Architectural, Engineering & Construction Defect Law Alert

Florida

By R. Thomas Roberts, Esq. (904-358-4215 or rtroberts@mdwcg.com) and Geoffrey Lutz, Esq. (904-358-4211 or grlutz@mdwcg.com

The court in the above action reviewed and applied Florida, Alabama and Louisiana law regarding the economic loss rule. As it pertains to Florida, relying upon Indemnity Insurance Co. of North America v. American Aviation, Inc., 891 So.2d 532 (Fla. 2004) and other cases, the court found that Florida's Economic Loss Rule applies in two situations. First, where there is contractual privity between the two parties and the plaintiff seeks tort damages. Second, when the defendant is the manufacturer or distributor of a product that does damage only to itself.

The Supreme Court of Florida found that the economic loss rule does not preclude an action by fishermen against polluters who damaged the fishing industry in Tampa Bay. Further, the Court found that the polluters owed a special duty of care to the fishermen as persons who forseeably could be injured from pollution of state waters. However, the dissent by Judge Polston raises the more interesting point concerning extending duty to parties. Judge Polston, citing Indemnity Insurance Co. of North America v. American Aviation, Inc., 891 So.2d 532 (Fla. 2004), McCain v. Florida Power Corp., 593 So.2d 500 (Fla. 1992), and other cases, warns that the extension of the zone of risk and duty in cases of pollution cases must have a "just stopping point." He continued to reason that economic consequences of a single accident are virtually endless and a future liability could be created to an "indeterminate amount for an indeterminate time to an indeterminate class." Citing Ultramares Corp. v. Touche, 255 N.Y. 170, 179 (N.Y. 1931).

In this case, Florida's Third District Court of Appeal, relying on Moransais v. Healthman, 744 So.2d 973 (Fla. 1999), explained that an extra-contractual remedy against a negligent professional is necessary because contractual remedies may be inadequate. Further, the court found that a limitation of liability provision in a professional's contract may be unenforceable. As to the practical implication, under current Florida law, a cause of action in negligence exists irrespective, and independent, of a professional services agreement.

Pennsylvania

By Gregory Kelley, Esq. (610-354-8273 or gjkelley@mdwcg.com)

The owner of a mobile home park alleged Township officials vexatiously acted to prevent him from expanding and further developing the park in violation of his constitutional right to use and develop his property. The owner also alleged that the Township Engineer advised the Township on issues in a manner that precluded the owner from expanding. The Township Engineer moved to dismiss this claim on substance, as he was sued in his official capacity, and on the basis that the Township was also a defendant. In §1983 suits, a claim against a government officer in his official capacity is the same as a claim against the entity of which the officer is an agent. Thus, the court held that the claims against the Township Engineer in his individual capacity merged with the claims against the Township, and the claims against the Township Engineer individually were dismissed.

The architect/defendant designed a parking garage. A collapse occurred during construction, resulting in death and injury. The architect's professional liability insurance applied and was exhausted. It then sought coverage from its general liability insurer, who denied coverage due to a professional services exclusion. The architect sued insurer. The court ruled for the insurer as the alleged negligence of the architect flowed from its professional role. Professional liability policies are intended to cover risks inherent to a particular profession, such as the failure to perform with a standard of skill expected. A professional act or service is one arising out of a vocation, calling, occupation, or employment involving specialized knowledge, labor, or skill, and the labor or skill involved is predominantly mental or intellectual. A General Liability policy covers risks that arise with the operation of a business. The categorization of a party's liability is determined based on the activity that party was involved in at the time the liability arose. As the liability arose from the architect's professional services, coverage was properly denied.