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Case Review Archives

Contractors, Architects and Owners Beware: Beacon Residential creates a duty of care by architects to homeowners associations

On July 3rd in Beacon Residential Community Assn v. Skidmore, Owings & Merrill LLP (Case No. S208173) the California Supreme Court confirmed that construction design professionals owe a duty of care to third party property purchasers who did not hire or contract with the professionals. This landmark decision is a game-changer for owners, architects and contractors alike, as liability for design and defect issues now directly impacts architects and may lead to added construction costs.

Modified Total Cost Theory of Damages Alive and Kicking in California

California Construction Law Case Review: In Dillingham-Ray Wilson v. City of Los Angeles, below, Dillingham-Ray Wilson (DRW) was awarded a contract by the City of Los Angeles ("City") to expand a wastewater treatment plant. During construction, the City issued over 300 change orders which included more than 1,000 changes to scope of work. Generally, the CIty requested an estimate of the cost of work and agreed with DRW that the parties would negotiate a lump sum payment at a later date. At the conclusion of the project, after millions of dollars of construction work to the plant, the City refused to pay DRW for these change orders. DRW requested an equitable adjustment to compensate for expenses and losses incurred due to interference and delays and the City countered with liquidated damages. The parties' disputes resulted in this litigation.

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