Complex Business Litigation Court Upholds Design Professional’s Duty Defense under AR Moyer, Post-Tiara

David Salazar, Esq., a partner in Cole, Scott & Kissane’s (“CSK’s”) Construction Group, recently filed and argued a Motion for Judgment on the Pleadings (the “Motion”) on behalf of a threshold inspector in a complex, multi-party construction lawsuit. The general contractor on the project sued CSK’s client for, among other things, professional negligence. The claimed damages exceeded $28,000,000.00. The Circuit Court in and for Miami-Dade County (the “Court”) granted the Motion and entered judgment on the pleadings as to the general contractor’s professional negligence claim against the threshold inspector.

The crux of the Motion was based on the rule that design professionals generally do not owe duties to protect parties with whom they are not in privity of contract from purely economic losses. The authority relied upon centered around AR Moyer, Inc. v. Graham, 285 So. 2d 397, 402 (Fla. 1973) and Spancrete, Inc. v. Ronald E. Frazier & Associates, P.A., 630 So. 2d 1197 (Fla. 3d DCA 1994). In AR Moyer, Florida’s Supreme Court carved out an exception to this general rule in situations where the design professional has supervisory authority over the general contractor tantamount to the power of life and death over the project. In Spancrete,  Florida’s Third District Court of Appeals held that an architect’s power to inspect and reject work does not constitute the supervisory control sufficient to satisfy the AR Moyer exception.

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In essence, the prevailing argument in the Motion was that, as merely threshold inspector, CSK’s client did not have such “supervisory authority” over the general contractor. According to the operative pleadings, the threshold inspector only had power to inspect the work and report its findings to the building department. Moreover, CSK argued that the Supreme Court of Florida’s recent holding in Tiara Condo. Ass’n, Inc. v. Marsh McClennan Companies, 110 So. 3d 399, 401 (Fla 2013) was of no moment. While, in Tiara, the Court expressly limited the economic loss rule to products liability cases, an absolute defense to a claim of duty under a negligence theory still exists in cases relating to purely economic losses when the alleged duty is not independent of one arising from contract. CSK successfully argued that this is unlike the economic loss affirmative defense, which assumes a duty is established. The Court agreed.

In addition to obtaining judgment on the pleadings as to the general contractor’s professional negligence claim, CSK previously secured dismissals of a variety of other claims the general contractor brought against its client. The Court previously dismissed the general contractor’s common law indemnity, equitable contribution, and negligent misrepresentation claims. The only remaining claim the general contractor has against CSK’s client is a claim for violation of the Florida Building Code. Matan Scheier, Esq., an associate in the Construction Group, provided invaluable assistance with regard to drafting the papers filed with the Court.

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