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Construction Professional MalpracticeProsecuting and Defending Claims against Design Professionals

by Gary C. Chiumento

The changing business and legal environment

over the course of the past two decades has

brought with it many ups and downs, includ-

ing turbulence in the planning, development,

design, construction and sale of both com-

mercial and residential properties. One thing

that has only increased over that time is the proliferation of

construction litigation in general and claims against construc-

tion professionals (e.g., architects, engineers, surveyors, etc.)

in particular. Perhaps the reason for the increase in claims

against construction professionals is a lapse in professional

standards and capability. More likely, however, it is the fact

that litigants have discovered the availability of the design

professional’s professional liability insurance policy as a

source of compensatory relief.

Regardless of its cause, litigators must be fully aware of the

nature, basis and technical requirements for both prosecuting

and defending construction professionals. The purpose of this

article is to acquaint practitioners with the basic requirements

and ‘rules of the game’ for prosecuting and defending claims

involving construction professionals, commonly referred to in

the construction industry as design professionals.

For the purposes of this article, a design professional is a

licensed person or an organization of licensed persons who

assist property owners and developers in the construction of

projects by providing planning, design or construction con-

tract administration services for the proj-

ects. While there are certainly exceptions

to the licensure requirement (including

but not limited to project and construc-

tion management), typically individual

design professionals are licensed pur-

suant to Article 45 of the New Jersey

Statutes.1 There is a wide array of profes-

sional services under this rubric, includ-

ing civil, structural, mechanical, geot-

echnical, environmental, electrical, fire

protection, interiors and landscape

architects. There are also material testing

and inspection firms, which while not

necessarily requiring licensure may nev-

ertheless fall under the category of

design professional for the purposes of

this article.

Types of ClaimsPotential claims against design pro-

fessionals include bodily injury, proper-

ty damage and economic loss. The vehi-

cles for these claims can be negligence,

intentional tort, contract, and, where

especially identified in a contract, war-

ranty/guarantee.2 In the context of a

construction project, typical claims

against design professionals include

negligence in the planning of a con-

struction project, the design (or creation

of the design documents such as plans

and specifications) or the negligent or

deficient provision of construction con-

tract administration services during the

construction phase of the project.

Typical plaintiffs in claims against

design professionals include the owners

who contract with the design profes-

sional, the contractors who utilize the

design professional’s construction docu-

ments (plans and specifications) and

third parties who use the building or

who are in some way injured as a result

of the negligent design or construction

administration.

Such claims happen in the context of

the private sector in the design and con-

struction of residential, commercial or

industrial construction projects, or in the

public sector where the design profes-

sional serves the needs of a public entity,

whether a municipal, county, state or

federal government project. Design pro-

fessionals can also be ‘derivative targets’

of suits by construction financiers, con-

struction sureties, subrogating insurance

companies and other parties providing

business or financial support to the con-

struction project. Each of these parties

has its own special take on the role

played by the design professional, and

often a bias on how the design profes-

sional impacts its piece of the puzzle.

In particular, the construction con-

tractor has a wide variety of business,

financial and economic claims to make

against design professionals. Often,

these claims are brought against the

design professional in tandem with

claims against the construction project

owner or developer. Among them are

claims for contract balances (where the

owner does not pay some or all of the

contract price on the advice or recom-

mendation of the design professional);

change orders (a contractual modifica-

tion required consensually or equitably

as a result of an increase in the contrac-

tor’s scope of work from the original

contract); and so called ‘delay’ claims

that result from the contractor having to

spend more time, money or other

resources on a project beyond its reason-

able completion date through no fault

of the contractor, thereby increasing its

overhead and other costs.

Prosecuting the ClaimWhether a client is the project owner,

a contractor or a third party sustaining

an economic or personal injury as a

result of the construction project, there

are certain activities that must occur in

order to prosecute the claim properly.

It is the rare case where the design

professional is not covered by profes-

sional liability insurance. This insurance

will offer a team of litigation profession-

als supporting the architect, surveyor or

engineer, including the specialized

architects and engineers (A/E) broker,

the professional liability insurance com-

pany claims representative and, often,

defense counsel who may have been

working with the design professional for

years. It cannot be argued that the more

accurate information accumulated up

front, the more efficiently the attorney

can provide a view of the case suggest-

ing a viable claim and be prepared to

move the matter briskly through the lit-

igation process. Anything less than this

will not be respected by the design pro-

fessional’s team or garner the case the

pre-litigation resolution that may make

expensive litigation unnecessary.

Plaintiff’s counsel must review the

project documents, interview critical

witnesses (including his or her own

client’s employees and vendors) and

solicit the assistance of an appropriate

like-licensed professional, all while hav-

ing an appreciation of the elements of

the claim and the time frames for avoid-

ing statutory and contractual limita-

tion/repose periods.

