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Contractors Face Uphill Battle Against Design Professionals

On July 30, 2014, a California Appeals Court issued an opinion which reaffirms the difficulty that general contractors face in pursuing engineers and other design professionals for negligent work.

In Atlas-Allied, Inc. v. San Diego Community College District, et al. (D061295) (Cal. Ct. App. 2014) the Fourth District Court of Appeals affirmed a trial court’s judgment in favor of engineer Nolte Associates against general contractor Atlas-Allied for negligence and negligent misrepresentation related to design and engineering services that Nolte provided to the San Diego Community College District for a fire suppression system at Miramar College in San Diego. Atlas-Allied originally sued the San Diego Community College District for cost overruns it incurred as a result of unforeseen site conditions at the project. Atlas-Allied also claimed that Nolte’s work was defective and contributed to Atlas-Allied’s cost overruns.

The trial court granted judgment in favor of Nolte after the close of Atlas-Allied’s case. On the negligence claim, the court found that Nolte did not owe a duty of care to Atlas because the parties did not have a contract with each other; Nolte was retained by the District. Likewise, on the negligent misrepresentation claim, the trial court found that Nolte did not make any misrepresentations to Atlas-Allied. The case proceeded on against the District and the District ultimately prevailed.

The Court of Appeals upheld the trial court’s ruling affirming the finding that as the project engineer, Nolte did not owe a duty of care to Atlas-Allied as the project general contractor. The Appeals Court ruled that in the absence of a contractual relationship between the general contractor and engineer, Atlas-Allied’s alleged injury and damages were simply not foreseeable enough to impose a duty of care on Nolte. The Appeals Court specifically noted that if the project design specifications were defective (as alleged by Atlas-Allied), Atlas-Allied had an adequate remedy in pursing the District for those defective specifications.

Although the opinion is unpublished at this time, Atlas-Alliedserves as a reminder of the obstacles that general contractors will encounter when seeking to assert a negligence claim against an engineer for their design work in the absence of a written contract between the parties. However, general contractors are not without recourse. They still have the right to pursue the project owner for defective plans and specifications.