Breach of Contract Claims. That was not the end of the matter, however, in First National Bank of Akron. Even without proof of a "positive legal duty imposed by law," the Architect had a contractual duty to observe the construction project. Had he fulfilled his contractual obligation, he would have detected the material deviations from the plans. When he issued the certificate of payment, he warranted—erroneously—that the quality of work complied with the plans. Thus, the Architect, while not liable for negligence, was liable for a breach of contract.

This case is particularly important because the Architect's contractual obligation was substantially similar to the Architect's contractual obligation in AIA Document B141. Specifically, the contract in First National Bank of Akron required the Architect

[to] make periodic visits to the site to familiarize himself generally with the progress and quality of the work and to determine in general if the work is proceeding in accordance with the Contract Documents. He will not be required to make exhaustive or continuous on-site inspections to check the quality or quantity of the work and he will not be responsible for the Contractor's failure to carry out the construction work in accordance with the Contract Documents.

The court recognized that the Architect's observation duties under such a contract were not particularly onerous. Still, they could not be ignored altogether:

Admittedly, the contract documents are explicit on the provision that exhaustive, continuous on-site inspections are not required. That exhaustive, continuous on-site inspections were not required, however, does not allow the architect to close his eyes on the construction site, refrain from engaging in any inspection procedure whatsoever, and then disclaim liability for construction defects that even the most perfunctory monitoring would have prevented.

The work on the Bank wall seriously deviated from the plans. When the Architect signed certificates of payment warranting that the work complied, he breached his contract. Even without the professional standard of care evidence needed for a negligence claim, the Architect could be found liable for damages based on breach of contract.

Required Proof. To establish that an Architect is liable in damages, the building Owner has two choices, breach of contract or negligence. As seen, the breach of contract action is pretty straightforward, requiring (1) a contractual clause that was not followed and (2) damage as a result. For proof of professional negligence, the Owner must prove (1) the Architect was negligent, (2) the Architect's negligence proximately caused the Owner damages. For either action, the amount of these damages must be shown.

The negligence standard was discussed at length by the court in Hedrick & Associates v. Koury (Nov. 15, 1990), Hamilton App., 1990 WL 178199. In that case, the court based its jury instruction on the Cincinnati Riverfront Coliseum case:

Negligence is a failure to use ordinary care. Ordinary care is that amount of care which a reasonabl[y] prudent person would have used in taking into consideration all of the facts, circumstances and conditions in which such person was placed at the time of the happening in question.

The amount of care required increases in proportion to the danger that should reasonably be foreseen. However, the test is still that of ordinary care under the circumstances.

Design professionals have a duty to use ordinary skill, care, and diligence in rendering their professional services. When they are called upon to provide plans and specifications for a particular job they must use their skill and care to provide plans and specifications which are sufficient and adequate.

An engineer, in the preparation of plans and drawings, owes to the person employing him the duty to exercise his skill and ability, his judgment and taste, reasonably and without neglect.

Expert Testimony. To prove negligence, the Owner in most cases will be required to present expert testimony in all but the most blatant cases. When the design professional's lack of skill or care is so apparent that even lay persons can recognize it, an expert witness may be unnecessary.

This was the rule in Simon v. Drake Construction Co. (1993), 87 Ohio App.3d 23. In that case, an injured construction worker brought a claim against the Architect who designed a stationary ladder. The court rejected that claim because the plaintiff failed to present expert testimony that the Architect had fallen short of the standard of care. For support, the court turned to cases involving the standards of care in the medical and legal professions, which the court apparently saw as comparable.

An Owner's Damages. Whether the claim is negligence or breach of contract, the cost of repairs often will determine the applicable measure of damages. As stated by the Hamilton County Appellate court in Cincinnati Riverfront Coliseum, Inc. v. Clark Engineering Co., 1985 WL 11516 (the earlier opinion, before the case got to the Ohio Supreme Court):

In a tort action such as this, the accepted measure of damages is generally considered to be the amount of money which will fully compensate and make whole the injured party. . . . To achieve this end, several methods have been employed in Ohio to assess damages, including a standard predicated upon cost of repairs, but it should be noted there is no arbitrary or exact formula that must be applied in every case without regard to whether its application would lead to full compensation for losses proximately caused by the wrongdoer's negligence.

