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Little Rocky Hill Volunteer Fire Co. v. Princeton Design Guild

A-4409-01T5 (N.J. Super. App. Div. 2003) (Unpublished)

CONTRACTORS; ARCHITECTS—In a design-build construction contract, if the architectural role is limited to design and preparation of construction documents and does not include supervision, the customer is obligated to pay the architectural fee portion of the contract despite the occurrence of construction defects.

A fire department entered into an agreement with a contractor to design and construct a second floor addition to, and renovation of, its existing building. A principal of the contracting firm was also the architect for the project. The contract contained a guaranteed budget of construction costs, plus a 15% fee, of which one-quarter was for architectural services. The project was completed and a certificate of occupancy was issued by the municipality. Thereafter, the fire department was required to pay for repairs for shoddy work performed by the contractor. The fire department sued the contractor for the costs of the repairs, plus reimbursement of the portion of the fee that was allocated for architectural services. The fire department argued that architectural design provision of the contract imposed an obligation on the architect to supervise the construction to make sure the project was built in accordance with the plans. It argued that, had those services been provided, there would not have been construction defects requiring repair. It also argued that, since its architectural services fee was for supervision of construction and the architect and contractor were related entities (so one could not really supervise the other), the contractor could did not perform architectural services and was not entitled to that fee. The lower court agreed and awarded the fire department the repair costs plus a reimbursement of the fee attributable to architect’s services. The Appellate Division reversed. It found that the contract did not require the architect to supervise the construction. The architect was required to complete the project design and construction documents necessary for the project. It fulfilled its obligations because the plans were approved by the municipality, the project was completed, and a certificate of occupancy was issued.

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