Green Building Litigation

You may recall that, back in December, the East Hampton Town Architectural Review Board approved Bates Masi Architects' controversial design for a modern two-story green office building at 132 North Main Street in East Hampton that would seek an unspecified level of LEED certification from USGBC. In a last ditch effort to stop the project from proceeding, a group of local residents have filed a lawsuit against the Board in Supreme Court for Suffolk County, alleging that it was negligent in approving the design and requesting that the court review and overturn the Board's determination. The court will hear oral argument in the coming weeks and either affirm or overturn the decision, or send the matter back to the Board for further review. The thrust of the plaintiffs' argument is that the Board "consistently ignored the evidence completely" with respect to the historic characteristics of neighboring buildings when considering the 132 North Main Street application. Under the controlling East Hampton zoning ordinance, the Board is required to deny designs that are "excessively dissimilar" to the character of the town.

Last week, the AIANYS Statewide Advisory Committee and the American Council of Engineering Companies of New York sponsored the 2007 Annual Joint Session on Current Insurance Issues for Design Professionals. Speakers from a number of prominent insurance companies, including Lexington, Beazley, Zurich, CNA, Liberty, and XL shared their thoughts on the current state of the insurance industry, from a softening market for professional liability insurance, to comments that several panelists made regarding the insurance coverage implications of BIM and LEED for design professionals. Of particular interest to us here at gbNYC, the entire panel agreed that the standard of care for architects and engineers is "changing rapidly," in large part due to the power of BIM technologies and the proliferation of USGBC’s LEED green building rating system.

First, with respect to BIM (which is discussed extensively in the context of sustainable design in the latest issue of eco-structure magazine), each insurer confirmed that their professional liability policies would cover errors and omissions in digital data, including BIM models. However, Lexington's representative called BIM "just 3-D CAD" and warned the audience that the true insurance coverage implications for BIM projects have yet to play out. In an interesting, though potentially sinister, twist, Beazley's panelist also noted that coverage would not extend in the type of situation where a firm hosted a BIM model on its own server, the server was compromised by some sort of hacker, and the digital model was damaged. This is not a designer's error or omission, so coverage would not be available to the architect or engineer who built the model. The same panelist noted that hidden risks are "key" with respect to BIM, and designers should guide themselves on such projects accordingly.

In terms of green projects, each of the panelists agreed that a design professional's errors and omissions coverage will not cover claims by an owner brought in the event that a LEED project does not reach the agreed-upon certification level.