797 Broadway Group, LLC v Stracher Roth Gilmore Architects  2014 NY Slip Op 08689 [123 AD3d 1250]  December 11, 2014 Appellate Division, Third Department discusses when and how a professional relationship between an architect and a client begins, ends, and the terms upon which the architect serves.  There are “design-build” agreements and more simple ones for “professional services” alone.  Depending on which agreement is reached between the architect and the client determines when the statute commences.

“Plaintiff owns an office building in the City of Schenectady, Schenectady County. In response to a 2006 request for proposals by the County of Schenectady to provide newly constructed or renovated office space to house its Department of Social Services and Job Training Agency, defendant, a professional partnership that provides architecture services, submitted a proposal to plaintiff to redevelop the premises. Plaintiff accepted the proposal and also entered into a separate agreement with the general contractor, BCI Construction, Inc., for construction administration and management services. Following substantial completion of the work, the County assumed use and occupation of the building in early 2009. Approximately three years later, the stucco facade of the building began to crack and fail, with delamination allegedly occurring over most of the building’s exterior vertical surfaces.

In December 2012, plaintiff commenced this action, asserting claims sounding in strict liability, breach of implied warranty of fitness for a particular purpose, breach of implied warranty of merchantability, negligent design or review, breach of contract and negligent misrepresentation. In lieu of answering, defendant moved to dismiss all six causes of action in the complaint. As relevant here, defendant argued that the claims either failed to state a cause of action or that they were time-barred under the three-year statute of limitations applicable to claims of professional malpractice. Supreme Court granted defendant’s motion, prompting this appeal.

[*2] Plaintiff argues that Supreme Court erred in determining that the contract at issue was not a turnkey or design-build agreement pursuant to which defendant was responsible for all aspects of designing and building the project, as opposed to only professional services. In “turnkey” or “design-build” construction projects, “an owner contracts with one entity to both design and build the project [and] [t]he turnkey builder is responsible for every phase of the construction from final design through subcontracting, construction, finishing, and testing” (Robert A. Rubin, Sarah B. Biser & Catherine M.K. Brown, New York Construction Law Manual § 1:23 [2d ed 33 West’s NY Prac Series 2013]; see Richard K. Allen, Stanley A. Martin & Leah A. Rochwarg, Construction Law Handbook § 6.03 [A] at 134-135 [2d ed 2013]; see also Charlebois v Weller Assoc., 72 NY2d 587, 590-592 [1988]). The design-builder generally cannot shift liability and is the “single point [of] responsibility” under a design-build contract, because it is “the [d]esign-[b]uilder [who] has the responsibility of the preliminary and construction design, the responsibility of submitting a fixed sum for the construction of the project and the responsibility for holding the contracts with its trade contractors” (Richard K. Allen, Stanley A. Martin & Leah A. Rochwarg, Construction Law Handbook § 6.03 [A] at 134 [2d ed 2013] [emphasis added]). As plaintiff asserts, it follows that nearly every design-build project involves the existence of two or more contracts—at least one among the members of the design-build team and one between the design-builder and the owner. Here, however, it was not defendant, the purported design-builder, who held the separate contract with the general contractor, but plaintiff as the owner. Hence, Supreme Court correctly determined that the parties had not entered into a design-build agreement, despite their mislabeling the agreement as such, because the critical factor in a design-build arrangement—that the owner has only a single contract with the design-builder—is absent.”

“In light of the foregoing, we conclude that plaintiff’s fourth and fifth causes of action—alleging that defendant was negligent and breached the parties’ contract by failing to use reasonable care in rendering its professional services—essentially allege professional malpractice (see id. at 542-543; City of Binghamton v Hawk Eng’g P.C., 85 AD3d 1417, 1418 [2011], lv denied 17 NY3d 713 [2011]). Such claims “ ’come[ ] within the purview of CPLR 214 (6),’ ” which sets forth a three-year statute of limitations for nonmedical malpractice, “ ’regardless of whether the theory is based in tort or breach of contract’ ” (City of Binghamton v Hawk Eng’g P.C., 85 AD3d at 1418, quoting Rev Assembly Mem in Support, Bill Jacket, L 1996, ch 623 at 6; accord Matter of R.M. Kliment & Frances Halsband, Architects [McKinsey & Co., Inc.], 3 NY3d at 542). We note that “ ’a claim for professional malpractice against an engineer or architect accrues upon the completion of performance under the contract and the consequent termination of the parties’ professional relationship’ ” (City of Binghamton v Hawk Eng’g P.C., 85 AD3d at 1418, quoting Town of Wawarsing v Camp, Dresser & McKee, Inc., 49 AD3d 1100, 1101-1102 [2008]). Defendant provided both invoices indicating that it last rendered services to plaintiff in early January 2009, and a certificate of substantial completion that was signed by plaintiff’s representative that acknowledged that the work was “sufficiently complete in [*3]accordance with the [c]ontract [d]ocuments so that [plaintiff could] occupy” the premises as of December 19, 2008. Plaintiff signed the certificate of substantial completion in March 2009; defendant signed it in April 2009. Accordingly, in the absence of any contractual obligations extending beyond issuance of the certification of substantial completion, the running of the statute of limitations commenced in April 2009, at the latest (see State of New York v Lundin, 60 NY2d 987, 989 [1983]; City of Binghamton v Hawk Eng’g P.C., 85 AD3d at 1419; cf. Town of Wawarsing v Camp, Dresser & McKee, Inc., 49 AD3d at 1102-1104). Inasmuch as plaintiff did not commence this action until December 2012, plaintiff’s fourth and fifth causes of action are time-barred (see CPLR 214 [6]).”