In an opinion filed July 3, 2014, the California Supreme Court provided some clarification to California law concerning an architect's liability to foreseeable third-party purchasers of residential units for design errors and omissions. In Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP (July 3, 2014) ____Cal.4th ____; 2014 WL 2988058, Cal. July 03, 204 (NO. S208173), the Court held that a principal architect (defined by the Court as an architect who in providing professional design services is not subordinate to other design professionals) of a residential project owes a duty of care to future homeowners.
Beacon concerned a dispute over a residential condominium project in San Francisco. The original developers of the project engaged two architects to provide architectural and engineering services. Although the finished units were rented out for two years after construction, a condominium association had been created prior to construction, and eventually the finished units were sold as condominiums.
The condominium association sued the original developers of the condominiums, along with the architects, alleging numerous design defects. As against the architects, the association asserted causes of action in negligence and violations of California's Right to Repair Act (Cal. Civil Code sections 895 et seq.). The architects, who had allegedly been paid more than $5 million for their work, demurred on the basis that they owed no duty of care to the association or its individual members. The trial court agreed with the architects that they owed no duty of care, as final design decision authority rested in the developers.
The appellate court reversed the trial court, applying the multi-factor test set out in California's principal duty of care case, Biakanja v. Irving (1958) 49 Cal.2d 647, to determine that the architects owed the association a duty of care.
On review, the California Supreme Court affirmed the appellate decision. In California, the existence or absence of a duty of care in negligence in the absence of privity is governed primarily by a multi-factor test set out in Biakanja. The Beacon court found that the Biakanja factors demonstrated a duty of care if the facts as alleged in the condominium association's complaint were proven:
- [The architects'] work was intended to benefit the homeowners living in the residential units that [the architects] designed and helped to construct.
- It was foreseeable that these homeowners would be among the limited class of persons harmed by the negligently designed units.
- [The association's] members have suffered injury; the design defects have made their homes unsafe and uninhabitable during certain periods.
- In light of the nature and extent of [the architects'] role as the sole architects on the Project, there is a close connection between [the architects'] conduct and the injury suffered.
- Because of [the architects'] 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 [architects'] conduct.
- The policy of preventing future harm to homeowners reliant on architects' specialized skills supports recognition of a duty of care. Options for private ordering are often unrealistic for typical homeowners, and no reason appears to favor homeowners as opposed to architects as efficient distributors of loss resulting from negligent design.
The Beacon court further found that a negligence action against the principal architects was permitted by the Right to Repair Act. The architects had argued, in the face of language in the Act addressing "design professionals," that nevertheless the Right to Repair Act was not intended to impose a duty greater than that imposed under common law. The Beacon court noted that even if the architects were correct regarding the intent of the Act, a duty of care existed at common law.
Beacon is a win for condominium associations and individual homeowners in these circumstances, in that it allows them potential recourse for design defects against the principal design professionals engaged by the developers.