Tuesday, June 15, 2010

“Gross Unfairness” Alleged If Contractors Can’t Sue Architects

by Yvonne Castillo
TSA General Counsel

This is what is alleged in a legal brief pending before the Texas Supreme Court. Imagine if in every project you did, regardless of whether you had a contract with the contractor on the project, the contractor could sue you because he lost money and is pointing the finger at you and the plans and specifications as the source of his economic damages. That’s what’s at stake in a case pending before the Texas Supreme Court. The case stems from an issue where Sharyland Water Supply Corporation is trying to recover alleged economic damages against sewer engineers for designing sewer lines in an alleged negligent manner (i.e. causing harm to their water lines), thereby allegedly creating economic damages to the Corporation. Why do we care about this case? Because Sharyland Water Supply had no contract with the design professionals and is alleging economic damages (without any accompanying property damage or personal injury), and depending on the Court’s ruling, this could easily translate into contractors being able to sue architects on the plans and specifications for alleged economic damages, even without privity of contract.

I’m in the process of finalizing and submitting an amicus brief (“friend of the court” brief since we’re not named litigants) on behalf of TSA to, hopefully, persuade the Court to rule against allowing Sharyland to recover against the engineers. In other words, we’re asking the Court to uphold the Economic Loss Rule, a long-standing legal doctrine that says you can’t sue a party in tort (negligence) for economic damages when there’s no property damage or personal injury. The architectural community cannot afford a change in law where the Economic Loss Doctrine is not upheld. This would be a big problem – opening up a pandora’s box of litigation. If contractors can sue on the architectural plans, who’s next? Subs?

No comments: