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DESIGN PROFESSIONAL PROJECT DOCUMENTATION AND CLAIMS: EMERGING LEGAL TRENDS Brennan, Manna & Diamond, LLC Robert A. Hager, Esq. Oswald Insurance All Ohio Design Professional Conference April 27, 2016 1

DESIGN PROFESSIONAL ROJECT …...DESIGN PROFESSIONAL PROJECT DOCUMENTATION AND CLAIMS: EMERGING LEGAL TRENDS Brennan, Manna & Diamond, LLC Robert A. Hager, Esq. Oswald Insurance All

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Page 1: DESIGN PROFESSIONAL ROJECT …...DESIGN PROFESSIONAL PROJECT DOCUMENTATION AND CLAIMS: EMERGING LEGAL TRENDS Brennan, Manna & Diamond, LLC Robert A. Hager, Esq. Oswald Insurance All

DESIGN PROFESSIONAL PROJECT

DOCUMENTATION AND CLAIMS:

EMERGING LEGAL TRENDS

Brennan, Manna & Diamond, LLCRobert A. Hager, Esq.

Oswald Insurance All Ohio Design Professional Conference

April 27, 2016

1

Page 2: DESIGN PROFESSIONAL ROJECT …...DESIGN PROFESSIONAL PROJECT DOCUMENTATION AND CLAIMS: EMERGING LEGAL TRENDS Brennan, Manna & Diamond, LLC Robert A. Hager, Esq. Oswald Insurance All

PART ONE

DISCOVERY BURDENS AND RESPONDING TO

SUBPOENAS:

JUST SAY …NO?

2

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WHAT IS DISCOVERY?

� Exchange of information between the parties in a

lawsuit

� Includes information regarding witnesses,

documents and other evidence each party may

use to present its case at trial

� Enables parties to evaluate opponents case and

prepare response prior to trial

� Permits a full and fair hearing after

consideration of all the facts

� Prevents “trial by ambush”3

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E-DISCOVERY

� What is e-Discovery?

• e-Discovery is one of

the formal processes of

exchanging information

before trial

• Involves request,

retrieval and

production of ESI

(“Electronically Stored

Information”)

4

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WHY IS IT IMPORTANT TO DISCUSS E-

DISCOVERY?

5

Electronic documents and communications are an integral part of most businesses.

of corporate records are stored in electronic format.

of electronic information is never printed on paper.

of information created today is first generated in digital format.

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HOW DOES THE

SUBPOENA

DISCOVERY

PROCESS WORK?

� Subpoenas are commonly

used in civil litigation to

obtain evidence from

individuals, corporations,

and other entities who

are not parties to a

lawsuit

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FIRST STEPS IN RESPONDING TO A SUBPOENA

�Alert key employees (general counsel, corporate officers, etc.)

�Calendar deadlines

�Contact your insurance representative

�Consider engaging outside counsel

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DO YOU IMMEDIATELY RESPOND TO THE

REQUEST?

o Begin document collection and review?

o Provide the requested documents (or testimony)?

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OR DO YOU JUST SAY …

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BENEFITS OF RETAINING OUTSIDE

COUNSEL

Counsel Can Help You Determine Appropriate Response Options:

�Issue a “Litigation Hold”

�Serve specific written objections

�Move to Quash or Modify

�Move for a Protective Order

�Attempt to informally resolve the issue

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COMPLY WITH OR RESIST THE SUBPOENA?

� Fed.R.Civ.P. 45 bestows “broad enforcement powers

upon the court to ensure compliance with subpoenas,

while avoiding unfair prejudice to persons who are the

subject of a subpoena's commands.”

� The Rules “afford nonparties special protection against

the time and expense of complying with subpoenas.”

� Rule 45(c)(1) expressly states that the court issuing the

subpoena must enforce the duty of the “party or attorney

responsible for issuing and serving a subpoena” to “take

reasonable steps to avoid imposing undue burden or

expense on a person subject to the subpoena.

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COMPLY WITH OR RESIST THE SUBPOENA?

