The Claims-Free Architect

Poor Site Planning

• Pro-Demnity Insurance Company • Season 2 • Episode 3

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In architectural practice, boundaries are critical. There are physical boundaries, professional boundaries and, what might best be called aspirational boundaries. In this episode, boundaries are badly defined, ignored, stretched and transgressed. Abysmal record keeping only makes matters worse.

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Welcome to Claims Stories – actual accounts of professional liability claims against Ontario-licensed architects, chosen from the 6,000-or-so cases, defended by Pro-Demnity Insurance Company.

 The Pro-Demnity Claims Stories were originally written by David Croft.

 The Stories are factual, but some elements have been altered to protect the identity of all parties involved – the guilty as well as the innocent.

 Architectural practice, it seems, can be far more exciting than most people imagine.

 … But in architecture, as in life, the wrong kind of excitement can be perilous.

•••••

 Episode 3, Season 2 - Poor Site Planning 

In architectural practice, boundaries are critical. There are physical boundaries, professional boundaries and, what might best be called aspirational boundaries. In this episode, boundaries are badly defined, ignored, stretched and transgressed. Abysmal record keeping only makes matters worse.

 •••••

An architect designs a rustic cottage on a lake, in the wilds of northern Ontario. But the waterfront lot line is never located. As the work progresses, the aspirations of the client go unchecked and the cottage bursts its design boundaries to become a mansion. As often happens, nature strikes back. This story is called “Wilderness Castle.”

 •••••

Magnus and Gertrude Goliath, a well-to-do couple who made their fortune as titans of industry, enjoyed an elegant lifestyle in Toronto. In keeping with their elevated station, they maintained a palatial mansion overlooking a private golf course in the city’s west end. Magnus Goliath, the husband busied himself managing family money and sitting on several hospital and corporate boards.

 Feeling the need of a summer hideaway in the Ontario northland, they bought a substantial lakeside acreage, on an island, in a remote northern lake. And, on the recommendation of a business acquaintance, the Goliaths commissioned the architect David Gavarti to design their retreat.

After several attempts, Gavarti finally came up with a design for the building and marine facilities that was acceptable to his clients. The drawings were completed without further complication.

From that point on, nothing seemed to go to plan.

 •••••

According to the Goliaths’ claim against Gavarti, the cost of construction was three times the amount the Architect had estimated – and, it had taken two years to complete, instead of the one season that Gavarti had promised.

 But that wasn’t all. The Architect had also failed to locate the proper lot lines, including the high water mark, so there was no way of knowing whether the cottage was properly located – and possibly in constant danger of being battered by waves.

 This lapse proved to be critical when a fierce winter storm pushed huge slabs of ice up onto the island, carrying away a large corner of the building as well as the entire dock. To protect his investment, Magnus Goliath had spent several hundred thousand dollars on the construction of riprap levees, in an attempt to hold back the forces of nature.

 To add to these problems, the Builder, Earl Perkins, who had been chosen by Gavarti, was completely incompetent. As just one example, he had attempted to move his equipment and material onto the island, after the spring thaw had already started, with the result that construction machinery and building products had fallen through the thinning ice. Adding insult to injury, he had attempted to charge Goliath for the loss.

 The clients were now claiming against the Architect Gavarti, the Builder Perkins and the Municipality, whose building department had failed to spot or respond to any of these problems.

 The claim exceeded three million dollars.

 •••••

The Architect was invited into Pro-Demnity’s offices to present his version of events. He told us a very different story.

 To begin with, his cost estimate was not wrong. It was based on his understanding of the project that Magnus Goliath, the client had described to him at the very beginning — and not the megaproject it had grown to become.

 As Gavarti explained it, Goliath had come into his office one summer day, without his wife Gertrude, and had briefed the Architect on his ideas for a modest getaway – a “shack in the woods” – something simple – reminiscent of his family’s hunting cabin on Lake Superior.

 As it happened, Gavarti had just completed a project that closely matched the Goliath’s description, so he understood his vision quite well – and also how much it would cost. Using his recent project as a guide, adding another 25% to cover additional transportation costs, he arrived at a reasonable ballpark budget of $750,000.

 For the project that the client had described, this figure was entirely appropriate, if not a little on the high side. However, it did not include two important considerations, about which the Architect knew nothing: First, Goliath had failed to mention his desire for extensive boating facilities. Second, Mrs Goliath had yet to weigh in with her own dreams, which were much more “grandiose” than those of her husband.

