Can a design firm rely on a manufacturer’s representations?

Online insurance claim form on a digital tabletOne of the issues faced increasingly by design firms is whether they have a right to rely on the information provided by manufacturers of products, materials, and systems. While the standard of care basically states that if the reliance of the design firm on a manufacturer’s information or representations is reasonable at the time of the design recommendation, the design firm has met its professional obligation. Of course, evidence of the informed consent by the project client to the design firm’s recommendation can make a big difference both in claims from the client and third parties. One of the Management Advisory bulletins on our risk management website goes into greater detail on how firms can reinforce the standard of care through contractual language. An additional Advisory provides suggestions on specifying new products or materials.

The issue of reliance on manufacturer representations has been prominent on projects where energy efficiency and sustainability are demanded. The plethora of new products, materials, and systems—and the claims made by their manufacturers—often bring up the issue of what is “reasonable” when specifying a component of a project.

One of the most significant “green design” cases where this issue came to the attention of the professions and the public was the failure of beams and columns used in the design of The Chesapeake Bay Foundation building constructed about 15 years ago. The issue was finally, but not publicly, resolved on July 23 when the parties in the lawsuit, The Chesapeake Bay Foundation, Inc., et al v. Weyerhaeuser Company, et al, filed a stipulation of dismissal with prejudice following a confidential settlement agreement and mutual release. The action ended protracted litigation with a private settlement.

In the case, the Chesapeake Bay Foundation contracted with a design firm to design the Philip Merrill Environmental Center (the foundation’s headquarters) on the Chesapeake Bay in Annapolis, Maryland. The foundation also contracted with a general contractor to oversee the construction, which spanned from 1999 into 2000. The sustainable design called for exposed structural wood members that penetrated the building’s façade.

The manufacturer of the beams, Weyerhaeuser, agreed to provide laminated beams, which have a rough-hewn appearance and are manufactured by bonding together strips of wood, for use as the exposed wood members. However, the lack of uniformity in the wood strips creates channels that run through the beams, allowing water to infiltrate the portions used outdoors. To protect against rotting, the structural laminates are pressure-treated with a wood preservative. A new preservative, PolyClear 2000, was to be used because it was a LEED low-emitting product. A subcontractor supposedly applied the preservative. Five years later, however, the foundation discovered that the laminated beams had deteriorated; it subsequently learned that the beams had not been treated with PolyClear 2000 as certified and that PolyClear 2000 was not appropriate for the job of preserving the beams. Weyerhaeuser had knowingly given false assurances to the contrary. The foundation sought $6 million to compensate it for the remedial work of replacing the deteriorated beams.

As with other projects reaching for unusual solutions to solve energy conservation or sustainability objects or to obtain third-party certifications, the use of new products or existing products in new situations can lead to performance that does not meet expectations. And that usually means litigation that challenges the definition of “reasonableness,” which may rely on contractual statements and obligations that put design firms at great risk.

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