Here Comes the Judge—Duties and Responsibilities

of Design Professionals When Deciding Disputes

Steven G. M. Stein1 and Ryan Hiss2

Abstract: Frequently during the progression of a construction project, the design professional is forced into the role of a judge of project
disputes between the owner and contractor. These disputes generally involve substantial claims for extra compensation or extra time and
have significant impact on the owner and contractor’s financial position on the project. The architect or engineer will be pressured by the
owner, who controls whether the design professional gets paid. The contractor, however, may threaten to pursue legal claims against
design professionals if they make the contractor’s job more expensive or fail to give it the appropriate time extension. In many cases,
design professionals must admit or deny whether their services were defective in some nature. In addition to these pressures, the design
professional is not necessarily trained or comfortable with acting as a judge and interpreting the meaning of contract terms. Generally,
when an architect or engineer performs this judicial function, they are immune from any liability for the results of decisions. However, the
design professional must make the decision in good faith and with impartiality. In addition, design professionals must only decide those
matters that their contract obligates design professionals to decide. This paper will address the nature of the designer’s role as judge and
the limits of the designer’s immunity with respect to the designer’s contract obligations and good faith and impartiality requirements.
DOI: 10.1061/共ASCE兲1052-3928共2003兲129:3共177兲
CE Database subject headings: Architects/engineers; Legal factors; Contract administration; Construction methods; Dispute
resolution.

Understanding Your Judicial Role
Generally, the design professional performs three different duties
on a construction project. First, the design professional acts as an
independent contractor. In this role, the design professional pre-
pares the design drawings and specifications for the project. Sec-
ond, the design professional acts as the owner’s representative for
the project. In this role, the design professional inspects work
performed, certifies payment, and otherwise supervises the
project. 关See John W. Johnson, Inc. v. Basic Construction Co.,
Inc., 292 F.Supp. 300, 302, 共D.D.C. 1968兲, When an architect
prepares plans, advises the owner and supervises performance,
she is acting as owner’s agent rather than as a judge.兴 Third, the
design professional acts as a ‘‘judge’’ of disputes. In this ‘‘quasi-
judicial’’ role, as it is usually referred, the design professional
decides disputes between the owner and contractor. The first two
roles are delegable; the last role is not 共Id.兲.
When acting as an independent contractor and an owner’s rep-
resentative, design professionals are legally liable for their acts
共Douglas 1993兲. If design professionals fail to act as reasonable
design professionals should when carrying out these obligations,
they may be held liable to the owner and in some circumstances
1
Partner, Stein, Ray, Harris, 222 West Adams St., Suite 1800,
Chicago, IL 60606.
2
Associate, Stein, Ray, Harris, 222 West Adams St., Suite 1800,
Chicago, IL 60606.
Note. Discussion open until December 1, 2003. Separate discussions
must be submitted for individual papers. To extend the closing date by
one month, a written request must be filed with the ASCE Managing
Editor. The manuscript for this paper was submitted for review and pos-
sible publication on October 25, 2002; approved on March 31, 2003. This
paper is part of the Journal of Professional Issues in Engineering Edu-
cation and Practice, Vol. 129, No. 3, July 1, 2003. ©ASCE, ISSN 1052-
3928/2003/3-177–183/$18.00.
to the contractor and subcontractors. However, when design pro-
fessionals step into the role of judge or arbiter of disputes, the
common law generally protects them from liability for the deci-
sions rendered. 共See Wilder v. Crook, 34 So.2d 832 共Ala. 1948兲,
engineer not liable in damages for failure to exercise care or skill
in the performance of ‘‘judicial’’ functions; City of Durham v.
Reidsville Engineering Co., Inc., 255 N.C. 98, 102-103, 120
S.E.2d 564, 567 共N.C. 1961兲, Engineers are immune from liability
for interpretations of the meaning and intent of the plans and
specifications, the authorization that additional work not ex-
pressly authorized in the contract be performed, and any decisions
on matters in dispute; Lundgren v. Freeman, 307 F.2d 104, 117
共9th Cir. 1962兲, architects protected from liability when acting as
judges over disputes; contra, Sutcliffe v. Thackrah, 1974 A.C.
727, In England, the immunity privilege may not apply.兲 This is
known as quasi-judicial immunity. This means that design profes-
sionals are generally unable to be sued by parties that are disap-
pointed with their decisions or for errors in their decisions. 共See
Lundgren, 307 F.2d at 118, architect not liable for errors in deci-
sion.兲 If disgruntled parties could sue judges or arbiters rendering
their decisions, there would be no end to litigation. In addition,
judges or arbiters would be governed more by the fear of a re-
sulting lawsuit than by their own unfettered judgment as to the
merits of the matter they must decide. 共See id. at 117, architect
not liable for errors in decision.兲 That is one of the main reasons
why courts have recognized immunity for design professionals’
decisions of disputes for well over 50 years 共Douglas 1993兲.
The immunity does not apply to every decision. In order for
immunity to apply, there must be an actual dispute, unless the
contract provides otherwise, and design professionals must be act-
ing within the scope of their contract duty to render decisions on
that dispute. In addition, the decision must be made in good faith
and be impartial. A closer look at each of these prerequisites will

JOURNAL OF PROFESSIONAL ISSUES IN ENGINEERING EDUCATION AND PRACTICE © ASCE / JULY 2003 / 177
assist design professionals in understanding what they can do to
maintain immunity.
Contractual Obligation to Act as Judge
The duty of the design professional to determine disputes is a
creature of contract. 共See E.C. Ernst, Inc. v. Manhatten Const. Co.
of Texas, 551 F.2d 1026, 1033兲 共5th Cir. 1977兲 Therefore, the
terms of the contract determine the scope of the design profes-
sional’s duty. 共See Lundgren, 307 F.2d at 117, architect acts as
judge within immunity rule when it acts within the guidelines of
this specific contract duty.兲 If the contract does not obligate the
design professional to decide disputes, then the architect or engi-
neer is under no obligation to do so, unless all parties otherwise
agree. Sometimes, especially where the American Institute of Ar-
chitects 共AIA兲 201 General Conditions are used 共AIA 1997兲, the
owner and contractor may agree to submit disputes to the design
professional even when the design professional has not agreed to
such role. In such instances, if a dispute in accordance with the
contract is submitted to the design professional, the decision
should be protected by immunity. 共See Mayfair Const. Co. v.
Waveland Associates Phase Limited Partnership, 619 N.E.2d
144兲 共Ill. 1st Dist. 1993兲
Generally, when the design professional is required to decide
disputes the contract states that the decision must be rendered in
good faith and be impartial. In such circumstances, or when the
contract is silent on the requirements for performing this function,
immunity will apply if the decision is rendered in good faith and
is impartial. However, design professionals can contract away
their immunity by agreeing to a more stringent standard of per-
formance. For example, if design professionals agree in the con-
tract that they are liable if the decision is unreasonable or negli-
gently made, they will be held to that standard. If the decision is
determined to be unreasonable under the circumstances, the de-
sign professional may be held liable for that decision. The negli-
gence standard also imposes liability exposure. There is no reason
for design professionals to agree to such standards and they
should refuse to act as the arbiter under such circumstances.
There is at least one circumstance where even if the contract
requires design professionals to act as judges of disputes, they
may be released from that duty. 共M.J. Daly & Sons, Inc. v. City of
West Haven, 2001 WL 1132403兲 共Conn. 2001兲 If a design profes-
sional takes over a project for another design professional, the
courts will likely require that the contractor approve that person
as the judge of disputes before acting in that capacity. This re-
quirement is to dissuade owners from firing design professionals
who may be ‘‘friendly’’ to contractors and replacing them with
design professionals friendly to the owner, when the owner is
aware of upcoming disputes that it wants decided in its favor.
However, under AIA 201, ¶ 4.1.3, when a design professional is
terminated from the project, the ‘‘Owner shall employ a new Ar-
chitect against whom the Contractor has no reasonable objection
and whose status under the Contract Documents shall be that of
the former Architect’’ 共AIA 1997兲. Therefore, if AIA 201 is used,
and the contractor does not object to the replacement design pro-
fessional, the new design professional would have the same
quasi-judicial responsibilities as the original design professional.
Standard Contract Terms
The terms of AIA B141 共1997兲, A201 共1997兲, and the Engineers
Joint Contract Document Committee 共EJCDC兲 Owner-Engineer
and General Condition agreements are illustrative of contract ob-
ligations to decide disputes.
178 / JOURNAL OF PROFESSIONAL ISSUES IN ENGINEERING EDUCATION AND PRACTICE © ASCE / JULY 2003
AIA Standard Terms
AIA A201, which is part of the Contract Documents referred to in
B141, provides two instances in which the design professional is
to act in a quasi-judicial capacity. The first instance of quasi-
judicial activity is when the design professional decides claims or
disputes presented for a decision under the dispute process in the
contract documents 共AIA A201, ¶ 4.4.1兲 共AIA 1997兲.
4.4.1 Claims, including those alleging an error or omission
by the Architect but excluding those arising under Para-
graphs 10.3 through 10.5, shall be referred to the Architect
for decision . . .
The decision by the design professional is final and binding 共AIA
A201, ¶ 4.4.5兲 共AIA 1997兲.
The dispute must be submitted to the design professional in
writing and must meet the formal claims requirements 共AIA
A201, ¶ 4.3.1兲 共AIA 1997兲. If the claim does not comply with the
requirements under AIA 201 ¶ 4.4, design professionals must not
decide the claim or they will be acting outside of the scope of
their authority. Design professionals must make sure that they
comply with the timing requirements and other formalities of the
dispute procedure, including, issuing a written decision 共AIA
A201, ¶ 4.4.5兲 共AIA 1997兲. Finally, the dispute must be between
the owner and contractor 共AIA A201, ¶ 4.4.1兲 共AIA 1997兲. If both
of these parties are not involved on opposing sides of the dispute,
the decision is outside of the design professional’s contractual
obligations. Although neither AIA 201 article 4.3 or 4.4 specifi-
cally provides for immunity, immunity would likely be provided
in all jurisdictions under the common law.
