In a widely reported case in Massachusetts, Coghlin Electrcial v. Gilbane Building Company, the Massachusetts Supreme Judicial Court upheld the implied warranty for the accuracy of plans and specifications from an owner in a context of a construction manager at risk project. In an updated twist on the Spearin Doctrine, Massachusetts has reaffirmed the doctrine and updated it for the construction manager context.
In Coghlin, there were design issues presented regarding spacing between the ceilings and the bottom of the structural steel in the construction of a psychiatric facility at the site of the Worcester State Hospital. Coghlin Electrical submitted a request for an equitable adjustment related to placement of the electrical work in the area between the steel and the ceilings, and sued the construction manager Gilbane thereafter. Gilbane sued the project owner because it relied upon the accuracy of plans submitted by the owner to Gilbane, acting as the construction manager at risk.
The court held that the construction manager can apply the implied warranty for the accuracy of plans and specifications when it has relied on the plans in good faith and acted reasonably to comply with its own design obligations. The Court distinguished the construction manager at risk delivery model from the traditional design bid build delivery mechanism, noting that a construction manager at risk “may provide consultation regarding the design of the project and therefore may influence the project’s final plans and specifications.” In determining whether a construction manager acted “reasonably,” the Court concluded that a factfinder may analyze the construction manager’s level of participation in the design phase and the extent to which the construction manager has been delegated the design responsibility. The more involved the construction manager is in the design, the “greater the burden will be to show” that its reliance on the defective design was reasonable and in good faith. This decision does not completely relieve the construction manager at risk from responsibility, but it does reaffirm the Spearin Doctrine in the construction manager setting.