Maryland Caselaw Provides a Cautionary Tale When Seeking to Recover for Design Defects

Earlier this month, the Court of Special Appeals of Maryland provided construction contractors with a cautionary tale when seeking to recover for design defects.  In Fort Myer Construction Corporation v. Maryland-National Capital Park and Planning Commission, the contractor filed a breach of contract action against the owner alleging a number of breaches, most significantly, the provision of incomplete and defective design documents from the owner’s engineer.  The contractor did not file a negligence cause of action against the owner or engineer although the owner did pursue a third-party complaint against the engineer for indemnification, contribution, and breach of contract.  Extensive discovery ensued, and a year and a half later, the engineer filed a motion to dismiss the contractor’s claim, arguing that the contractor failed to file a Certificate of Qualified Expert at the outset of the case as required by a Maryland statute which applies to negligence claims against architects or engineers.  The contractor noted that it did not have a negligence claim against the engineer, but conceded the engineer’s argument, and consented to the dismissal.  Following the dismissal, all of the parties moved for sanctions, and the Montgomery County Circuit Court awarded sanctions against the contractor in excess of six hundred thousand dollars for the owner’s and engineer’s costs of the litigation due to the contractor’s failure to file the Certificate of Qualified Expert at the outset of the case.

On appeal, common sense prevailed and the Court of Special Appeals of Maryland reversed the sanctions award, ruling that whether to file the Certificate of Qualified Expert was a fairly debatable question of law when the only claims presented against the design professional were for breach of contract, and not for negligence.  However, the Court of Special Appeals held that if it had later turned out that the asserted deficiencies were attributable to a licensed design professional, then the defendants could have been entitled to move for summary judgment based upon the contractor’s failure to file a Certificate of Qualified Expert.  While contractors can agree that the Court of Special Appeals of Maryland made the correct decision in overturning the award of sanctions against the contractor, the circuit court’s ruling certainly should be a reminder for contractors to give extra consideration to the necessity of filing a Certificate of Qualified Expert when filing litigation in Maryland, even where the claim is for breach, if there is any potential that the claim for breach might arise from a design defect.