The second instance in which the design professional acts in a
quasi-judicial capacity is when, even without a formal dispute, the
owner or contractor submits a written request for an interpretation
or determination of performance under, and requirements of, the
contract documents 共AIA A201, ¶ 4.2.11兲 共AIA 1997兲.
4.2.11 The design professional will ‘‘interpret and decide
matters concerning performance under, and requirements
of, the Contract Documents on written request of either the
Owner or Contractor. The Architect’s response to such re-
quests will be made in writing within any time limits
agreed upon or otherwise with reasonable promptness.’’
The AIA specifically provides for immunity when rendering
these decisions 共AIA A201, ¶ 4.2.12兲 共AIA 1997兲. Notice that in
order for this interpretation duty to arise and for immunity to be
provided, the interpretation request must be in writing 共AIA
A201, ¶ 4.2.11兲 共AIA 1997兲. It is possible that an oral request will
not be considered within the design professional’s scope of duties,
and any decision on an oral request may be denied immunity.
Therefore, when such an oral request is made, ask for it in writing
to insure immunity protection.
When interpreting contract documents, AIA B141 also re-
quires the design professional to endeavor to secure faithful
performance by both owner and contractor in addition to
making the interpretation in good faith and with impartiality
共AIA B141, ¶ 2.6.1.8兲 共AIA 1997兲.
2.6.1.8 Interpretations and decisions of the Architect shall
be consistent with the intent of and reasonably inferable
from the Contract Documents and shall be in writing or in
the form of drawings. When making such interpretations
and initial decisions, the Architect shall endeavor to secure
faithful performance by both Owner and Contractor, shall
not show partiality to either, and shall not be liable for the
results of interpretations or decisions so rendered in good
faith.
 In order to maintain immunity, be sure to make efforts to se-
cure faithful performance and carefully document such efforts in
letters or memos.
As one would presume, the AIA does not place any additional
restrictions on the design professional’s decision-making obliga-
tion above those normally required to trigger immunity protec-
tion. The design professional is simply to act in good faith and not
be partial to either the owner or contractor. The only other re-
quirements that the design professional must follow are the pro-
cedural requirements of rendering a written decision with reason-
able promptness and following the timing requirements of ¶ 4.4.2.
AIA B141 and AIA A201 are good examples of contract provi-
sions requiring the design professional to act in a judicial capacity
and maintain immunity.
EJCDC Standard Terms
Not surprisingly, the EJCDC 共1996兲 standard contracts also give
the design professional authority over disputes between owners
and contractors. EJCDC 共1996兲 A1.05共13兲 provides:
13. Disagreements between Owner and Contractor. Render
formal written decisions on all claims of Owner and Con-
tractor relating to the acceptability of Contractor’s work or
the interpretation of the requirements of the Contract Docu-
ments pertaining to the execution and progress of Contrac-
tor’s work. In rendering such decisions, Engineer shall be
fair and not show partiality to Owner or Contractor and
shall not be liable in connection with any decision rendered
in good faith in such capacity.
Under the EJCDC General Conditions between owner and
contractor, the design professional’s role as ‘‘judge’’ of disputes is
also set forth. Section 9.09 EJCDC 共1996兲 of the contract pro-
vides:
A. Engineer will be the initial interpreter of the require-
ments of the Contract Documents and judge of the accept-
ability of the Work there under. Claims, disputes and other
matters relating to the acceptability of the Work, the quan-
tities and classifications of Unit Price Work, the interpreta-
tion of the requirements of the Contract Documents pertain-
ing to the performance of the Work, and Claims seeking
changes in the Contract Price or Contract Times will be
referred initially to Engineer in writing in accordance with
the provisions of paragraph 10.05, with a request for a for-
mal decision.
B. When functioning as interpreter and judge under this
paragraph 9.09, Engineer will not show partiality to Owner
or Contractor and will not be liable in connection with any
interpretation or decision rendered in good faith in such
capacity. . . .
Unlike the AIA, the EJCDC has one trigger of the design
professional’s ‘‘judicial’’ obligations. The owner or contractor
must submit a written request pursuant to paragraph 10.05, in-
cluding a request for a formal decision 共EJCDC 1996兲. If the
written request does not comply with 10.05 or does not make a
request for a formal decision, the design professional is not au-
thorized to render a decision, and any decision made is likely not
cloaked with immunity.
Similar to the AIA, the dispute must be between the owner and
contractor and not between one of those parties and someone else.
The formal claims procedure in paragraph 10.05 of the EJCDC
General Conditions must be followed. The claim must contain the
documents and information required in 10.05共A兲, and the oppos-
ing party must be given an opportunity to respond. The design
JOURNAL OF PROFESSIONAL ISSUES IN ENGINEERING EDUCATION AND PRACTICE © ASCE / JULY 2003 / 179
professional must render a written decision within 30 days after
receipt of the last submittal of the claimant or opposing party. If
any of these procedural requirements are not met, a court may
consider the design professional’s decision to be outside of his or
her scope of authority.
