Developers: Be Wary When Selecting Design Professionals (4th Circuit Decision Ruling that Developer’s Right to Indemnity Preempted by Federal Statute)


Equal Rights Center, et al. and Archstone Multi-Family Series I Trust v. Niles Bolton Associates, et al, No. 09-1453 http://pacer.ca4.uscourts.gov/opinion.pdf/091453.P.pdf

The Fourth Circuit Court of Appeals found that a Developer/Owner’s cross-claim for indemnity is preempted by federal statutory language, therefore disallowing a developer to recoup damages asserted against the architect on the Project. The statutes at issue in this case are the Fair Housing Act and Americans with Disabilities Act. While the facts are not entirely relevant, it is worth noting that the as built project did not meet the strict standards prescribed by these Federal guidelines.

In reading this opinion, I must question the court’s reasoning and conclusion. It is fairly safe to assume that a Developer in contractual privity with an architect should be able to rely on the designer’s professional guidance as it pertains and applies to U.S. Code and Regulatory mandates. Developers rely on design professionals when building complicated projects, and, so long as there are not circumstances which are unique, architects should be held to reasonable professional standards.

POSSIBLE FACTS WHICH MIGHT CAUSE THIS CASE TO BE DISTINGUISHED

It should be noted that the Developer in this matter sought to recoup and capture all damages asserted against it in reliance on indemnification provisions inserted in the Owner and Architect contract. There is speculation that the attempt to secure indemnification for all claims hindered the Developer’s claims.

While individual facts cause cases to be distinguishable from others, we feel that Developers and Owners alike need to be absolutely careful in selecting architects with experience in similar projects. This goes without saying, although architects specialize in differing degrees within the profession, and just because an individual or company holds a license should not be the only qualification.

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3 thoughts on “Developers: Be Wary When Selecting Design Professionals (4th Circuit Decision Ruling that Developer’s Right to Indemnity Preempted by Federal Statute)

  1. Hi Clay,
    Ugly case for Archstone for sure. It will be interesting to see how much precedential value the case has as developers scale back from the all or nothing approach running away from this case. It is certain this case will be cited A LOT moving forward!

    We talked about the same case on Monday,

    http://www.valanduseconstructionlaw.com/2010/06/articles/accessibility/are-developers-stuck-holding-the-bag-for-architects-ada-and-fha-mistakes-equal-rights-center-and-archstone-v-niles-bolton-associates/

    Like

  2. Clay:

    Agree that design professionals owe plans that meet the standard of care. (I talk about standard of care in my blog post today, actually). The problem I see, as one who often represents designers, is that often the design gets value engineered, and often construction defects confound potential design issues.

    Like

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