Source: http://www.lexology.com, October 11, 2012
By: James Warmoth, Bradley Arant Boult Cummings LLP
When faced with a risky means and methods issue—excavating near an existing structure, for example—contractors frequently seek or otherwise receive input (whether they want it or not) from the owner or its on-site representative. In other cases, the contractor may simply take comfort in the fact that the owner is observ-ing the means and methods in progress and is not objecting to them. In either case, the contractor may assume that so long as the owner somehow “buys in” to the contractor’s plan and the contractor properly exe-cutes it, the owner will bear some or all of the risk if something goes wrong. This is not a sure assumption.
Generally, a contractor is solely responsible to implement the owner’s design concept through means and methods of its choosing, so long as the owner or owner’s designer does not dictate in the design that the contractor employ specific means and methods. More-over, inspection provided by or for the owner generally does not guarantee the contractor’s performance or relieve its obligation to perform work in accordance with the drawings and specifications. It is common for contracts to spell out these principles. The AIA A201 (2007), for example, provides that the “Contractor shall be solely responsible for, and have control over, construction means, methods, techniques, sequences and procedures and for coordinating all portions of the Work under the Contract, unless the Contract Documents give other specific instructions concerning these matters.”
While these are generally well understood prin-ciples, the analysis is less obvious when the owner has somehow indicated its approval of the means and methods. An older but frequently cited case out of Iowa, Shepherd Components, Inc. v. Brice Petrides-Donohue & Associates, Inc., illustrates why a contractor should not assume that it is off the hook in these cases. Shep-herd involved sewer system improvements that required excavation near an existing structure. Although the contracts for the project clearly assigned sole liability for means and methods to the contractor, the owner’s engin-eer, upon request for consultation from the contractor, provided its approval of the contractor’s proposed meth-od for protecting the adjacent property during excava-tion. The contractor installed sheet piling designed to retain the soil supporting the existing structure but—thinking it would solve a separate vibrations problem—deviated from the plan by excavating some material from the existing structure-side of the sheet piling. Signs of a potential failure quickly appeared. The contractor consulted the engineer and proposed a new plan to him. Although the engineer apparently did not formally approve this second plan, he was intimately aware of the plan and discussed it with the contractor in several meetings. The contractor followed the new plan without objection from the engineer. Nevertheless, a significant failure occurred and the owner of the existing structure sued the contractor and engineer.
Despite these “bad facts” for the engineer, which made it appear that he at least tacitly approved the plan, the court focused primarily on the terms of the contracts at issue and the customary lines of responsibility dis-cussed above. Under its contract with the owner, the contractor had sole authority over means and methods. In contrast, while the engineer’s contract with the owner contained a duty to inspect the construction site, he had no authority to control means and methods. At trial, the property owner and contractor argued that the engineer should be primarily liable for the failure based on his negligence in failing to object to the plan or propose a plan of his own, especially given his involvement in the situation. Nevertheless, the court found that the engin-eer’s on-site involvement did “not change the fact that [he] had no legal duty to interfere with [the contractor’s] judgment on which construction procedures to utilize.” In the end, the contractor was left holding the bag.
Understandably, contractors may view the owner’s engineer as a good source of input, and there is nothing inherently wrong with seeking such input. However, the lesson of Shepherd is that contractors should not assume that the owner or owner’s engineer has taken responsi-bility for a means and methods issue just because the engineer has observed, participated in, or even approved the method.