Summary: Broward County, Florida, entered into a contract with an architectural firm for construction phase services on a project at the Fort Lauderdale Airport. The County also entered into a contract with a construction contractor. Both contracts contained routine provisions that are found in industry-standard contracts, such as those published by EJCDC, concerning the role and duties of the architect/engineer (A/E).
As the project neared completion, the County terminated the construction contract, for reasons that are not explained in the appellate decision. The contractor filed lawsuits against the County (breach of contract) and against the architect (professional negligence); the two suits were consolidated by the court. The architect moved for summary judgment, contending that it did not owe the contractor a duty of care, and thus there could be no negligence claim. The trial court agreed, and the contractor appealed the summary judgment.
Decision: The appellate court reversed the trial court’s summary judgment favoring the architect. The appellate court relied on Moyer v. Graham (Florida 1973) and decisions following Moyer. These decisions hold that a contractor may maintain a negligence action against an A/E if the A/E had “supervisory” duties with respect to the contractor, and if there was a “close nexus” between A/E and contractor. According to the Florida courts the nexus is clearly close enough if the A/E has ultimate decision-making power, but may be sufficiently close even if the A/E’s role falls short of complete control.
On the Fort Lauderdale airport project, the appellate court concluded that “the architect effectively controlled the project and the contractor’s fate.” The court conceded that the architect did not have the authority to stop work, but noted that it did have the right to recommend work stoppage. The court put substantial stock in the architect’s role in reviewing payment applications and recommending payment, holding that the “architect was given near absolute authority regarding payments to the contractor, demonstrating the architect’s influence over the contractor’s economic vitality.”
Also deemed significant by the appellate court was a statement by one of the architects in a deposition that the firm’s role was to be the County’s “eyes and ears” on the project. From this and other strands of evidence the court concluded that the architect had “supervisory control, both de facto and de jure [both factually and legally],” and allowed the contractor to continue the claim against the architect.
Comment: The exposure of A/Es to direct claims by construction contractors, either based on the consequences of design errors or with respect to the A/E’s administration of the construction contract, varies from state to state. In many jurisdictions claims must follow the lines of contractual privity: the contractor may bring a claim against the owner, and if warranted the owner may then pursue the A/E. In other states, such as Florida, contractors are sometimes able to bring claims directly against the A/E. EJCDC supports privity-based procedures, which emphasize the carefully-crafted terms and conditions of the governing contracts.
In the Uddin case, the architect raised the defense that its contract contained a clause stating that it had no duty to third parties, thus eliminating any duty of care between architect and contractor. The appellate court held this clause to be “inconsequential,” essentially concluding that the negligence/tort rule of the Moyer line of cases, concerning supervisory control, nexus, and foreseeability of harm to the contractor, prevailed over the no-third-party-beneficiary contract terms.
In the EJCDC contracts, the Engineer has an important construction phase role—but one that has definite limitations. The Engineer does not “supervise” the construction or the project. The Engineer is contractually shielded from liability for decisions on matters such as the quality of the work and the extent of completion as long as the decisions are rendered in good faith—and in nearly all cases the contractor is able to contest adverse decisions or pursue remedies from the Owner, thus undercutting the notion that the Engineer controls the Contractor’s fate. The Engineer does not have any direct role in terminations, and merely makes recommendations regarding Contractor’s applications for payment.
Various commentators in Florida have expressed concern over the Uddin decision, and have stated the need for a definitive Florida Supreme Court decision that would allow A/Es to provide routine administrative services to their clients without undue exposure to contractor claims.