Also like the AIA, the EJCDC does not hold the design pro-
fessional to a higher standard than the general immunity standard.
Design professionals need only render their decisions in good
faith and with impartiality in order to comply with the contract
requirements and maintain immunity. Therefore, if the procedural
steps are followed and the design professional is fair and renders
a decision in good faith, the architect or engineer will not be
liable for the impact of the decision.
Acting within Scope of Contract Obligation
In order for immunity to apply, design professionals must be act-
ing in their role as judge. 共See E.C. Ernst, Inc., 551 F.2d at 1033,
The immunity arises from the architect’s resemblance to a judge
and once this resemblance ends, the immunity ends.兲 There is no
bright line test for determining when design professionals are
acting as judge, or their other contract capacities of owner’s agent
or independent contractor. However, in order for design profes-
sionals to be acting as judges, they must be presented with a
dispute, unless the contract provides otherwise. 共See Craviolini v.
Scholer & Fuller Assoc. Architects, 357 P.2d 611 共Ariz. 1961兲,
When the allegations against a design professional arise out of her
determination of an Owner-Contractor dispute, she is usually im-
mune against the allegations; however, if the allegations concern
conduct which is remote from and in no way associated with the
performance of her arbitrator function, she may be held liable.兲
By a dispute, the courts mean the owner and the contractor have
different positions with regard to the interpretation of the contract
documents or the acceptability of the contractor’s work. If there is
no dispute, then there is nothing for the design professional to
decide. Rather than act as a judge, the design professional would
be acting as an independent contractor or as owner’s agent, roles
for which immunity does not apply. Therefore, if the owner or the
contractor is simply seeking advice or guidance, there is no
decision-making process for the immunity to attach, and the de-
sign professional may be liable for that advice 共Little 1976兲.
Design professionals are only to decide disputes that they are
expressly given jurisdiction to decide. If design professionals de-
cide a matter to which they have not been given jurisdiction in the
contract, they could be liable for the ramifications of that deci-
sion, including a claim for interference with the contractor’s con-
tract by making the contractor perform additional work or redo
services for no extra cost 共see Lundgren, 307 F.2d at 118兲. In
addition, the design professional must reasonably comply with the
procedures and time deadlines for decisions set forth in the con-
tract documents. If they are presented with a dispute but fail to
act, to the extent that failure causes harm to the owner or the
contractor, design professionals will not be immune from liability
for that failure.
Finality of Decisions
The design professional’s determination of a dispute is final and
binding only when the contract expressly so provides. Under the
AIA and EJCDC, the decisions are initial and are appealable to an
arbitrator under the dispute resolution provisions set forth in the
contract. However, if the owner or contractor does not timely
appeal the decision, it is final and binding on the parties. Notwith-
standing, under AIA B141 ¶ 2.6.1.9-1997, any decision by the
design professional regarding matters ‘‘relating to the aesthetic
effect shall be final 关and not appealable兴 if consistent with the
intent expressed in the Contract Documents.’’ 共AIA 1997兲
Impartiality and Good Faith
No Bias or Favoritism
On its surface, the requirement to act impartially and in good faith
seems reasonable and easily accomplished. The reality of the situ-
ation is much different. The interdependency of the various roles
of the design professional on a project makes this requirement
none too easy to fulfill. The design professional has contracted
with the owner and must satisfy the owner to avoid termination
and to keep getting paid. Any decision against the owner’s inter-
est does not make the owner happy and has potentially harmful
ramifications for the design professional. On the other hand, any
ruling against the contractor will likely result in increased project
costs and less profits for the contractor, who will then look to
obtain compensation for these losses from the person making the
decision on grounds that the design professional’s interpretation
of the contract documents is unreasonable and more burdensome
than anticipated. Regardless of these opposing pressures, the de-
sign professional must treat the owner and contractor equally and
fairly in deciding disputes and not render a decision on any type
of bias.
Good faith and impartiality have commonly understood mean-
ings. However, in order to understand exactly how the design
professional must act to maintain immunity, it is worth examining
the legal definitions of these terms. Good faith is ordinarily used
to describe that state of mind denoting honesty of purpose, free-
dom from intention to defraud, and, generally speaking, means
being faithful to one’s duty or obligation 共Black 1991兲. If the
design professional’s motive is to make the correct or appropriate
decision, then they are likely acting in good faith. Impartial
means favoring neither, disinterested, treating all alike, unbiased,
equitable, fair, and just 共Black 1991兲. If design professionals set
aside their personal interests and any bias toward the owner or
contractor, the decision will be made with impartiality.