In addition to the principle design

professional, the plaintiff must also con-

sider the contract relationship between

the project owner and the design profes-

sionals. What was the designer’s ‘scope

of work’ (list of construction project

tasks)? Are there obligations for defense,

indemnification or system or product

warranties? Are there sub-consultant

contracts, and is it prudent to sue the

sub-consultant directly rather than

suing only the principle consultant? The

contractor likely will have kept project

records, such as general and sub-con-

tracts, final plans and specifications,

correspondence, and logs (change

orders, shop drawings, requests for

information and meeting minutes). The

contractor, as the client, should be able

to provide counsel with a treasure trove

of project information.

Once the attorney has a handle on

the project record, he or she can create a

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project timeline and discuss the case

substantively with potential experts for

liability (what did the design profession-

al do wrong) and damages that proxi-

mately flow from the deficient conduct.

The subject of damages can be elusive

(and the role of the claim expert critical)

as it is often a matter of interpreting the

project record coupled with an objective

and often quite technical analysis of the

additional work, services, equipment,

materials and supplies used by the con-

tractor. The liability expert, on the other

hand, is especially important, as he or

she can serve to guide the plaintiff

through the gauntlet of the affidavit of

merit statute (AMS).3 The New Jersey

Supreme Court has addressed repeatedly

the requirements of the AMS in several

cases, along with the unforgiving sanc-

tion of dismissal with prejudice for the

unwitting plaintiff who fails to adhere

to it. Indeed, the Court has even warned

that prudence dictates having an affi-

davit of merit in one’s pocket even

before filing suit.4 Making sure the

expert-affiant has access to the critical

project documents is every bit as impor-

tant as reciting the formulaic language

of the AMS, and will assist the expert to

be a valuable ally up through report,

deposition and trial.

Prior to commencement of the litiga-

tion, plaintiff’s counsel should seriously

consider pre-suit notification. This has

the effect not only of attempting pre-

suit settlement negotiations but also

provides an important step in the claims

process, as it establishes a ‘claim’ under

the professional liability policy. These

policies are usually of a ‘claims made’

variety and, therefore, establishing the

fact and time of the claim is important

to insure it will be covered under the

policy. A request for pre-suit mediation

is not misplaced, and is often built in to

construction contract documents, often

as a pre-condition to suit or demand for

arbitration. Such a demand under the

contract supported by a settlement

brochure, which outlines the claim, and

the critical documents will help estab-

lish liability and convince the profes-

sional’s claims team the claim has merit.

In preparing the complaint, counsel

needs to insure there is a count for every

identifiable cause of action, whether in

tort, contract, warranty, etc., and in

each count an identification of the legal

duty, the breach of duty and the proxi-

mate cause between the alleged breach

and the damages sought. While plain-

tiffs routinely plead a count for

fraud/deceit against design profession-

als, claims for violations of the New Jer-

sey Consumer Fraud Act5 are usually

invalid, except in certain specialized cir-

cumstances.6 Additionally, counsel

should take care to identify accurately

on the case information statement the

correct track assignment. Too often,

suits against licensed professionals do

not have the proper track description.

Perhaps this occurs in the hope that the

court will not assign the requisite dis-

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covery period (450 days) or, possibly, it

will escape the attention of defense

counsel and the scheduling of discovery

regarding the affidavit of merit (AOM).

Such ploys can be counterproductive.

While the Administrative Office of the

Courts requires the trial court to sched-

ule a conference on this topic prior to

the expiration of the AOM time period,

the trial court is obliged to implement

the AMS and its requirement of dis-

missal with prejudice regardless of

whether or not the so-called Ferreira

conference occurs.7

Representing the Design Professional

Understanding the Design

Professional’s Role

In order to defend a design profes-

sional effectively, it is necessary to

understand the nature and scope of the

professional’s services. Most of the serv-

ices of a design professional for a con-

struction project can be reduced to one,

some or all of the following phases:

• Schematic Phase—This is the ini-

tial opportunity to define the con-

struction in terms of the owner’s

needs and resources, including the

creation of elevations and plan views

while describing in a narrative format

the building’s functions and systems.

Often, at this very preliminary stage,

there is information about the build-

ing site and projections regarding

likely construction costs.

• Design Development Phase—

Here, the project takes a decidedly

technical turn. Mechanical, electrical,

plumbing, fire protection, structural

and architectural building systems

are planned for, designed (often via

engineering specialists) and coordi-

nated by the lead design professional

(architect or engineer). Further

refinement of approximate construc-

tion costs occur and the owner is

asked to approve the direction of the

project so final documents can be

prepared.

