Donnelly Construction Co. v. Oberg/Hunt/Gilleland
In Donnelly Constr. Co. v. Oberg/Hunt/Gilleland, 139 Ariz. 184, 186, 677 P.2d 1292, 1294 (1984) the supreme court held that a claim for breach of an implied warranty may be brought against a design professional even in the absence of privity. 139 Ariz. at 188-89, 677 P.2d at 1296-97.
Donnelly arose out of a bid the Coconino County Board of Supervisors solicited for improvements to a school. 139 Ariz. at 185, 677 P.2d at 1293. One of the documents available to the bidders was a site plan that included engineering specifications prepared by Oberg/Hunt/Gilleland ("OHG"), an architectural firm. Id. In preparing its bid, Donnelly Construction Company relied on the site plan and the associated specifications. Id. The board of supervisors eventually accepted Donnelly's bid. Id.
However, after beginning construction, Donnelly discovered that the plans and specifications OHG had prepared were incorrect. Id. at 185-86, 677 P.2d at 1293-94.
The faulty plans resulted in increased construction costs to Donnelly. Id. at 186, 677 P.2d at 1294.
Donnelly sued the school district and OHG for the increased costs, asserting claims of negligent misrepresentation, negligence, and breach of the implied warranty that OHG's plans were accurate. Id.
OHG filed a Rule 12(b)(6) motion to dismiss, asserting (among other arguments) lack of privity between Donnelly and OHG. Id.
The trial court granted the motion, and OHG ultimately petitioned the Arizona Supreme Court for review following a reversal by the Court of Appeals. Id.
In ruling that the trial court erred in granting the motion to dismiss, our supreme court held that a contractor need not be in privity with an architect to sue the architect for negligence and breach of implied warranty. Id. at 188-89, 677 P.2d at 1296-97.
The court recognized that the implied warranty given by design professionals is "that they have exercised their skills with care and diligence and in a reasonable, non-negligent manner." Id. at 189, 677 P.2d at 1297. Accordingly, the court held that Donnelly was able to go forward with its breach of implied warranty claim and its negligence claim.
The Arizona Supreme Court determined that "design professionals have a duty to use ordinary skill, care, and diligence in rendering their professional services," 139 Ariz. at 187, 677 P.2d at 1295, and are liable for "foreseeable injuries to foreseeable victims which proximately result from their negligent performance of their professional services." Id. at 188, 677 P.2d at 1296.
Thus, the court concluded, a construction contractor could bring a negligence action against a design professional for increased construction cost caused by a faulty site plan--even in the absence of a contract between the contractor and designer. Id. at 185-86, 188, 677 P.2d at 1293-94, 1296.