 Gavarti launched himself into the project. Initial design sketches were prepared in short order. And, as the design progressed, Gertrude Goliath made frequent visits to the Architect’s studio, offering helpful suggestions to bring the cottage more into line with her own vision. For her, the wilderness location and her husband’s fantasy of a spartan boyhood camp were just minor obstacles on the way to realizing her own dream of a noble residence, where important guests could be lavishly entertained. Between initial sketch design and final building plans, the humble shack evolved into a sumptuous country residence.

 Meanwhile, Magnus Goliath was expanding his own aspirations. He had always loved the idea of paddling a birchbark canoe through untamed scenery. Along with the rustic cabin, it was something he had dreamed about since boyhood. But … his social status had changed since then, so his dreams now included dinner parties aboard an antique mahogany cabin cruiser with brass detailing and a well-appointed galley.

 As for the damage caused by ice and water, the architect Gavarti explained that this had been entirely due to particularly heavy weather over the past few winters – conditions which could not have been foreseen. And, Goliath had caused much of the shoreline problems himself, by accumulating building materials at the waterline. This was not only ill advised, but also contrary to environmental laws. His other attempts at harbour-building were amateurish at best, and paid no heed to the unrelenting forces of wind, water and ice.

 As to the claim that the building had been located too close to the high-water line, it had been sited at the recommended setback of 18 metres from the shoreline – except … where was the shoreline? There now appeared to be several interpretations of the distance, and the difference was as much as 10 metres.

 The cabin-in-the-woods-by-the-lake fantasy – still unrealized – had ended up costing close to 2.25 million dollars … not including the boat.

 •••••

The Goliath’s claim was multi-faceted. But the many allegations of trivial defects were, unfortunately, well founded. The wall construction was defective, resulting in unacceptable levels of air and moisture infiltration and the deterioration of millwork. The foundation walls were also substandard. They had been specified as 20-centimeter thick concrete, but were actually constructed from parged block, which was easily damaged by ice.

 Even so, the cost of remedial work to the building was not very great – and nowhere near the amount being claimed.

 The major claim – the destruction of the harbour – was, at first glance, without merit. Gavarti had not been commissioned to design any harbour facilities; no shoreline work had been shown on any of his drawings – and it was hard to believe that he would have offered any professional advice in an area where he had so little expertise.

 However, there was the Architect’s possible shoreline location error to consider. In fact, how had he located the shoreline in the first place – and to what extent had this necessitated additional harbour work? Furthermore, on his visits to the harbour, he must have noticed the work being done. Whether he commented on the work or not, his presence on the site may have made him liable to some degree.

 •••••

Discoveries were held in the offices of the lawyers appointed to defend the Architect. The meeting was attended by: the Architect Gavarti, the Pro-Demnity claims manager, and legal counsel.

 When Gavarti arrived, he was weighed down with plastic grocery bags – several in each hand – filled with what appeared to be wastepaper. He proceeded to empty the contents onto the boardroom table, finishing with a triumphant “Voila!” 

 This, he explained, was his filing system. He wrote very few letters, preferring to conduct all of his business orally. Whenever anything seemed noteworthy, he entered it into exercise books, by hand. “Noteworthy” matters seemed to include not just project notes, but every imaginable kind of information: personal observations, reminders, here and there a design sketch, shopping lists, project hours, etc. For this meeting, he had gone to the trouble of ripping the books apart and setting aside those pages – or portions of pages – that related to the matter at hand. This meant that there were few indications of times or dates, so piecing together a record of his site visits – or the sequence of events in general – and putting together legal defences – would be a challenge.

 We instructed Gavarti to take his “file material” home and reconstitute his books, so that we could at least construct some sort of timeline. It was a nightmarish task, and ultimately unsuccessful, leaving us with no recorded documentation to rely on. 

 Inspections, the Architect told us, were a separate matter. Ms. Goliath would call him now and then and invite him to drive up in her Mercedes or fly by private aircraft, and off they would go. Gavarti was clearly an impulsive man, and Gertrude Goliath, evidently, an impulsive woman.

 We had another problem with Gavarti. As a defence witness, he was not going to shine. Courts usually favour dull types who just answer the questions. Gavarti talked very quickly, with a vocabulary that was rough-hewn and crudely colourful. He was a talented artist with a theatrical manner. But even more worrying, he could not recall very much. Those many hurried trips with Mrs Goliath were all a blur.

 We needed to devise a defence strategy that was sufficiently credible to, at least, reduce the damage claim to something within Gavarti’s insurance limits. Otherwise, he could be ruined.

 •••••

After some discussion, we established the main planks of the defence.

 First. Spread or divert blame. The general contractor, the township, the surveyor, and Goliath himself had all participated in the construction process in some way, and must bear some liability for the loss.

