Donnelly Const. Co. v. Oberg/Hunt/Gilleland, 17056-PR

• Decision Date: 08 February 1984
• Docket Number: No. 17056-PR,17056-PR
• Citation: 677 P.2d 1292,139 Ariz. 184
• Parties: DONNELLY CONSTRUCTION COMPANY, an Arizona corporation, Plaintiff-Appellant, v. OBERG/HUNT/GILLELAND, Architects, Defendants-Appellees.
• Court: Arizona Supreme Court

Page 1292

677 P.2d 1292

139 Ariz. 184

DONNELLY CONSTRUCTION COMPANY, an Arizona corporation, Plaintiff-Appellant, v.OBERG/HUNT/GILLELAND, Architects, Defendants-Appellees.

No. 17056-PR.

Supreme Court of Arizona In Banc.

Feb. 8, 1984.

O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears, P.C. by Larry L. Smith and Charles J. Muchmore, Phoenix, for plaintiff-appellant.

Jennings, Strouss & Salmon, by Jefferson L. Lankford, Phoenix, for defendants-appellees.

GORDON, Vice Chief Justice:

In June of 1976, the Board of Supervisors of Coconino County solicited bids on behalf of Page School District Number Eight for improvements to the Page School complex.The site improvements included the construction of retaining walls and sidewalks, grading and filling, and the installation of a sprinkler system.Among the documents available to the bidders was a site plan, including engineering site specifications, prepared by Oberg/Hunt/Gilleland [hereinafter "O/H/G"], a firm of architects.Plaintiff, Donnelly Construction Company, relied on the plans, specifications, and information contained in the site plan to prepare its bid on the improvements.Donnelly's bid was accepted and a contract with the county board of supervisors was entered on July 6, 1976.Upon beginning work, Donnelly found the plans and specifications prepared by O/H/G to be in substantial error.The errors resulted in increased costs of construction to Donnelly.

After substantially completing the work, Donnelly sued the Page School District¹ and O/H/G for its increased costs.Donnelly asserted three claims against O/H/G: negligence, negligent misrepresentation, and breach of the implied warranty that O/H/G's plans and specifications were accurate.O/H/G filed a motion to dismiss pursuant to Ariz.R.Civ.P. 12(b)(6) claiming that Donnelly's complaint failed to state a claim upon which relief could be granted.O/H/G supported its motion with arguments that the claims were barred (a) because all of O/H/G's actions were quasi-judicial in nature and deserving of immunity and (b) because there was no contractual privity between Donnelly and O/H/G.Without recitation of its reasoning, the trial court granted the motion to dismiss.Donnelly appealed to Division One of the Court of Appeals which reversed and remanded to the trial court.²Donnelly Construction Co. v. Obert/Hunt/Gilleland, 139 Ariz. 190, 677 P.2d 1298(App.1983).O/H/G petitioned this Court to review the decision.Having found the holding of Division One in this matter to be in direct conflict with case law from Division Two, we accepted jurisdiction, pursuant to Ariz. Const. art. 6, § 5(3)andAriz.R.Civ.App.P. 23, to resolve the conflict.Although we agree with Division One of the Court of Appeals that the trial court's granting of O/H/G's motion to dismiss was error, we vacate its opinion in the instant case.

In our review of the granting of the motion to dismiss for failure to state a claim, this Court must assume the truth of Donnelly's allegations.Parks v. Macro-Dynamics, Inc., 121 Ariz. 517, 591 P.2d 1005(App.1979).We can uphold the dismissal only if Donnelly could not be entitled to relief under any facts susceptible of proof under the claims stated.Sun World Corp. v. Pennysaver, Inc., 130 Ariz. 585, 637 P.2d 1088(App.1981).As noted above, O/H/G offered two arguments that Donnelly's complaint stated no claim.These arguments will be examined seriately.

IMMUNITY FOR QUASI-JUDICIAL FUNCTIONS

O/H/G's first basis for their motion to dismiss was that their duties were quasi-judicial in nature and that they therefore had immunity against actions such as the one brought by Donnelly.In Craviolini v. Scholer & Fuller Associated Architects, 89 Ariz. 24, 357 P.2d 611(1960), this Court held that an architect who is empowered to resolve disputes between an owner and a contractor acts, in resolving such disputes, in a quasi-judicial capacity and that, to allay the architect's fears of being mulcted in damages, he or she has immunity against actions arising from performance of those duties.However, we find Craviolini to be inapposite to the case before us.Donnelly's claims against O/H/G all stem from allegedly negligently prepared plans and specifications, not from O/H/G's resolution of any dispute between Donnelly and the Coconino Board of Supervisors or the Page School District.As we made clear in Craviolini, the immunity

"attaches to every act done in the judicial capacity, but to no other.Thus the architect has no immunity as an architect * * *.If the tortious conduct with which he is charged * * * is remote from and in no way associated with the performance of his arbitrator's function, he is liable for it in accordance with the usual principles of tort law."

