Make Sure You Know What You're Doing Before You Bend Over Backwards
We know that client satisfaction has to be a priority on anyone’s list. Just imagine the number of projects you’ve been included on or gotten thanks to one happy customer recommending you to another.
But we need to be careful in how far we’re willing to go to satisfy a client because 
those measures could create liability we didn’t have before and could erase protections we contracted for.
Take the case of Senior Housing, Inc. v. Nakawatase. Nakawatase was the architect on a project to build a multiunit residential building for the elderly. The contract for this project included the AIA standard form language stating:
“8.2 As between the parties to this Agreement: as to all acts or failures to act by either party to this Agreement, any applicable statute of limitation shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than the relevant Date of Substantial Completion of the Work, and as to any acts or failures to act occurring after the relevant Date of Substantial Completion, not later than the date of issuance of the final Certificate for Payment.”
The project was substantially completed on September 1, 1983. In 1984, the building owners found moisture problems leading to water and air leaks every time it rained or the wind blew.
Rather than telling the owner that this was not a design issue and that the owner should contact the contractor directly, Nakawatase conducted an on-site inspection and sent a letter to the owner advising that the contractor had been instructed to re-caulk the windows and that the building would be watched to determine if the re-caulking fixed the problem. In 1985 the owner told Nakawatase that the problem had not been fixed. Nakawatase was asked, and did, prepare bids for the application of a water repellant sealer to the entire building.
We don’t know if that work was ever done, but in 1986, with the problems persisting, the owner hired an independent engineer to inspect the building and find out what was wrong. The engineer concluded that the drawings had a flashing design that didn’t properly allow water drainage. The owner had the problems corrected and sent a demand for payment to Nakawatase in September of 1986. Nakawatase never responded to the demand and in March of 1987, the owner sued Nakawatase.
An important thing to remember at this point is that back then, the applicable statute of limitations was two years.
Nakawatase convinced the trial court that Section 8.2 (which the parties contracted for) was applicable and that since the suit was filed over two years from September 1, 1983, the court should dismiss the matter. Senior Homes appealed.
The appellate court held that Nakawatase could not use the statute of limitations as a defense because it did not deny responsibility for the moisture problems, because it instructed the contractor on the course of action to take in correcting the damages, and acted in apparent acknowledgment of its responsibility by making representations that remedial measures would be taken, observed, and further corrected if necessary.
We know there’s a desire to keep the customer satisfied. We need to balance that desire with its ramifications for post-project remedial work and communications when problems arise. We can end up creating new problems and accepting new liabilities depending on the actions we take when we attempt to investigate or correct a potential defect. You wouldn’t attempt a marathon without warming up, so why would you try to handle a potential conflict without first understanding what your rights and liabilities might be.