 Second. Deny liability for any non-architectural work that may eventually be proven to be negligent. But … have expert reports supporting the Architect’s design and details to rebut the plaintiff’s “technical audit” – which showed several defects in the construction of the house – and provide damage control for the scope of its criticisms.

 Third. Produce legal arguments to support the choice of the setback line, using old maps of the area and current cases related to shoreline rights, noting that the lot line may be underwater part of the time.

 Fourth. Attempt to reduce any damage assessment by pricing out the remedies, examining betterment arguments, and so on.

The litigation ground on slowly. Discoveries lasted months, growing into years, as experts’ reports, rebuttals and further examinations of witnesses were produced. The surveyor, contractor and town building official were examined in their offices in Northern Ontario. This proved very time-consuming and expensive for both the Goliaths and Pro-Demnity, who were paying for counsel’s time, plus board and lodging at the Moose Inn.

 There was, however, an upside to this necessary inconvenience. During long, empty evenings at the Moose Inn, in the relaxed mood of the off-season, counsel for both the Pro-Demnity and the plaintiff spent hours alone in the dining room. This gave them the opportunity to work out a deal, which they presented to both clients. Goliath would settle within insurance limits and indemnify us against claims by other defendants that might exceed these limits. But he would continue against the contractor, the surveyor, and the township.

 •••••

This strange tale sounds like something that could never happen to an experienced professional, but it did – and there are several lessons that we can all learn from it.

 Lesson No. 1: It’s not unknown for an architect to be seduced by a Group-of-Seven, Call-of-the-Wild building site, and an upper-crust client. This Architect’s artistic imagination was easily swept away by the image of a remote woodland cottage and, unfortunately, his professional practicality failed to throw him a lifeline.

 Lesson No. 2: The Architect was a northerner by birth. He should have been aware of local conditions – for example, that the levels of northern lakes vary greatly from year to year. This fact should have been a major consideration in siting the building.

 Lesson No. 3: Local consultants could easily have been enlisted to advise on the design of the docks, as well as the location of the house. A local architect could have been hired to do the site review and advise on local conditions.

 Lesson No. 4: Regardless of the excellence of an architect’s work, a breakdown in the architect-client relationship can lead to grave problems. This architect’s connection to his client began to fail as soon as it was noticed that the original budget had been exceeded. Gavarti assumed the cost escalation was evident, since Gertrude Goliath’s grand plans were the main cause. But, by not warning his clients in writing, he was vulnerable to the accusation that he hadn’t kept them informed. A client, or clients, must be informed, in writing, of the cost of any escalations. It is a fundamental duty of the architect. 

•••••

Monsters aren’t just in fairy tales. In this story, a “monster home” earns its name by terrorizing an architect and his clients. Too big for its site, the home encroaches on the building setback requirements, and challenges three levels of government. The architect, the owners and finally, the home itself, are all defeated, in a story we call “Creating a Monster.”

 •••••

 Andrew Cormier and Delores Cavanaugh were partners. Not in the domestic or romantic sense, but in a much more profound way: They were dance partners.

 Andrew was a hardware store owner, and Delores was a securities salesperson. Both were very successful in their own right. Although they were not married to each other, or otherwise emotionally involved, they were members of the same dancing club. Over the years, they had established a sort of chemistry that they decided to extend into a business partnership.

 They were a strange but effective duo, approaching real estate with the same enthusiasm and grace that they applied to the Viennese waltz. Between them they built a string of small properties, with Andrew as builder and Delores as closer, and had sold them for handsome profits.

 Deciding to venture into the luxury residential market, they hired the Architect Joseph Bakillus to design an imposing home on a quiet suburban lot. It should have been an easy score. But it ended disastrously.

 Andrew and Delores were now suing the Architect for a million dollars.

 •••••

The plaintiffs’ case was, essentially, that they were not experts in residential design and construction. They had relied entirely on their architect, and he had failed them.

They had purchased a residential lot, cut down all the trees and torn down the existing home. They had engaged the Architect to design a 550-square-metre colossus on the site, on the basis of which they had obtained mortgage funding.

 After the house had been staked out, a building permit had been secured, and digging had begun, … a few of the neighbours, noticed that the excavation seemed abnormally large. They called the building inspector, who confirmed their suspicions, and the work was stopped.

 As it turned out, the Architect had designed to a nine-metre rear-yard setback, where zoning regulations called for 12-metres. He had designed a large house that was, in fact, too large. Consequently, the house had to be completely redesigned, with a 3-metre by 20-metre chunk chopped off the footprint. On three floors, that added up to 180 square metres – almost one-third of the house, and equivalent in size to a typical suburban home on any other lot.

 To make matters worse, When the revised house was barely half built, another Stop Work Order was issued. It appeared that the Architect had not thought to deposit the new drawings with the City.