� Does the subpoena request the production

of sensitive or proprietary information?

• Courts may quash or modify a subpoena that

seeks trade secret or other confidential

commercial information

• Issues may be resolved by using a

confidentiality agreement or protective order:

� Documents produced can only be used for the

purpose of the litigation

� Limit on who can view the documents

� Require the documents to be filed under seal

� Prompt return or destruction of the

documents at the conclusion of the lawsuit

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COMPLY WITH OR RESIST THE SUBPOENA?

� Are large volumes of documents and/or

ESI (Electronically Stored

Information) sought?

• Recipient must produce responsive

materials in the form in which they are

ordinarily maintained or in a reasonably

usable form

• Recipient does not need to produce the

same ESI in more than one form

• Recipient does not need to provide ESI

from sources that are not reasonably

accessible because of undue burden or cost,

such as electronic data stored on backup

tapes14

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COMPLY WITH OR RESIST THE

SUBPOENA?

� Does the attorney-client privilege, work product doctrine or some other recognized privilege or protection apply?

• Even potentially responsive documents may be withheld from production based on the attorney-client privilege, work product doctrine or some other recognized privilege or protection

• Counsel should conduct the pre-production document review

• Only those non-privileged documents that fall within the scope of the subpoena should be produced

• Materials withheld on privilege grounds will require the creation of a privilege log, absent agreement or court order

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COMPLY WITH OR RESIST THE SUBPOENA?

� Grounds for Objections:

� Insufficient time to comply

� Seeks irrelevant evidence

� Requests privileged or other protected information.

� Undue burden or expense

� Requests trade secret or other confidential business

information

� Requests unretained expert's opinion or information

� Vague or ambiguous requests

� Improper service

� Issued out of the wrong court

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COMPLY WITH OR RESIST THE SUBPOENA?

� Have you been adequately served?

� Were witness fees required and tendered at the

time of service?

� Is production required more than 100 miles from

where the subpoena recipient lives, works, or

regularly transacts business in person?

� Other technical defects on the face of the

subpoena?

� Does the subpoena allow reasonable time to

comply?17

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CAUTION: OBJECTIONS MAY BE WAIVED

18

Fed. Rule 45(c)(2)(B) provides that an entity served

with a subpoena has fourteen (14) days (or before the

time specified for compliance) to serve the party

seeking the documents with written objections.

Bailey Indus., Inc. v. CLJP, Inc., 270 F.R.D. 662

(N.D. Fla. 2010)

• Nonparty recipient of subpoena waived objection

to subpoena on basis of proprietary information or

trade secret

• E-mail from nonparty recipient's counsel to

subpoena's proponent, which indicated he might

need to redact certain information was insufficient

• Redacted documents were not themselves proper

written objection since they stated no objection

and provided no explanation for redactions

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DISCOVERY BURDENS AND RESPONDING TO

SUBPOENAS:

JUST SAY …NO?

In summary:

� Counsel is available to assist

� Burdensome requests may be quashed

or limited

� Confidential and privileged documents

must be protected

� Timely objections must be asserted or

else waived

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PART TWO

PROJECT SAFETY: A DESIGN PROFESSIONAL

RESPONSIBILITY?

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DESIGN PROFESSIONAL LIABILITY FOR

PROJECT AND SITE SAFETY

� Generally design professionals are not liable for construction site injuries

� Limited exceptions where there is a contractual duty to supervise work

� Personal injury attorneys are now looking at design professionals as potential defendants

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McKean v. Yates Eng'g Corp., No. 2013-CA-01807-COA, 2015 WL 5118062

(Miss. Ct. App. Sept. 1, 2015), reh'g denied (Mar. 1, 2016)

• Employees of subcontractor, who were injured when scaffolding

collapsed at construction site, brought negligence action against

architect, engineer, and property owner.

• Court granted summary judgment to defendants.

• The Court of Appeals held:

• Engineer's design drawings for

construction of scaffolding were not the

cause of scaffolding's collapse;

• Engineer had no duty to inspect

scaffolding;

• Architect had no duty to ensure that

scaffolding design was adequate.

