Court confirms designers may be liable To HOAs For Defects Under Tort Law And SB 800

Court confirms designers may be liable to HOAs for defects under tort law and SB 800

By William C. Last, Jr. and Jonathan M. Bowne

A new California appellate court opinion (Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP et al), issued December 13, 2012, confirms that construction design professionals may be held liable to third parties, including homeowners associations, for defects resulting from design decisions. The court held that both common law negligence and California’s construction defect statute SB 800 could support a claim.

Beacon concerned a new construction residential condominium project in San Francisco. The development’s homeowners association ("HOA") filed suit against, inter alia, the project architects, alleging that certain defects resulted from the choice to include cheaper windows and a design lacking adequate ventilation. The HOA included the architect in both common law causes of action alleging negligence and a claim pursuant to SB 800. The architect demurred the complaint, citing existing law limiting a designer’s liability for defects to instances where the claimant can prove the designer had “control” over the construction process, assuming a role beyond that of providing design recommendations to the owner. The trial court granted the demurer and the HOA appealed.

The appeals court reversed the trial court ruling, and held that the architect could be liable under both common law tort theories and an SB 800 claim.

Relative to the negligence theory, the appeals court examined existing law relative to designer liability and performed an analysis relative to the policy of imposing such liability. The court found that the architect’s work was intended to affect the HOA, that the harm caused was foreseeable, that it was possible for the HOA to prove damages with certainty, that a close connection between the architect’s conduct and the injury existed, that moral blame attached to the architect’s conduct, and the presence of a policy motive to protect purchasers from future harm.

Relative to the SB 800 theory, the appeals court examined the wording of the statute and noted the inclusion references to design professionals throughout the bill. Accordingly, the court held, that the plain language of the statute provides that design professions could be held liable under its terms. The court also reviewed the legislative history of the bill and found that it confirmed the legislature’s intent to include designers.

The Beacon case confirms that designers can be held liable for defects regardless of their level of “control” over the construction process, and that they also may be held liable pursuant to an SB 800 claim.

This article, ©2013, was written by William C. Last, Jr. and Jonathan M. Bowne. Mr. Last is an attorney who has been specializing in Construction Law for over 32 years. In addition to belonging to a number of construction trade associations, Mr. Last holds a California "A" and "B" license. He can be contacted at 415-764-1990 or 650-696-8350. A number of his past articles can be found on his website (lhfconstructlaw.com). This bulletin is published periodically to provide general information about current legal issues. The articles are not intended to be a substitute for the advice of an attorney as to a specific problem. If you have a specific legal question or need legal advice, you should contact an attorney.