In Rochester Endoscopy and Surgery Center, LLC and Jaro Company, LLC v. DesRosiers Architects, PC, 2020 WL 6231823 (Mich. App. October 22, 2020), the Court of Appeals of Michigan granted Defendants’ Motion to Dismiss the professional negligence claims against the architect. The Rochester Plaintiffs purchased a unit in a condominium, which they intended to convert to a surgical outpatient facility. Plaintiffs hired OYK Engineering & Construction (“OYK”) to serve as the Design-Builder for the project. OYK subcontracted with Desrosiers Architects, PC, (“Desrosiers”) to provide design and architectural services.

Desrosiers allegedly provided an architectural design that did not comply with the relevant building codes and project guidelines. OYK constructed the surgical outpatient facility based on these plans. Plaintiffs, upon learning of the noncompliant design and construction, insisted OYK and Desrosiers fix their noncompliant work, but OYK and Desrosiers refused.

Plaintiffs filed a professional-negligence lawsuit against Desrosiers, alleging Desrosiers owed Plaintiffs a duty to exercise reasonable care in the design of the facility. Desrosiers moved for summary judgment, arguing it could not be held liable for professional negligence because it did not contract with Plaintiffs, did not have a professional relationship with Plaintiffs and did not owe Plaintiffs a duty as a third-party beneficiary to its contract with OYK.

Under Michigan law, a design professional may owe a duty toa third party where three conditions are met: (1) there must be a special relationship between the client and the third party; (2) the third party must lack any other legal remedy; and (3) the third party must have incurred damage as a consequence of the design professional fulfilling a legal or equitable duty owed to the client.

The appellate court found no professional relationship existed between Desrosiers and Plaintiffs due to the lack of a contract governing their conduct. The Court also held Desrosiers did not owe Plaintiffs a duty as a third-party because Plaintiffs did not allege a special relationship with Desrosiers. The Appellate Court held Desrosiers was admittedly aware that its design work would benefit Plaintiffs, but the contract did not contain any express promise to act for Plaintiffs’ benefit. The Court further noted Plaintiffs could still seek damages from OYK, the general contractor with whom it shared a contractual relationship.

Whether a design professional owes a duty to the owner in the absence of privity of contract is a reoccurring issue in Architect and Engineering cases. Many states have adopted the economic loss doctrine to resolve this issue, but even in the states that have not, existence of a duty is not a foregone conclusion. This case reaffirms in Michigan the principle that a professional relationship is necessary to support the finding of a duty in absence of a contract and in the absence of such a relationship, no direct claims exist against the design professional.