A recent Illinois State Court of Appeals decision has highlighted the distinction between providing a product for sale to the public on the one hand, and providing a service under a contract on the other. Many design firms are now branching out to market and deliver their own products, satisfying a growing market for prefabricated structures, substructures, and building systems while taking advantage of developments in manufacturing coordination. Historically, architects involved solely with design have enjoyed immunity from expanding breach of warranty doctrines. But, as designers enter the stream of commerce to deliver fully manufactured products, that protection may disappear. When they do, design firms may subject themselves to liability for implied warranties and strict liability, concerns typically reserved for manufacturers and builder-sellers. Design firms need to make sure their products are priced to account for this risk and that they are insured for it. Sophisticated customers ordering prefabricated structures, substructures, and building systems from design firms or their subsidiaries should seek proof of the same.

In Board of Managers of Park Point at Wheeling Condominium Ass’n v. Park Point at Wheeling, LLC, 2015 IL App (1st) No. 123452, ___N.E.3d___, 2015 WL 9589615 (December 31, 2015), a condominium homeowners association sued an architecture firm for defective design leading to water and air infiltration. The architecture firm had designed the 128-unit complex in 2000, and construction had commenced from 2001 to 2004. The architecture firm did not take part in the construction or sale of the units. Continue Reading Design Professional Firms Selling Prefabricated Accessory Dwelling Units, Building Substructures, or Micro Homes May Be Liable for Breach of Implied Warranty, or Strict Product Liability.

Earlier this year, the Supreme Court issued Eclectic Investment, LLC v. Patterson, 357 Or 25, 346 P3d 468, modified, 357 Or 327 (2015). Eclectic has fundamentally affected pleadings and third-party practice in multi-party tort actions. Previously, it was standard for third-party defendants without a contractual relationship to sue each other for common law indemnity and contribution. Where liability was closely related or possibly overlapping, this was a negotiation tool and a potentially valuable claim. Not anymore. By confirming the elimination of common law indemnity for negligence claims in Oregon, the decision has prompted much argument and motion practice. Parties are now seeking to extend the reach of the several liability statute, ORS 31.610, to eliminate common law indemnity and contribution claims in other contexts.

Of recent note is Wyland v. W. W. Grainger, Inc., No. 3:13-CV-00863-AA, 2015 WL 3657265 (D Or June 11, 2015). There, the plaintiff, a mechanic, was injured on the job when a grinder broke apart. The plaintiff sued the distributor for negligence and strict products liability, and the distributor sought indemnity from the suppliers. The suppliers moved for summary judgment, arguing that Eclectic precluded the distributor from recovering common law indemnity. The Court held that Eclectic did preclude the claim as to negligence, but not as to strict liability. The holding raises at least two issues of note. Continue Reading Oregon Federal District Court Applies Recent Developments in Common Law Indemnity to Strict Product Liability Claims