In determining if the design professional acted in good faith,
the courts generally look for any fraud or willful and malicious
intent to injure the owner or the contractor. If the design profes-
sional is not attempting to intentionally or willfully harm one of
the project participants, the decision will likely be protected by
immunity. In Lundgren v. Freeman, the architects were requested
to determine whether the contractor should be terminated from
the project. The architect, without giving the contractor a suffi-
cient opportunity to respond, decided for termination. The court
cited several factors that created a question of fact as to whether
the architect acted in bad faith and with bias toward the owner
when deciding to terminate the contractor from the job. These
factors included: past poor relations between the contractor and
architects, repetitive and significant cutting of the contractor’s
estimates, making assertions not backed by independent evidence,
no prior notice of inadequate job performance, and ordering redo
work that was performed strictly in accordance with the plans and
specifications. The court held that these factors, without any re-
buttal, could indicate favoritism for the owner, and the contrac-
tor’s claim against the architect for interference with the contract
was not dismissed 共see Lundgren, 307 F.2d at 118-19兲.
180 / JOURNAL OF PROFESSIONAL ISSUES IN ENGINEERING EDUCATION AND PRACTICE © ASCE / JULY 2003
One lesson in impartiality that can be gleaned from Lundgren
is the utilization of a dispute procedure that is fair and allows both
parties to properly present their evidence. In Lundgren, the con-
tractor was not given prior notice of a meeting to decide its ter-
mination, thereby giving an impression of bias and malicious in-
tent. Without due notice, the contractor could not properly prepare
its evidence and argument 共Id.兲. Also, the design professional
waited until after the decision to hire an independent company to
prepare a report on the contractor’s performance 共Id.兲. The deci-
sion was based on potentially unreliable information that was not
verified by the design professional.
The design professional should adopt a procedure, unless one
is dictated by the contract, that allows for due process 共see John
W. Johnson, Inc., 292 F.Supp. at 304兲. All parties should be given
ample notice of the request for a decision, time to present docu-
mentation of their positions, and an opportunity to be heard, if
desired. The design professional should then review the informa-
tion provided by both sides. If an independent analysis is neces-
sary, that analysis should be performed prior to making a deci-
sion, and both sides should have an opportunity to rebut the
findings of the independent analysis. If steps such as these are
followed, the process will clearly give an impression of fairness,
and it will be difficult to prove any malicious intent on the part of
the design professional.
Furthermore, to act in good faith, design professionals must
make decisions in a reasonably expeditious manner 共see E.C.
Ernst, Inc., 551 F.2d at 1033兲. If the decision is unreasonably
delayed or not made, the design professional will not be protected
by immunity. In E.C. Ernst, Inc. v. Manhatten Const. Co. of
Texas, the architect was to determine whether the generator units
submitted by the plaintiff contractor were acceptable under the
plans and specifications. The court determined that the architect,
after several months of requesting submittals, verifications, chas-
ing different issues, changing his mind, and finally deciding that a
new system was needed, acted unfairly by unreasonably delaying
making a decision and forfeited his right to immunity. Of particu-
lar concern to the court was that the architect never communi-
cated his reason for disapproving submittals and requiring addi-
tional information 共Id.兲. Presumably, if this had been done, the
delay may have been considered reasonable.
No Promotion of Self-Interest
Oftentimes, design professionals are presented with a dispute that
attacks the adequacy of their design. It is possible that the claim
or dispute arises out of alleged errors in the plans and specifica-
tions. 共See Lundgren, 307 F.2d at 118, Architect is often called
upon to pass upon the sufficiency, accuracy, and adequacy of his
own plans and specifications thereby pushing him in a direction to
be unfair to the contractor.兲 The design professional will be forced
into the uncomfortable position of having to determine whether
the owner will be required to pay more to the contractor because
of the design professional’s error, or, will attempt to cover their
own error and make the contractor correct its performance with-
out additional pay or time caused by the error. It is difficult to act
impartially and in good faith in such circumstances. However, the
design professional must do so.
Design professionals must keep in mind that protecting their
drawings and plans from attack may be costly. If a decision is
rendered against a contractor by design professionals solely on
the basis of protecting their designs from attack and not on the
merits of the claim, the contractor may succeed in avoiding im-
munity and bringing a claim for interference with the contract
against the design professional. If the contractor were to succeed
on such a claim, the design professional may be liable for the
contractor’s increased costs, lost profits, and possibly punitive
damages if malice is involved. However, if the design profession-
al’s protection of the design is warranted and the decision is made
in good faith and with consideration of the design’s potential
defects, the design professional will not be liable for a decision
requiring strict compliance with the design. In Ballou v. Basic
Construction Co., the plaintiff fabricated and delivered 200 pre-
cast concrete columns for the construction of Community Hospi-
tal in Roanoke, Va. 共407 F.2d 1137, 4th Cir. 1968兲. The plaintiff
sued the architects for determining that all but 45 of the columns
were in compliance with the plans and specifications. Plaintiff
fabricator argued that the decision by the architects was fraught
with excessive rigidity to the plans and specifications and poor
judgment, in that the plans could not be exactly complied with
and the variance in the prefabricated columns was very minor.
