Archive for June 2015

Philadelphia Jury Hands Down $5.5 Million Judgment Against Architectural Firm

June 18, 2015

In May, 2015 a jury awarded the City College of Philadelphia (CCP) $5.5 million against design firm Burt Hill (now part of Stantec) for breach of contract and professional negligence. The suit arose following large budget overruns and construction delays on a massive expansion and renovation project aimed at transforming CCP’s campus into a functionally modern—and aesthetically inviting—facility to serve its nearly 40,000 students.

According to CCP’s court filings, Burt Hill made multiple misrepresentations that induced CCP to hire the firm. These representations included Burt Hill’s ability to handle all architectural and engineering work in-house and that the project would be staffed by senior-level professionals experienced in comparable projects. CCP contended that Burt Hill, in an attempt to save money and mask its lack of qualifications in multiple project areas,  subcontracted engineering and other design services, assigned an inexperienced and unlicensed professional as lead project architect, and staffed the project with interns from Drexel University. CCP claimed the outsourcing resulted in a series of errors and omissions, and ultimately to significant delays and substantial additional project costs.

According to CCP, Burt Hill submitted plans and specifications for bid—six months behind its own schedule—that the firm knew were incomplete and riddled with errors. In doing so, Burt Hill “relinquish[ed] its quality-control obligation over its own documents to the bidding contractors.” CCP alleged this constituted a breach of Burt Hill’s professional obligations, and allowed contractors to charge premium prices for change order work required to complete the project. In addition, delays in the delivery of construction documents required eliminating the planned, staggered construction schedule that Burt Hill initially proposed for cost-efficiency purposes. Instead, the new construction and renovation portions of the project were undertaken concurrently, further adding to project costs. All told, the project’s cost ultimately ran $14 million over the initial $28 million budget.

Burt Hill’s defense claimed the project was plagued by well-documented owner-directed changes.  It claimed that once purported change order errors and omissions arising from these changes and related issues were culled out, those remaining—and attributable to the entire design team—were “well within the margins” permitted by professional standards.

This Blog is made available by Laurie & Brennan, LLP for general educational purposes only. The purpose of the Blog is not to provide specific legal advice on any particular matter. By using this Blog site you understand that there is no attorney client relationship between you and this firm and the authors or members of the firm. This Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Under rules applicable to the professional conduct of attorneys in various jurisdictions, the material on this Blog may be considered advertising material.

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Developers Beware: Waiver of the Implied Warranty of Habitability Does Not Apply to Subsequent Purchasers

June 9, 2015

In a recent decision the Illinois Appellate court has ruled that an initial home purchaser’s waiver of the implied warranty of habitability does not bind subsequent purchasers who purchased the home without knowledge of the waiver, even if that home was sold “as is.” As such, a subsequent purchaser can sue the original developer for a breach of the implied warranty of habitability

In Fattah v. Bim, 2015 Ill. App. LEXIS 331, (Ill. App. Ct. 1st Dist. 2015), a developer built and sold a home under a sales contract that contained a valid waiver of the implied warranty of habitability. Three years later, the initial purchaser sold the property “as is” to Fattah. Four months after the sale, the patio collapsed. Fattah then filed a lawsuit against the developer, alleging that the developer had breached the implied warranty of habitability by constructing a home with latent defects.

The Illinois appellate court held that a subsequent purchaser is not bound by an initial purchaser’s waiver of the implied warranty of habitability when the subsequent purchaser did not have knowledge of the waiver or knowingly agree to accept the waiver. The court relied on the well-settled law that although an implied warranty of habitability can be waived, the purchaser must have knowingly waived that right. The court found that there was no evidence that the subsequent purchaser knowingly agreed to accept the initial purchaser’s waiver of the implied warranty of habitability.

Additionally, the court found that the “as is” rider provision used in the sales contract between the initial and subsequent purchaser did not prohibit the subsequent purchaser’s claim against the developer. It reasoned that an “as is” rider could only negate the warranty if it had a provision which fully disclosed the consequences of waiving the warranty. Without such a provision, and merely buying a home “as is,” a subsequent purchaser does not waive its right to assert an implied warranty of habitability claim against the developer.

With this ruling developers are on notice that an initial purchaser’s signing of a waiver of the implied warranty of habitability does not obviate the developer’s liability to subsequent purchasers from latent defects.

This Blog is made available by Laurie & Brennan, LLP for general educational purposes only. The purpose of the Blog is not to provide specific legal advice on any particular matter. By using this Blog site you understand that there is no attorney client relationship between you and this firm and the authors or members of the firm. This Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Under rules applicable to the professional conduct of attorneys in various jurisdictions, the material on this Blog may be considered advertising material.


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