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The Supreme Court of California made a key decision involving tort duties that has the potential to drastically affect property developers, future homeowners, customers, and businesses as well. Beacon Residential Community Association v. Skidmore, Owings & Merrill:
The California Supreme Court unanimously affirmed a judgment of the California Court of Appeal in the case of Beacon Residential Community Association v. Skidmore, Owings & Merrill, 59 Cal.4th 568 (2014), holding that an architect owes a duty of care to future homeowners in the design of a residential building where…“the architect is a principal architect on the project—that is, the architect, in providing professional design services, is not subordinate to other design professionals. The duty of care extends to such architects even when they do not actually build the project or exercise ultimate control over construction.” (Id. at 571.) In short, primary architects have a duty of care to homeowners as long as negligence in their building design could foreseeably result in personal injury or property damage.
The plaintiff, Beacon Residential Community Association, was a homeowners association and sued several parties including defendant property architects, alleging that the architectural designs of the condos had defects, “including extensive water infiltration, inadequate fire separations, structural cracks, and other safety hazards.” (Id. at 572.)
The defendant meanwhile argue that there was no duty of care and applied the case of Bily v. Arthur Young & Co., 3 Cal.4th 370 (1992), arguing that in Bily, the court held that an auditor (accounting firm) does not owe a duty of care to non-client third party investors. The Supreme Court quickly distinguished Bily, pointing out that an auditor is far more removed from the transactions that cause any third-party investor losses compared to the case at hand. Furthermore, the plaintiffs in auditor liability cases are a more sophisticated class of plaintiffs and therefore are better able to protect their own interests. Finally, the court points out that in auditor liability cases, there are only economic losses as opposed to architect negligence cases where there are severe risks of personal injury or property damage.
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