However, the court, recognizing the application of the immunity
doctrine, held that poor judgment or excessive rigidity does not
demonstrate malice or bad faith and held that the architects were
not liable for their decision 共Id. at 1141兲. Also, there was no
evidence that the architect rendered his decision in a manner
solely to cover his own liability. If proof had been submitted
showing that the architect’s decision was based solely on self-
interest and that maybe the plans and specifications were to blame
and not the contractor, the court would have held the architect
liable for the ramifications of his decision.
Liability Exposure for Failing to Act in Good Faith
and Impartially
If design professionals fail to act in good faith or impartially in
rendering a decision or if they act outside of the scope of their
contract obligations to decide disputes, they will be subject to
liability. Generally, the design professional will likely be faced
with a claim for tortious interference with the contract or defama-
tion.
Tortious Interference with Contract
Tortious interference consists of intentional and improper inter-
ference with the performance of a contract or a prospective con-
tract relation. Generally, there are three legal elements to this
claim. The design professional must: 共1兲 know of the existence of
a valid contractual relationship between the owner and the con-
tractor; 共2兲 intentionally and improperly interfere with the con-
tract by inducing either the owner or the contractor to breach or
terminate the relationship; and 共3兲 cause damage to the party
共owner or contractor兲 whose contract is breached 共Dehnert v.
Arrow Sprinklers, Inc., 705 P.2d 846, Wyo. 1985兲. For example, a
design professional is presented with a dispute between the owner
and the contractor over whether the materials used by the con-
tractor conform to the specifications and other contract docu-
ments. The design professional, without reviewing any of the
documentary evidence presented by the contractor or owner, rules
in favor of the owner because the design professional and the
owner have worked on several projects together and does not
want to disrupt that relationship. The decision is rendered in bad
faith. The contractor is now required to tear out and replace the
materials, even though he previously complied with the contract
and obtained all necessary approvals to use those materials. The
contractor may sue the design professional for interfering with its
contract by requiring it to redo work that was done in compliance
JOURNAL OF PROFESSIONAL ISSUES IN ENGINEERING EDUCATION AND PRACTICE © ASCE / JULY 2003 / 181
with the contract documents. The damages asserted against the
design professional would likely be the cost to tear out and re-
place the materials and any consequential damages, such as in-
creased overhead.
In Dehnert v. Arrow Sprinklers, Inc., the court was presented
with a situation similar to the previous example, except that the
architect was not deciding a dispute but certifying a termination.
A school district entered into a construction contract with Arrow
Sprinklers, Inc. that specified the use of brass sprinkler heads or
an approved equal 共705 P.2d 846, Wyo. 1985兲. The architect pre-
liminarily approved a product substitution; however, the contract
required that any changes in the work, including the substitution
of an equal, had to be approved by the school district pursuant to
a formal written change order prepared by the architect and
signed by the school district. Without obtaining prior approval or
a written change order, Arrow installed plastic sprinkler heads.
共The plastic heads had been indicated on a shop drawing ap-
proved by the architect and on which the architect did not take
specific exception to the substitution.兲 The architect directed
Arrow to replace the heads after they had been installed. When
Arrow refused, the school district terminated the contract upon
the architect’s advice. Arrow sued the architect for intentional
interference with a contractual relationship and bad faith. The
lower courts held in favor of Arrow and assessed damages against
the architect. However, the Wyoming Supreme Court held that the
evidence did not clearly establish that the architect acted in bad
faith, and therefore ruled in favor of the architect and dismissed
the claim.
There are other cases in which design professionals have been
sued for intentional interference with contract rights that do not
directly concern the design professional’s obligation to decide
disputes but can be analogized to that situation. In Certified Me-
chanical Contractors, Inc. v. Wight & Company, Inc., an architect
was sued for interfering with a general contractor’s contract with
an owner when the architect caused the owner to halt the project
in order to permit the architect to test the general contractor’s
work 共515 N.E.2d 1047, 1987兲. The testing lasted more than 4
months and the general contractor filed suit against the architect
for interfering with the progress of its project and to collect its
expenses for the delay. Fortunately for the architect, but after
incurring significant legal fees, the court held that there was no
evidence of bad faith or actual malice, and the interference claim
was dismissed.
In Waldinger Corp. v. CRS Group Engineers, Inc., the me-
chanical contractor sued the project engineer for interference with
the contract when the engineer required strict compliance with
allegedly unnecessarily restrictive specifications 共775 F.2d 781,
7th Cir. 1985兲. The engineer prepared specifications for two
wastewater treatment facilities. The mechanical subcontractor
claimed it was unable to supply sludge dewatering equipment as
specified in its subcontract due to the restrictive specifications,
which the engineer refused to change. The subcontractor was ex-
cused from performing its subcontract and the mechanical con-
tractor blamed the engineer for the termination of the subcontrac-
tor. The appellate court sent the case back to the trial court with
instructions that if the mechanical contractor could produce evi-
dence that the engineer insisted on strict compliance with the
specifications in order to injure the subcontractor or to further
his/her own personal goals the engineer would be liable for the
costs incurred by the mechanical contractor to procure substitute
performance.
