Designerless Roofs – Who Has Liability For Faulty Design?

Introduction
It is a fact of life that the commercial
roofing industry is in a constant state of
change. Building owners’ expectations for
the performance of roof systems continue to
increase over time. Manufacturers frequently
introduce new products or change their
existing products in an effort to meet the
evolving demands of the marketplace. The
adoption of new building code provisions
and other legislation has imposed new energy
efficiency and “green roof” requirements
on the industry. These and other developments
have increased the importance of
roof design specialists who keep current on
the constant changes in roofing technology,
building codes, and performance requirements
and limitations and who can provide
building owners with informed, objective
advice, free from conflicts of interest. A factor
that further enhances the roof design
professional’s value to building owners is
the code of ethics to which they are bound,
either through professional state licensure
or membership in RCI.
Notwithstanding the substantial value
that independent roof design professionals
can add to projects, many owners do not
retain such specialists to design
their roofs. This may be due to a
lack of knowledge of the availability
or value of an independent
roof designer, or a conscious
decision based on a
short-term perspective that the
cost exceeds the benefits.
Building owners may be persuaded
by a contractor or manufacturer
that an independent
designer is unnecessary because
the contractor or manufacturer
is capable of providing “turnkey”
design-build or design-procure
services at no (apparent) additional
cost to the owner. It is
thus likely for the foreseeable
future that some commercial
roofs will be constructed without
the benefit of independent professional
design.
It would overstate the case to
say that every roof installed
without the benefit of independent
professional design is
doomed to premature failure, or
that every roof designed by an
independent roof design professional
is guaranteed to perform
within or exceed expectations.
However, it has been demonstrated
that utilizing a qualified
independent roof design professional greatly
increases the likelihood that the roof will
meet the owner’s immediate and future
needs related to leak-free occupancy, minimized
maintenance costs, and long-term
service. When a building owner forgoes use
of an independent design professional, he
increases the risk that the roof will not meet
his requirements concerning performance,
cost, appearance, or longevity. This is
because critical choices of materials and
design of details will be made by someone
whose principal role or financial interest is
selling materials or installing a roof, not the
provision of design services.
These observations about the importance
of independent professionals in roof
design set the stage for the principal issue
addressed in this article: When no roof
design professional is involved with a roof
that fails prematurely, who has liability for
any design defects that cause or contribute
to the failure? The answer, as with so many
issues in life, is “it depends.” The answer
will be affected principally by the roles of
the different parties involved with the roof
and the scope of their agreements. In examining
this issue, the author will separately
discuss the legal issues relating to each of
the principal parties involved in the typical
roofing project.
The Owner
The owner’s decision not to use a design
professional can have at least two consequences.
First, the owner loses a strong
advocate for his interests, thereby increasing
the chance that his expectations for the
roof will not be met as discussed above. The
second consequence is that allocation of
legal liability and recovery of damages for
design errors become more complicated and
less certain. This is because there may be
no single party who has clearly assumed
responsibility for the roof design.
With or without a professional designer
of record, the owner will bear the first-line
A roof consultant views an interesting protection
arrangement in this leaking building. (Photo courtesy
Fincastle Engineering.)
34 • I N T E R FA C E OC T O B E R 2005
liability to third parties who are injured or
damaged as a result of faulty roof design.
For example, if roof leaks or complete failure
of a roof due to a design defect lead to
water damage to contents, structural collapse,
or injury to occupants or bystanders,
the owner (simply by virtue of owning the
building), will be legally liable to those third
parties.
The owner or his insurer can and frequently
will seek indemnification for such
claims from the parties who were responsible
for committing the design errors. If an
independent roof design professional was
involved, the liability for any design errors
will clearly rest with him. In that event, the
owner will have recourse against the
designer for damages the owner must pay to
third parties, as well as his own damages. A
designer will frequently have errors and
omissions (E&O) insurance coverage to pay
such claims.
However, where no independent design
professional was involved, the owner will
first have to determine who is responsible
for the faulty design, and then seek
recourse against him or her. Moreover, if an
independent design professional was not
involved, E&O coverage will likely not be
available as a source of recovery for the
owner.
The Contractor
In the absence of a designer of record,
design responsibility may be unclear. It may
rest with the contractor, manufacturer, or
both. If a contractor is hired to install or
replace a roof with no clear designation of
design responsibility, the contractor nonetheless
will likely be deemed to have
assumed responsibility for the suitability of
the materials installed and the design of the
roof details. Because in law, liability follows
responsibility, the contractor will have liability
if the roofing materials selected are
unsuitable for the application or if roof
details are substandard, in addition to the
contractor’s customary liability for installation
flaws.
