Thompson v. Gordon: Design Professionals' Duty Limited to Contract

 

The Illinois Supreme Court’s holding in Thompson v. Gordon reinforces what cases such as Ferentchak v. Village of Frankfort, 105 Ill. 2d 474 (1985), have held for years: that the duties and obligations of a design professional, including the duty of care, are defined by contract.

By way of background, the defendant engineers entered into a contract to design improvements to roads adjoining a shopping mall and to design a replacement of an existing bridge over the interstate.  The contract also provided that “the standard of care applicable to engineer’s services will be the degree of skill and diligence normally employed by professional engineers or consultants performing the same or similar services.”  The bridge, as replaced pursuant to the plans, had a seven-inch high median, which was essentially identical to the median it replaced on the original bridge.  Plaintiff, in an unsuccessful opposition to the entry of summary judgment, offered an expert affidavit expressing the opinion that the engineering standard of care required the design of a barrier on the bridge as opposed to merely “replacing” the raised median.

The appellate court, over a dissent, reversed the summary judgment.  The Supreme Court reversed, holding that the difference between the terms “replacement” and “improvements” made it clear that the specific terms of the contract did not require the redesign of the bridge deck, and that the standard of care provision of the contract related only to the express engineering services to be provided, as opposed to expanding the scope of services and duty of the engineers to redesign the “replacement” structure to include a barrier.

The impact of this case on design professionals is that the Supreme Court confirmed what was stated in Ferentchak, that the degree of skill and care required of the civil engineer depended on his contractual obligation and the scope of that duty was defined by the contract. 

Additionally, the case reiterated useful guidelines regarding the interpretation of contracts:

  1. When contract terms are unambiguous, they are given their common meaning without outside evidence;
  2. When they are ambiguous (subject to more than one meaning), then you need additional evidence to figure out what the parties to the contract meant;
  3. Just because parties disagree as to a term's meaning does not make it ambiguous.

Thompson underscores the value of attorney review of a contract prior to execution.  As in this case, the design professional was protected from liability based solely on the language of its contract.

 

Federal District Court Quashes Subpoena of Non-Party Deposition, Cites FAA

 

The United States District Court for the Northern District of Illinois recently held in Ware v. C.D. Peacock, Inc., 2010 WL 1856021 (N.D. Ill. 2010), that Section 7 of the Federal Arbitration Act does not authorize arbitrators to issue subpoenas for depositions of non-parties outside the physical presence of the arbitrator.  Plaintiff, a former employee of C.D. Peacock, filed an action with the American Arbitration Association alleging employment discrimination.  Following some discovery, C.D. Peacock filed a summary judgment motion.  In opposition, Plaintiff submitted an affidavit from a former co-worker, Helene Tomasian.  The motion for summary judgment was denied based in large part on Tomasian's affidavit.  On C.D. Peacock's request, the arbitrator issued a subpoena for Tomasian's deposition. 

At issue before the court was Tomasian's motion to quash the subpoena for deposition.  She argued that she could not be compelled to participate in a deposition without her consent.  The court began by noting that an arbitrator's authority over parties that are not contractually bound by the arbitration agreement is strictly limited by the Federal Arbitration Act.  Ware, 2010 WL 1856021, at *1.  And, because the Seventh Circuit had not addressed the specific issue in question, the court analyzed the split opinions of the other Circuit Courts of Appeal, ultimately adopting the position of the Second and Third Circuits.  Id., at *3. 

While it is true that non-parties can consent to discovery in arbitrations, the court stated that Tomasian clearly did not do so in this case.  Id.  In addition, C.D. Peacock would not be prejudiced by its inability to depose Tomasian prior to the arbitration.  To the contrary, C.D. Peacock was in possession of Tomasian's affidavit and could expect that her testimony would be consistent with her affidavit.  Id.  Finally, the court commented that by voluntarily entering into arbitration with Plaintiff, C.D. Peacock could not have reasonably expected to obtain full-blown discovery from non-parties.  Id.  "Parties to a private arbitration agreement forego certain procedural rights attendant to formal litigation in return for a more efficient and cost-effective resolution of their disputes... A hallmark of arbitration-and a necessary precursor to its efficient operation-is a limited discovery process."  Id. (citing COMSAT Corp. v. National Science Foundation, 190 F.3d 269, 276 (4th Cir. 1999).  Tomasian's motion to quash the subpoena was granted. 

The Ware Court's holding serves as a reminder of the limited, and hopefully efficient, nature of arbitration.

 

Lead Paint Law Goes Into Effect April 22, 2010

 

Owners, developers and builders working in the renovation arena please note that the EPA’s new regulations on lead paint take effect on April 22, 2010.  The regulations are contained at Title 40, Part 745 of the Code of Federal RegulationsThe importance of this legislation and its impact on contractors is clear. However, it should also be noted that it is anticipated that preparation and cleanup alone may double the work time and the costs of extra time on projects and training required may be passed on to the consumer.  

