Large infrastructure projects are often subject to intricate contractual relationships between the relevant stakeholders, and this will also include collateral warranties to cover any potential gaps in liability to mitigate potential effects of one of the participants in the contractual matrix becoming insolvent. Parties lower down the contractual chain may engage their own designers or consultants to discharge their obligations up the contractual chain. An interesting scenario arose in the recent case Multiplex Construction Europe Ltd v Bathgate Realisations Civil Engineering Ltd (Formerly Dunne building & Civil Engineering Ltd (In administration) (2) BRM Construction LLC (3) Argo Global Syndicate 1200 (2021) , and the two issues that were heard by way of preliminary issue.
The economic loss rule is alive and well in California. In State Ready Mix, Inc. v. Moffatt & Nichol (2015) 232 Cal.App.4th 1227, the Court of Appeal ruled that a concrete supplier (State Ready Mix, Inc., or “Supplier”) could not seek equitable indemnity or contribution from an engineer for the cost to remove and replace Supplier’s concrete that was non-compliant with Supplier’s own contract. Although the Court minced no words when it described the factual basis for its ruling (“If [Supplier] wants to see who is at fault, it should look in the mirror.”), the most notable aspect of the opinion was its analysis and rejection of the legal theories of potential liability. Continue reading “Tort-Based Indemnity/Contribution Remedies Not Available to Shift Contract Damages”
The California Supreme Court issued a unanimous decision in Beacon Residential Community Association v. Skidmore, Owings & Merrill, S208173, on July 3, upholding a homeowners association’s right to pursue a common law negligence claim against the project architects of a 595-unit condominium project in San Francisco.
Building on substantial case law and the common law principles on which it is based, we hold that an architect owes a duty of care to future homeowners in the design of a residential building where, as here, the architect is a principal architect on the project — that is, the architect, in providing professional design services, is not subordinate to other design professionals. The duty of care extends to such architects even when they do not actually build the project or exercise ultimate control over construction.
In 2008, a crane operator and a construction worker were killed when a construction crane collapsed on the east side of Manhattan. The decedents’ estates brought suit against the project owner, the construction manager and the crane operator. The three construction defendants asserted cross-claims against the City of New York seeking indemnification and contribution on the grounds that the City failed in its duty to keep the construction site safe.