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November 1st, 2018
architects and engineers
LOUISIANA FEDERAL DISTRICT COURT RULES CONTRACTOR COULD NOT RECOVER FOR ACTS OF CONTRACT ADMINISTRATION MADE BY ARCHITECT IN GOOD FAITH

In Patriot Contracting, LLC v. Star Insurance Company, 2018 WL 1123586 (U.S. Dist. Ct., E.D. La.), the United States District Court for the Eastern District of Louisiana ruled that exculpatory clauses in the general contract benefitting the architect were enforceable. 

The State of Louisiana (the “State”) contracted with Defendant The Architectural Studio/James Dodds, AIA Corporation (“TAS”) for planning, design, and management services with regard to the project, including provision of construction documents and administration of the construction contract. When the original Contractor failed to complete the Project, the State contracted with Plaintiff Patriot Contracting, LLC (“Patriot”) to complete the work. Patriot assumed all obligations owed by the original contractor under the general contract, including being bound by an exculpatory clause stating the architect could not be held liable for its good faith administration of the contract.

Following completion of the Project, Patriot alleged TAS was slow to respond to the contractor’s Requests for Information regarding the details of the contract documents and its failures caused Patriot to incur increased expenses. Patriot also alleged TAS acted unreasonably in withholding payments to the Patriot for work TAS declined to certify, and Star and TAS continued to demand unreasonable punch list work.

Patriot sued TAS for professional negligence and TAS moved for partial summary judgment, arguing the exculpatory clause relieved TAS of liability for claims arising from its good faith administration of the contract. Patriot argued the Motion should be denied because the contract cannot relieve TAS of its independent duties as a professional and because the exculpatory clause was void under Louisiana law.

In support of its argument, Patriot relied on Louisiana Revised Statutes § 9:2780.1, which holds agreements to indemnify against liability for loss or damage resulting from the indemnitee’s own negligence or intentional acts or omissions are void and unenforceable. The Court disagreed, holding the clause is not an indemnity agreement, but rather an exculpatory clause that merely limits the architect’s liability. The Court granted TAS’s motion for summary judgment in part, holding that Section 9:2780.1 does not prohibit limitations of liability and an architect’s independent obligations do not supersede such agreements.

Design professionals should be aware of the existence of similar exculpatory clauses in the general contract. These exculpatory clauses may reduce or extinguish liability for claims by the general contractor against them.
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