By: Benjamin D. Wu
A professional relationship is the hallmark of a professional-negligence claim. Generally, damages for professional negligence aren’t recoverable in the absence of a professional relationship. This rule is well established in the context of legal malpractice and medical malpractice―a non-client or a non-patient generally doesn’t have grounds to sue for derivative damages incurred as a result of professional negligence.
As with most rules, there are exceptions. In some circumstances, a professional may owe a limited duty to a third party. Those circumstances are few and far between. For a professional to be held liable to a third party, three conditions must be met: (1) there must be a special relationship between the client and the third party―one in which the potential for conflicts of interest is eliminated because the interests of the client and the third party are merged with regard to the instance of professional negligence; (2) the third party must lack any other legal remedy, and (3) the third party must have incurred damage as a consequence of fulfilling a legal or equitable duty owed to the client. So, as an example, an attorney retained to draft a will may owe a limited duty to beneficiaries named in the will. As another example, an independent medical examiner retained to perform an examination for purposes of litigation may owe a limited duty to the litigant.
Recently, the Court of Appeals reaffirmed these principles in the architectural-malpractice context. In Rochester Endoscopy and Surgery Center, LLC and Jaro Company, LLC v DesRosiers Architects, PC, plaintiffs hired a general contractor to build a new surgical facility. The general contractor contracted with defendant, an architectural firm, to design the surgical facility. During construction, plaintiffs discovered that defendant’s architectural design didn’t comply with the relevant building codes. Plaintiffs demanded that defendant (and the general contractor) cure the defect. But plaintiffs met resistance, so they fired the general contractor and sued defendant for professional negligence. Plaintiffs also filed a separate lawsuit against the general contractor.
Plaintiffs claimed that defendant negligently performed certain duties under defendant’s contract with the general contractor. Plaintiffs failed to allege a professional relationship with defendant. Plaintiffs also failed to allege any of the circumstances in which a third party can sue for professional negligence, such as the existence of a special relationship and the unavailability of another legal remedy. So the Court of Appeals held that plaintiffs’ professional-malpractice claim failed as a matter of law.
But that holding didn’t end the inquiry. Although defendant didn’t owe plaintiffs a professional duty, the common law imposes a duty on all persons to use ordinary care to avoid physical harm to persons and property. The Court of Appeals thus framed “the threshold question” as “whether, although plaintiffs were not a party to the professional relationship between [the general contractor] and defendant, there nonetheless existed a legal duty on the part of defendant to plaintiffs as a non-contracting third party, the breach of which could result in tort liability.”
Ultimately, the Court of Appeals answered this question in the negative. The common-law duty to use ordinary care to avoid physical harm doesn’t extend to intangible economic loss, such as the loss claimed by plaintiffs (i.e., expenditure of money to cure the defects in the design and construction of the surgical facility). As such, the Court of Appeals held that the common-law duty didn’t pave the way for recovery.
The Court of Appeals’ decision reinforces the basic principle that, absent special circumstances, a professional relationship is required for a professional-negligence claim. A professional may be liable to a third party in tort, but those circumstances are rare.