{"id":900014,"date":"2022-06-08T16:09:27","date_gmt":"2022-06-08T22:09:27","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=900014"},"modified":"2022-06-08T16:09:43","modified_gmt":"2022-06-08T22:09:43","slug":"spearin-doctrine-strategic-planning-beforehand","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/spearin-doctrine-strategic-planning-beforehand\/","title":{"rendered":"Project Owners Can Effectively Combat Contractors’ Efforts To Use The Spearin Doctrine As A Sword With Strategic Planning Beforehand"},"content":{"rendered":"\n

Rose Tanner and paul Sonderegger | Thompson Coburn<\/a><\/p>\n\n\n\n

Contractors across the country can use the over 100-year old\u00a0Spearin<\/em>\u00a0Doctrine<\/a>\u2014which places liability for construction defects on the party who either mandates specifications or is given discretion\u2014as an offensive weapon to recoup damages. Recent case law has been handed down that clarifies and sets forth scenarios when a contractor can use the\u00a0Spearin<\/em>\u00a0Doctrine as a sword. Through careful planning, project owners and developers can draft construction contract terms and conditions that can effectively negate contractors’ ability to utilize the\u00a0Spearin<\/em>\u00a0Doctrine offensively in lawsuits.<\/p>\n\n\n\n

Background<\/h3>\n\n\n\n

Defendant contractors or subcontractors have traditionally used the Spearin<\/em> Doctrine as a shield to liability for the failure of a project’s design. See United States v. Spearin<\/em>, 248 U.S. 132, 136 (1918). The Spearin<\/em> Doctrine provides that, when an owner provides mandatory design plans and associated specifications, an implied warranty attaches as a matter of law, and the contractor cannot be at fault when the design fails. Spearin<\/em> also states that an owner cannot prevent a contractor from using the Spearin<\/em> shield by including general<\/em> contract clauses, such as broadly requiring the contractor to examine the site or check the plans pre-construction. <\/p>\n\n\n\n

A majority of states have adopted the\u00a0Spearin<\/em>\u00a0Doctrine, including Missouri.\u00a0See Penzel Constr. Co., Inc. v. Jackson R-2 Sch. Dist.<\/em>, 544 S.W.3d 214, 226 (Mo. Ct. App. 2017).\u00a0\u00a0Penzel<\/em>\u00a0recognized that the\u00a0Spearin<\/em>\u00a0Doctrine is not limited to its original use as a shield; it can also be used as a sword by contractors against owners. In\u00a0Penzel<\/em>, the contractor’s use of the\u00a0Spearin<\/em>\u00a0Doctrine in its breach of contract claim resulted in a $800,000 jury verdict award to the plaintiff contractor. The Missouri Court of Appeals affirmed this judgment.\u00a0Penzel Constr. Co., Inc. v. Jackson R-2 Sch. Dist.<\/em>, No. ED 108821, 2021 WL 3040984, at *27 (Mo. Ct. App. July 20, 2021),\u00a0reh’g and\/or transfer denied<\/em>\u00a0(Aug. 23, 2021). For additional discussion of\u00a0Penzel<\/em>, see\u00a0Missouri appellate court opens the door to Spearin claims by contractors against public entities (thompsoncoburn.com).<\/strong><\/a><\/p>\n\n\n\n

Drafting construction contracts to avoid the Spearin<\/em> sword<\/h3>\n\n\n\n

Owners can avoid the Spearin<\/em> sword by giving contractors contractual discretion or responsibility for the design. A recent federal court decision highlights how important it is for owners to carefully draft their contractual documents. In BAE Sys. Ordnance Sys., Inc. v. Fluor Fed. Sols<\/em>., LLC, No. 7:20-CV-587, 2022 WL 969773, at *16 (W.D. Va. Mar. 30, 2022), a defendant subcontractor brought a Spearin<\/em>-based counterclaim against the plaintiff contractor. The Spearin<\/em> counterclaim has so far survived, because the court found the contract terms were \u201cambiguous\u201d as to who had responsibility for the design.  For example, one contract term stated (emphasis added):<\/p>\n\n\n\n

It is incumbent upon the Subcontractor to review the documents submitted and to perform their own analysis, including Hazard and Operability Studies and Life Safety Code Analysis. The Subcontractor shall be solely responsible for the design<\/strong> and all safety reviews and safety submittals with all required state and federal agencies.<\/p>\n\n\n\n

The plaintiff attempted to isolate the single underlined phrase from the above provision to argue that the subcontractor had design responsibility; therefore, the subcontractor’s Spearin<\/em> claim should be dismissed. But, the court chose to view the underlined phrase in light of the entire<\/em> provision and held that it was ambiguous as to whether the referenced responsibility related to design as a whole or only to safety-related design.  The court also discussed seemingly contradictory terms throughout the contract.  Owners cannot escape the Spearin<\/em> sword simply by placing one sentence in a provision or an entire contract; their contract as a whole<\/em> must consistently give the contractor at least some discretion or control over the design.  <\/p>\n\n\n\n