Defamation
Defamation is a communication that tends to harm or lower the
reputation of another in the estimation of the community or to
deter a third person from associating or dealing with that person.
If the defamatory language is in writing or some other permanent
medium, the defamation constitutes libel. Spoken defamation
constitutes slander. If the defamatory statement adversely reflects
on a person’s abilities, business, trade, or profession, it constitutes
libel or slander per se and malice, falsity, and damage to reputa-
tion are presumed without proof.
There are several defenses to defamation. Truth is a complete
and absolute defense to common law defamation. There is also an
absolute privilege for those communications shielded by the pub-
lic policy of protecting honest communications in certain situa-
tions to facilitate the availability of accurate information. A con-
ditional or qualified privilege arises in those circumstances where
the communicator is making the statement to those with a com-
mon interest in the subject matter. In order for the statement to be
privileged, the communicator must make the statement while act-
ing within the scope of the common interest and the statement
must be free from malice.
In an Illinois case, Quality Granite Construction Co., Inc. v.
Hurst-Rosche Engineers, Inc., an engineering company was held
liable to a general contractor for defamation 共261 Ill.App.3d 21,
Ill.App. 5 Dist. 1994兲. The engineering company, Hurst-Rosche
Engineers, after the general contractor allegedly completed the
project, wrote a letter to the general contractor’s bonding com-
pany indicating that the general contractor ‘‘may be considered in
default.’’ The letter went on to state that the default was caused by
‘‘the contractor’s failure to complete the project in a timely man-
ner, substandard workmanship, reluctance to complete punch list
items, and an inability to interpret contract documents, plans, and
specifications as bid.’’ The general contractor alleged that this
letter was sent to the bonding company solely to pressure the
general contractor into compromising its claims. As a result of the
letter, the bonding company temporarily suspended bonding. In
addition, the general contractor was only able to obtain bonding
on a limited basis in the future.
The general contractor sued the engineering company for defa-
mation. The engineering company argued that because it was sim-
ply fulfilling its contract duty to advise whether or not the work
complied with job plans and specifications and to report any de-
ficiencies, its communication was privileged. Further, the engi-
neers argued that it is a matter of custom, contract, and sound
public policy that design professionals are required to evaluate
and report on a contractor’s work. The court disagreed and judg-
ment was rendered against the engineering company for defama-
tion and punitive damages.
In another case, an engineer was sued for defamation for state-
ments made regarding the abilities of the lowest bidder to a public
project. In Riblet Ramway Co. v. Ericksen Associates, Inc., the
State of New Hampshire engaged Ericksen as an engineering con-
sultant to renovate and repair ski lifts 共665 F. Supp. 81, D.N.H.
1987兲. Ericksen’s duties included reviewing bids of compliance
with specifications. At a public hearing before the Governor and
Executive Council, a councilor asked the engineer ‘‘Are you say-
ing there is a risk to the public safety if the state was to go with
Riblet 关the low bidder兴?’’ The engineer answered, ‘‘That’s cor-
rect.’’ Riblet claimed that the engineer, through the exchange at
the public hearing, slandered him and tortiously interfered with
his prospective agreement. Fortunately for the engineer, the court
found that the statements were not defamatory.
182 / JOURNAL OF PROFESSIONAL ISSUES IN ENGINEERING EDUCATION AND PRACTICE © ASCE / JULY 2003
In Alfred A. Altimont, Inc. v. Chatelain, Samperton & Nolan,
an architect was sued for defamation for statements made about a
contractor to the contractor’s surety. The case involved the con-
struction of a church. When the project fell behind schedule, the
architect wrote to the contractor’s surety expressing distress at the
slow construction process 共374 A.2d 284, D.C. App. 1977兲. The
letter indicated that there were many days when no one was on
the job, that the contractor was not promptly and faithfully per-
forming the contract, and might be in default. In a second letter,
the architect blamed the contractor for the delays and stated that it
considered them ‘‘extremely negligent.’’ At a subsequent meeting,
a representative of the architect refused to retract the statements
and stated that he thought the contractor should get out of the
construction business.
On the basis of the architect’s letters and statement, the con-
tractor sued the architect for defamation, interference with his
business with bonding companies, and intentionally or mali-
ciously interfering with his contract with the church. The court
held that there was no evidence of malice, and therefore, the
statements were not actionable.
Under both defamation and tortious interference with contract,
punitive damages may be assessed if the acts of the design pro-
fessional were malicious. Therefore, it is important from a liabil-
ity perspective that the design professional act solely in good faith
and without intent to protect the owner or the design professional
from liability when deciding disputes.
Summary
The design professional has many responsibilities on a project.
