Palmer v. Brown

In this action to recover for architectural services, with a cross-complaint raising issues of fraud, negligence and illegality of contract, defendant appeals from an adverse judgment.

Plaintiffs, Dan Saxon Palmer and William Krisel, co-partners, brought this action to recover $2,190.01 as the balance claimed to be due for architectural services rendered to defendant. Count one of the complaint alleged, in part, the execution of a written contract whereby plaintiffs, as a co-partnership, agreed to render various architectural and professional services to defendant in connection with the design and erection of a “medical and professional” building, and defendant promised to pay for such services a fee of 5% per cent of the total cost of the building; that plaintiffs performed all of the terms of the agreement; that the building erected pursuant to the plans and specifications provided by them cost $75,736.17; that plaintiffs received only $2,785.11 from defendant, leaving an unpaid balance of $1,380.38 due and owing;

To this pleading, defendant responded with an answer and cross-complaint. So far as here material, the answer denied liability for the extra and additional services; denied that any sum was owing plaintiffs for architectural services; and alleged the invalidity of the contract between defendant and plaintiffs inasmuch as at the time of its execution William Krisel, who was then unlicensed, represented himself to be an architect; that Krisel, while so unlicensed, prepared most of the drawings and performed most of the supervision of the construction and subsequently signed, as an architect, a certificate for payment of $14,250 to the contractor which defendant paid in reliance on the representation that Krisel was an architect.

The cross-complaint, in four counts, was to the following effect:

Count 1: To recover damages of $20,000 by virtue of the fact that plaintiffs fraudulently issued certificates to the contractors showing satisfactory completion of work without ascertaining whether the premises were free from liens chargeable to the contractors;

Count 2: To recover damages of $20,000 for plaintiffs’ negligence in issuing certificates to the contractors without requiring proof that the premises were free from liens chargeable to the contractors and without carefully examining the work to see that it had been properly done;

Count 3: To recover $2,785.11 previously paid to plaintiffs on account of the employment contract, which was allegedly void, defendant not having been notified in writing prior to the making thereof that Krisel was not a licensed architect, as required by section 5537, Business and Professions Code;

Count 4: This count, as amended, was for the recovery of $14,250 as damages caused when, on October 27, 1950, Krisel

signed as architect a certificate of payment in this amount for the contractors, knowing it was not then due, and at which time he was not a licensed architect, a fact unknown to defendant when he paid the contractors.

A demurrer to the third count of the cross-complaint was sustained without leave to amend. Plaintiffs’ answer denied generally the allegations of the first and second counts of the cross-complaint. As to the amended fourth count, plaintiffs admitted that on October 27, 1950, Krisel was not a licensed architect when he issued the certificate of payment, but alleged that it was issued “in advance of the time specified” at defendant’s request. On the issues thus framed, the cause was tried before a jury, which returned a verdict in favor of plaintiffs for $1,497.03 and found also for plaintiffs on the cross-complaint.

The record discloses that on March 28, 1950, plaintiffs and defendant entered into a written contract under which plaintiffs were to design and supervise the construction of a two-story building which defendant intended to erect. At the time the contract was signed, plaintiffs were doing business as a partnership consisting of Dan Saxon Palmer, a licensed architect, and William Krisel, who was not licensed. Krisel did not receive his architect’s license until October 28, 1950. The partnership name was:

“Dan Saxon Palmer, Architect William Krisel Associate”

and under this style, was referred to as “the Architect” in the “Standard Form of Agreement between Owner and Architect” executed by the parties. Both Palmer and Krisel signed the contract for the partnership. When Krisel was licensed in October, the partnership name was changed to “Dan Saxon Palmer & William Krisel, Architects.”

Section 1 of the contract, entitled “The Architect’s Services,” reads as follows: “The architect’s professional services consist of the necessary conferences, the preparation of preliminary studies, working drawings, specifications, large scale and full size detail drawings, for architectural, structural, plumbing, heating, electrical, and other mechanical work; assistance in the drafting of forms of proposals and contracts; the issuance of certificates of payment; the keeping of accounts, the general administration of the business and supervision of the work.” (Emphasis added.)

.On July 5, 1950, defendant made an agreement with The Biking Corporation and one Joel T. King, as contractors, for

Palmer testified that prior to the issuance of the certificates, plaintiffs did not require from the contractors any proof that the money was being used by them to pay for material and labor furnished for the job. Defendant introduced evidence showing that between January and June of 1950, plaintiffs supervised the construction of an adjoining building for defendant which was erected by the same firm of contractors. On this job, Palmer issued ten architect’s certificates of payments to Joel King, eight of which recited either that he had received his releases or that King had actually paid out the amount authorized. Palmer also testified that while he was superintending King’s construction of defendant’s medical building, the firm of Palmer and Krisel was employed by King and Biking Corporation “to do an apartment building.” Plaintiffs submitted periodic bills to Biking for this work and received payments therefor.

