The Spearin doctrine is alive and well in Maryland. Pursuant to that doctrine, owners who provide plans and specifications to a contractor impliedly warrant that information and may be responsible if that information is defective. Last week, a Maryland appeals court applied the century-old Spearin doctrine to affirm a trial court victory for Balfour Beatty in its dispute with the owner of the Turkish-American Community Center (TACC) in Lanham, Maryland. The case involved a $71 million contract to construct a multi-building campus for Turkish-Americans to celebrate Turkish culture. Following completion of the project, the owner refused to make final payment to Balfour Beatty claiming that its work was defective. In response, Balfour Beatty blamed the owner for providing defective plans and specifications. The trial court ruled in favor of Balfour Beatty and the Appellate Court of Maryland affirmed.
The court’s decision relies upon the U.S. Supreme Court’s landmark decision in U.S. v. Spearin, 248 U.S. 132 (1918). In Spearin, the Supreme Court held that owners impliedly warrant the information, plans, and specifications that they provide to the general contractor: “[I]f the contractor is bound to build according to plans and specifications prepared by the owner, the contractor will not be responsible for the consequences of defects in the plans and specifications” (Spearin, 248 U.S. at 136). Importantly, this implied warranty “is not overcome by the general clauses requiring the contractor to examine the site, to check up the plans, and to assume responsibility for the work until completion and acceptance” (Spearin, 248 U.S. at 137). Courts in many jurisdictions, including Maryland, have since adopted the Spearin doctrine to protect contractors who rely upon an owner’s defective design work.
In TACC, the owner’s consultant performed the initial design, which was purportedly 80% complete. Balfour Beatty completed the remaining 20% of the design work pursuant to its obligation under the “design-build” agreement. The court nonetheless found that Balfour Beatty was not responsible for defects in the design. The court based this conclusion on statements in the preamble to the contract regarding the history of the design and a representation that the owner was not aware of any design errors or omissions. The court also found that the final 20% of the “design” work was mainly coordination work with the architectural drawings and other trades. As such, the court determined Balfour Beatty did not accept full-design responsibility but was entitled to rely upon the design that the owner provided and implicitly warranted under the well-worn Spearin doctrine.
A full copy of the court’s unreported decision is available here.