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LeBlanc v. Logan Hilton Joint Venture, 463 Mass. 316, 974 N.E.2d 34 (2012)

� Estate of maintenance electrician, who was electrocuted as he began work upon transmission equipment at hotel, brought wrongful death action against owner, architect, architect's consultant, electrical subcontractor, general contractor, manufacturer of electrical switchgear equipment, and equipment's installer.

� Trial Court granted summary judgment in favor of architect and consultant on co-defendants' cross-claims.

� The Supreme Judicial Court held:

� expert testimony was not required to establish professional standard of care;

� genuine issues of material fact regarding causation precluded summary judgment for design professionals “where, as here, there was evidence that the Design Team actually knew of the deficiencies but failed to fulfill its contractual duty to report the deficiencies to Hilton, and where the deficiencies presented so obvious a risk to the safety of any person who would operate the switchgear ...”

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DESIGN PROFESSIONAL LIABILITY FOR

PROJECT AND SITE SAFETY

• What does your contract

say about safety?

• Safety and supervisory

responsibilities should be

clearly addressed

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AIA DOCUMENT B101 CONTAINS THE

FOLLOWING PROVISIONS:

� § 3.6.1.2 The Architect shall advise and consult with the Owner during the Construction Phase Services. The Architect shall have authority to act on behalf of the Owner only to the extent provided in this Agreement. The Architect shall not have control over, charge of, or responsibility for the construction means, methods, techniques, sequences or procedures, or for safety precautions and programs in connection with the Work, nor shall the Architect be responsible for the Contractor’s failure to perform the Work in accordance with the requirements of the Contract Documents. The Architect shall be responsible for the Architect’s negligent acts or omissions, but shall not have control over or charge of, and shall not be responsible for, acts or omissions of the Contractor or of any other persons or entities performing portions of the Work.

� § 3.6.4.2 In accordance with the Architect-approved submittal schedule, the Architect shall review and approve or take other appropriate action upon the Contractor’s submittals such as Shop Drawings, Product Data and Samples, but only for the limited purpose of checking for conformance with information given and the design concept expressed in the Contract Documents. Review of such submittals is not for the purpose of determining the accuracy and completeness of other information such as dimensions, quantities, and installation or performance of equipment or systems, which are the Contractor’s responsibility. The Architect’s review shall not constitute approval of safety precautions or, unless otherwise specifically stated by the Architect, of any construction means, methods, techniques, sequences or procedures. The Architect’s approval of a specific item shall not indicate approval of an assembly of which the item is a component.

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Yow v. Hussey, Gay, Bell & Deyoung Int'l, Inc., 201 Ga. App. 857, 412 S.E.2d 565 (1991)

� Worker brought action against architect/engineer for personal injuries sustained at construction site when he stepped into uncovered storm drain.

� Yow court held that in the face of these AIA contract provisions, the “architect/engineer did not expressly or impliedly have control over or assume any responsibility for construction site supervision or safety, including alerting construction workers and others affected by the construction of potential hazards at the site.”

� Under this circumstance of a total absence of contractual responsibility for site supervision and safety, [the architect/engineer] could not be held liable in tort for claims of common law simple negligence regarding site safety.”

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DESIGN PROFESSIONAL LIABILITY FOR

PROJECT AND SITE SAFETY

� Ohio courts have similarly held that an architectural/engineering firm is not liable in tort for construction site injuries unless it actively participates in construction work or explicitly assumes responsibility for project safety. See, e.g., Nicholson v. Turner/Cargile, 107 Ohio App. 3d 797, 806 (10th Dist.1995).

� In Nicholson, the survivors of a group of ironworkers killed in a structural steel collapse alleged that the defendant architectural/engineering firm failed to stop or prevent workers from installing cantilevered beams with an unsafe leveling procedure.

