In a decision filed today that will be of interest to design firms and professionals across the state, the Washington Supreme Court for the first time in Michaels, et al. v. CH2M Hill, Inc. addressed the scope of the immunity provided to design professionals by the Industrial Insurance Act in RCW 51.24.035.
All in all, an interesting if not entirely surprising decision (which also contains an interesting discussion of the duties owed by design professionals). The take away is this: It is now clear that design professionals have immunity from tort suits (as a third party) only where (1) they are engaged in providing construction-related services on a construction-related project, and there is a nexus between the construction services and the injury; and (2) where the claim is for negligent supervision of the worksite, not negligent design. Otherwise, no third party immunity.
The facts in Michaels are horrific: Mike Cmos, a City of Spokane employee, drowned in sewage sludge when a digester dome at the City’s sewage treatment plant collapsed. Two other city employees were severely injured. While the treatment plant is owned and operated by the City, the City had hired CH2M Hill as an “engineering consultant” in connection with a 10-year capital improvement project. Among other things, CH2M Hill was engaged to design and manage certain recirculation and heating systems, as well as to generally provide “on call” services for plant operations.
As part of these services, CH2M Hill suggested certain mechanical changes to the plant’s recirculation system. While these changes necessitated changing certain plant operations, the evidence at trial was that neither the plant superintendent, operations supervisor, nor the maintenance supervisor were aware of this need to alter the operations. This, it turned out, was disastrous. In what appears to be have been a cascading series of failures, one of the plant’s digesters began filling up shortly after the mechanical alterations. Despite efforts to divert the sludge, the digester eventually collapsed. Cmos was killed, and his coworkers Dan Evans and Larry Michaels were severely injured.
Evans, Michaels, and Cmos’s family sued CH2M Hill for negligence (as the Court noted, the City itself was plainly immune from such suit under the Act as the employer). In defense, CH2M Hill argued (among other things) that it was immune from the tort suit pursuant to certain provisions of the Industrial Insurance Act, RCW 51.24.035.
The Court (in a not terribly surprising decision given the facts) held that CH2M Hill was not immune from tort suit here, for at least two separate reasons. Pursuant to RCW 51.24.035, design professionals (unlike other third party tortfeasors) enjoy limited immunity from suits by injured workers where they have been “retained to perform professional services on a construction project.” This immunity (as is plain from the language of the statute) does not extend to services performed outside of a construction project, and pursuant to the exception in RCW 51.24.035(2) does not extend to the “negligent preparation of design plans and specifications.”
As to the first limitation, CH2M Hill argued that it was in fact providing services on a construction project (and in doing so argued that the entire wastewater treatment plant was a construction project). The Court disagreed. While CH2M Hill did perform some construction-related services at the plant, the Court held that the mere existence of unrelated construction in the plant generally did not trigger the RCW 51.24.035 immunity for all services. CH2M Hill’s specific negligent act was related to CH2M Hill’s “on call” contract for plan operations, not the construction. Interestingly, the Court appears to have defined for the first time what constitutes a construction “site” and “project.” A “construction site” is now officially “‘a space of ground occupied or to be occupied by a building’ that is or will be ‘put together to form a complete integrated object.” A construction project “would be the overarching plan and process of so completing a building (or other structure).” Good to know!
In addition, the Court held that CH2M Hill was not immune because the alleged actions constituted “the negligent preparation of design plans and specifications.” CH2M Hill argued that because it did not create any relevant written plans or specifications, this immunity exception did not apply. The Court disagreed, holding that design professionals could not escape liability for negligent work by not putting plans and specifications in writing. The Court upheld the trial court’s finding that the CH2M Hill’s proposals were negligent preparation of a design plan, and were for this additional reason not immune.