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#25:  Building Codes: The Baseline for Proper Construction

1/25/2015

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Since 2000, the International Code Council has published a version of its International Building Code every three years, setting forth the minimum requirements for design and construction of buildings within its scope.  (A separate International Residential Code governs the construction of one- and two-family dwellings.)  The Council also puts out an International Mechanical Code, International Plumbing Code and International Energy Conservation Code on the same three year cycle.

Currently New Hampshire has adopted the 2009 versions of these documents as its State Building Code (along with the 2014 version of the National Electrical Code).  Municipalities are free to adopt stricter standards than contained in these codes, but few municipalities do so.  Enforcement of the State Building Code is the responsibility of the municipalities; if they don’t have code enforcement officials, the State Fire Marshall steps in to fill that role.

RSA 155-A:2,VII is explicit that “The contractor of a building, building component, or structure shall be responsible for meeting the minimum requirements of the state building code and state fire code.”  But responsible to whom?  Certainly to the municipality for any fines assessed (RSA 155-A:8 and 676:17 authorize fines of $275 for the first offense and $550 for subsequent offenses, for each day that a violation continues after notice of noncompliance).  Likely to the owner, who will have a hard time getting a certificate of occupancy without a code-compliant structure.  But what about liability to third parties for physical injury or financial harm arising from the structure being out of code?

Our Supreme Court has yet to rely on this statute as a basis for contractor liability to an injured plaintiff, for the simple reason that no plaintiff has yet pressed the issue.  But the Court has noted in other contexts that violation of a statute or regulation can amount to negligence when the defendant already owes a common law duty of care to the plaintiff.  In such a case the defendant “will be held to the statutory standard of conduct if the plaintiff is in a class the legislature intended to protect, and the harm is of a type the legislature intended to prevent."  Marquay v. Eno, 139 N.H. 708, 714 (1995).  In the case of building codes, the harm intended to be prevented is physical injury from an unsafe structure.  If, indeed, a contractor owes a common law duty to potential occupants of a building to make it safe―and despite occasional hints, the Supreme Court has never explicitly declared that such a common law duty exists―the State Building Code would likely set the threshold standard of care, in which case its breach would automatically amount to negligence.

As to financial harm, it’s pretty clear that RSA 155-A:2,VII imposes no liability on the contractor, nor does it establish the standard of care for a common law duty owed by the contractor to the owner.  Building codes are intended “to protect the health and secure the safety of occupants of buildings, and not to protect the personal or property interests of individuals,” Island Shores Estates Condominium Ass'n v. City of Concord, 136 N.H. 300, 307 (1992).  An owner who wants the latter protection must get it from his contract, not from the statute.  (This is a variant of the “economic loss rule” that precludes recovery of purely financial harm in a tort case.  I’ll have more to say about the “economic loss rule” in a future blog.)

RSA 155-A:2,VII also states that “No municipality shall be held liable for any failure on the part of a contractor to comply with the provisions of the state building code.”   This language settles a question left unanswered by the Supreme Court in Island Shores Estates.  The case rejected an owner’s claim of financial harm against a municipality based on a building inspector’s issuance of a certificate of occupancy in the face of code and structural problems, because no duty was owed by the city to protect the owner’s financial interests.  However, the Court declined to decide “whether recovery can be had for a physical injury sustained on the premises in reliance on the inspection.”  The statute now answers that question in the negative.

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#24:  Design Specs and Performance Specs

1/4/2015

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When a contractor bids on a set of construction specifications, he looks beyond what specific materials, configurations and connections are called for, and considers the means and methods his crew will employ to build the project.  Rarely are those means and methods dictated to him in the specs.  On those rare occasions when the specs dictate not only the “what” but also the “how,” deviations from the “how” specs are not allowed.  These are often called “design specs.”

Sometimes the desired end result of the construction is not only to “be” something (like a bridge or a residence), but also to “do” something―to perform in a specified manner (like a “clean room” or waste water treatment plant).  These are often called “performance specs.”

Courts have picked up this verbiage.  To quote from Stuyvesant Dredging Co. v. United States, 834 F.2d 1576, 1582 (Fed.Cir.1987), “Design specifications explicitly state how the contract is to be performed and permit no deviations.  Performance specifications, on the other hand, specify the results to be obtained, and leave it to the contractor to determine how to achieve those results.”  This makes it sound as though a set of specs must be one or the other.  The truth is that a given set of specs will often have elements of both.

The distinction is important when it comes to assigning blame for a project that doesn’t work out as planned.  If the contractor implements the precise design he is given, then regardless of how he implemented it and regardless of whether the owner or the contractor dictated the means of implementing it, the contractor is off the hook.  This is the so-called Spearin doctrine, named for the case of United States v. Spearin, 248 U.S. 132, 136 (1918) (“But if the contractor is bound to build according to plans and specifications prepared by the owner, the contractor will not be responsible for the consequence of defects in the plans and specifications”).

Not only does the contractor have no liability when he implements the specs he is given, but he is entitled to be paid for his work
―even if the outcome is unsatisfactory.  This is the teaching of Perkins v. Roberge, 69 N.H. 171, 173 (1897), in which a contractor “agreed in writing with the defendant to build a baker's oven and furnace in a workmanlike manner, in accordance with a plan and specifications furnished by the defendant.  The oven was built by the plaintiff in accordance with the contract.  It did not work in a satisfactory manner on account of the fault of the plans.  The failure of the oven to work in a satisfactory manner being attributable to the defects in the plans furnished by the defendant, and not to the failure of the plaintiff to perform his contract, he is entitled to recover the contract price for the performance of his undertaking.”

The Spearin doctrine and the rule enunciated in Perkins apply to design specs, not to performance specs.  Consequently, contractors often find themselves arguing that a relevant spec is design and not performance based.  If, as some courts hold, design specs are those which eliminate contractor discretion as to the means and methods of implementation, the argument is a hard one to win.  In my view, such a focus on discretion is overblown.  The first question should always be whether the fault lies in the plans and specs themselves, or in how they were implemented ―and only in the latter case should we ask whether the means and methods of implementation were dictated or chosen.

Losing this argument is not always the end of the game for a contractor.  As Smith, Currie and Hancock’s Common Sense Construction Law (5th ed. 2014) notes, “an owner still can be liable for a contractor’s unanticipated difficulties under a performance specification if the contractor shows that the owner-furnished performance specification was impossible or commercially impracticable to achieve.  A performance specification is commercially impracticable if it can be performed only at an excessive and unreasonable cost.”  I’ll be blogging on this at a later date.


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    Frank Spinella

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