Construction Law Today : Construction Lawyer & Attorney : Joshua Glazov : Design Build Contracts, Construction Bankruptcy

In the last post we talked about the recent trial of the the the Indianapolis-Marion County Public Library's (the "owner") fraud claims against against New York based Thornton Tomasetti Engineering, Inc. (the "structural engineer").  Those claims stemmed from $50 Million in cost overruns to build the underground garage foundation of an addition to the Indianapolis Central Library.

The owner also sued the structural engineer on a litany of other claims, including negligence in providing structural design services.  But the trial didn't include the owner's negligence claims because they were dismissed before the trial started.  The owner appealed.  In this post we'll talk about the Court of Appeals's decision because it has important effects on the liability of architects, engineers, and other design professionals. 

Background

Recall from the last post that when hiring designers for the project, the owner contracted with architects Woolen Molzan and Partners, Inc. (the "architect") to be the project's prime designer.  The architect then sub-contracted with the structural engineer to serve as the project's structural engineering sub-designer.  The Owner never had a contract with the structural engineer. 

Recall also that the only damages the owner claimed were for repair, retrofitting, and delay costs.  The owner never claimed any damages for:

• Death or personal injury to anyone.
  
• Damage to the owner's property other than problems with the foundation and garage the structural engineer designed.  They did not claim damages for things like broken computers in the existing parts of the library or broken light poles in the library parking lot.
• Damage to the property of anyone else (e.g., damage to neighboring buildings or cars of library customers).

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In an article last week, Jon Murray of the Indianapolis Star reported that the Indianapolis-Marion County Public Library (the "owner") will not appeal a jury verdict of no liability on the owner's $50 Million fraud claim against against New York based Thornton Tomasetti Engineering, Inc. (the "structural engineer").  The case stems from cracks and gaps in the concrete members of the Indianapolis Central Library's new underground garage that also serves as the building's foundation. 

Though the owner will not appeal from the lost trial of their fraud claims, they are already appealing Judge Matthew Kincaid's pre-trial dismissal of their negligence and breach of contract claims.

The Backstory

In 1998, the owner hired architects Woolen Molzan and Partners, Inc. (the "architect") to design renovation of, and additions to, the main Indianapolis public library.  The architect contracted with the structural engineer to work as the structural engineering sub-designer on the project. The architect also hired Charlier Clark & Linard, PC (the "observer") to observe report on the construction work once it started.

Construction started in 2002 with Shook, LLC as the "prime contractor".  As construction progressed, significant problems developed with the rebar and concrete in the garage. In fact, after the completion of each concrete pour, numerous defects were discovered, including exposed steel reinforcement and voids in the beams and columns.

In February 2004, approximately a month after the prime contractor completed the two final major concrete pours, owner personnel discovered major voids in concrete beams and columns in the garage. Concerned about the structural integrity of the garage, the owner hired Construction Technologies Laboratories, Inc. (the "forensic engineer") to investigate the garage. The forensic engineer reported several design and construction defects in the garage. Representatives of the forensic representatives even believed that the garage was "at serious risk for structural failure if construction were allowed to continue."  The owner suspended work on the project on May 6, 2004. Continue Reading...

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