In a recent trial court decision (Flaherty v Dolan, Case No. CGC-12-522648), a San Francisco judge found as a matter of law that a geotechnical engineer responsible for providing geotechnical services, including ongoing services during construction, owed a duty to future purchasers of lots in a residential subdivision.
The court found the engineer, who was under direct contract with the developer, “had a key role in the development of the project.” In support of this conclusion, the court found significant fairly standard scoping language for geotechnical engineers and many design professionals. “The purpose of our services is to (1) work with the design team and contractor and (2) observe the construction/installation of the geotechnical related elements of the project to check they are constructed in accordance with the intent of our recommendation.”
The geotechnical engineer also had written to the developer outlining the risk of potential landslides that should be disclosed to future homeowners, which the court found implicated the engineer in the disclosure process. Finally, the court pointed out that the geotechnical engineer had been paid several hundred thousand dollars in fees.
From this court’s interpretation of Beacon Res. Comm. Ass’n v Skidmore, Owings & Merrill LLP, (2014) S208173 it seems that where the design professional has a meaningful role during construction and is paid for the project what the court views as a sizeable fee, there is a significant risk of owing a direct duty to future residential purchasers.