Near the end of November, 1950, it was discovered that some of the subcontractors were not proceeding with their work. An investigation disclosed that their cessation of work was due to nonpayment of their accounts and that King and Biking were financially unable to complete their performance and owed more on unpaid bills than the balance payable to them under the contract. On December 19, 1950, defendant gave notice of termination to the contractors, because of their default.

After the default by King and Biking Corporation, defendant, as owner, let the balance of the contracts required to finish the building and paid directly to these individual contractors the amounts of their bills. Since no general contractor was on the job, plaintiffs took over the responsibility of supervision of the remaining work, and for these additional duties they predicate their claim for $510 extra compensation. A statement by a certified public accountant indicates defendant was compelled to pay $72,409.28 to complete the building, or over $15,000 in excess of the contract price.

Defendant’s assistant, Krasik, testified to alleged defects in the construction of the building for which it was sought to hold plaintiffs responsible. These included:

(a) Stairway landing. The landing was welded to the floor joists by a structural steel company during the early part of the job and approved by the architect ás part of the rough framing. The stairs were installed after the default, and only then was a slope in the top landing discovered which caused trouble with the doors. Krasik testified that this defect could not be noticed during construction.

(b) Dex-O-Tex matting. This matting developed cracks which Krasik attributed to the fact that the underlying steel was not sufficiently rigid. It was installed under a subcontract made directly by defendant after the general contractors defaulted.

(e) Exterior stair treads. These were composed of laminated pieces of wood glued together and covered with steel plates. The steps subsequently rotted. Krasik asserted that Palmer assured him the glue was waterproof and would cause no difficulty.

(d) Floors off-level. When the building was completed, the floors appeared level. About six months after the building was completed, a sagging in the floors of some of the offices came to light.

After the default, defendant obtained $5,500 from security given by King in lieu of a performance bond.

The court granted plaintiffs’ motion to strike all testimony about the Dex-O-Tex on the ground that the architect was not responsible for anything that happened under a subcontract let directly by the owner. The evidence regarding the stair treads was stricken “as not being within any issue

Turning first to plaintiffs’ performance under the medical building contract, we may for the moment forego consideration of any problems raised by the fact that Krisel prepared most of the plans and specifications while unlicensed and assume that they represented the final work of Palmer, the licensed architect who checked and approved them. For in any event, it is clear that the express statutory command, that “in no-case” shall the unlicensed member be designated as an architect, was violated when Krisel signed a certificate of payment in which he was designated as “Architect” while unlicensed. The statutory language prohibiting such designation is comprehensive, and it is patently calculated to prevent deception of the public at any stage of performance under a contract which the partnership entity was validly entitled to make without notifying its client that a particular member was not in fact an architect. Furthermore, under the terms of the contract, the issuance of certificates of payments was one of the “architect’s services.” Palmer admitted he did not direct Krisel to sign such certificate. It is argued that “Krisel, as a co-partner, had a right to sign such certificate on behalf of the co-partnership.” But Krisel had no more right to issue such certificate authorizing payment when unlicensed than he had to designate himself as an architect, or to personally render architectural services not directed by Palmer. Nor is Krisel’s action cured by the fortuitous fact that he was licensed the following day. A law student who has been notified that he has passed the bar examination but has not yet been admitted to practice may not, during such interim, designate himself as an attorney and transact business with a client as such. A candidate for an architectural license is in the same, situation. The line of demarcation having been unequivocally drawn by the Legislature, we cannot by a process of judicial erosion impinge on that line by saying in effect that “in some cases” a nonlicensed member of a partnership may designate himself as an architect and render architectural services to one who has not been properly notified that he is not an architect.

Plaintiffs argue that the repeated statements in Joseph v.

It necessarily follows that although the partnership contract for the rendition of architectural services was valid in its inception, plaintiffs’ right to recover thereunder is defeated by the manner in which performance was executed. (Joseph v. Drew, supra.) The contract for the medical building being indivisible, plantiffs should not be entitled to retain the money advanced to them on account by defendant. Defendant, however, could not recover these payments under his third cause of action in his cross-complaint since it was predicated upon the theory that plaintiffs had violated section 5537, Business and Professions Code, which was not here applicable. (Joseph v. Drew, supra.) He should, nevertheless, have the opportunity to amend this cause of action so as to seek recovery of such payments on the theory that an unlicensed member of the firm performed architectural services, not directed or supervised by the architect, and also improperly designated himself as an architect in violation of section 5539, Business and Professions Code.

What we have previously remarked is especially pertinent to the question of whether plaintiffs are entitled to compensation for designing the sales booths. Most of these plans, like the others, were designed by Krisel and purportedly checked by Palmer. Counsel for defendant endeavored early in the trial to inquire searchingly into the matter of whether Krisel or Palmer was actually doing the work called for under the contract, and to this end sought to examine Palmer as to what portion of the architectural services were performed by him and what portion by Krisel. Counsel was precluded from pursuing this significant line of inquiry when the court sus

Plaintiffs also sought recovery of $510 as the reasonable value of “extra work” performed after the default of the contractors. These services were rendered after Krisel was licensed. Defendant testified that plaintiffs agreed to make no charge for these services. Plaintiffs testified to the contrary. Since it cannot be ascertained from the judgment whether the jury found in favor of plaintiffs or defendant on this item, this issue must also be retried.

