North Peak v. Architecture Plus (CA1 4/26/11)

This opinion about an architect’s implied warranty tells us that it is “very likely” correct.

A property owner hired Architecture to design a custom home. He told Architecture that he wanted a view of the city but the contract did not expressly provide for that. North Peak, the contractor, started to build it but discovered that it faced the wrong way. North Peak therefore started over and sued Architecture for the resulting expenses, alleging breach of implied warranty (and negligence, which turned out to be barred by the state of limitations, an issue not involved here). Architecture moved to dismiss the warranty count; the trial court granted it; this opinion reverses.

The trial court followed the Court of Appeals opinion in Flagstaff Affordable Housing, which seemed to say that claims against architects are in tort, not contract. But the Supreme Court vacated that decision.  This opinion therefore follows Donnelly, which held that a contractor need not be in privity with an architect to sue on an implied warranty. But Architecture argued, citing Barmat, that the implied duty to a party not in privity is simply to act non-negligently. Although this opinion specifically says that it relies on Donnelly, that’s arguably what Donnelly says, too. The Court of Appeals looks to some Supreme Court cases involving parties in privity to conclude that the implied warranty “very likely” arises out of contract, not tort.

What is the warranty? It is to “exercise its skill with care and diligence and in a reasonable, non-negligent manner.” So, Architecture can be liable in contract to North Peak, without privity, and without any breach of the express terms of the contract.

If you’re a bit confused about where to draw the line between tort and contract, you ain’t seen nothin’ yet. North Peak also sued the architect personally. Architecture argued that he didn’t sign the contract in his personal capacity. The court says that doesn’t matter since North Peak’s claim isn’t based on the contract.

And so it almost makes sense when the court concludes by saying that North Peak isn’t entitled to fees because its claim “sounds” in contract but does not “arise out of” contract.

So, Architecture and its principal have a contractual duty not to be negligent that is independent of a contract. (That’s not the way the court puts it, that’s just the way we put it to make it sound even stranger.)

(link to opinion)