27

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DESIGN PROFESSIONAL LIABILITY FOR

PROJECT AND SITE SAFETY

� In affirming summary judgment granted in favor of the design firm, the Nicholson court explained:

� “an architect or engineer generally has no duty to the employees of independent subcontractors, unless the architect or engineer actually participates in subcontractors’ work or explicitly contracts for safety responsibilities.” Id. at 805.

� Provisions to those similar in Yow shielded the architectural/engineering firm from liability from the negligent construction procedure that was employed. Id. at 802-804.

� The Nicholson court held that because “on-site inspections were for the purpose of insuring that the construction met with the architect’s design specifications, [the architectural/engineering firm] did not have a contractual duty to make the construction site safe for the general construction workers.” Id. at 803. 28

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DESIGN PROFESSIONAL LIABILITY FOR

PROJECT AND SITE SAFETY

� Lack of safety responsibility may permit early dismissal

� Design professionals should not actively participate in contractor work, including project safety

� Limit contract responsibilities to supervise work

� Read your contract and confirm no responsibility for site safety

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PART THREE

WHAT IS THE ECONOMIC LOSS

DOCTRINE AND HOW CAN IT BE USED

TO RESOLVE CLAIMS EFFECTIVELY?

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ECONOMIC LOSS DOCTRINE

� Court-developed doctrine adopted by a majority

of U.S. states and jurisdictions

� Prohibits a tort recovery (negligence, strict

liability, etc.) when damage results in economic

loss, but does not cause personal injury or

damage to any other property

� Precludes contracting parties from asserting tort

causes of action as a means to recover economic

or commercial losses arising out of a contract

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WHAT ARE “ECONOMIC LOSSES” IN THE

CONTEXT OF CONSTRUCTION?

� 6 Bruner & O'Connor Construction Law § 19:10.33

Economic Losses

Cost to repair or replace defective materials

Cost to repair damage to a

structure

Diminution in value of a damaged

structure not repaired

Loss of use or delay in

utilization of property for its intended

purpose

Lost profits, revenue, and

costs

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Owner

Contractor

Subcontractor #1

Subcontractor #2

Architect

Consultant34

ECONOMIC LOSS DOCTRINE

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HOW DOES THE ECONOMIC LOSS

DOCTRINE WORK IN OHIO ?

Floor Craft Floor Covering, Inc. v. Parma Cmty. Gen. Hosp. Ass'n, 54 Ohio St. 3d 1, 560 N.E.2d 206 (1990)

35

• Flooring contractor sued hospital and

architect to recover damages caused by

defect in flooring

• Court dismissed claim against

architect for failure to state claim

• Court of Appeals affirmed

• Ohio Supreme Court held that flooring

contractor could not sue architect for

economic injury due to allegedly

defective plans and specifications in

absence of direct contractual

relationship between contractor and

architect

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HOW DOES THE ECONOMIC LOSS

DOCTRINE WORK IN OHIO ?

Internatl. Fid. Ins. Co. v. TC Architects, Inc., 2006-

Ohio-4869

� Surety and assignee of construction contractor

brought action against architects on construction

project alleging architects caused delays that led

contractor to default on contract with property

owner

� Architects moved for summary judgment.

� Court granted the motion

� Court of Appeals held architects had no

contractual privity with contractor and could not

be liable to contractor for negligence36

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HOW DOES THE ECONOMIC LOSS

DOCTRINE WORK IN OHIO ?

The exception:

Clevecon, Inc. v. Ne. Ohio Reg'l Sewer Dist., 90 Ohio App. 3d 215, 628 N.E.2d 143 (1993)

� Contractor which constructed sewer project asserted malpractice claims to recover delay damages from architect

� Court denied architect's motion for summary judgment and for directed verdict

� Court of Appeals held:

� lack of privity between contractor and architect was not absolute bar to malpractice action seeking economic loss damages;

� whether architect's control over project was sufficient nexus to substitute for privity of contract was fact question precluding summary judgment.

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HOW DOES THE DOCTRINE WORK IN

OHIO?