Id. at 28, 357 P.2d at 614(emphasis in original).The grant of the motion to dismiss cannot be upheld on the basis of immunity.

PRIVITY OF CONTRACT

O/H/G's second basis for the motion to dismiss was that, absent privity of contract, they owed no duty and could not be liable to a contractor such as Donnelly.This argument was premised on Blecick v. School District No. 18 of Cochise County, 2 Ariz.App. 115, 406 P.2d 750(1965).In Blecick, Division Two of the Court of Appeals was confronted with a fact situation similar to the one currently before us.There, the plaintiff was a contractor who had entered into a building contract with the defendant school district's Board of Trustees to construct school rooms at an elementary school.During construction, changes in the architects' plans and specifications had to be made.The changes resulted in added cost to the contractor who sued the school district and the architects.The trial court dismissed the complaint against the architects for failure to state a claim.The Court of Appeals affirmed.Although stating the issue in tort terminology ("Is an architect liable to a contractor for the preparation of defective plans and specifications?"Id. at 119, 406 P.2d at 754), the Court of Appeals discussed it in contract language ("There is no privity between [the contractor] and the architects by virtue of the [contract between the owner and the architects] nor are [the contractors] third-party beneficiaries thereof."Id. at 120, 406 P.2d at 755) and held that the contractor could not hold the architect liable for having negligently drawn the plans and specifications.Insofar as Blecick stands for the proposition that an architect cannot be sued in tort by a contractor for negligent preparation of plans and specifications, it must be overruled.

There is no requirement of privity in this state to maintain an action in tort.See, e.g., O.S. Stapley Co. v. Miller, 103 Ariz. 556, 559, 447 P.2d 248, 251(1968)(QuotingRestatement (Second) of Torts§ 402A(2)(b)(1965), this Court stated that the seller of a product is liable to a user or consumer although "the user or consumer has not bought the product from or entered into any contractual relation with the seller.");Wetzel v. Commercial Chair Co., 18 Ariz.App. 54, 500 P.2d 314(1972).Rather, an action in negligence may be maintained upon the plaintiff's showing that the defendant owed a duty to him, that the duty was breached, and that the breach proximately caused an injury which resulted in actual damages.Ontiveros v. Borak, 136 Ariz. 500, 667 P.2d 200(1983).Duty and liability are only imposed where both the plaintiff and the risk are foreseeable to a reasonable person.This Court has held that a broad view will be taken of the class of risks and the class of victims that are foreseeable.McFarlin v. Hall, 127 Ariz. 220, 619 P.2d 729(1980).

Design professionals have a duty to use ordinary skill, care, and diligence in rendering their professional services.National Housing Industries, Inc. v. E.L. Jones Development Co., 118 Ariz. 374, 576 P.2d 1374(App.1978).When they are called upon to provide plans and specifications for a particular job, they must use their skill and care to provide plans and specifications which are sufficient and adequate.SeeL.H. Bell & Associates, Inc. v. Granger, 112 Ariz. 440, 543 P.2d 428(1975);Rosell v. Silver Crest Enterprises, 7 Ariz.App. 137, 436 P.2d 915(1968).This duty extends to those with whom the design professional is in privity, as in Rosell, and to those with whom he or she is not, as in L.H. Bell.

In L.H. Bell, an engineer was hired to design a bridge and its approaches.The bridge was constructed according to the engineer's plans.After a heavy rainfall, water flooded nearby property causing property damage and loss of business income.This Court found that it was foreseeable, in designing a bridge without culverts, that there would be flooding on the plaintiff's property.Given both a foreseeable risk and a foreseeable victim, the trial court's finding of negligence was upheld.

We find it equally foreseeable in the instant case that Donnelly, hired to follow the plans and specifications prepared by O/H/G, would incur increased costs if those plans and specifications were in error.As noted above, we here assume the truth of Donnelly's allegations, including that it was hired to follow the plans and specifications prepared by O/H/G.Such an allegation is subject to proof.O/H/G may be able to demonstrate that Donnelly was not a foreseeable victim in this case because Donnelly was not hired to follow the plans and specifications prepared by O/H/G, but rather was given those plans and specifications as only general guidelines and was expected to create its own plans and specifications prior to construction.However, such proof goes beyond the face of the complaint.The complaint did state a cause of action in negligence and its dismissal was error.³

Our decision herein necessitates a review of Arizona cases other than Blecick which have denied negligence actions against certain professionals because of a lack of privity.For example, in Phoenix Title & Trust...