William H. Gordon Assocs., Inc. v. Heritage Fellowship, United Church of Christ, 291 Va. 122

Summary

The Supreme Court of Virginia considered the accrual of a negligent design claim against an engineer, the effect of a construction contract on an engineer’s liability, the evidence required to establish breach of a professional engineering standard of care, settlement offsets, and construction-delay damages. The court held that the negligent design claim accrued when the county approved the final site plan, that the construction contract did not shift design liability to the contractor, and that the evidence supported liability for the engineer. The court also addressed the settlement credit and the award of extended construction-loan interest damages.

Holdings

1. A negligent-design claim against a design professional accrues when the allegedly negligent plans are finally approved, and here the county's August 5, 2009 approval of the final site plan started the limitations period. Heritage's July and August 2013 actions were therefore timely.
2. The construction contract did not shift liability for Gordon's design deficiencies to W&J. W&J was required to follow Gordon's prescriptive plans and was not responsible for design work or remediation where it materially complied with those plans.
3. Sufficient expert and documentary evidence supported the findings that Gordon breached the professional engineer's standard of care in designing and overseeing the rain-tank system and that those breaches proximately caused the collapse.
4. The PSI settlement did not release Gordon from liability for the rain-tank-collapse injury, but Gordon could be entitled to an offset. The circuit court was required to determine and allocate the consideration attributable to the collapse-related claims rather than accept the settlement's allocation to attorneys' fees without analysis.
5. Heritage could not recover its construction-loan interest payments as delay damages because the delay did not extend, alter, or otherwise increase the financing obligations; the payments would have been incurred even without the delay.

Questions Presented

1. Whether Heritage's negligent-design claims were barred by the five-year statute of limitations.
2. Whether the construction contract shifted responsibility for Gordon's design defects and the resulting remediation costs to W&J.
3. Whether sufficient evidence supported the finding that Gordon breached the professional engineer's standard of care and proximately caused the rain-tank collapse.
4. Whether Gordon was entitled to a release or offset based on Heritage's settlement with PSI.
5. Whether construction-loan interest paid during the delay was a recoverable measure of damages when the loan term was not extended or otherwise altered.

Disposition

reversed_and_remanded