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Annual Review of Signifi cant Cases
Affecting Design Professionals
by Daniel G. Katzenbach, Esquire and Jonathan A. Peterson, Esquire
Contract
LeBlanc v. Logan Hilton Joint Venture, 463 Mass. 316, 974 N.E.2d 34 (2012)
The Supreme Judicial Court of Massachusetts held that an architect can be held liable for
contribution for a breach of its contractual duties. However, a party has no right to contractual
indemnifi cation where the architect failed to report a subcontractor’s negligence and the
contract provided that the architect would not be responsible for the acts or omissions of the
subcontractor.
An electrician was killed by electrocution when he was repairing an electrical transformer at
the Logan Airport Hilton Hotel in Boston. The plaintiff and administratrix of the hotel brought suit
against numerous parties alleging negligence, gross negligence, and breach of warranty. These
parties included the owner of the hotel, Logan Hilton Joint Venture (Hilton); the architect that
designed the hotel, Cambridge Seven Associates, Inc. (Cambridge); the consultant that Cambridge
retained to provide electrical services, Cosentini Associates-MA, LLP (Cosentini); and the
construction subcontractor for electrical services, Broadway Electrical Co., Inc. (Broadway). Cross-
Daniel Katzenbach is a partner in the Raleigh offi ce of Cranfi ll Sumner & Hartzog, LLP. Since joining
the fi rm in 1997, Dan has concentrated his practice in the areas of construction law, environmental
and toxic torts, architects and engineers professional liability, premises liability, and other complex
litigation matters. Dan’s clients include general contractors, developers, architects, engineers, product
manufacturers, trucking companies, and insurance and surety companies and agencies. Dan is a
graduate of Washington & Lee University (B.A., 1994) and Wake Forest University School of Law (J.D.,
1997). He is admitted to practice in North Carolina state courts and the federal eastern and middle
districts of North Carolina.
Jonathan Peterson is an associate attorney in the Raleigh offi ce of Cranfi ll Sumner & Hartzog, LLP, where
he practices in the areas of construction law, premises liability, complex litigation matters, and architects
and engineers professional liability. Jonathan is a graduate of the University of North Carolina at Chapel
Hill (B.A., 2007) and William & Mary Law School (J.D., 2012). He is admitted to practice in North Carolina
state courts.
This annual update is to provide a review of the most signifi cant decisions impacting
design professionals. The cases will consider the following important issues: the effect
contractual language has on a professional designer’s liability, duty of care owed to
third parties and its scope, the completed and accepted doctrine, privity of contract
issues, coverage issues, the economic loss rule, spoilage, nullum tempus, certifi cates of
merit, and arbitration agreements.
As will be discussed, courts have reached various conclusions regarding duty to third
persons, the accepted and completed doctrine, and whether privity will prevent actions
between parties who are not in contract with each other. Further, these cases consider
the extent to which contracting will limit a professional designer’s liability for defective
designs and how courts enforce such limitations. This update also provides case law
suggesting that courts look to clear, unambiguous language in policies to decide
coverage issues. Lastly, the cases included illustrate the complexity in applying the
economic loss rule.
Cranfi ll Sumner & Hartzog LLP
5420 Wade Park Boulevard
Suite 300
Raleigh, NC 27607
(919) 828-5100 Telephone
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www.cshlaw.com
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claims were fi led by Hilton and Broadway against Cambridge and Cosentini for indemnifi cation
and contribution. The trial court granted summary judgment in favor of Cambridge and Cosentini
as to the complaint and the cross-claims.
Hilton and Broadway appealed from the grant of summary judgment as to their cross-
claims. On appeal, the appeals court affi rmed summar y judgment as to Broadway’s cross claim
for indemnifi cation, but reversed as to the other cross-claims. The supreme judicial court then
affi rmed the trial court’s grant of summar y judgment in favor of Cambridge and Cosentini as it
related to the indemnifi cation cross-claims, but reversed as to the contribution cross-claims.
Hilton and Cambridge entered a contract in which Cambridge was going to provide
architectural services to Hilton for a hotel construction project. Under the contract, Cambridge
“was to provide various professional services, including architecture, technical specifi cation
writing, coordination of consultants’ services, and electrical engineering.”1 The contract also
stated that Cambridge “was to prepare ‘Design Development Documents’ for the hotel consisting
of ‘drawings, specifi cations and other documents which fi x and describe the expected fi nal size
and character of the Project,’ including electrical systems materials.”2 Cambridge was to develop
a “preliminary layout of switchgear, transformer and generator placement”3 and was to use such
specifi cations to prepare the fi nal construction documents, which would include “fi nal electrical
specifi cations.”
Once the construction phase started, Cambridge had to visit the site regularly to make sure
the work was being performed in accordance with the construction documents. Cambridge,
however, “was not required to make exhaustive or continuous on-site inspections.”5 Cambridge
was required to submit written reports to Hilton every two weeks detailing Cambridge’s
observations and progress on the work. Cambridge also, according to the contract, had to notify
Hilton of any defi ciencies or deviations from the requirements of the construction contract which
came to Cambridge’s attention.
The contract specifi ed that Cambridge “shall not have control over or charge of acts
or omissions of the contractor or its subcontractors, and ‘shall not be responsible’ for the
contractor’s ‘failure to carry out Work in accordance with the Construction Contract.’”6 The
indemnity provision of the contract stated that Cambridge would indemnify Hilton against all
claims “‘arising out of and to the extent caused by the negligent acts, errors or omissions during
the performance of professional services’7 by its consultants provided that the claims did
not ‘result from the negligent acts or omissions of the Indemnitees or other parties for whom
Cambridge is not responsible.’”8
The court then described the electrical switchgear and how LeBlanc was electrocuted.
When LeBlanc arrived at the switchgear, it had no warning signs or other text on the face of the
switchgear cabinets. The doors of the switchgear were also opened. LeBlanc was electrocuted
when he attempted to open cabinet 1 and touched the gear.
The specifi cations of the switchgear were as follows: The switchgear was to have a stenciled
“mimic bus” diagram, which would show the confi guration of the equipment. It was also supposed
to have a warning sign on or adjacent to the switching equipment stating: “WARNING—LOAD SIDE
OF SWITCH MAY BE ENERGIZED BY BACKFEED.”9 The manufacturer of the switch gear noted that
he never received the specifi cations and therefore did not install the diagram or warning signs on
the switchgear. A subcontractor hired by Broadway also tested the switchgear and recommended
placing warning signs on it. Cosentini reviewed the report and also wrote a letter to Broadway
agreeing with the subcontractor that warning signs needed to be installed on the switchgear.
Nevertheless, this recommendation failed to lead to warning signs and the diagram being placed
on the switchgear.
Annual Review of Signifi cant Cases Affecting Design Professionals
