professionals (in that case, an accountant) do not owe a duty to anyone other than their client. This was then developed further in the 2001 decision of Ratcliff v. Vanir. Finally, in 2004 there was the case of Weseloh Family Limited Partnership v. K.L. Wessel Construction Co. Each of these decisions has progressively improved the position of design professionals relative to the duties they owe to their clients or others.
This issue is important because if third parties who are not in privity of contract with the design professional are allowed to file suit, the door opens for contractors, construction managers, subsequent owners, and others to sue the design professional. Having this type of exposure to liability would not only increase liability to the design professional, but create a scenario of torn loyalties, making it difficult for the architect to properly serve their client, the owner, if doing so may subject the architect to liability claims by the contractor. The recent case involving SOM reverses the recent history of cases by holding that, in fact, architects may have a duty to those with whom they are not in contract.
This has a national effect, not only on those firms which practice in California and in other states, but if California adopts a rule that architects owe duties to those with whom they are not in contract, such a case would be instructive to other jurisdictions. The rationale used by the California Court in crafting such a rule would provide a template to courts and litigants in other states of how to hold architects liable for duties that they never before had.
Clearly, the consequences for the profession are grave should the California Supreme Court rule in favor of Beacon. And because of the seriousness of this matter, the AIACC has engaged the legal assistance from one of its allied partners—the law firm of Collins, Collins, Muir + Stewart (CCM+S).
CCM+S has agreed to assist the AIACC with the preparation of an amicus curiae (friend of the court) brief to the California Supreme Court. CCM+S has agreed to file a request with the Supreme Court that they be permitted to present an amicus curiae brief on behalf of the AIACC. Concurrent with the filing of that request, the court rules require CCM+S also file the amicus brief. This process will be assisted by CCM+S’ appellate department, as well as attorneys that are intimately involved in the representation of architects. At this time the AIACC’s amicus is scheduled to be filed on or around September 17, 2013.
CCM+S has generously reduced their rates and fees to assist AIACC with this process. As you can see and appreciate, CCM+S’s existing relationship with the AIACC, and their knowledge with the previous and relevant court cases cited, has reduced the amount of legal research needed to write the amicus brief, and thus significantly reduced the cost to provide these services.
Since this is clearly not just a California issue, and because this matter is significant on both a national and state level, the AIACC requested the support and assistance of the AIA in the funding of the amicus. Seeing the importance of this issue the AIA has agreed to support the amicus, including financial support in the amount of $2,500 to help defray the cost of the amicus and has also offered to add their name to the brief, subject to their review and approval of the brief.
Additionally, the American Council of Engineering Companies (ACEC) will file its own amicus brief with the California Supreme Court.
The AIACC will continue to provide updates on the case as it progresses.