WA Case Update: Court Finds Breach of Independent Duty Even without Actual Property Damage

From the desk of Paul Sheely: The “independent duty doctrine,” also referred to as the “economic loss rule,” describes the law establishing what kinds of damages give rise to claims that are recoverable in tort (negligence) claims and which may only be sought in a breach of contract claim.  Generally, what the rule boils down to is that claims arising out of injury to person or property are recoverable in a tort claim, whereas claims for “pure economic loss” (such as money owed on a loan) are recoverable only in a breach of contract claim.  Over the past 15 years, Washington has, at least in the construction context, adhered to a strict interpretation of the rule that the ability to allocate risk by contract is so important to the construction industry that negligent construction claims are not allowed.  Several cases over the past few years, however, have shown a trend towards allowing negligence claims, particularly against engineers and architects, where the professional failed to meet a duty and that failure results in property damage. 

Claims Pointer: In this recent Washington Court of Appeals case, the court allowed a negligence claim against an engineering company which was involved in construction oversight where the construction defects were related to life safety even though no property damage had yet occurred.  This case serves as notice to engineers, architects, their insurers, and their attorneys that courts are likely to allow tort claims arising from professional liability to proceed where the defects are related to life safety issues, even if no property damage has yet occurred.

The Pointe at Westport Harbor Homeowners’ Association v. Engineers Northwest, Inc., No. 458389-0-II, Washington Court of Appeals, Div. II. (May 3, 2016).

Dodson-Duus, LLC (“Dodson-Duus”) the developer of The Pointe, an upscale condominium in Westport, Washington, contracted with Steven P. Elkins Architects Inc. (“Elkins”) to carry out the...

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