{"id":904640,"date":"2025-08-05T13:09:16","date_gmt":"2025-08-05T19:09:16","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=904640"},"modified":"2025-08-05T13:09:19","modified_gmt":"2025-08-05T19:09:19","slug":"direct-damages-vs-consequential-damages-in-florida","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/direct-damages-vs-consequential-damages-in-florida\/","title":{"rendered":"Building Design Disputes \u2013 New Analysis of Direct v. Consequential Damages in Florida"},"content":{"rendered":"\n<p>Stephanie Eaton | <a href=\"https:\/\/www.spilmanlaw.com\/resource-article\/building-design-disputes-new-analysis-of-direct-v-consequential-damages-in-fl\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Spilman Thomas &amp; Battle<\/a><\/p>\n\n\n\n<p>Are design professionals involved in your Florida project?\u00a0 If so, then you need to be aware of this newly decided case. The U.S. District Court for the Middle District of Florida, in Orlando, issued an Order on July 11, 2025, confirming that in Florida, remediation costs for defective design work do constitute <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/consequential-damages-vs-direct-in-design-disputes\/\">direct damages<\/a>, regardless of whether third-party contractors performed the remediation work.\u00a0\u00a0<em>See Orlando Health, Inc. v. HKS Architects, Inc.<\/em>, Case No. 6:24-cv-00693-JA-LHP (M.D. Fla., Jul. 11, 2025).\u00a0This ruling occurred despite the use of the parties\u2019 contract \u2013 the AIA B101 (2017) &#8211; that contained a waiver of consequential damages.\u00a0Could this outcome affect your Florida project?\u00a0To make that determination, we need to discuss what happened in\u00a0<em>Orlando Health<\/em>.<\/p>\n\n\n\n<p>On December 30, 2019, HKS Architects Inc. (HKS) was hired as the architect of record responsible for planning, architectural and engineering services for the design and construction of a six-story healthcare facility in central Florida.&nbsp;HKS, in turn, hired BBM Structural Engineers Inc. (BBM) to provide structural engineering services and signed structural drawings to HKS. During construction, the healthcare facility owner discovered multiple design errors, such as a badly designed cantilevered overhang, deficiently designed structural beams, incorrect design of concrete beams, and missing reinforcing steel.&nbsp;These structural errors were of such a magnitude that they required immediate repair.&nbsp;Thus, the owner hired a third-party contractor to demolish and rebuild part of the facility.&nbsp;After the owner paid the third-party contractor millions of dollars to perform the remediation, the owner sued to recover remediation cost damages from HKS, who filed a third-party complaint against BBM, contending that BBM made the structural design errors.<\/p>\n\n\n\n<p>Not so fast, argued HKS and BBM, who jointly moved for summary judgment on the owner\u2019s claims, relying upon paragraph 8.1.3 of AIA B101\u2019s waiver of consequential damages provision.&nbsp; &nbsp;HKS and BBM argued that the costs incurred by the Owner to pay a third-party to remediate the design damages were consequential damages, and therefore the Owner could not recover those costs.&nbsp;The Court disagreed. Instead, the Court noted that the parties had not defined the term \u201cconsequential damages\u201d in their contract.&nbsp;The Court further reasoned that the owner\u2019s direct costs to remediate the design damages were recoverable, regardless of the fact that third-parties performed the remediation work.&nbsp;This conclusion was based on the Court\u2019s finding that when remediation damages are a direct result of the breach of the design professional\u2019s contractual obligations (i.e. deficiently designed plans), then those damages will be considered \u201cdirect\u201d damages, not \u201cconsequential\u201d damages; therefore, the AIA B101 waiver of consequential damages did not bar the owner\u2019s claim. The Court was careful to distinguish the facts related to the project at issue from the project at issue in&nbsp;<em>Keystone Airpark Authority v. Pipeline Contractors, Inc.<\/em>, 266 So. 3d 1219 (1<sup>st<\/sup>&nbsp;DCA, Jan. 25, 2019), where the damages to the building were the result of the third-party contractor\u2019s performance of the remediation work that could have occurred independently from the design professional\u2019s duty to inspect (not design) the building at issue.&nbsp;<em>Orlando Health<\/em>, Opin. at 12-15. Thus, in&nbsp;<em>Keystone<\/em>, the \u201c\u2018need for repair did not arise within the scope of the immediate transaction between [the engineering firm] and the [a]irpark\u2019 but instead \u2018stemmed from loss incurred by the [a]irpark in its dealings with a third party \u2013 the contractor.\u2019\u201d&nbsp;<em>Orlando Health<\/em>, Opin. at 11-12.<\/p>\n\n\n\n<p>Following this decision, design professionals in Florida must be mindful of the limits of the consequential damages provision in the AIA B101.&nbsp;One potential impact of this decision may be a change to insurance limits, and\/or deductibles, and\/or coverage related to remediation of buildings in Florida where the fact finder determines that the remediation was caused solely by the design professional\u2019s breach of contract.&nbsp;Another impact may be that, when contracting with the owner, design professionals in Florida may seek to limit the payment of remediation damages to a certain price point, even if it is determined that the remediation was caused solely by the design professional\u2019s breach of contract.&nbsp;A third potential impact of this decision may be that the design professionals insist upon contracting with any third-parties to perform remediation, such that the design professionals, not the owner, control the scope and cost of that work.&nbsp;The issue that still may be in limbo, in light of&nbsp;<em>Keystone<\/em>&nbsp;and&nbsp;<em>Orlando Health<\/em>, is whether a mix of design professional breach of contract&nbsp;<strong>and<\/strong>&nbsp;defective work by a third-party remediation contractor both cause damages to a building.&nbsp;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stephanie Eaton | Spilman Thomas &amp; Battle Are design professionals involved in your Florida project?\u00a0 If so, then you need to be aware of this newly decided case. The U.S. District Court for the Middle District of Florida, in Orlando, issued an Order on July 11, 2025, confirming that in Florida, remediation costs for defective&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/direct-damages-vs-consequential-damages-in-florida\/\">Continue reading <span class=\"screen-reader-text\">Building Design Disputes \u2013 New Analysis of Direct v. Consequential Damages in Florida<\/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":[9009,10721],"tags":[9895,9099,9852,94],"class_list":["post-904640","post","type-post","status-publish","format-standard","hentry","category-design-professionals","category-insurance","tag-advise-consult","tag-consequential-damages","tag-direct-damages","tag-florida","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Building Design Disputes \u2013 New Analysis of Direct v. 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