Title: Howard v. Usiak

State: vermont

Issuer: Vermont Supreme Court

Document:

Howard v. Usiak (99-082); 172 Vt. 227; 775 A.2d 909

[Filed 11-May-2001]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal  revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of  Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any  errors in order that corrections may be made before this opinion goes
  to press.

                                 No. 99-082

Paul E. Howard, DVM, MS           	         Supreme Court

                                                 On Appeal from
     v.	                                         Chittenden Superior Court

Wayne Usiak d/b/a Wayne Usiak & Associates	 May Term, 2000

Matthew I. Katz, J.

John J. Collins and Michael J. Harris of Sutherland, Collins, McMahon & Harris, 
  Inc., Burlington, for Plaintiff-Appellant.

Thomas F. Heilmann of Heilmann, Ekman & Associates, Burlington, for 
  Defendant-Appellee.

PRESENT:  Amestoy, C.J., Dooley, Morse and Skoglund, JJ., and Gibson, J. (Ret.), 
          Specially Assigned 

       DOOLEY, J.   Client Dr. Paul Howard appeals from a judgment in favor
  of architect Wayne  Usiak d/b/a Wayne Usiak & Associates in this
  architectural malpractice case.  On appeal, client  argues that the trial
  court erred in concluding that he did not prove negligence, nor negligent 
  misrepresentation, and that he is not entitled to restitution of design
  fees or other damages based on  violation of the architectural licensing
  statute.  We affirm.

       There is little dispute about the basic facts.  Client is a veterinary
  surgeon who had plans to  create an animal emergency clinic in Vermont to
  provide emergency care to pets after regular  business hours and to offer
  services of visiting specialists, such as veterinary ophthalmologists.  

 

  Architect is a specialized veterinary architect, who operates a licensed
  practice in New Mexico and  has experience in designing clinics that
  conform to federal standards.  In 1993, client attended a  conference in
  Missouri at which veterinary architects, including architect, were
  promoting their  specialized clinic structures.  Client arranged a meeting
  with architect.  

       In December 1993, architect visited Vermont to meet with client and
  discuss rough ideas for  the clinic.  During architect's trip, he produced
  preliminary sketches of what he and client discussed.   The parties decided
  to contract for architectural services.  Before entering into a written
  agreement in  later January, architect obtained a Vermont license to
  practice architecture through a reciprocal state  licensing procedure. 

       A full contract with architect has three phases, described as: Phase
  I, Programming and  Preliminary Design; Phase II, Construction Documents;
  and Phase III, Construction Administration.   The parties contracted only
  for Phase I services.  Architect described Phase I, in part, as follows:

    This portion . . . will provide you with a set of drawings
    sufficient to  approach lending institutions, governmental
    agencies, review  committees and the like.  These will be detailed
    enough to develop  accurate budgets, approach potential
    contractors, gain preliminary  agency approvals . . . .  On the
    other hand, they will also be flexible  enough to make any changes
    necessary for budgetary, building code  or personal changes of
    mind you may have after reviewing a hard  copy.

  Architect charged ten percent of construction costs as a fee for all three
  phases.  Of this, 35% was  attributed to Phase I.  The contract specified
  that construction costs were estimated at $280,000 so  that architect's fee
  would be $28,000 for all phases, and, specifically, $9,800 for Phase I.

       Client and architect then worked together to design a structure that
  would be within client's  budget.  They envisioned a clinic with
  approximately 2,900 square feet that would be primarily 

 

  housed on the first floor with a second floor containing a small sleeping
  quarters, a meeting room,  and office space for client.  The second floor
  would be used by clinic workers only and would be  accessed by stairs. 
  Architect drafted plans based on these specifications. 
 
       Soon after client initiated the process to obtain the necessary
  permits for the building, the  issue arose as to whether the structure
  required an elevator under state regulations.  Architect  expressed his
  belief to client that federal law exempts buildings under 3,000 square feet
  from  elevator requirements for handicap accessibility.  The court found
  that the general rule is that public  buildings are required to be
  accessible to persons with physical disabilities, which includes having 
  elevators for multistory buildings, but both parties believed that client
  could circumvent any elevator  requirement due to the limited purpose of
  the clinic's second floor.  An experienced local builder  affirmed
  architect's belief by telling client that he would not need to include an
  elevator in the  structure.  Client then continued the permitting process
  with limited professional assistance from a  permitting consultant.

       The permitting process made evident that the structure, as designed
  for the contemplated uses  of the second floor, would need an elevator.
  Vermont regulations on accessibility for persons with  physical
  disabilities are more stringent than federal regulations.  Architect
  proposed three alternatives  to installing an elevator; however, all three
  solutions increased the costs of the building in excess of  client's
  budget.  In 1995, client applied to the Vermont Architectural Barrier
  Compliance Board for  an exemption from the elevator requirement, and the
  Board granted an exemption upon the condition  that the second story be
  used only for an office and two storage rooms.  Throughout this process, 
  architect remained willing to revise the design of the building so that it
  satisfied client's needs and  complied with state and federal laws. 
  Client, however, fired architect without affording him the 

 

  opportunity to redraft the clinic design.  By the time that client fired
  architect, architect had  submitted bills for all Phase I services,
  indicating that he had performed all services due under this  preliminary
  phase. 

       Client then filed suit against architect alleging that he was entitled
  to recover money paid to  architect for his services and lost future
  profits from the delays occurring as a result of the elevator  issue. 
  Client's complaint stated four causes of action: violation of the Vermont
  architectural  licensing statute, negligence, negligent misrepresentation,
  and  misrepresentation.  Client appeals  from the court's dismissal of all
  claims, except he has not appealed the dismissal of the  misrepresentation
  claim.  His three claims on appeal are that the trial court erred in not
  finding as a  matter of law that: (1) architect negligently misrepresented
  his qualifications and intentions; (2)  client was entitled to a return of
  the fee paid architect because architect commenced services before 
  obtaining a Vermont license; and (3) architect committed malpractice in not
  finding and notifying  client of the elevator requirement, and in designing
  a building that did not comply with an applicable  code.

       Client argues first that the trial court erred in finding that
  architect did not engage in  negligent misrepresentation regarding his
  qualifications, knowledge and job performance in entering  into the
  contract with client.  He contends that the following representations made
  by architect meet  this definition.  First, architect represented that he
  was a veterinary specialist with considerable  specialized expertise in the
  design of veterinary facilities, including handicapped accessibility.  
  Second, architect represented that because he was a specialist designer, he
  understood the impact that  design decisions have on costs, staffing, and
  methods of practice.  Third, to assuage client's  reservations about
  employing an out-of-state architect, architect assured client that building
  codes 

 

  and materials were available to ensure that client's building complied with
  applicable codes.  Client  contends that because he justifiably relied on
  these representations in hiring architect, and incurred  increased costs
  attributable to architect not knowing or discovering the elevator
  requirement prior to  designing the clinic, architect is liable for his
  pecuniary loss.  

       Vermont has adopted the definition of negligent misrepresentation from
  the Restatement  (Second) of Torts: 

    One who, in the course of his business, profession or employment,
    or  in any other transaction in which he has a pecuniary interest,
    supplies  false information for the guidance of others in their
    business  transactions, is subject to liability for pecuniary loss
    caused to them  by their justifiable reliance upon the
    information, if he fails to  exercise reasonable care or
    competence in obtaining or  communicating the information.

  Limoge v. People's Trust Co., 168 Vt. 265, 268-69,