The next major contention of defendant is that the court improperly withdrew from the jury consideration of his claim for damages resulting from the issuance of certificates of payment, amounting to $46,600, without first obtaining lien releases. The first and second counts were based on fraud and negligence, respectively, and the fourth related specifically to the issuance of the certificate by Krisel for $14,250 on October 27, 1950, before the time called for by the contract and on which he designated himself as “architect” while unlicensed.

The record shows that in supervising the erection of another building by King and Hiking for defendant immediately prior to the present job, plaintiffs had in almost every instance obtained lien releases from King prior to issuing a certificate to him. They failed to ask for them on the present job at any time, although they could have done so under defendant’s contract with King-Hiking. The evidence showed that during the progress of the medical building work, plaintiffs accepted private employment from King and Hiking and received payments therefor. Defendant testified that he never requested any of the certificates to be issued, but relied on plaintiffs to issue them at the proper time. Plaintiffs, on the contrary, asserted that defendant often telephoned and asked that a certificate of payment be issued.

In support of the court’s action, plaintiffs point to the fact that Rottger, the contractor’s bookkeeper, was unable to testify specifically as to “what materials theretofore delivered and incorporated in the job, or labor, was not paid for” at the time each respective certificate of payment was issued. Because of this they assert the court was required to hold that defendant was unable to establish any damage and to withdraw such issue from the jury. However, Rottger did testify that on October 27,1950, all of Riking’s accounts payable were due, and that up to November 30, 1950, only $27,391.33 of the bills chargeable to the medical building had been paid by the contractors, as against $46,600 received by the contractors upon certificates of payment during that period. It is thus inescapable that at the time the progress payment certificates were issued, attesting that King and Biking were entitled to intermediate payments for the building material, the contractors had not been paying all of their subcontractors. The court’s charge is based on the fundamental misconception that if there was no showing that any particular bill for material or labor was due a subcontractor when the certificate was issued, defendant could not prove he was damaged by the issuance of the certificate. However, though a bill for such labor and material might not be due in the technical sense of being then payable, it was nonetheless owing if it had been furnished by the subcontractor for the building, though payments, as between subcontractor and contractor, might be deferred. (See Gelgud v. Los Angeles Rock & Gravel Co., 14 Cal.App.2d 604 , 608 [ 58 P.2d 673 ] ; Crocker-Woolworth Nat.

The court refused also to submit to the jury the question whether plaintiffs properly performed their supervisory duties with respect to such defects as off-level floors, the rotting of stair treads, and the cracked Dex-O-Tex matting. This was error. An architect, when supervision is a part of the duties assumed by him under his contract with the owner, is required to exercise due care in the performance of his supervisory function, and is liable to the owner for negligence on his part. (Lindeberg v. Hodgens, 89 Misc. 454 [ 152 N.Y.S. 229 , 231]; Avent v. Proffitt, 109 S.C. 48 [ 95 S.E. 134 , 135]; Pierson v. Tyndall, (Tex.Civ.App.) 28 S.W. 232 .) Plaintiffs undertook the duty of supervision of the work. They agreed to continue to supervise the work after the contractors’ default, and indeed, claimed $510 extra compensation therefor. Palmer testified that considerably more time was devoted to supervision after such default. However, when it appeared that the Dex-O-Tex contract was let by defendant after the default, the court stated it would admit no “evidence as to what took place after the default and after the owner had taken it over.” This ruling was clearly wrong, in view of Palmer’s testimony, as well as testimony that the cracking of the Dex-O-Tex resulted from lack of sufficient rigidity in the underlying steel structure and not from any defect in the material. The fact that defendant, instead of King, let the contract did not lessen: plaintiffs’ responsibility to supervise the work in accordance with their agreement.

The record also shows that the steps were formed of laminated wood glued on the job and covered with steel plates. Palmer gave assurance that the glue used was waterproof and would cause no difficulty. The steps subsequently rotted and fell apart. It was also discovered six months after the building was completed that the floors in the offices on the second floor sagged. There was testimony that this was due to defective construction in the underlying steel framework. While concededly the architect’s undertaking, absent a special agreement, is not an absolute guaranty that satisfactory results will ensue (see White v. Pallay, 119 Ore. 97 [ 247 P. 316 ]; Shipman v. State, 43 Wis. 381 ; Chapel v. Clark, 117 Mich. 638 [ 76 N.W. 62 , 72 Am.St.Rep. 587 ]), there is evidence that the above defects might have been caused not

Moore, P. J., and McComb, J., concurred.

A petition for a rehearing was denied August 24, 1954, and respondents’ petition for a hearing by the Supreme Court was denied September 30, 1954.