Engineers Can Inadvertently Extend Their Liability to Those Outside of Their Contractual Relationships through the Engineer’s Contractual Duties and Actions

Sarah Johnson, Esq.

Most engineers understand that if they commit errors or omissions that result in damages, they may face claims from their clients. However, engineers are often surprised to find they may have duties to and be held liable to other parties besides their clients.

Some jurisdictions hold that engineers owe a duty of care to anyone who reasonably relies on their work, including contractors.¹ However, many jurisdictions hold that economic losses may not be recovered in tort (i.e. via a negligence count) against an engineer who prepares plans and specifications for a construction project—at least absent some sort of special circumstances.² These jurisdictions basically hold that the engineer’s duty arises only in the engineer’s contract and that the engineer does not owe any duty to those outside of the contractual relationship.³

However, even in jurisdictions that find an engineer’s duties to be limited, there are often circumstances where the engineer can inadvertently or unknowingly extend their legal duties to parties outside of the contractual relationship with their client. One such example can be found in Grace & Naeem Uddin, Inc. v. Singer Architects, Inc. In Grace & Naeem Uddin, the Court of Appeal of Florida reiterated the holding in Moyer that a contractor may recover economic losses via a professional negligence claim against a design professional who supervises the subject project.⁴ The case involved a professional negligence claim by the plaintiff contractor against the defendant architect.⁵

The county entered into separate contracts with the architect and the contractor for a development and improvement project at the airport.⁶ As the project neared completion, the county terminated the contractor.⁷ The architect’s contract with the county made the architect responsible for various construction administration services, such as visiting the site and attending construction events and meetings, conducting observations, informing the county of the progress and quality of the work, and evaluating and certifying the contractor’s applications for payment, among others.⁸ The architect was also contractually obligated to give recommendations on disputes between the county and the contractor, recommend rejection of nonconforming work, review shop drawings, assist the county in determining project completion, etc.⁹ The architect testified that he acted as the county’s “eyes and ears” for the project and that he recommended the contractor’s termination with reasonable certainty that the contractor would then be terminated.¹⁰

The trial court granted the architect’s motion for summary judgment, finding that the architect did not owe the contractor any duty of care.¹¹ However, the appellate court reversed, finding that there was an issue of fact as to whether the architect owed the contractor a duty of care based on its supervisory role on the project and the resulting close nexus between the architect and the contractor.¹² The court found that when the architect’s contract does not require the architect to perform supervisory duties and the architect does not in fact perform those duties, no such duty will be imposed.¹³ The appellate court found that the architect could be found to have had supervisory control over the project based on the aforementioned contractual obligations and testimony despite not having final-decision making authority and despite language in the architect’s contract stating that there were no intended third-party beneficiaries.¹⁴ Thus, if an engineer wishes to avoid liability to others outside of the contractual relationship, they should avoid taking on a supervisory role on projects.

Although cases involving personal or bodily injury do not involve economic losses and thus are typically not subject to the same limitations regarding privity, design professionals do not owe duties to construction workers in most circumstances because they are not in control of the construction site or the means and methods of construction as made clear in their contracts.¹⁵ However, a design professional can inadvertently or unknowingly extend their legal duties to workers on a construction site. Bonilla v. Verges Rome Architects offers an example. In Bonilla v. Verges Rome Architects, the Court of Appeal of Louisiana found an issue of fact as to whether the defendant architect owed the plaintiff injured construction worker a duty of care where the architect agreed to observe the work and inform the owner of deviations from the contract documents. The architect was present on site on the date of the accident and took photographs, which showed that the architect could have been aware that the project manual was not being followed.¹⁶ The case involved a claim for negligence by the plaintiff injured worker against the defendant architect in relation to injures the worker sustained when the ceiling of the vault he was jackhammering collapsed.¹⁷

The court found an issue of fact as to whether the architect was aware of the contractor’s deviations from the contract requirements involving demolition and whether the architect failed to identify an unsafe condition based largely on photographs taken by the architect right before the worker began demolishing the ceiling, which suggested that the architect might have been aware that the partially demolished walls were not supported or braced and the demolition was being accomplished via jackhammering both in contravention of the project manual.¹⁸ Moreover, the court found an issue of fact even though the architect did not have any control over or responsibility for construction means and methods and the contractor was responsible for the safety precautions and programs and for all temporary shoring and bracing per the applicable contracts.¹⁹

When conducting construction observation services, an engineer should clearly identify what they are documenting and why in taking photographs. If the photographs are not related to the engineer’s scope of work, then the engineer should consider whether to even take said photographs. Further, should the engineer notice any unsafe conditions or deviations from the contract documents, they should report these conditions pursuant to the terms of their contract immediately.

Claims Retrospective: Design-Build Projects Can Present Unique Challenges for Design Professionals.

In a typical construction project, the owner contracts with a design professional (typically an architect or engineer) to design the building, structure, infrastructure, etc., and the owner then contracts with a general contractor to have those items built. Accordingly, there are two separate branches of contracts: one covering the design from the owner to the design professional to subconsultants and one covering the construction from the owner to the general contractor to the subcontractors.

In a design-build project, the owner contracts with one company to complete both the design and construction. While design-build projects certainly have some advantages in certain circumstances, they can also present some unique challenges for design professionals. Many of the challenges presented in the design-build context arise from the fact there is another entity or company between the design professional and the owner, which can lead to less control over the design than the professional may be used to. Moreover, the design-build company, which has ultimate control over the design, may not have as much experience in design work because it is often more of a construction-oriented firm.

