CM Report on Construction (2011)
2011 Spring
A summary of significant recent developments in the law focusing on substantive issues of litigation and featuring analysis and commentary on special points of interest.
Download this publication as a PDF
Articles in this report
*Special Alert: Important New Decision From The Illinois Supreme Court For Design Professionals
On January 21, 2011, the Illinois Supreme Court issued a significant ruling in favor of design professionals limiting their tort liability. In Thompson v. Gordon, et al., 2011 Ill. LEXIS 10 (January 21, 2011), the Court analyzed whether the standard of care provision of a contract relates only to the express engineering services to be provided. In a unanimous decision, the Court held that a design professional's duty is limited to the terms of its contract.
*The USGBC And The LEED Rating System: Are They Leading Or Misleading The Way To Energy Efficiency?
In October 2010, a group of design professionals led by Henry Gifford (“Gifford”) took aim at the United States Green Building Council (“USGBC”) and its founders in a class action lawsuit filed in federal court. Gifford attacked the USGBC’s Leadership in Energy and Environmental Design (“LEED”) rating system, which certifies buildings as being designed and constructed in an environmentally friendly manner.
Arizona Adopts Economic Loss Doctrine To Bar Tort Actions In Construction Defect Cases But Only When Contractual Remedy Is Available
In Flagstaff Affordable Housing L.P. v. Design Alliance, Inc., 223 Ariz. 320, 223 P.3d 664 (Ariz. 2010), the Arizona Supreme Court considered the question of whether Arizona law recognized the economic loss doctrine as a bar to an owner's tort action when an architect's negligent design caused economic damages but no physical injury to persons or other property.
Illinois Appellate Court Finds No Duty Owed By Concrete Testing Company To Subcontractor Responsible For Pouring Concrete
The Illinois Appellate Court found that a concrete testing company hired directly by the project owner did not owe a duty to a concrete subcontractor hired through one of the owner’s contractors. The court examined the possibility of a contractual duty, a duty based upon the parties’ relationship, or a duty under the voluntary undertaking doctrine.
Illinois Appellate Court Upholds Contract Limitations On Recovery Against Home Inspector
The Appellate Court of Illinois for the Fifth District considered a case where homeowners brought a lawsuit against the company they hired to perform a home inspection. In the contract between the home inspector and the homeowners, the contract limited the inspector's liability to its fee, which was $175, and required that the homeowners bring any claims within 2 years of the date of the inspection.
New York Court Applies Economic Loss Doctrine In Dismissing Surety's Lawsuit Against Architect
The United States District Court for the Southern District of New York was faced with a dispute over the construction of a fourteen story vertical campus for Baruch College in New York City. The owner of the project entered into a contract with an architectural firm to provide all of the designs for the project, including contract drawings, specifications and bid documents, and to approve all shop drawings, samples and substitutions proposed by the contractor.
Subcontractor Bound By Scope Of Prime Contract When Bid Proposal Is Not Attached To Subcontract
In a case that underlines the importance of making sure a contract spells out exactly the scope of a party’s duties, a subcontractor was found to owe over $200,000 to a general contractor for failing to install a product it never intended to provide.
Washington Supreme Court Rejects "Bright-Line" Application Of The Economic Loss Doctrine
The Supreme Court of Washington refused to apply the economic loss doctrine as a “bright-line rule of general application” precluding recovery in tort any time there is an economic loss. Instead, the court found that an engineering firm could assume tort law duties beyond its contractual obligations and subject itself to negligence causes of action for economic damages brought by parties with whom it did not contract.