Life Time Fitness, Inc. v. Chagrin Valley Eng'g, Ltd., No. 1:13CV566, 2014

WL 6879082, at *1 (N.D. Ohio Dec. 4, 2014)

Design of the parking area of a Life Time Fitness health-club

facility

� Chagrin Valley provided civil engineering services

� Plaintiffs filed lawsuit seeking to hold Chagrin Valley

liable for alleged damages related to the deterioration, re-

engineering, and remediation of the parking lot

� Plaintiffs claimed Chagrin Valley failed to meet standard of

care

� Negligence claims and breach-of-contract claim premised

upon the same facts and circumstances 38

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HOW DOES THE DOCTRINE WORK IN

OHIO?

39

Judge Christopher Boyko held:

� Plaintiffs’ negligence claims are also barred by the

“economic loss” rule since they allege only “monetary

damages incurred in remediating the damage to the

parking surface.”

� Plaintiffs would be bound to recover only for injuries

contemplated by the original agreement.

LTF Real Estate

Company

FCA Construction

Company, Ltd.H.C. Nutting

Chagrin Valley Engineering,

Ltd.

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HOW DOES THE DOCTRINE WORK IN

OTHER JURISDICTIONS?In Bilt–Rite Contractors, Inc. v. Architectural Studio, 581 Pa. 454,

866 A.2d 270, 287 (Pa.2005), the Pennsylvania Supreme Court held

that a building contractor can maintain a claim for negligent

misrepresentation against a design professional without privity of

contract, stating:

40

[W]e hereby adopt Section 552 [of

the Restatement (Second) of Torts]

as the law in Pennsylvania in cases

where information is negligently

supplied by one in the business of

supplying information, such as an

architect or design professional, and

where it is foreseeable that the

information will be used and relied

upon by third persons, even if the

third parties have no direct

contractual relationship with the

supplier of information.

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HOW DOES THE DOCTRINE WORK IN

OTHER JURISDICTIONS?

Trinity Contracting, Inc. v. Mun. Sewage Auth. of Twp. of Sewickley, No. 523

C.D. 2015, 2015 WL 8776568 (Pa. Commw. Ct. Dec. 15, 2015)

� Contractor filed suit against township's

municipal sewage authority and design

professional for breach of contract and negligent

misrepresentation relating to construction of

sewage treatment plant

� Court entered judgment in favor of contractor.

� Parties appealed

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HOW DOES THE DOCTRINE WORK IN

OTHER JURISDICTIONS?

� Appeals court cited Bilt–Rite Contractors, Inc. and held

that design professional negligently misrepresented

geotechnical information to contractor where:

� Design professional had actual notice of geotechnical

data 14 months before bid solicitation but failed to

revise project design in light of that data

� Design professional represented to contractor that

project could be constructed as originally designed

despite knowing that geotechnical report showed

otherwise

� Court determined it was not contractor's burden to

independently verify representations that township and

design professional made to contractor during bidding

process42

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HOW DOES THE DOCTRINE WORK IN

OTHER JURISDICTIONS?

Gongloff Contracting, L.L.C. v. L. Robert Kimball & Associates,

Architects & Engineers, Inc., 2015 PA Super 149, 119 A.3d 1070

(2015)

� Steel subcontractor brought action against architect for

negligent misrepresentation, alleging it incurred numerous

problems on construction project due to improper roof design

� Architect filed motion for judgment on the pleadings based on

the economic loss doctrine

� Court granted the motion

� Appeals Court reversed and held architects are potentially

subject to liability for negligent misrepresentation claims

when it is alleged that those professionals negligently

included faulty information in their design documents43

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WHAT SHOULD THE ECONOMIC LOSS

DOCTRINE MEAN TO YOU?

Although exceptions may apply, the Economic Loss

Doctrine is a powerful tool which may be used to avoid or

limit claims by third parties

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PART FOUR

STATUTES OF LIMITATION: AM I

PROTECTED?

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STATUTE OF LIMITATIONS

� What are statutes of

limitation?

� Statutes of limitations

are laws passed by a

legislative body to set the

maximum time after an

event when legal

proceedings may begin.

