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Contractor’s Tort Liability Ends at Completion of Construction

Construction & Contractor Disputes and Real Estate Law

In a recent case called Neiman v. Leo A. Daly Company the California Court of Appeal upheld summary judgment awarded to an architect based on his affirmative defense of the “completed and accepted” doctrine. Under this doctrine, once a contractor has completed its work and the owner has accepted it, the contractor is no longer liable to third parties injured as a result of an obvious, patent defect in the contractor’s work.

In Neiman, the Plaintiff fell on the stairs at the campus theater of the Santa Monica Community College.  She sued the College and others, including the architect. The plaintiff alleged that the stairs did not have contrasting marking strips at the edge of each step and that caused or contributed to her trip and fall.

The Architect designed the theater arts building for the college. The theater was completed almost two years before the plaintiff’s injury. The architect’s agreement with the college required him “to observe the construction to completion and in so doing to comply with all requirements of Title 21, California Administrative Code, with respect to such observation. This observation is contemplated to mean that the Architect shall make such visits to the work in progress as necessary to determine that the work is carried out in accordance with the contract documents including Architect’s specifications ….” The plaintiff sued the architect contending that he failed to properly conduct his inspections during construction.

The trial court granted the architect’s motion for summary judgment based on the “completed and accepted” doctrine. In upholding the trial court’s judgment, the Court of Appeal extended what is essentially a contractor’s defense to the design professional’s responsibility to inspect the work. The court distinguished this claim from a claim that the drawings and specifications contained errors or omissions. Here, the contrasting marking strips were called for in the design documents. The architect was sued because he failed to discover the absent contrast strips.

The rationale underlying the “completed and accepted” doctrine was explained by the court:

[W]hen a contractor … completes work that is accepted by the owner, the contractor is not liable to third parties injured as a result of the condition of the work, even if the contractor was negligent in performing the contract, unless the defect in the work was latent or concealed. The rationale for this doctrine is that an owner has a duty to inspect the work and ascertain its safety, and thus the owner’s acceptance of the work shifts liability for its safety to the owner, provided that a reasonable inspection would disclose the defect. Stated another way, ‘when the owner has accepted a structure from the contractor, the owner’s failure to attempt to remedy an obviously dangerous defect is an intervening cause for which the contractor is not liable.’ The doctrine applies to patent defects, but not latent defects. ‘If an owner, fulfilling the duty of inspection cannot discover the defect, then the owner cannot effectively represent to the world that the construction is sufficient; he lacks adequate information to do so.’

The court held that as a matter of law the absence of contrast marking strips was a patent, obvious defect. “The absence of stripes on the stairs is obvious and apparent to any reasonably observant person. The stripes are designed to be seen by someone walking down the stairs. Thus, a reasonable inspection should disclose the striping called for in the plans and specifications is missing.”

The completed and accepted doctrine is a defense that should be considered by all contractors after they have completed their work on a project.  After Neiman, it is a defense that can, in certain cases, be asserted by design professionals as well.  In any case, it is always advisable to seek prompt and experienced legal assistance when facing these kinds of claims.

If you are a contractor interested in seeking legal counsel regarding such matters, don’t hesitate to contact Brewer Offord & Pedersen LLP at (650) 327 – 2900 or visit us on the web at www.BrewerFirm.com.

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