 But there was more. While Andrew and Delores were waiting for their new permit, an “anti-monster” bylaw was passed, which meant that even the revised gross floor area was unacceptable. They were now forced to apply to the Committee of Adjustment for a variance … which was denied … as was their subsequent appeal. Finally, after two more years, an appeal to Divisional Court succeeded in granting the variance, which allowed them to construct the revised plan.

 But by then, the real estate market had dramatically cooled, and people were looking for more affordable homes. Monsters had lost their charm.

 In all, seven years had elapsed. The home had been completed, but was still empty. Losses amounted to $1 million.

 •••••

The Architect related his version of events to Pro-Demnity.

 He had relied on Delores, a very shrewd operator, to supply him with the lot size and setback requirements. She had given him this information in the form of a sketch, which unfortunately, he could not produce. 

 In fact, he was unable to provide any helpful documents at all, since he had a policy of not keeping records. Even his financial records were scant, since he also had a policy of operating on a cash basis.

 He had, however, corrected his plans immediately upon learning of the setback problem, and had placed them in Andrew’s hands within a few days. He hadn’t taken the revised plans to City Hall because he saw this as Andrew’s job. His client was, after all, an experienced builder, despite his official statement to the contrary.

Since he kept no records, the Architect tended to rely on his memory of events. But this was a poor strategy, since his recollections varied daily. The result was a confused and confusing story about what he had said and done.

 What we were able to deduce was that Bakillus, in return for a very low fee, had performed a very minimal service. This seemed consistent with his overall stripped-down business approach. Even though residential design formed the basis of his practice, his experience with the builders of these homes was surprisingly limited.

 In the end, he admitted that the area miscalculation was his error. The incorrect setback information and the delay caused by the second Stop Work Order he blamed on his client.

 •••••

 Once discoveries started, our seemingly hopeless defence prospects started to look up. Andrew and Delores were terrible witnesses whose versions of events were even hazier than those of the Architect. In fact, their statements were so convoluted, and bore so little relation to their testimony at the variance and appeal hearings, that they lacked any credibility at all. Their elaborate explanations of their “losses” were incoherent, and so obviously fabricated, that they were deemed worthless.

 The talkative Andrew cheerfully admitted to having lied in several places. He even stated that his lawyer knew that his evidence was false. This forced his lawyer into the uncomfortable position of having to swear that this part of his client’s testimony was false. It’s sometimes hard to predict what kind of incriminating testimony a witness might give under oath, but Andrew’s confessions exceeded expectations.

 Our appraisal expert followed up by showing that the plaintiffs’ expectations of profit and marketability were totally unjustified. Although the market was roaring ahead when the first shovel hit the ground, it had cooled considerably since then. They had built a monstrous white elephant, that no one wanted.

 Neither side wanted a trial. But without the threat of a protracted legal proceeding, the plaintiffs had no real leverage. The defensive art was to drive a bargain at the lowest point the plaintiff would reluctantly accept, without resorting to a trial. The plaintiff’s lawyer was weary of the case and ready for a solution.

 The case eventually settled for approximately ten cents on the dollar.

 •••••

In this unlikely series of events, we were very fortunate that the Architect’s disappointing performance – redeemed in the end – was outmatched by the poor behaviour of the plaintiffs. We would otherwise have lost this case in a serious way. 

 And, since mistakes were made, lessons can be learned.

 Lesson No. 1: Architects must keep records and take careful notes of clients’ instructions and wishes. Some architects excel at doing this. Many others do a reasonable job. The alternative – sloppy records and cash transactions without receipts – is dangerous … and can lead to Tax or Criminal Court …  where Pro-Demnity can’t help you.

 Lesson No. 2: Stay abreast of building and zoning bylaws. They are constantly changing. And avoid relying on your client for important site information, especially where your entire building design relies on this information. 

 Lesson No. 3: Take the permit process seriously. Be especially careful when you are relying on someone else to secure the permit. It is not only troublesome; it’s also contrary to law to build without a valid permit. 

 •••••

Thanks for listening to this edition of Claims Stories. We hope it was instructive and entertaining … as well as cautionary.

Remember that every jurisdiction and ever case is different. Always refer to the laws, and regulations governing your local jurisdiction and consult a legal, architectural and insurance professional about the unique circumstances of your own case.

 • The Pro-Demnity Claims Stories were originally written by David Croft.

• The audio episodes are read by Liam Gadsby and produced by Revelateur Studio, Toronto.

• The publisher and the executive producer of the written stories and audio episodes is Pro-Demnity Insurance Company, Toronto. For more information, including the full legal disclaimer, visit prodemnity.com.