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Construction Litigation

The Spearin Doctrine as a Defense to Defective Workmanship Claims

By Wally Zimolong – April 11, 2012

Construction defect claims are one of the fastest growing areas of construction litigation and a potential source of crippling liability for contractors. Contractors are aware that the contract specifications instruct the contractor what to build. However, the specifications may also hold the key to a successful defense to defective workmanship claims thanks to what is known as the Spearin doctrine. Successfully invoking a Spearin doctrine defense hinges on whether the specifications are “performance” versus “design” specifications. Because the distinction between the two is often nuanced, understanding the difference between a performance and a design specification is critical to a Spearin doctrine defense.

The Spearin Doctrine: Background and History
The Spearin doctrine’s roots and name come from a 1918 United States Supreme Court decision, United States v. Spearin, 248 U.S. 132 (1918), which held that a contractor will not be liable to an owner for loss or damage that results solely from defects in the plan, design, or specifications provided to the contractor. Effectively, Spearin created a doctrine whereby the owner impliedly warrants that the plans and specifications, if followed, will result in a functioning system. Spearin holds that if a contractor is required to build according to plans and specifications prepared by the owner (or the owner’s representative), then the contractor will not be responsible for the consequences of defects in the plan. As Justice Brandeis held in Spearin, “the insertion of the articles [in the contract] prescribing the character, dimensions and location of the [work to be performed] imported a warranty that if the specifications were complied with, [the work] would be adequate.” Id. at 137.

In Spearin, George B. Spearin sued to recover the balance due under a contract with the federal government to build a dry dock at the Brooklyn Navy Yard according to plans and specifications the government prepared. The work required Spearin to relocate a sewer main. The specifications “prescribed the dimensions, material and location of the section to be substituted.” Id. at 133–34. Spearin completed the relocation as specified.

About a year a later a heavy rain and high tide caused the sewer to overflow before the dry dock was completed, causing the excavation of the dry dock to be flooded. An investigation revealed that an existing internal dam had diverted the water into a portion of the sewer that overflowed into the dry dock. The internal dam was an existing feature but was not shown on the plan and specifications the government gave to Spearin. Spearin and the government each claimed the other was responsible for the flood. Eventually, the government canceled Spearin’s contract and completed the work with a replacement contractor. At the time the contract was canceled, Spearin was not fully paid.

The Supreme Court ruled that Spearin had no responsibility for the flood because the internal dam was not shown on the plans and specifications that the government gave to Spearin, which specifically dictated how and where the sewer should be relocated. Thus, the government warranted the adequacy of the specifications, and the Spearin doctrine was born.

The Modern Doctrine: Design or Performance Specifications
Today, the modern approach to Spearin assigns responsibility for a defective construction according to whether the specification prescribing the construction is a performance or a design specification. See PCL Constr. Servs., Inc. v. United States, 47 Fed. Cl. 745 (2000). Because a contractor can invoke the Spearin doctrine only when it builds a system according to a design specification, it is important to understand the difference between the two. Moreover, it is important for contractors to be able to spot performance specifications because of the increased risk the contractor assumes when building according to a performance standard.

Performance specifications set forth an objective or general standard that is supposed to be achieved, and the contractor is “expected to exercise his ingenuity in achieving that objective or standard of performance, selecting the means and assuming a corresponding responsibility for the selection.” Blake Constr. Co. v. United States, 987 F.2d 743, 745 (Fed. Cir. 1993). Performance specifications specify the results to be obtained and leave it to the contractor to determine the best way to achieve the desired results. Therefore, the contractor not only warrants that the system will be constructed as planned but also that it will perform as intended.

Design specifications, on the other hand, precisely state how the work is to be performed. Design specifications describe in detail the materials to be used and the manner in which the work is to be executed. There is no flexibility allowed to a contractor’s approach and, as one court put it, the contractor is “required to follow [these specifications] as one would a road map.” Id. Here, the contractor does not warrant that the system will perform in any certain way.

Thus, the level of discretion that exists within a given specification is the key to courts’ analysis of the difference between design and performance specifications. “Discretion serves as the touchstone for assessing the extent of implied warranty and intended liability.” Conner Bros. Constr. Co., Inc. v. United States, 65 Fed. Cl. 657, 685 (2005). However, difficulties frequently emerge when determining whether a specification is a design or a performance, given that many specifications may combine elements of both.

A contractor that is claiming that a particular specification is design rather than performance must establish that the specification does not allow any kind of meaningful discretion in how the work is performed and, further, that the defective specification is the cause of the injury. Id. In other words, the contractor has to prove that he or she followed the design precisely and thoroughly and that any deviation was a result of the design itself, not the contractor’s work product.

Further, specifying a certain manufacturer or a product is not dispositive of whether a specification is design or performance, especially when a specification permits substitution of a product with an approved equal. Simply naming a specific product or manufacturer does not create a design specification in and of itself. See W.G. Yates & Sons Constr. Co. v. United States, 53 Fed. Cl. 83 (Fed. Cl. 2002); Fla. Bd. of Regents v. Mycon Corp., 651 So. 2d 149 (Fla. Dist. Ct. App. 1995).

One way to determine whether a specification is a performance specification is to determine the “result to be obtained” from the work. For instance, if the work calls for all the windows in a building to be replaced and nothing further, then it is likely a performance specification. However, if the specification and plan call for certain windows to be replaced in a certain location of the building and for the replacement of the windows to be completed in accordance with a certain procedure, then the specification could be labeled a design specification. A.G. Cullen Constr., Inc. v. State Sys. of Higher Educ., 898 A.2d 1145 (Pa. Commw. Ct. 2006). The degree of discretion rather than specificity itself is what helps determine what the specifications designation is, although specificity doesn’t hurt.

Importantly, the contractor must still show good faith. If a contractor builds a high-rise in strict compliance with the specifications and discovers upon completion that the building is structurally unsound, then the contractor must have acted in good faith and done all due diligence before the construction is complete. If the contractor had or should have had any knowledge that the plans and specifications were inaccurate or defective, then the contractor must notify the owner immediately. There is a duty to point out to customers deficiencies in the plans and specifications.

The Future of the Spearin Doctrine
The future of the Spearin doctrine is bright. Especially, as more buildings are constructed using green technologies that are often based on altruistic hopes rather than proven building science, claims for defective construction may well increase. Clearly, the Spearin doctrine will play an important role in deciding who is responsible for systems that fail to perform. If contractors are careful, honest, and thorough and if the specifications are defective, then the Spearin doctrine provides an excellent defense to claims of defective workmanship.

Keywords: litigation, construction litigation, defect claims, United States v. Spearin

Wally Zimolong is a member of Sigman & Zimolong, LLC, in Philadelphia, Pennsylvania.

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