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August 1st, 2017
construction
FIFTH CIRCUIT REFUSES TO BROADEN SCOPE OF AFFIRMATIVE DUTY TO WARN BASED ON CONTRACTOR’S EXPERTISE

In LaShip, LLC v. Hayward Baker, Inc., No. 15-30816, 2017 WL 829503 (Mar. 1, 2017), the Fifth Circuit held a commercial contractor was not required to warn the owner of alleged defects in the design specifications of foundation columns that were provided by the engineer despite the fact the contractor had specialized experience in foundation design.  The Fifth Circuit refused to broaden the affirmative tort duty to warn based on a party’s expertise and upheld the statutory protections for the contractor.

LaShip, LLC (“LaShip”), an owner and operator of a shipbuilding company in Houma, Louisiana, sought to construct a large shipbuilding facility.  An engineer designed the facility’s foundation system, which was based on soil borings and recommendations provided by a geotechnical and materials engineering company.  Hayward Baker, Inc. (“HBI”) contracted to construct the foundation columns and shafts based on the specifications and soil borings provided by the engineers.

HBI complied with the specifications by testing the compressive strength of the columns to ensure the columns met the design standards and specifications. Even though the samples met the column strength requirements, the columns later exhibited spiraling and settlement.  LaShip filed suit on January 21, 2011, alleging claims for breach of contract, negligence, and breach of the implied duty of workmanlike performance against HBI. 

The Fifth Circuit held HBI was statutorily immune under La. Stat. Ann. § 9:2771 from LaShip’s claim for failing to warn of design defects.  This statute provides a shield from liability for general contractors when defects arise as a result of the contractor’s adherence to plans and specifications that were furnished to it.  However, the contractor cannot escape liability if it had reason to believe adherence to the plans would create a hazardous condition. 

The Fifth Circuit found HBI’s work met the specifications it received and found the settlement issues stemmed from a design defect.  LaShip argued, however, that HBI had specialized knowledge of foundation design and, as a result, should have known the design was defective.  The Court disagreed, noting there was no evidence HBI actually knew of a design defect and no increased duty existed simply due to the company’s increased experience. 

This case is good news for contractors in Louisiana.  The Courts were unwilling to broaden the scope of the affirmative tort duty to warn simply because a contractor has increased knowledge and expertise in the area or should have known.  A plaintiff will have to prove the contractor possessed actual knowledge of the defect that would create a hazardous condition to trigger the affirmative duty to warn and will not be punished simply based on the contractor’s expertise.


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