In Orlando Health, Inc. v. HKS Architects, Inc., 792 F. Supp. 3d 1298, 1299 (M.D. Fla. 2025), the Middle District of Florida held a waiver of consequential damages under the AIA “Standard Form of Agreement Between Owner and Architect” was not applicable to the owner’s costs of remediation stemming from a deficient design. The dispute arose from HKS Architects Inc.’s provision of architectural and engineering services for the construction of an Orlando Health hospital facility. As part of the agreement, HKS and Orlando Health agreed under the standard AIA contract form to “waive consequential damages for claims, disputes, or other matters in question arising out of or relating to the[e] Agreement” found in § 8.1.3.

HKS contracted with BBM Structural Engineers Inc. (“BBM”) to provide the structural design. While HKS and BBM contracted directly and BBM had no contractual relationship with Orlando Health, HKS and BBM also included a standard waiver of consequential damages in their agreement. Orlando Health discovered multiple structural errors related to design errors and omissions, including cracked slabs, inadequate design support for cantilevered overhangs, and the bending and formation of concrete slabs related to alleged deficiently designed structural beams. Orlando Health thereafter hired a third-party to demolish and remediate certain areas of the facility and sued HKS and BBM to recover its’ related costs.

HKS and BMM moved for summary judgment, arguing all of Orlando Health’s damages were consequential and therefore waived under AIA § 8.1.3. The Court, however, found HKS and Orlando Health failed to define the term “consequential damages” in the Agreement. The Court recognized consequential damages are those that “do not arise within the scope of the immediate buyer-seller transaction,” such as lost profits, reputational damage, rental expenses or loss of use. The Court was deliberate in distinguishing this case from cases where damages to a facility stemmed from dealings with the third-party where the remediation work could have been performed correctly regardless of the engineering firm’s services. See Keystone Airpark Auth. v. Pipeline Contractors, Inc., 266 So. 3d 1219, 1221 (Fla. Dist. Ct. App. 2019) (finding the need for repair did not arise from the immediate transaction between the engineering firm and property owner). The Court noted in Keystone the damages were caused by a contractor and the engineer was sued for failing to administer and inspect the work. The Court noted that in this case, the repairs were the direct result of design defects.

The Court focused on HKS’s contractual agreement to provide plans, including structural engineering, to find Orlando Health’s remediation damages were the “direct, natural, logical, and necessary consequences of HKS’s deficient plans.” As the Court determined Orlando Health’s damages directly resulted from HKS’s deficient plans, the AIA waiver of consequential damages did not bar Orlando Health’s claim. This case is instructive for design professionals seeking to limit their contractual liability. Orlando Health highlights that standard provisions limiting consequential damages may not protect design professional from damages determined to stem directly from its services.