Beacon v. Skidmore Decision

California Design Professionals Delivered Hard Blow in Supreme Court Decision Beacon Residential v Skidmore, Ownings & Merrill.

Among many alleged deficiencies, these San Francisco homeowners experienced oppressive heat gain due to substitutions in windows and a lack of proper ventilation design, which created excessive heat and rendered the units uninhabitable during high temperatures. Defendant architects were not only responsible for the design, but billed over $5 million and “played a lead role not only in designing the Project but also in implementing the Project design,” which included weekly construction meetings, altering design requirements and advising the owner of nonconforming workmanship.

The Court concluded that a duty was owed to subsequent purchasers who must rely on these professionals to properly design their homes, regardless of whether they were directly contracted. In Beacon, the architects sought to limit their liability by precluding third-party rights in their contract, but the Court dismissed these provisions as being irrelevant.

The Court also looked to California’s Right to Repair legislation (SB 800), despite the fact that SB800 specifically excludes apartment conversions as occurred here. The Court concluded that the plain language of SB800 Section 896 implicates design professionals when their design causes a violation of the standard due to a negligent act.

Architects should pay special attention to this ruling and take aggressive steps to reduce their design errors by seeking qualified peer review of their work, standardizing and perfecting common building cladding and flashing details, and moving away from the traditional “builder’s set” of minimalist construction drawings. Architects should be more involved in the selection of time-proven products to reduce incompatibility failures. All these have been proven to result in reduced liability for design professionals.

This case provides insight to where the future of construction defect litigation will be headed, considering “soft” no-damage claims such as comfort, indoor air quality and SB800 performance issues lacking consequential damage are on the rise.

Read the California Supreme Court decision here.