Homeowners Fail in Attempt to Hold Development's Architect Liable

A recent court decision reminds us of the sometimes difficult proof required to hold professionals, in this case an architect, responsible for claimed deficiencies in their work. In the case of Harbour Pointe v. Benjamin Beechwood, LLC, 5882/12, NYLJ (Sup., QU, decided May 20, 2013), the Association of Condominium Owners at Harbour Pointe sued developers of the buildings for alleged construction defects. Also named in the case were the architects of record. The suit against the architect alleged breach of contract, negligent misrepresentation and professional malpractice. Common to all of these theories of recovery is the requirement that the plaintiffs establish that there was a duty owed them by the defendant, architect.

On the contract claim, it was clear that the homeowners were never signatory to the contract between the developers and the architect. Consequently, the Association homeowners alleged that they were a third party beneficiary of the contract. A plaintiff establishes a duty owed if it can be shown that a contract between two other parties clearly intended to benefit the plaintiff and that the benefit was not merely incidental. In the clearest example of this, the contract itself indicates that the contracting parties have agreed to accomplish a certain objective for the benefit of a third person. That third person is known as a third party beneficiary. Here, however, the contract between the sponsor and the architect contains no provision expressly stating any intention to benefit the plaintiff, Association.

The theory asserted against the architect based on its allegedly negligent misrepresentation in the description, report and certification contained in the offering plan failed, too. In order to establish a cause of action for negligent misrepresentation, the plaintiff must show either privity of contract (not applicable here) or a relationship so close as to approach that privity. The court found that the plaintiffs were not a known party at the time of contracting. The Court held that the defendant architect could not have known that the individual plaintiff homeowners would be among those who would rely on its representations when made, since it could not have known or had the names or means of knowing of specific plaintiffs' existence. The plaintiffs were merely members of a potential class of purchasers, rather than a known party. Thus, there is no equivalence of privity.*

The cause of action for professional malpractice was dismissed, as well, due to the lack of proof of a duty owed by the architect.

There are circumstances pursuant to which these types of claims may be sustained. However, the threading of the proverbial needle must be done precisely and carefully in order to survive the inevitable motion to dismiss the case. If you have any questions concerning the obligations or rights of a professional concerning claims of professional malpractice, ask the lawyers at Catania, Mahon & Rider, PLLC.

*The author believes this portion of the court's analysis may be subject to question. While the individual members of the class of Homeowners who became members of the HOA, pursuant to the mandatory provisions of the offering plan may not have been ascertainable, certainly the HOA was contemplated, identified and mandated from the outset.