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Beacon Residential etc. Assn. v. Skidmore, Owings & Merrill

The California Supreme Court recently issued an opinion in Beacon Residential etc. Assn. v. Skidmore, Owings & Merrill, (July 3, 2014, S208173) 59 Cal. 4th 68 (2014), analyzing an issue that had not previously been decided by the California Supreme Court — whether an architect who provides services to a residential developer may be liable to the eventual purchasers of the residences for negligence in the rendition of those services in the absence of privity. (Slip op., p. 5.) The court held that "an architect owes a duty of care to future homeowners in the design of a residential building where, as here, the architect is a principal architect on the project — that is, the architect, in providing professional design services, is not subordinate to other design professionals. The duty of care extends to such architects even when they do not actually build the project or exercise ultimate control over construction.” (Id. at p. 2.)

The case arose out of a lawsuit filed by a homeowners association on behalf of its members against a condominium developer, two architectural firms and various other parties over construction design defects that allegedly made the homes unsafe and uninhabitable for significant portions of the year. (Slip op., p. 1.) Plaintiff alleged that negligent architectural design work performed by defendants resulted in several defects, including “solar heat gain,” which made the condominium units uninhabitable and unsafe during certain periods due to high temperatures. (Id. at p. 3.) The trial court sustained the defendants’ demurrer, finding that an architect who makes recommendations, but not final decisions on construction owes no duty of care to future homeowners with whom it has no contractual relationship. The Court of Appeal reversed, concluding that an architect owes a duty of care to homeowners in these circumstances, both under the common law and under the Right to Repair Act (Civ. Code, § 895 et seq.). (Id. at pp. 1-2.) The California Supreme Court granted review.

The Supreme Court affirmed, holding that “an architect owes a duty of care to future homeowners where the architect is a principal architect on the project — that is, the architect, in providing professional design services, is not subordinate to any other design professional — even if the architect does not actually build the project or exercise ultimate control over construction decisions.” (Slip op., p. 16.) The Court analyzed the factors set forth in Biakanja v. Irving (1958) 49 Cal.2d 647, 650, and Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, which examined whether a duty of care exists between a plaintiff and defendant in the absence of privity. (Slip op., pp. 12-22.) The Court summarized its conclusion in terms of the Biakanja factors: “(1) Defendants’ work was intended to benefit the homeowners living in the residential units that defendants designed and helped to construct. (2) It was foreseeable that these homeowners would be among the limited class of persons harmed by the negligently designed units. (3) Plaintiff’s members have suffered injury; the design defects have made their homes unsafe and uninhabitable during certain periods. (4) In light of the nature and extent of defendants’ role as the sole architects on the Project, there is a close connection between defendants’ conduct and the injury suffered. (5) Because of defendants’ unique and well-compensated role in the Project as well as their awareness that future homeowners would rely on their specialized expertise in designing safe and habitable homes, significant moral blame attaches to defendants’ conduct. (6) The policy of preventing future harm to homeowners reliant on architects’ specialized skills supports recognition of a duty of care.” (Id. at pp. 22-23.) Thus, the Court held that the trial court had erred in sustaining defendants’ demurrer on the ground that they did not owe a duty of care to the Association’s members. (Id. at pp. 25-26.)

Related Practices

• Professional Liability