The High Cost of Miscommunication: Construction Edition
In the recent Washington Court of Appeals case DWP General Contracting, Inc. v. Wilson Architects, PLLC, Dr. Harold Lee hired DWP General Contracting to build an apartment complex. The contract required DWP to complete the project within 180 days. But construction delays and payment disputes caused work to halt, leaving the project only 60% complete after a year. To resolve the issue, Wilson Architects, the architecture firm on the project, stepped in as a mediator. Wilson Architects drafted an “Agreed Upon Procedures” (AUP) document to facilitate the resumption of work. Lee and DWP incorporated the AUP into the original contract, and DWP resumed construction. DWP eventually completed the project, but late – over a year past the original deadline.
Despite the AUP, another dispute arose over construction delays and payments, leading Lee to sue DWP for breach of contract after completion. The jury found DWP liable and awarded Lee approximately $500,000 in damages. After losing the case, DWP sued Wilson Architects, claiming negligence and unauthorized practice of law in drafting the AUP. DWP argued that Wilson Architect’s failure to address the project’s delays and contractual deadlines in the AUP caused their damages. The trial court dismissed DWP’s claims, and the Court of Appeals affirmed.
At first glance, the case seems like a straightforward contract dispute. But it raises critical issues regarding communication, documentation, and professional roles in real estate transactions and business transactions. For landowners and business owners, the case reiterates the importance of understanding your contracts and ensuring that any changes are clearly documented and understood by all parties. For builders, it serves as a reminder to protect yourself from liability by adhering to deadlines, carefully reviewing contract amendments, and understanding the scope of any new agreement. Parties frequently litigate change orders. Understanding the new roles and responsibilities helps avoid costly disputes.
Perhaps most importantly: For non-lawyer professionals such as architects, CPAs, and engineers, the case highlights the risk of stepping outside your professional area of expertise by drafting legal documents and giving legal advice. Although Wilson Architects narrowly avoided liability, it nonetheless spent many months and many thousands in legal fees defending itself, all while risking ruinous financial consequences. If only they would have hired competent counsel. As Dwayne “The Rock” Johnson would say: Know Your Role.
How We Can Help
Complex construction projects often involve disputes and include multiple parties with competing interests. By working with experienced legal professionals from the outset, you can avoid the pitfalls that cost DWP, Lee, and Wilson Architects so dearly.
For questions regarding constructions disputes, please contact Beresford Booth at info@beresfordlaw.com or by phone at (425) 776-4100.
