Arizona Supreme Court Considers Change in Ability to Sue Design Professionals

By Jessica A. Jackson

Arizona’s economic loss rule has historically prevented a party from recovering purely economic damages under tort law unless the tort (i.e. negligence) was accompanied by physical harm—either in the form of personal injury or damage to other property. In the context of suing a design professional, this creates a problem since damages are often wholly economic—it costs money to fix the problem but nobody was hurt. But in April of this year the Arizona Court of Appeals broadened the scope of permissible claims against design professionals in negligence—holding that an owner of a project is not barred by the economic loss rule from bringing an action for negligent design against an architect, even where the damages claimed were purely economic and no personal injury or damage to other property was claimed.

The Arizona Supreme Court granted review of this decision and oral argument was held in November. To view a video and summary of the arguments of the parties before the Arizona Supreme Court, click here. The basic argument on the part of the design professional emphasizes that they should be treated no differently than how Arizona law has historically treated negligence claims in construction defect or products liability cases—i.e., that there must be something more than wholly economic damages to sustain a claim of negligence. They are arguing that the Court of Appeals has dramatically increased the scope of who may now sue design professionals in negligence. The owner of the project argues the opposite—that the Court of Appeals has decided the issue correctly in light of the fact that design professionals owe a duty to use ordinary care, skill, and diligence in rendering professional services.

The Arizona Supreme Court is expected to issue a decision on this case in the next few months and we will provide an update when the opinion is released. In the meantime, for more information or a copy of the decision of the Court of Appeals, contact Jessica A. Jackson at jjackson@holmwright.com or (480) 477-8593.