• Construction Documents Phase—

Assuming there is agreement on the

design regarding building systems, the

final approvals and coordination

occurs in order to complete the (hope-

fully) final set of construction draw-

ings and the written project descrip-

tion, known as specifications. The

construction documents have several

purposes, the most important of which

are pricing the project by contractor

candidates (bidders), permitting of the

project by government authorities and

building the project by the contractor.

• Bidding/Procurement Phase—

The design professional can be asked

by the owner to provide bid sets of

construction documents for pricing.

The design professional can also

answer bidders’ questions, provide

bulletins, addenda and updates to the

design while it is still in the bidding

process, and can help the owner ana-

lyze the bids and select the contractor

for the project.

• Construction Contract Adminis-

tration Phase—Services in this

phase provide an opportunity for the

design professional to do as much (or

as little) as the owner needs so con-

struction adheres to the contract doc-

uments. These services can include

daily representation on the project

(usually reserved for the largest and

most complex projects); a limited,

highly defined set of services (e.g.,

review of construction submittals or

change orders, occasional appear-

ances on the site to observe the gen-

eral progress of the work) or still fur-

ther limited to an ad hoc response to

contractor’s questions (sometimes

known as requests for information or

RFI); or a determination that the

project is ‘done’ (so-called substantial

completion inspections). (An exam-

ple of a very comprehensive cata-

loging of possible design profession

services over and above ‘basic’ servic-

es can be found in AIA document

B101-Sec. 4.1).

Armed with information regarding

the design professional’s typical scope of

work, defense counsel is better prepared

to understand the claim and prescribe a

resolution plan. The request for design

professional defense is often made

directly by the professional who has

been served with a complaint or, more

commonly, receives a letter giving

notice of a claim. Counsel should waste

no time scheduling an interview, as well

as an opportunity to review the client’s

project documents. Construction cases,

even those involving personal injury,

are document intensive.

The interview should not be limited

to the specific allegations of the com-

plaint, but on the project timeline; the

professional’s scope of work; and the

written and oral communications

between the professional and the owner,

contractor and construction manager, if

any. It is also important to determine if

the professional is a sub-consultant to a

lead professional or is itself the lead for

sub-consultants who must be placed on

notice and possibly brought into the

suit via third-party complaint. Careful

attention should be paid at this time to

the construction and professional serv-

ices contracts, which identify scope of

work and often provide for defenses,

limitations of liability, indemnification

and ‘additional insured’ provision that

may need to be asserted immediately.

In answering the complaint, counsel

should keep in mind relevant separate

or affirmative defenses, including affi-

davit of merit, statute of frauds, Engi-

neers Immunity Act, non-responsibility

for the acts of independent contractors,

statutes of limitations and repose, eco-

nomic loss doctrine and defenses poten-

tially available under the New Jersey

Tort Claims Act.8

Once the answer has been served

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along with a carefully tailored request

for documents and a set of interrogato-

ries (the only effective way, other than a

case management order, to obtain

expert discovery),9 counsel should con-

tinue to develop as much information as

possible about the project while await-

ing the plaintiff’s AOM. If the AOM is

not received in a timely fashion, counsel

should file a motion to dismiss with

prejudice without delay, even if the

court has failed to convene a Ferreira

conference.

Design Professional Defenses

Defenses available to design profes-

sionals focusing on liability include pro-

cedural (emphasizing legal defenses that

are not project fact- or scope-sensitive)

or substantive (project fact- or scope-

sensitive).

Procedural defenses include the

AOM, statutes of limitation or repose

(check contracts for possible claims peri-

od commencement dates) subrogation

waiver (where the contract precludes

claims by project participants or their

property/casualty insurance carriers if

the claim is the result of an insured

loss), limited immunity for construction

site safety issues,10 and contractual limi-

tations against loss (consequential,

punitive, liability policy insurance lim-

its, or specific significant dollar

amounts).11

Substantive defenses for design pro-

fessionals are typically broken down

into two parts: liability and damages.

Liability defenses focus on the plaintiff’s

burden of proof to show the design pro-

fessional’s conduct deviated from stan-

dards of professional care and practice.12

Since it is difficult for a jury in the

absence of ‘common knowledge’ to

know (or understand) the professional

(and often technical) standards of care

for architects, engineers or surveyors,

the plaintiff’s burden is to produce testi-

mony of an expert in the defendant’s

professional field to identify what pro-

fessional standards required the defen-

dant to do and how this failure, within

the facts and circumstances of the proj-

ect, proximately caused the plaintiff’s

injuries.

