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Washington State Professional Liability Update: Supreme Court Expands the Independent Duty Doctrine

November 19, 2013
Donatelli v. D.R. Strong Consulting Engineers, Inc., No. 86590-6 (Wash. Nov. 14, 2013)


WHY THIS CASE IS IMPORTANT

This case further expands the independent duty doctrine in the professional liability context. The Supreme Court of Washington increased the scope of remedies available to plaintiffs in claims against design professionals finding that a tort duty arises independently of any contractual duties.

Fortunately, the Washington rule is still narrower than the one adopted in some jurisdictions where the duty to avoid negligent misrepresentation always arises independently of a contract. This case, however, expands the scope of that tort even to situations in which economic loss alone is at stake and the parties contracted against economic liability.

FACTS

In October 2002, the Donatelli’s hired D.R. Strong Consulting Engineers, Inc. to help develop the Donatellis’ real property. According to the Donatelli’s, D.R. Strong represented that it would be able to finish the project in approximately one and a half years for under $50,000. The scope of work allegedly included the acquisition of preliminary permit approval from King County and managerial services to oversee the operation.

King County granted preliminary approval in October, 2002, with the approval to remain valid for five years. The preliminary approval expired in October of 2007. At that point, the project was still incomplete with an alleged price tag of approximately $120,000. Before D.R. Strong could obtain a new preliminary approval, the Donatelli’s suffered substantial financial losses and eventually lost the property in foreclosure.

PROCEDURAL BACKGROUND

The Donatelli’s sued D.R. Strong for, among other claims, professional negligence and negligent misrepresentation. The trial court denied D.R. Strong’s motion for summary dismissal, holding that professional negligence claims could be stated even in the context of a contractual relationship.

The Court of Appeals affirmed, holding that the independent duty doctrine did not bar negligence claims because professional engineers owe duties to their clients independent of any contractual relationship.

Upon appeal to the Supreme Court of Washington affirmed. Regarding the professional negligence claim, the Court found that genuine issues of material fact existed in the record as to the nature of the duties D.R. Strong assumed under the contract. Because the Court could not determine the scope of D.R. Strong’s contractual obligations, it could not determine if any duties to the Donatelli’s arose independently of the contract. While the Court stated that it would not have barred the Donatellis’ negligence claim under the independent duty doctrine, it found that the doctrine simply did not apply since the record did not establish the scope of contractual duties on that issue.

Regarding the negligent misrepresentation claim, the Court stated generally that where one party, through misrepresentations, induces another party to enter into a contractual relationship, a duty to avoid negligent misrepresentation “might” arise independent of the contract. Over a vigorous dissent, the Court then went on to find that D.R. Strong’s duty to avoid negligent misrepresentations to induce the Donatelli’s into hiring D.R. Strong arose independently of the contract.

HOLDING

The Supreme Court of Washington held that the duty to avoid misrepresentations that induce a party to enter into a contract arises independently of the contract. Thus, the independent duty doctrine does not bar a subsequent claim for negligent misrepresentation. Of further significance, the Court ruled that the independent duty doctrine did not bar negligence claims because professional engineers owe duties to their clients independent of any contractual relationship.

This case further expands the circumstances in which the independent duty doctrine will allow plaintiffs to seek tort remedies from parties to a contract, including architects and engineers in the professional liability arena.

Wood, Smith, Henning & Berman LLP is proud of its nationwide association with the construction community. With over 130 lawyers, the firm is able to effectively service its clients out of its multi-state offices. In the Pacific Northwest, Gordon Hauschild manages the Seattle, Washington office, and Timothy Repass heads the new Portland, Oregon, office.

The firm provides full service representation to the construction community, representing the developer, contractor, design professional and surety. In addition, the firm handles a comprehensive range of civil litigation including environmental and toxic tort, general liability, professional liability, labor and employment law, intellectual property, transportation, entertainment, and business litigation matters.

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