By: Alexander S. Beck, Esq., Stearns, Roberts & Guttentag, LLC
Under Florida Law, where an express provision in a professional service contract provides for a heightened standard of care, the professional must perform its services in accordance with the terms of the contract. Failure to perform the services under the contract pursuant to the heightened standard of care may result in a breach of the contract.
In School Board of Broward County v. Pierce Goodwin Alexander & Linville, 2014 WL 1031461 (Fla.4th DCA 2014), the School Board entered into a contract (“contract”) with an architectural firm (the “architect”) to perform design services for the renovation of a high school. During the initial phase, the preliminary design plans were reviewed by the School Board’s peer reviewer. The peer reviewer contended that a portion of the plans were not code-compliant regarding fire safety because a third floor balcony on one of the buildings required a staircase as an emergency exit. The architect disagreed and suggested an alternative solution to meet the fire code standards. The issue of bringing the design plans under code compliance was negotiated for several months before general contractors were able to bid on the project. Pursuant to the design contract between the parties, the school board’s chief building official (“building code official”) had final authority to determine the correct interpretation of all applicable building codes, statutes, and regulations. The architect believed its alternative solution was approved by the building code official based on oral statements made by the building official during a meeting with the architect and the School Board prior to submission of the initial design plans for bidding by contractors.
After construction commenced, the building code official determined the design plans were not code-compliant and a staircase was required for the third floor balcony. That decision resulted in the redrafting of plans by the architect and the implementation of change order item (“COI”) 51. It also resulted in the School Board paying more for the renovation because the general contractor’s bid did not contemplate the construction of a staircase, and the initial construction had to be reworked. The School Board filed a complaint against the architect seeking damages for breach of contract, breach of contractual indemnity, and breach of common law indemnity. The crux of the School Board’s suit was that the architect did not provide initial design plans for bidding by contractors that were code-compliant.
One of the issues raised pretrial was the standard of care applicable to the contract between the parties. The School Board contended that the standard of care was whether the initial plans were code-compliant as required by the contract (breach of contract standard). The architect contended that the standard of care was whether it performed its duties with ordinary and reasonable skill (negligence standard). The trial court interpreted the contract to limit damages to those arising from “negligent performance.” As a result, the School Board was prohibited from presenting evidence indicating that the initial design plans were not code-compliant. Additionally, the jury was instructed on a negligence theory of liability, rather than a breach of contract theory of liability. The jury returned a verdict determining there was no breach of duty by the architect regarding COI 51. The School Board appealed the verdict.
On appeal, the School Board argued that the trial court applied the incorrect standard of care after erroneously interpreting the contract. Where no ambiguity exists with regard to the parties’ intention, the interpretation of the contract is a question of law. Under common law, an architect rendering professional services is to perform such services in accordance with the standard of care used by similar professionals in the community under similar circumstances. An architect owes a duty of due care to his client in arranging site plans and drawing buildings which are in conformance with building codes as well as other similar local ordinances. As long as the architect uses the ordinary and reasonable skill other architects in the community use to draft plans that are code-compliant, then the common law standard of care is met.
However, where an express provision within a professional services contract provides for a heightened standard of care, the professional must perform in accordance with the terms of the contract. If an architect contracts to perform duties beyond those required by ordinary standards of care, the quality of that performance must meet the contractual terms. Thus, an architect can contractually commit to perform under a standard of care higher than the common law standard.
In this case, the School Board argued that the standard of care usually applicable to architects was heightened by the provisions of the contract which required the design services to: “. . . [b]e in accordance with all applicable codes, laws, and regulations of any governmental entity . . . with the Owner serving as the interpreter of the intent and meaning of … any other applicable code[.]” Conversely, the architect argued that the standard of care was defined in the contract under the provision that the architect will indemnify the owner from damages by the architect’s: “ …negligent, reckless or intentional wrongful acts or omission, error, misconduct, or commission.
In interpreting a contract, Courts review contested phrases as part of the whole contract rather than focusing on each phrase separately. If a contract is internally inconsistent, it is the duty of the court to resolve the inconsistency in a manner that renders the contract meaningful.
The architect argued on appeal that the above indemnification clause applied to first-party liability. The appellate court disagreed and found that the indemnification clause applied to third-party liability. The court explained that the indemnity clause unambiguously stated that the architect shall indemnify and hold harmless the school board from claims and damages “which are or may be imposed upon, incurred by or asserted against Owner.” The court did not construe the terms “imposed upon” and “incurred by” to refer to first-party liability, but instead construed those terms to refer to situations in which the School Board may face vicarious liability (i.e. third party-liability). As such, the court determined that the indemnity clause would not affect the architect’s first-party liability for failure to deliver professional services in accordance with the agreement (e.g. school board’s count for breach of contract).
Based on the type of clause cited above by the School Board, the appellate court concluded that the parties unambiguously allocated to the architect the risk for costs and expenses attributable to design plans that were not code-compliant. The court reasoned that the plain language of the contract required, during all phases of the architect’s performance, delivery of design plans for a building that would be code-compliant, rather than merely requiring plans prepared with ordinary and reasonable skill services. The fact that the contract specifically stated that all design plans were to be in compliance with all applicable codes, and only once makes reference to “customary professional standards,” persuaded the court that the architect committed itself to a higher standard. Therefore, the appellate court held that the trial court applied the incorrect standard of care under which the architect was to perform its services, and ordered a new trial on the claims involving COI 51.
This case demonstrates that an architect may contract to perform professional services pursuant to a heightened standard of care. When the express provisions of the contract provides for such a heightened standard of care, and the architect fails to perform in accordance with such standard of care, the architect may be in breach of the contract.
About the Author: Alexander S. Beck is an associate with Stearns, Roberts & Guttentag, LLC. Mr. Beck in construction law including construction lien claims, payment and performance bond claims, bid protests, construction contract preparation, and construction and design defect claims He can be reached for consultation at [email protected].