In Beacon Residential Community Assn v. Skidmore, Owings & Merrill LLP (2014) 59 Cal.4th 568, the California Supreme Court issued a broad ruling creating potentially extensive liability for architects who are the principal designers of residential projects. The Court held that such design professionals owe a duty of care to purchasers and can be liable for negligence even when they do not build the project and do not exercise control over construction decisions.

Beacon Residential Community Homeowners Association sued two architectural firms, Skidmore, Owings & Merrill LLP and HKS, Inc., over alleged construction design defects. The Homeowners Association claimed that the architects violated building codes by approving substandard windows and a building design that lacked proper ventilation, subjecting the units to periods of unsafe temperatures. While acknowledging that the developer made the final decisions on the architects’ recommendations and that contractors had control over the construction process, the Court concluded that design professionals could be directly liable to future homebuyers, because it was foreseeable that purchasers would suffer injury as a result of an architect’s negligent design. The Court noted that the developer relied upon the architects’ specialized training and professional judgment and that the architects applied their expertise throughout the construction of the project, conducting inspections, monitoring contractors' compliance with plans, and altering design requirements as issues arose.

In so holding, the Supreme Court narrowed and limited the Court of Appeal decision in Weseloh Family Ltd. Partnership v. K.L. Wessel Construction Co., Inc., (2004) 125 Cal.App.4th 152, a case regularly relied upon by design professionals in support of their argument that they do not owe a duty of care to homeowners because they lack contractual privity with plaintiffs. The Court distinguished Weseloh on the grounds that the defendant design professional's limited role in that case was so minor and subordinate to another professional in the same discipline as to foreclose liability to third parties.

Following Beacon Residential, it is important to distinguish between principal and subordinate design professionals in assessing potential liability. A design professional owes a duty of care to homeowners when he or she is the principal design professional on the project. On the other hand, subordinate design professionals such as, for example, consulting engineers, do not owe a similar duty of care to third parties.

Under the Court’s analysis in Beacon Residential, design professionals, like subcontractors, are on the hook for construction defect claims, and it will be more difficult for principal design professionals to extricate themselves from lawsuits at the demurrer/pleading stage or via summary judgment motions. Beacon Residential solidifies the rights of property owners to bring claims directly against design professionals for construction deficiencies. Additionally, in those circumstances where the design professional's indemnity obligations are not controlled by contract, the decision supports the right of builders and developers to bring claims for equitable indemnity against design professionals.