Court Opinion

ID: 8292263
Source: CourtListenerOpinion
Date Created: 2022-10-17 10:49:17.442598+00
Date Added: 2024-06-11T16:43:54.131065
License: Public Domain

Cureton, Judge
(dissenting):
This case involves the interpretation of provisions of two contracts. At the heart of the controversy is a handwritten paragraph in each contract designated as “Section 15.1 Payments to the Architect.” The owners contend their obligation to pay the architect is contingent upon the projects obtaining loan funding.
The two contracts are copies of the American Institute of Architects “Standard Form of Agreement Between Owner and Architect.” Section 15.1 has been added by the parties. The addition of this section creates an ambiguity in the contracts. The printed provisions of the AIA contracts refer in various sections to owner approval of certain design docu*203ments. Section 1.1.4 refers to owner approval of schematic design documents and Section 1.2.1 refers to design development documents. Section 1.3.1 discusses owner approval of construction documents. These printed sections clearly refer to owner approval of various stages of documents prepared by the architect. However, handwritten Section 15.1 is not so clear. Reading the section as a whole with all reasonable inferences resolved in favor of the owners leads to the interpretation that the phrase “if the project is approved and not closed” refers to approval of the project for loan funding, and not approval by the owner. This is a reasonable construction of the section since the first sentence specifically refers to the loan closing.
The majority’s interpretation of the handwritten language of Article 15.1 as referring simply to approval of the plans by the owners ignores the realities of a project of-the sort here involved where the approval (not the least of which is funding) by persons and entities other than the owners determines the viability of a project. Rhetorically, the question must be asked: did not the owners approve the project, at least in principle, even before the architect was employed to prepare the plans? Moreover, would not a final decision by the owners to go forward with the project be contingent upon assurances that the project would be funded? Clearly, if the parties intended “project approval” to mean approval of only the plans by the owner, they could have so provided. Instead it seems logical and reasonable to me the parties intended to pay the architect from closing proceeds; but provided that in the event the project was approved (to include funding) and the owners chose not to close (which obviously refers to the loan) the owners would nevertheless be responsible for paying the architect from their personal funds.
I would find the contract ambiguous on the question of the intent of the parties regarding when the architect received compensation. I would reverse the award of partial summary judgment to the architect and remand to the trial court.