There are some very important highlights:

  • Effective April 21, no contractor may offer or perform renovations in “target housing” without certification.  Target housing means any housing constructed prior to 1978, so renovators working in homes, apartments or condominiums built prior to 1978 need to take this seriously.
  • There are only very limited exceptions, such as where a certified inspector has determined the project is free of lead paint beyond permitted levels.  Projects with no children or pregnant woman that are owner occupied can also qualify for excluding coverage, but only if the owner signs off that the contractor is not required to meet the regulatory practices.
  • Contractors performing renovations have extensive obligations to give disclosure and notice to building occupants in writing prior to renovation, including providing EPA publications.  Persons and contractors performing work in this arena must provide their customers the EPA’s brochure, Renovate Right (pdf).
  • The regulations further include specific work practice standards, so watch out for potential employee personal injury claims and OSHA inspections and violations as well.
  • Even relatively minor work is swept up in the requirements: generally work disrupting more than 6 square feet of painted area is regulated.
  • When working with possible lead issues, workers will need to place heavy plastic sheets on the ground, seal the room, seal off vents to the area where the project is taking place, remove or cover furniture in the area, cover the ground and plants outside of the work area, close all windows, and mark off the work area to keep non-workers away. Contractors will be required to post warning signs, restrict occupants from work areas, prevent dust and debris from spreading, conduct a thorough cleanup and verify that the cleanup was effective.

This legislation has contractors and building inspectors working to get up to speed on the new rules and licensing requirements. Contractors also must be EPA-certified to work in buildings that could have lead paint. Contractors must be certified by April 22, 2010.  Meetings will be offered for contractors to become certified to work in buildings that might have lead paint. The Illinois Department of Public Health has issued a news release (pdf) which includes list of meetings and locations at which contractors can become certified.

 

Halpin v. Schultz - Argument in the Supreme Court

 

We first wrote on the travails and accomplishments of Mr. Schultz back in 2008. The case involves the Illinois Drainage Code and will be important to any land owner, particularly farmers.

The case was granted leave to appeal and has now been argued in front of the Illinois Supreme Court.

As in the previous court, Mr. Schultz argued the case himself. Video of the argument can be found here

If you listen to the argument, you'll see that the attorneys for the Halpin's are arguing that the appellate court essentially re-tried the case at the appellate level and that the appellate decision was against the manifest weight of the evidence and that the appellate court abused its discretion.

This will be an important decision for developers and those who represent them.  We may end up seeing confirmation of the appellate court's constitutional concern:

"The law does not favor the expropriation of private property for the public good without just compensation.  Even less attractive is the expropriation of private property for the private benefit of an adjoining property owner."

 

 

5 Cent Architecture?

With the economy in tatters and so many people losing their jobs and looking for work it’s refreshing to hear about people taking charge of their destiny and succeeding. NPR ran a story on Morning Edition this morning about John Morefield (find it here). Morefield is a Seattle Architect who has been the topic of other blogs recently. (The picture at the left is from the Kelsey Keith article at Flavorwire.)

After being laid off from two separate jobs in one year as projects for the firms he worked for went away, Morefield took to offering advice with a booth at a local farmer’s market with a sign that read “Architecture 5¢”. The task wasn’t a gimmick, it was an honest way to try an develop a business and clientele in a market that has turned sour… and its working.

Morefield’s website “architecture5cents.com” is taking off and the booth has generated numerous contacts and business as homeowners walk by and drop a nickel in his can for some free advice about their building and architecture concerns.

The target audience is the individual homeowner, but good advice and a good idea can lead to a host of possibilities. It’s even been adopted to a certain fashion by lawyers in both print and … blogs.

While we’re generally prohibited from offering specific advice to people by ethical rules and codes of conduct, legal blogs and information sources offer a host of targeted answers and commentary on topics that are relevant to everyone… especially in the construction industry.

Even more poignant is the ability to help out in a tough economy. Every nickel from Morefield’s virtual website is donated to the Ballard Food Bank.

With so much talk about a stimulus package and infrastructure dollars headed our way, its easy to lose sight of the traditional word-of-mouth methods for marketing and face-to-face discussions that can help build a business. But there is no substitute for human interaction.  

Blawg Review #204

Above the Law is the host of this week’s Blawg Review. In true ATL form, nothing is sacred.

A New Construction Law Blog

We'd like to welcome the attorneys at Cole Schotz to the Construction Law Blogosphere. 

The attorneys of their construction practice group have launched the Real Estate and Construction Law Monitor.

Social Networking for the Industry...

 

The good people over at Construction Lien Blog, have a posting that let us know about a social networking website called Construction Exchange.

The website is populated with a bevy of information and individuals who participate in a host of informational exchanges from Q&A style discussions, to information about projects and bidding.

 

Another Arthouse Project in Illinois?

            We're constantly in wonderment over the different building initiatives and collaborations that can occur when good people get together for something important and worthwhile.  This recent article at Quad-Cities Online reports on one of those projects in the making.

            Apparently, the fine developers at Artspace are again eyeing Illinois for a project, this time in Rock Island.  As part of the growing trend across Illinois' different towns to revitalize downtown areas as a place for community and commerce to interact, Rock Island's own District project is well on its way.

These initiatives are bringing construction work to many areas, and as public interest projects and artistically centered and planned locations, are allowing architects to have some free reign in progressive and green design.  We think an Artspace project in Rock Island would make a fine addition to their downtown, which already merits a visit in its own right and includes some delectable treats like The Blue Cat Brew Pub, and Lagomarcino's vintage confectionary just across the Mississippi river.  And, we'd be remiss to not mention that the area is home to a true Illinoisconstructionblog "must-see", Saarinen's John Deere Corporate Headquarters.