When undertaking the judicial role, the design professional ren-
ders decisions that have significant financial impact on the owner
and the contractor. Fortunately for the design professional, when
acting as a judge of disputes, the design professional is cloaked
with immunity from liability. However, this immunity is not ab-
solute. It is critical that in order to maintain immunity, the design
professional must act in accordance with the judicial obligations
set forth in the contract. By acting outside the scope of the ex-
pressed judicial function, the design professional may lose immu-
nity. In addition, design professionals must always exercise their
duty to decide disputes in good faith. It would be very easy for
design professionals to be biased toward the owner because that is
who pays them and who may hire them for additional jobs. How-
ever, if design professionals fail to carry out their duties in good
faith, they will likely find themselves subject to a claim for inter-
ference with the contract and/or defamation.
Conclusion
When undertaking the role of project judge or arbiter of disputes,
the design professional must strictly adhere to the contract re-
quirements. Design professionals must be very familiar with the
scope of their obligation and the procedural requirements for de-
ciding disputes. By deciding disputes over which design profes-
sionals have no contractual duty to decide, design professionals
may expose themselves to liability for negligently rendered deci-
sions. However, if design professionals only decide those disputes
that the contract requires them to decide, immunity will likely
apply, as long as the decision is fair, impartial, and independently
made.
The design professional must render decisions in good faith. In
order to accomplish this requirement, the design professional
must adhere strictly to the contract procedure for deciding dis-
putes. If the contract does not provide a procedure, the design
professional should establish one that follows the basic due pro-
cess principles of affording each side an adequate opportunity to
present evidence of their position and rebut the evidence of the
opposition. Also, the design professional should follow a proce-
dure that provides for a timely decision. The more unnecessary
delay in rendering a decision, the more suspicious the decision
appears. Furthermore, the design professional should document
the decision in writing, setting forth the reasoning of the decision.
The document will provide evidence of the design professional’s
good faith. Finally, design professionals should be careful with
their written communications. E-mails are discoverable, and if
design professionals make any statements in e-mails that support
a claim that they were not independent or fair in rendering their
decision, the e-mails will become documentary evidence in an
interference with contract and defamation case brought by the
contractor or owner against the design professional.
Endnotes
Alfred A. Altimont, Inc., v. Chatelain, Samperton & Nolan, 374
A.2d 284 共D.C. App. 1977兲.
Ballou v. Basic Construction Co., 407 F.2d 1137 共4th Cir. 1968兲.
Certified Mechanical Contractors, Inc., v. Wight & Company, Inc.
162 III.App.3d 391 共III.App. 2nd Dist. 1987兲.
City of Durham v. Reidsville Engineering Co., Inc., 225 N.C.
98, 120 S.E.2d 564 共N.C. 1961兲.
Craviolini v. Scholer & Fuller Assoc. Architects, 357 P.2d 611
共Az. 1961兲.
Dehnert v. Arrow Sprinklers, Inc., 705 P.2d 846 共Wyo. 1985兲.
E.C. Ernst, Inc. v. Manhatten Const. Co. of Texas, 551 F.2d 1026
共5th Cir. 1977兲.
JOURNAL OF PROFESSIONAL ISSUES IN ENGINEERING EDUCATION AND PRACTICE © ASCE / JULY 2003 / 183
John W. Johnson, Inc. v. Basic Construction Co., Inc., 292
F.Supp. 300 共D.D.C 1968兲.
Lundgren v. Freeman, 307 F.2d 104 共9th Cir. 1962兲.
Mayfair Const. Co. v. Waveland Associates Phase Limited Part-
nership, 619 N.E.2d 144 共III.App. 1st Dist. 1993兲.
M.J. Daly & Sons, Inc. v. City of West Haven, 2001 WL
1132304 共Conn. 2001兲.
Quality Granite Construction Co., Inc. v. Hurst-Rosche Engi-
neers, Inc., 261 III.App.3d 21 共III.App. 5th Dist. 1994兲.
Riblet Tramway Co. v. Ericksen Assocs., 665 F.Supp. 81
共D.N.H. 1987兲.
Santucci Construction Company v. Baxter & Woodman, Inc.,
151 III.App.3d 547 共Ill.App. 2nd Dist. 1986兲.
V.M. Solis Underground Utility & Paving Co. v. City of Lardo,
et al., 751 S.W.2d 532 共Tx. Appl. 1988兲.
Waldinger Corp. v. CRS Group Engineers, Inc., 775 F.2d 781
共7th Cir. 1985兲.
Wilder v. Crook, 34 So.2d 832 共Ala. 1948兲.
References
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the contract for construction.’’ AIA, A 201-1997, 共4兲, 4.4, 4.4.1-4.4.8,
Washington, D.C.
Black. 共1991兲. Black’s law dictionary, 6th Ed., West Group, Eagan,
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Douglas, B. S. 共1993兲. ‘‘Reassessing the architect’s role as arbiter.’’
U.S.F.L. Rev., 共27兲 873, 877-81.
Engineers Joint Contract Document Committee 共EJCDC兲. 共1996兲. ‘‘Stan-
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Little, D. C. 共1976兲. ‘‘The architect’s immunity as arbiter.’’ St. Louis Univ.
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