When owners leave no room for contractor discretion in constructing a project, they leave the door open to contractor-initiated Spearin<\/em> claims. For example, if an owner’s design specifications state that a certain named material or device is to be used as \u201cthe only approved\u201d option or to be used \u201cexclusively,\u201d the owner cannot avoid liability if that material or device causes a delay or failure. See Christopher Glass & Aluminum, Inc. v. Tishman Constr. Corp. of Illinois<\/em>, 2020 IL App (1st) 191972-U, 70. <\/p>\n\n\n\n

On the other hand, if a specification allows the contractor some amount\u2014even minimal\u2014discretion, it may be deemed a \u201cperformance specification\u201d (as opposed to a \u201cdesign specification\u201d) and the owner can avoid liability for a failure stemming from that specification. See A.G. Cullen Const., Inc. v. State Sys. of Higher Educ<\/em>., 898 A.2d 1145, 1157 (Pa. Commw. Ct. 2006).  In A.G. Cullen<\/em>, the owner successfully avoided the Spearin<\/em> sword. The contract offered the names of two approved window manufacturers, but also expressly permitted the use of other manufacturers so long as they could provide windows \u201cwith equal performance characteristics.\u201d The contractor first attempted to purchase windows from one of the two \u201capproved\u201d manufacturers, but the manufacturer could not provide conforming windows. This resulted in a costly delay to the project. The court analyzed the language of the specification and concluded that the contractor was not bound to that one window manufacturer. Because the contractor could<\/em> have chosen a different window system, the specification was a \u201cperformance specification,\u201d and, therefore, the owner could not be held liable for delay-related damages due to the contractor’s choice of window manufacturer. Similarly, in Ames Constr., Inc. v. Clark Cty<\/em>., No. 218CV299JCMGWF, 2020 WL 3488736, at *5 (D. Nev. June 26, 2020), a contractor filed breach of contract claims against the owner after higher-than-expected water flow caused delays and resulting repairs to the project. The specifications provided an estimated<\/em> water flow and it described the result<\/em> it wished to achieve (\u201ca dry construction site\u201d), but it permitted the contractor to decide how<\/em> best to achieve that result. Accordingly, the court granted summary judgment in favor of the owner. The key to owners avoiding liability under Spearin<\/em>, therefore, is to expressly provide the contractor with discretion in the contract’s design specifications.<\/p>\n\n\n\n

Looking ahead<\/h3>\n\n\n\n

Recent decisions anticipate future discussion on the allowable reach of the Spearin<\/em> sword. In Tolliver Group, Inc. v. United States<\/em>, the Federal Circuit Court of Appeals deferred on an opportunity to limit the use of the Spearin<\/em> sword. The contractor\u2014as plaintiff\u2014sought recovery for the legal fees it incurred in litigation that was based on technical manuals that it created for the government. The contractor made a Spearin<\/em>-based argument that it should be allowed to recover costs from the government because it followed the government’s design specifications. The trial court agreed and cited Spearin<\/em>. However, the Court of Appeals ruled that the trial court should not have relied on Spearin<\/em> because the contractor did not put the defendant on notice of its Spearin<\/em> implied warranty claim. This decision highlights the importance of citing Spearin<\/em> and relying on design specifications, not other specifications, if a party wishes to rely upon and utilize the doctrine.<\/p>\n\n\n\n

The Federal Circuit explicitly noted that it was not ruling on whether the Spearin<\/em> Doctrine could be used by a contractor seeking reimbursement for attorney’s fees; rather, it was remanding the decision based solely on the trial court’s lack of jurisdiction. The Federal Circuit left the door open to future discussion on this topic by noting, \u201cthe United States has raised significant questions about whether the Spearin<\/em> doctrine applies here.\u201d  Tolliver Grp., Inc. v. United States<\/em>, 20 F.4th 771, 775 (Fed. Cir. 2021).<\/p>\n\n\n\n

Recent and current litigation highlights the importance of carefully drafting clear construction contract terms and conditions on the issue of responsibility for design specifications by and between owners and contractors. Thompson Coburn’s Construction Litigation practice group works closely with the firm’s transactional attorneys to advise clients on drafting contracts that can avoid unnecessary exposure.\u00a0 Thompson Coburn will continue to follow the evolving case law on the\u00a0Spearin<\/em>\u00a0Doctrine and analyze implications for its clients’ contracts.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Rose Tanner and paul Sonderegger | Thompson Coburn Contractors across the country can use the over 100-year old\u00a0Spearin\u00a0Doctrine\u2014which places liability for construction defects on the party who either mandates specifications or is given discretion\u2014as an offensive weapon to recoup damages. Recent case law has been handed down that clarifies and sets forth scenarios when a… Continue reading Project Owners Can Effectively Combat Contractors’ Efforts To Use The Spearin Doctrine As A Sword With Strategic Planning Beforehand<\/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":[9,4],"tags":[9895,224,19,9160],"class_list":["post-900014","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","category-construction-defects","tag-advise-consult","tag-construction-contract","tag-construction-defects-2","tag-spearin-doctrine","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nProject Owners Can Effectively Combat Contractors' Efforts To Use The Spearin Doctrine As A Sword With Strategic Planning Beforehand - 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When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"