The Manufacturer
The liability equation becomes more
complicated, however, when the role of the
roofing manufacturer is considered. If a
manufacturer issues a traditional “materialonly”
roofing warranty, the contractor will
likely continue to have liability for design
errors with one possible exception. The
OC T O B E R 2005 I N T E R FA C E • 3 5
manufacturer may have liability for suitability
of the product if it recommended a
particular product with knowledge of the
intended application.
If a manufacturer issues a no-dollarlimit
(“NDL”) warranty covering installation
and roofing materials, design liability may
shift entirely to the manufacturer. Acceptance
by the manufacturer, particularly
after inspecting the completed roof, can
constitute acceptance of
responsibility and thus ultimate
legal liability for the
quality of the installation,
suitability of the product
for the particular application,
performance of the
roofing materials, and adequacy
of the design.
However, when a roof covered by
an NDL warranty prematurely fails
and design defects not discovered
during the pre-warranty inspection
are found, the manufacturer may
deny the claim on the basis that its
warranty has been voided by the contractor’s
use of improper, non-standard
details. To avoid this sort of
dispute, the wise contractor should
obtain the manufacturer’s advance
approval of any non-standard details.
Absent such a step, a legally murky situation
may result in which liability is hotly
contested between the contractor and manufacturer.
The dispute can become even
more factually complex if it is unclear
whether the roof failure resulted from substandard
installation, material failure, or
design flaws.
Once the
manufacturer
inspects and
accepts the roof
by issuing an
NDL warranty, it
will have a heavy
burden to establish
that it did
not, by virtue of
issuing its warranty,
accept all
design aspects of
the roof. Even if
the manufacturer
contends it
could not have
discovered the
particular design
flaw by inspecting
the finished
roof, unless it convinces the trier of
fact that the design flaw was fraudulently
concealed, it runs a high risk of being determined
to have assumed the risk of even hidden
design flaws and thus found liable to
the owner.
Even if a manufacturer is successful in
contending that the contractor is liable for
design defects, it will still have a second hurdle
to surmount. That is the burden to prove
the extent and materiality of such design
defects. This requirement is illustrated by an
Oregon case, Amfac Foods, Inc. v. Fred A.
Snyder Roofing and Sheet Metal Corp.1 In
Amfac, when the roof leaked, the roofing
subcontractor defended a claim for breach of
warranty by contending that the owner had
voided the warranty coverage by installing
rooftop equipment without prior notice to
the subcontractor as required by the warranty.
The court ruled that the roof subcontractor
was required to prove the occurrence
and extent of such modifications to the roof
and that the installation of such equipment
was a material cause of the leaks. A court
will likely hold a manufacturer to the same
burden to prove the extent and materiality of
the design defects as the cause of roof failure
(as distinguished from substandard
installation or material failure).
Conclusions
Involvement in a legal battle over ultimate
liability for roof design is usually not
in the owner’s best interests. The typical
owner is better served by a roof that performs
to expectations rather than becoming
enmeshed in expensive litigation with multiple
finger-pointing parties. Reliance solely
upon even the best NDL warranty can thus
be short-sighted.
A much better method of reducing the
risk of poor performance is to prevent roof
failure in the first place through proper
design and material specification. For if roof
leaks result from use of unsuitable materials
or substandard details, the owner is
likely to incur costs that no roof manufacturer’s
warranty will cover, such as damage
to other building components (including
insulation, roof deck, and ceilings), damage
to contents, and interruption of operations.
Such risks will not be covered even by NDL
warranties because they typically exclude
consequential damage to other building
components or contents. Also, should the
roof fail prematurely, the owner bears the
risk that the installer or material manufacturer
is no longer in business or cannot be
identified as a result of loss of records.
Before deciding to forego the services of
an independent roof design professional,
the building owner should carefully weigh
the benefits of such services against the
increased risk of premature roof failure and
potentially complicated issues of legal liability
for design flaws in the absence of a
designer of record.
143 OR. App. 107, 602 P.2d 321 (1979).
Paul E. Ridley is a partner of Kirkpatrick & Lockhart
Nicholson Graham LLP, a law firm with offices in 12 cities in
the U.S. and U.K. Mr. Ridley is resident in the Dallas office.
He has practiced law for 21 years and focuses his practice on
resolving construction disputes. Prior to becoming a lawyer,
Ridley practiced architecture and is a registered architect.
Ridley is a former member of RCI’s Board of Directors as
Region IV director, former chairman of the Nominating
Committee, and has participated in mock trial presentations
at several national conventions. Mr. Ridley has also taught RCI seminars on various
law-related issues.
Paul E. Ridley
36 • I N T E R FA C E OC T O B E R 2005
Dimensionally unstable foamed plastic insulation resulted in a failure
investigation at this plant in Michigan. (Photo courtesy of Roof
Engineering Inc.)