Design professionals typically become involved with a design-build project when the design-build company subcontracts the design, or some portion thereof, to the design professional. Design professionals should approach such subcontracts with great attention to detail, especially in the situations where the design-build company is subcontracting only a portion, but not all of the necessary design work to the design professional.

Although it is generally beneficial to have a written contract on all projects, a written contract that establishes the design professional’s scope of work is very important in the context of a design-build project. The written contract between the design-build company and the design professional should not only help the parties involved make certain that all aspects of the design are being addressed appropriately, but also assist the design professional in defending themself from claims in the event that a design issue beyond their scope of work is overlooked or done improperly.

In that regard, claims often arise where some part of the design gets overlooked or is not addressed by the appropriate professional. Claims may also arise where the design-build company bases its bid/proposal on preliminary design work and then sues the design professional for its cost overruns, claiming the design professional’s preliminary design was incomplete or subject to creep scope. Without a clear written contract, the design-build company almost always alleges that any error or change in the scope in any portion of the design is the design professional’s fault given that it is responsible for the “design” portion of the design-build project.

For example, a design-build company hired a structural engineer to provide certain structural drawings, but excluded certain details thereon, which were intended to be provided by engineers hired by the various subcontractors or other engineers hired by the design-build company. When errors surfaced in the subject details, the design-build company blamed the structural engineer, claiming they were responsible for the details. The fact that there was no written contract excluding the details from the structural engineer’s scope of work allowed the design-build company to create an issue of fact regarding the structural engineer’s scope of work despite the fact that the structural engineer specifically identified they were not responsible for the applicable details on its drawings.

Another issue that should be addressed in a design professional’s contract with a design-build company is the “chain of command,” or to whom the design professional is supposed to communicate and how during the duration of the project. In many cases, the design professional will be prohibited from communicating directly with the owner, at least without also communicating with the design-build company. If the design professional believes that such a limitation will be unworkable or prove problematic, they should address the issue at the contracting stage as, once in place, failure to follow the assumed chain of command can lead to claims.

For example, an engineer was required to send all communications to the owner through the design-build company unless instructed otherwise in writing. During the project, the engineer discovered that the design-build company made many mistakes in the construction of the project. At some point, the engineer began communicating directly with the owner, who eventually terminated the design-build company based—at least in part—on the reports of the engineer and thereafter contracted directly with the engineer to complete the project with the use of a different contractor. In the ensuing claim, the trier of fact found that the engineer not only breached their contract with the design-build company, but also negligently interfered with the design-build company’s contract with the owner.

As the two examples above illustrate, design professionals should approach design-build projects with careful consideration. Particular attention should be paid to the design professional’s contract as the scope of work, expectations, and lines of communication should be addressed from the beginning and carefully documented. Thereafter, design professionals should take care to follow their contract and document any issues or deficiencies and report them to the correct party(ies).

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¹Wright Constr. Servs , Inc. v. Hard Art Studio, PLLC, 853 S.E.2d 500, 501 (N.C. Ct. App. 2020) (holding “architects and engineers performing work on a construction project owe a duty of care to those who reasonably rely on their work, including the builder on the project” and that the “duty applies to an architect [or engineer] hired by the property owner” even if the architect or engineer “has no other business relationship with the builder.”).
²Fireman’s Fund Ins. Co. v. SEC Donahue, Inc., 679 N.E.2d 1197, 1200-02 (Ill. 1997) (holding that economic losses may not be recovered in tort against an engineer who prepares plans and specifications for a construction project); see also, Balfour Beatty Infrastructure, Inc. v. Rummel Klepper & Kahl, LLP 130 A.3d 1024, 1036-38 (Md. Ct. Spec. App. 2016) (finding that a construction contractor’s ability to recover economic losses against a design professional where there is no contractual privity is limited to situations involving death personal injury, property damage, or risk of death or serious personal injury).
³Fireman’s Fund, 679 N.E.2d at 1200-01; Balfour Beatty Infrastructure, 130 A.3d at 1035-36.
⁴Grace & Naeem Uddin, Inc. v. Singer Architects, Inc., 278 So.3d 89, 92 (Fla. Dist. Ct. App. 2019) (citing A.R. Moyer, Inc. v. Graham, 285 So.2d. 397, 402 (Fla 1973)).
⁵Id. at 91.
⁶Id. at 90-91
⁷Id. at 91.
⁸Id.
⁹Id.
¹⁰Id.
¹¹Id.
¹²Id. at 92-93, 94.
¹³Id. at 92.
¹⁴Id. at 93-94.
¹⁵Thompson v. Gordon, 948 N.E.2d 39, 51-52 (Ill. 2011) (holding that the duty of an engineer in tort is defined by the terms of its contract); Young v. Hard Rock Constr., LLC, 292 So.3d 178, 184 (La. Ct. App. 2020) ( “In determining the duty owed to an employee of a contractor by an engineering firm also involved in the project, the court must consider the express provisions of the contract between the parties.”).
¹⁶Bonilla v. Verges Rome Architects, No. 2022-CA-0625, 2023 La. App. LEXIS 806, *22-25 (Ct.  App. May 11, 2023).
¹⁷Id. at *2-3.
¹⁸Id. at *13, 23-25.
¹⁹Id. at *7-11.