� Represents a filing

deadline after which all

claims are barred.

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RATIONALE

� The statutes reflect the general idea that as more time passes after an event, the more likely it is that evidence will be lost, destroyed, or forgotten

� Bring claims within a “reasonable” amount of time – i.e. within a short enough time period to avoid the problems of defective memory, lost evidence, lost witnesses, or other similar problems

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HOW DO STATUTES OF LIMITATIONS

WORK?

� For the most part, each state’s statute has the same function:

�The statutes serve as a defense when a lawsuit is filed.

�If you are sued after the period of time specified in the statute of limitations for a claim passes, the court will dismiss the claim against you.

� However, the statutes vary by state in two ways:

1. By time period; and

2. By what act or event sets the statute in motion

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STATUTES VARY BY WHAT ACT OR EVENT

SETS THE STATUTE IN MOTION

� Some statutes state, or have been interpreted

by state courts to mean, that the statute of

limitations begins to “run” or start from the

time of the negligent act.

� Other statutes state, or have been interpreted

by state courts to mean, that the statute of

limitations begins to “run” or accrues when the

party discovered, or should have discovered,

the damage or injury giving rise to the claim.

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OHIO STATUTE OF LIMITATIONS FOR

PROFESSIONAL NEGLIGENCE

�The applicable statute of limitations in

Ohio for a claim of professional negligence

against architects and engineers is R.C.

2305.09 (D)

�The statute provides that claimants have

four years to bring their claims, but the

statute does not explicitly indicate when

the four year period begins to run 50

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OHIO CASES

� Life Time Fitness, Inc. v. Chagrin Valley Engineering, LTD, 2014

U.S. Dist. LEXIS 168216 (N.D. Ohio Dec. 4, 2014)

� Plaintiff asserted a professional negligence claim

based on the alleged failure “to design the parking lot

in a manner which complied with the highest

industry standards and in a manner demonstrating

good professional skill and judgment.”

� Claimed Chagrin's negligent design caused them to

suffer “monetary damages incurred in remediating

the damage to the parking surface.”

� Chagrin responded that the statute of limitations has

expired on negligence claims.

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� Chagrin argued that the negligence claims accrued at the

time the design was completed, which was on April 8, 2008

or when the “when the act is committed” based on Flagstar

Bank, F.S.B. v. Airline Union's Mtge. Co., 128 Ohio St.3d

529, 536, 947 N.E.2d 672 (2011).

� Plaintiffs argued that their negligence claims accrued at the

time of injury based on a “delayed-damages” rule from Kunz

v. Buckeye Union Ins. Co., 1 Ohio St.3d 79, 81, 437 N.E.2d

1194 (1982).

� Plaintiffs suggested they were not injured until the parking

lot failed in January 2010.

� The Court held that claims for professional negligence

against engineers for design services accrue at the time the

engineering design was complete.

� Plaintiffs had until April 8, 2012 to bring the cause of action

and were barred from bringing their claims for professional

negligence. 52

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CONCLUSION FROM OHIO CASE LAW

The four year period in R.C. 2305.09 (D) accrues

when the architect or engineer committed the

negligent act – i.e. when the architect or engineer

finished its design and turned it over to the owner.

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COMPARE OHIO TO WISCONSIN

� In Crawford v. Shepherd, a Wisconsin court applied

Wis. Stat. § 893.19(5) in determining whether a

plaintiff’s claim of negligence in construction against

an architect was time-barred.

� The statute provided that claimants had 6 years to

bring their claims.

� The Wisconsin court determined that the 6 period in

the statute began to run when the claimant

discovered, or should have discovered, his damage or

injury.

• Crawford v. Shepherd, 86 Wis.2d 362, 272 N.W.2d 401 (App.1978).54

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STATUTES VARY BY TIME PERIOD

State Statute Language of Statute

Washington RCWA

4.16.326(1)(g)

The applicable “statute of limitations expires,

regardless of discovery…six years after the

termination of the [design] services.”