Defense counsel can often blunt the

attack by showing that the plaintiff’s

expert has little expertise in the speci-

fied field, relied upon inaccurate or

unlikely facts in coming to his or her

opinion or failed to identify specific sup-

port in the literature of the defendant’s

profession to derive the alleged standard

of care requirement or deviation. The

common failure of experts to use sup-

porting literature or other identifiable

sources to support their version of the

professional standard is sometimes

referred to as a ‘net opinion’13 and,

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under certain circumstances, can subject

the plaintiff’s case to dismissal. A partic-

ular type of net opinion is the ‘personal

opinion,’ where the only support for the

proposed standard is the substitution of

the expert’s personal conduct and expe-

riences in place of an identification of

what the average practitioner would do

(or refrain from doing) under similar cir-

cumstances.14

Another closely related opportunity

for the defendant is to demonstrate to

the fact finder’s satisfaction that the

plaintiff’s expert has misidentified the

defendant professional’s ‘scope of work’

for the work or service of another. It is

common to confuse the scope of project

services between and among the owner’s

forces, the construction manager, archi-

tects, engineers and even contractors

who not infrequently have contractual

responsibility for design during con-

struction.

In addition to the usual defenses

regarding damages (vague and indefinite

proofs regarding value or diminution in

value or the cost of repairs), design

defendants often have the opportunity

to show the plaintiff’s ‘damages’ are not

damages at all, but merely legitimate

costs associated with expected risks

encountered during construction. Such

costs can result in ‘betterment’ to the

owner. This concept suggests that plain-

tiffs should bear the cost of a building

system or certain remediation, as it

results in an improvement or addition in

value for which the owner derives bene-

fit. Similarly, ‘wear and tear’ on a build-

ing resulting from neglect of routine or

specially required maintenance is some-

times mistaken for design deficiencies.

Another damage-related defense is

the confusion of ‘omission’ (the failure

to include an item and its cost in the

design and construction), later remedied

by inclusion of the omitted system and

its resultant costs with ‘error,’ where the

cost of remediating deficiencies provides

no additional value to the owner. An

error, therefore, if the result of a devia-

tion from standards of professional care,

will subject the design professional to

the full cost of the remedial repair. An

omission, however, because it adds

value to the owner’s project (and was

not previously charged as a cost to the

owner) entitles the defendant to a credit

to the extent that the repair adds value

to the owner’s project. The defendant

may nevertheless be responsible for

other consequential damages, such as

the increased cost of the remedial repair

because it was not subject to competi-

tive pricing at the outset of the project

or the increase in material or labor costs

since the time of original bidding. The

identification of these damages issues

can dramatically reduce the design pro-

fessional’s exposure in any given case.

ConclusionNotwithstanding the occasional urge

for tort reform, construction claims

asserting personal injury, property dam-

age and economic loss will likely exist

for as long as there are construction

projects. An understanding of the role of

the design professional in planning,

developing, designing and constructing

the project is vital to the successful rep-

resentation of any party involved with

these claims. �

Gary C. Chiumento is a member of the

law firm of Chiumento McNally LLC and

head of its construction litigation depart-

ment. He is a frequent speaker and contrib-

utor to design professional organizations

and publications and co-author of the book

Construction Administration for Archi-

tects (McGraw Hill 2009). The author

gratefully acknowledges the assistance of

Stephen McNally, Jordan Tafflin and

Michael DeRita in the preparation of this

article.

ENDNOTES

1. N.J.S.A. 45:3-5 (Architects); N.J.S.A. 45:8-27(Professional Engineers and Surveyors).

2. Bd. of Trustees, Union College v. Kennerly,Slomanson & Smith, 167 N.J. Super. 311, 315(Law Div. 1979).

3. N.J.S.A. 2A: 53A-26 et seq.

4. Galik v. Clara Maass Med. Ctr., 167 N.J. 341, 357(2001).

5. N.J.S.A. 56:8-2.

6. Blatterfein v. Larken Assoc., 323 N.J. Super.167 (App. Div. 1999)(architect’s liability underCFA limited to certain commercial and realestate marketing functions as opposed torecondite activities of its learned profession).

7. Paragon Contractors, Inc. v. Peachtree Con-dominium Association, 202 N.J. 415 (2010).

8. N.J.S.A. 59:4-6.

9. R. 4:17-4(e).

10. N.J.S.A. 2A:29B-1.

11. Marbro Inc., v. Borough of Tinton Falls, 297N.J. Super. 411, 416-418 (Law. Div. 1996), cit-ing Valhal Corp. v. Sullivan Assoc., Inc., 44F.3d 195, 203 (3d. Cir. 1995).

12. Taylor v. DeLosso, 319 N.J. Super. 174,179-180(App. Div. 1999). See also, New Jersey JuryCharge, Sec. 5.52 (and cases cited therein).

13. Taylor, supra, Ibid.

14. Taylor, supra, Ibid.

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