Unfortunately, it happens all too frequently, an architect directs a contractor to do additional work and assures the contractor that it will be paid for the extra work. However, when the Owner subsequently refuses to pay for the additional work, the architect disclaims liability for the additional costs the contractor has incurred. Moreover, the contractor has no recourse against the architect without a direct contract with the architect under which the contractor can pursue a claim. That is until now, as a recent decision suggests that the architect’s Teflon coating might be wearing thin. This decision might herald the beginning of a trend whereby courts hold architects liable for promises made on the job site by allowing contractors to make direct claims against architects for the cost of performing additional work ordered by the architect despite the absence of a direct contractual relationship between the architect and the claiming contractor. What does this mean for contractors? It means there may now be one more person at the table to help resolve – and pay for – extra work claims.

A recent decision from the New York Appellate Division, Pulver Roofing Company, Inc. v. SBLM Architects, P.C., 65 A.D.33 826 (2009), overturned a lower court’s dismissal of a quantum meruit claim brought by a roofing contractor against the architect on a public school construction project. The architect had directed Pulver to perform additional roofing work while promising that Pulver would be paid by the owner for the additional work. By reversing the lower court’s dismissal of Pulver’s claim against the architect, the Appellate Division affirmatively found that a contractor could have a contractual right to be paid by someone other than the beneficiary of construction work if a third party both ordered and expressly promised that the contractor would be paid for the work. In the Pulver case, the Court held that the architect did not have to be the beneficiary of the additional work in order to be liable on a quantum meruit basis for the cost of the additional work. This ruling has the potential to change the current landscape of extra work claims by taking the architect off the sidelines of the claim process and assigning liability to them in situations where they ordered the performance of extra work along with a promise of payment.

Traditionally, Massachusetts law has been clear that where a contractor has a written contract for the performance of work, the contractor cannot bring claims against other parties on the project with whom the contractor did not have a contractual relationship. See, e.g., Brick Construction Corp. v. CEI Development Corp., 46 Mass.App.Ct. 837, 839-40 (1999); Evans v. Multicon Construction Corp., 30 Mass.App.Ct. 728, 740 (1991). This well established legal principle can be found in multiple jurisdictions. See Enterprise Plumbing & Heating v. Cohn, 1996 Con., Super LEXIS 893 (“The mere fact that a third party benefits from a contract between two other parties doesn’t make that party responsible in quasi contract or unjust enrichment”) citing the general principle in 17 C.J.S. Contracts, §370(2).

By denying claims between parties without direct contractual relationships, the courts have prevented contractors from recovering damages from architects as there is typically no direct contract between a contractor and an architect on the traditional design-bid-build project. The Pulver decision, however, recognizes the reality of job site communications and the all too frequent scenario of instructions, promises and performance where contractors are pressured into performing work before the appropriate paper work is completed in order to maintain the project schedule. It is important to note that, in order for architects to be liable for the costs of additional work, the Pulver case held that four specific criteria must be satisfied: (1) the work must have been performed in good faith; (2) the work must be accepted by the owner; (3) the contractor must have expected to be paid for the work; and (4) the work must be reasonably valued. If these facts are present, contractors may now be at less risk of being left holding the bag on additional work claims that are denied by the owner despite an architect’s previous promise of payment. This is, of course, particularly important on public construction projects, where contractors cannot rely on their statutory lien rights as security against non-payment for extra work.

This legal theory has yet to be considered by a Massachusetts court, however, should it be adopted in Massachusetts, the threat of being held liable in court for the cost of extra work the architect has authorized and promised compensation for, will likely force architects to the negotiating table during the claim process. This should be particularly appealing to contractors because, in the current economic environment, the ability to bring additional individuals into a dispute is likely to greatly increase the likelihood of a positive outcome by spreading the risk across additional parties.

As always, before demanding payment, a contractor must properly evaluate their potential claim by performing a detailed analysis of both the scope of the contract at issue as well as the factual circumstances surrounding the relevant claim. As discussed above, this is particularly true when asserting a claim against a party outside of the traditional contractual relationships familiar to contractors (eg. owner–contractor, general contractor–subcontractor) because of the strict factual requirements that must be present for the claim to be maintained. Before asserting any claim directly against an architect, a contractor must perform a thorough factual investigation and legal analysis to determine if the actions of the architect gave rise to a direct claim for the additional work performed. However, now, in light of the Pulver decision, if the proper circumstances exist, the contractor may be able to hold the architect directly responsible for their job site promises.