{"id":2147,"date":"2013-10-07T06:15:45","date_gmt":"2013-10-07T12:15:45","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=2147"},"modified":"2013-09-30T14:16:54","modified_gmt":"2013-09-30T20:16:54","slug":"architects-final-secision-may-not-be-final","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/architects-final-secision-may-not-be-final\/","title":{"rendered":"Architect’s “Final” Decision May Not Be Final"},"content":{"rendered":"

Alan S. Bishop – September 20, 2013<\/p>\n

An architect specified as Initial Decision Maker (\u201cIDM\u201d) in an AIA contract wears many hats: independent design professional, owner\u2019s agent on the construction site, and impartial decider of disputes. But is the architect also the judge and jury?<\/p>\n

The decision in\u00a0Neighbors Construction Co.,\u00a0Inc. v. Woodland Park at Soldier Creek, LLC., 284 P.3d 1057 (Kan. App. 2012) exemplifies the modern trend. The IDM\u2019s decision was found be final for purposes of allowing the construction project to proceed. However, the IDM\u2019s decision did not preclude arbitration and was not binding on the arbitrator or the court.<\/p>\n

Initial Decision Maker as an ADR Tool<\/strong><\/p>\n

An IDM is one of many dispute resolution processes that are available: partnering, structured negotiations, mediation, dispute review boards, non-binding arbitrations, and expedited binding arbitrations. The IDM provides an initial decision that is temporary but final enough for the parties to proceed with the work. On some projects, the IDM is a neutral (not the owner\u2019s architect or representative) with sufficient technical and\u00a0legal expertise to respond quickly to disputes. This technique can be a cost-effective dispute resolution tool.<\/p>\n

Historically, architects and engineers hired by or employed by project owners could render certain decisions that were binding and not appealable to an arbitrator or the court. That was not the approach of the AIA General Conditions at issue in the\u00a0Woodland Park\u00a0case. Under the AIA A201\u20132007 General Conditions of the Contract for Construction, the IDM presented with a dispute between the owner and a contractor may issue interim decisions to\u00a0keep the job moving. If no party objects to the determination within 30 days, the IDM\u2019s decision becomes final and absolutely binding. An objecting party is entitled to a review of the decision in future arbitration or litigation. At the future hearings, the IDM\u2019s decision may be presented in evidence but is merely advisory.<\/p>\n

Case Illustration<\/strong><\/p>\n

In\u00a0Woodland Park, a payment dispute arose between the owner and contractor. The architect was responsible for certifying payment applications for the owner, and was also the IDM. The architect had certified the contractor\u2019s payment applications as the job proceeded. However, after the owner refused to pay a portion of a payment application that had been approved by the architect, the owner submitted a claim to the architect asking for a review\u00a0of every pay application. Subsequent to that review, the architect rescinded the earlier certification of the payment application disputed by the owner.\u00a0 The unpaid contractor stopped work and terminated the contract.<\/p>\n

An arbitration was held to settle the payment dispute. Contrary to the architect\u2019s decision, the arbitrator held for the contractor, finding that the contractor\u2019s pay application should have been certified and paid. When the contractor sought to enforce the arbitration award in court, the owner argued the architect, as IDM, had issued a conclusive decision and the arbitrator erred by not deferring to the architect\u2019s decision.<\/p>\n

The court rejected the owner\u2019s contention that the IDM had the same authority as an arbitrator. The court distinguished the IDM of the AIA contract provisions from an arbitrator in significant ways:<\/p>\n

The IDM\u2019s decisions were final and conclusive for\u00a0aesthetic determinations, but not for other dis-putes (unless the other decisions were not disputed within thirty days). Binding authority only exists if unambiguously granted by the contract.<\/p>\n

The IDM\u2019s decision-making lacked due process (an adversarial hearing with presentation of evidence and an opportunity to cross-examine witnesses).<\/p>\n

The trial court and appellate court thus held that the arbitrator was entitled to reach his own conclusions and that the architect\/IDM\u2019s decision was merely advisory.<\/p>\n

Preserving Claims for Judicial Review<\/strong><\/p>\n

Closely read the technical requirements and dispute resolution procedures of your contract. How are claims made and preserved? Who can make decisions in their sole, subjective discretion that can be overturned only for fraud or gross mistake? When can inaction lead to a binding, conclusive result? The prevailing party in this case knew the answers to those questions as it made hard choices during the project and ultimately obtained a satisfactory outcome.<\/p>\n

via Architect’s “final” decision may not be final – Lexology<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Alan S. Bishop – September 20, 2013 An architect specified as Initial Decision Maker (\u201cIDM\u201d) in an AIA contract wears many hats: independent design professional, owner\u2019s agent on the construction site, and impartial decider of disputes. But is the architect also the judge and jury? The decision in\u00a0Neighbors Construction Co.,\u00a0Inc. v. Woodland Park at Soldier… Continue reading Architect’s “Final” Decision May Not Be Final<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[41,14,436],"tags":[118,12,80],"class_list":["post-2147","post","type-post","status-publish","format-standard","hentry","category-arbitration","category-construction-2","category-dispute-resolution-2","tag-architect","tag-construction","tag-dispute-resolution","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nArchitect's "Final" Decision May Not Be Final - Advise & Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/architects-final-secision-may-not-be-final\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Architect's "Final" Decision May Not Be Final - Advise & Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"Alan S. Bishop – September 20, 2013 An architect specified as Initial Decision Maker (\u201cIDM\u201d) in an AIA contract wears many hats: independent design professional, owner\u2019s agent on the construction site, and impartial decider of disputes. But is the architect also the judge and jury? The decision in\u00a0Neighbors Construction Co.,\u00a0Inc. v. 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