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Declaration of Default Not Required to Trigger Surety’s Liability on Performance Bond, Court Holds

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Unless Collusion
Insurer Bound by Results of Insured’s Trial or Finding that Settlement Was Reasonable, Washington Supreme Court Holds

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Courts Intervene
Arbitration Decisions: Finality May Not Always Be Best

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'Deplorable' and 'Irrational'
Government Acted in Bad Faith in Default Termination; Court Awards $17 Million in Damages to Contractor

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Construction Industry News

Florida Contractor Allowed to Sue Architect for Defective Design


September 17, 2001


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Howrey LLP

Plaintiff Hewett-Kier Construction, Inc., a general contractor, entered into a contract with the Palm Beach County School District to build a project according to the plans and specifications supplied by two Defendants, Lemuel Ramos and Associates, Inc., an architectural firm, and one of its employees. Plaintiff sued Defendants for malpractice, alleging that Defendants violated the duty of care owed by professional architects in the preparation of the design documents and that Defendants knew their client would supply the design documents to the general contractor, who would be injured if the plans were inadequate. Plaintiff alleged that it suffered economic losses as a result of the defective design documents. There was no contract between Plaintiff and Defendants.

Defendants moved to dismiss on the basis of the economic loss rule, and the trial court granted the motion with prejudice on the basis that there was no contract or special relationship between Plaintiff and Defendants. The trial court also found that, based on the design contract, Defendants were not a supervisory architect and, as such, could not be liable for purely economic injuries.

The Court of Appeal reversed, holding that Florida recognizes a common law cause of action against professionals based on their acts of negligence even in the absence of a direct contract between the professional and the aggrieved party. Hewett-Kier Construction, Inc. v. Lemuel Ramos & Associates, 775 So. 2d 373 (Fla. 4th DCA 2000). Further, the economic loss rule does not bar an action for purely economic losses when a special relationship under Restatement (Second) of Torts §552 exists between the professional and a third party who is affected by the professional's negligent acts. The Court of Appeal held the contractor's allegations that the architect prepared erroneous design documents with the knowledge that the school board would supply them to the successful bidder and that the successful bidder would be injured if they were inadequate were sufficient to establish a special relationship.

The Court of Appeal also found that the trial court's reliance on the design contract in ruling on the motion to dismiss violated the rule that a court may not go beyond the four corners of the complaint when evaluating the legal sufficiency of the allegations in the complaint. The Court of Appeal, however, did advise Defendants that if they believed the design contract proved no special relationship existed between Plaintiff and Defendants, Defendants could plead it as an affirmative defense.


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For more information about the issues covered in this report, please contact Paul Berning in our San Francisco office at 415-848-4996 or at paulberning@howrey.com or contact your Howrey attorney. For more information about Howrey's Construction Practice Group, click here.


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