Part 2 of a 2-part series: Shackled by liability to third parties

In the first part of this article (CSE, 09/07, page 38), I discussed that most claims against engineers come from project owners, but as many as a third come from non-clients—individuals and entities who do not have a contract with the engineer. Part 1 left off with discussion of a Louisiana case, Day v.

By Kenneth M. Elovitz, PE, ESQ., In-house counsel, Energy Economics, Inc., Foxboro, Mass. October 1, 2007

In the first part of this article ( CSE , 09/07, page 38), I discussed that most claims against engineers come from project owners, but as many as a third come from non-clients—individuals and entities who do not have a contract with the engineer.

Part 1 left off with discussion of a Louisiana case, Day v. National U.S. Radiator Corporation , where a court of appeals found an architect negligent in approving a plumbing subcontractor’s shop drawings that were missing a pressure relief valve on a domestic hot water system, and that their negligence was a proximate cause of an explosion.

The Supreme Court of Louisiana eventually reversed the case. It found that the architect was not liable to the plaintiff for the explosion. The Supreme Court acknowledged that the architect’s contract required the architect to provide “adequate supervision of the execution of the work to reasonably insure strict conformity with the working drawings, specifications and other contract documents.” However, the Court explained that “the primary object of this provision was to impose the duty or obligation on the architects to insure to the owner that before final acceptance of the work the building would be completed in accordance with the plans and specifications.” The architect was not responsible for the contractor’s method of doing the work so was not liable for the contractor’s failure to install a pressure relief valve before lighting off the boiler. The court also explained that “the architects’ approval of the [submittal] was only an approval for [the subcontractor] to place the order with [the supplier] for the purchase of the items listed in it, and the [submittal] was not intended as a shop plan for fabrication or a plan showing construction details.” Engineers can use the Day case to argue that their approval of shop drawings and submittals extends only to the information presented and not to information that could or perhaps even should be presented to illustrate the details of how the equipment will be installed.

But the parties discussed in Part 1— contractors and subcontractors; lenders, insurers and sureties; and contractor and subcontractor employees—aren’t the only sources of liability from third parties. There are a few others. They include building occupants and visitors bringing claims based on indoor air quality, sick building syndrome and multiple chemical sensitivity and tenants who sue a building engineer for inadequate mechanical and electrical systems.

These claims generally involve bodily injury or property damage and follow normal tort liability rules for ordinary negligence cases. As the case of MacPherson v. Buick Motor Co.ngineer might be able to defend a Legionella claim by showing that the problem was poor operating and maintenance practices as opposed to a design defect. On the other hand, if the engineer located the cooling tower so close to an outside air intake that cooling tower effluent would be expected to enter the occupied space through the HVAC system, the engineer might have a harder time defending the claim.

Persons or entities purchasing the property after construction are potential claimants against engineers for construction defects. These claimants might be purchasers of a commercial building or buyers of individual condominium units from the developer who retained the engineer to design the building. If these claims allege property damage (perhaps including loss of value) or personal injury due to an alleged defect in the design or construction of the property, engineers will likely have some exposure. “In following the modern trend, we hold that privity is not an absolute prerequisite to the existence of a tort duty. The duty of the architects and the builders in this case to use due care in the design, inspection and construction of this condominium extended to those persons foreseeably subjected to the risk of personal injury created, as here, by a latent and unreasonably dangerous condition resulting from their negligence.

Practical management tips

Engineers must be careful not to induce reliance by accommodating requests for information from non-clients. “Status inquiries” and other requests by lenders and sureties for information about a project are among the most insidious risks. Unless the engineer’s contract for services requires the engineer to provide this information, the engineer has no obligation to provide it. Accommodating this type of request, even with a disclaimer, creates a large, uncompensated risk of a claim based on reliance. These form letters can even be ignored unless that service is required in the engineer’s contract for services.

Merely furnishing copies (with the client’s permission) should not create justifiable reliance. If lenders, sureties, or other people requesting the documents are going to get them anyway, there is no need to inconvenience these people by making them jump through unnecessary hoops. Making copies is a clerical or ministerial act that should not create justifiable reliance. For clarity, the transmittal can state that the copies are being furnished at the client’s request.

Documentation and commissioning

Engineers need to think about how they can deflect or mitigate claims by outsiders, especially when those claims are for personal injury or property damage.

To be liable, an engineer must make some type of mistake or error in judgment. The plaintiff must show that the injury was a natural consequence of that mistake.

To prove the engineer was at fault, the plaintiff should be required to show that the defect which caused the injury was inherent in the design and existed when the engineer left the job. Good records of what the system was suppose to do and how it performed at startup could go a long way to keep the plaintiff from making that showing.

Here are some ideas that engineers can implement to help thwart claims for personal injury by people they never met:

Include some type of commissioning or performance evaluation at the end of each job to document that the system operated in accordance with the design when the engineer left. If the system was not operating that way at the time of the accident, the engineer can argue that the deficiency was not a function of the design.

Design systems with operation and maintenance in mind so building owners have the means to operate systems in accordance with the design for years to come. Document how the systems are supposed to operate and what performance is expected.

Review the owners’ manuals to see if they have the information owners need to maintain proper system operation.

  1. MacPherson v. Buick Motor Co., 217 NY 382, 111 N.E. 1050 (1916)

  2. Village of Cross Keys, Inc. v. U.S. Gypsum Co., 556 A.2d 1126, 315 Md. 741 at 753 (Md., 1987) quoting Council of Co-Owners Atlantis Condominium, Inc. v. Whiting-Turner Contracting Co., 517 A.2d 336 at 338, 308 Md. 18 at 21 (Md., 1986)