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Pennsylvania 42 Pa.C.S.A. §

5536

An action “brought against any person lawfully

performing or furnishing the design, planning,

supervision or observation of construction…must

be commenced within 12 years after completion

of construction…”

West Virginia W. Va. Code § 55-

2-12

Claims in tort for professional negligence “shall

be brought…within two years…”

Illinois ILCS CH 735 5/13-

214

Actions against “any person for an act or omission

of such person in the design, planning,

supervision, observation or management of

construction…shall be commenced within 4

years…”

Michigan M.C.L.A. 600.5839 “A person shall not maintain an action…against

any state licensed architect or professional

engineer performing or furnishing the

design…unless the action is commenced

within…six years…”

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WHAT SHOULD THE STATUTE OF

LIMITATIONS MEAN TO YOU?

� Which state statutes

of limitation may

apply to your project?

� When does the

statute begin to run?

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THE STATUTE OF LIMITATIONS TIES INTO

DISCOVERY

� Among other things, the statutes affect how long

you should retain your records or documents in

connection with a project.

� The amount of time you must retain documents

can vary widely amongst the states; therefore, it

is important to fully understand how the statute

of limitations may apply when creating a

document retention policy.

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CONCLUSION

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QUESTIONS?

Contact Information:

Robert A. Hager

Brennan, Manna & Diamond, LLC

75 E. Market Street

Akron, Ohio 44308

(330) 253-4925

[email protected]

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PART FIVE

WARRANTY CLAIMS

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IMPLIED WARRANTIES

� What is an Implied Warranty?

� Implied warranties are warranties that the law

presumes you have given to the other party.

� Even if you never make any written warranty or

guaranty, some state courts will find you liable for

certain, implied warranties unless you explicitly

disclaim them.

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HOW DO IMPLIED WARRANTIES WORK?

� Implied warranties are not uniformly applied in

different jurisdictions.

� Just as with the economic loss doctrine, whether

implied warranties apply may have a great

impact upon the ultimate success of parties to

litigation, so it is important to recognize when

and how an implied warranty may apply to your

project based on state law.

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OHIO’S TAKE ON IMPLIED WARRANTIES

� Ohio law does not recognize the existence of any implied warranties by architects.

� To the contrary, Ohio law is clear that an architect’s undertaking does not imply any warranties or guarantee a perfect plan or satisfactory result.

• See Craft Gen. Contractors, Inc. v. City of Urbana, 10th Dist. No. 81AP-346, 1982 WL 3960 at *4 (Feb. 2, 1982)

• See also Menifee v. Ohio Welding Products, Inc., 1st Dist. Hamilton No. A-7903209, 1984 WL 4171, *4 (Jan. 4, 1984) aff'd, 15 Ohio St.3d 75, 472 N.E.2d 707 (1984)

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COMPARE OHIO TO ARIZONA

� In North Peak Construction, LLC v. Architecture Plus, Ltd, a general contractor sued an architect for breach of implied warranty and negligence. 254 P.3d 404 (Ariz. Ct. App. 2011).

� The plaintiff, a general contractor, sued the architect after plaintiff was required to demolish construction work built pursuant to the Architect’s plans.

� The architect’s plans built plaintiff’s home facing an unfavorable direction. The demolition and reorientation increased the cost of the project by approximately $160,000.00.

� Plaintiff alleged the Architect “breached the implied warranty by providing deficient and substandard workmanship in designing and orienting the custom home on the lot without maximizing the views of the city.”

� The court held that even without privity of contract, “breach of implied warranty is a valid cause of action against a design professional and can be brought in addition to a claim for negligence.”

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WHAT SHOULD IMPLIED WARRANTIES

MEAN TO YOU?

� Just as design professionals must be aware and

attentive of whether the economic loss doctrine

may apply, and what statute of limitations

applies to a project, design professionals must be

aware and attentive of what implied warranties

may apply to a project.

� States vary in recognizing whether implied

warranties apply to design professionals; thus, it

is recommended that you consult your attorney in

determining what warranties may apply.65