In First National Bank of Akron v. Cann, the court applied a substantially similar test in determining the proper damages for the Architect's breach of contract. In that case, the court said that "[t]he appropriate measure of damages is the reasonable cost of material and labor required to place the building in the condition contemplated by the parties at the time they entered into the contract."

Claims Brought by Non-Owners. Sometimes the conduct of a design professional injures someone other than an Owner. For instance, a defect in the plans or specifications may cause a subcontractor additional work or expense. Can the injured subcontractor obtain damages from the design professional? The answer, in Ohio, is not usually.

The problem is that the subcontractor's injury is likely to be only economic: He has spent more money than he originally planned because of the design professional's shortcomings. So the "Economic Loss Doctrine" applies, and it says that economic losses should be handled through contract actions, not tort (negligence) actions. That is the Supreme Court's lesson in Floor Craft Floor Covering, Inc. v. Parma Community General Hospital Assoc. (1990), 54 Ohio St.3d 1, a very significant case.

The Floor Craft plaintiff was a flooring contractor who alleged that the Architect's specification of incompatible flooring materials caused him expensive repair work. Was this a basis for a negligence claim? Not according to the Supreme Court:

The key issue presented in this case is whether a contractor may sue an architect for economic injury in the absence of privity of contract [a contractual relationship] between the parties. For the reasons which follow we answer such query in the negative.

If the contractor had had a contract with the Architect, a breach of contract action would have been possible. But "no common-law duty requires an architect to protect the contractor from purely economic loss," so a negligence action was not an option. A strong dissent pointed out that this was not the law in numerous other jurisdictions. But the dissenters failed to convince enough justices, so the "Economic Loss Doctrine" is the law in Ohio.

The only exception is a narrow one: When a design professional exercises unusual control of the construction project, this may be seen as a sufficient "nexus" to substitute for a contractual relationship. For instance, in Clevecon, Inc. v. Northeast Ohio Regional Sewer District (1993), 90 Ohio App.3d 215, the contractor's lack of a contract with the Architect was no obstacle to an action for professional malpractice. In a decision based on Floor Craft, the court still found that "liability for economic loss exists in a malpractice action against a design professional."

What was the difference between Floor Craft and Clevecon? The amount of control exercised by the Architect and sewer designer, Jenny:

Jenny's involvement in the tunnel project went far beyond the limited role of the architect in Floor Craft. Jenny exercised a substantial amount of control over the project. Jenny's engineers were present at the construction site and gave orders about the project, including ordering the removal of concrete segments and the application of additional grouting. This type of control has been held to establish a nexus between the parties.

This type of control was sufficient to permit a claim against Jenny, even though the plaintiff and Jenny did not have a contract. But the usual ruling is just the opposite. When the only losses are economic, plaintiff is limited to a contract claim and can only sue a party with whom he has a contract.

Recommendations. The cases show that design professionals can be held liable for negligent design as well as for failure to carry out their contractual duty to observe the construction. Paragraph 4.2.2 of AIA Document A201 sets down the usual contractual requirements:

The Architect will visit the site at intervals appropriate to the stage of construction to become generally familiar with the progress and quality of the completed Work and to determine in general if the Work is being performed in a manner indicating that the Work, when completed, will be in accordance with the Contract Documents.

While this does not require exhaustive inspections, it does require attention by the design professional, or claims are likely to result.

To avoid both types of claims, the Architect should have a strong quality control program in place, assuring that its design will be reviewed by a competent professional. Such a review can minimize claims of negligent design.

As to the alleged failure to inspect/observe the construction, the Architect should ensure that it observes the construction at appropriate intervals, and that the person making the observations is competent to detect non-conforming and defective work. Before signing any Pay Application, the Architect should be sure to check relevant sections of the work, thus assuring that the warranty of compliance with the plans is based on knowledge. Often what the Architect most needs to see will be covered up by the time of a Pay Application. Therefore, the Architect should observe the work regularly, before substantial portions of the work are covered up.

What the Courts Are Saying . . .