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An architectural consultant cannot tortiously interfere with
an architect’s contract with an owner after the architect-owner
contract has been terminated. This lesson is illustrated
in the case of Paul Steelman Ltd. v. HKS, Inc., 2007
U.S. Dist. LEXIS 5886 (D. Nev. 2007).
In this case, the owner contracted with an architect to perform
architectural services on a project involving the expansion
and renovation of a Connecticut casino. Pursuant to the
architectural contract, the architect was permitted to retain
consultants to assist it in performing architectural services on
the project. The architect entered into a consulting agreement
with a consultant to provide project management, construction
documentation and construction administration
services on the project on behalf of the architect.
Five months after the owner entered into the contract with
the architect, the owner notified the architect that it was terminating
the contract for convenience. The architect subsequently
notified the consultant of the termination for convenience.
The architect also requested that in accordance with
the parties’ consulting agreement, the consultant not communicate
or deal directly with the owner. Despite the architect’s
request, the consultant did communicate directly with the
owner and was subsequently hired as the new project architect.
As a result, the architect brought suit against the consultant
on multiple counts, including tortious interference
with the architect’s contract with the owner.
The architect alleged that the consultant interfered with the
architectural contract by communicating directly with the
owner without authorization and despite the architect’s request.
The architect claimed that this communication allowed
the project to proceed utilizing the architect’s design
without final payment to the architect. As such, the architect
argued that architectural contract’s payment obligations survived
the termination of the contract.
The consultant countered that the architectural contract was
terminated by the owner prior to any direct communication
between the consultant and the owner. Thus, the consultant
argued that the communication could not have interfered
with the architectural contract.
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The court ruled in favor of the consultant. The court noted
that because the architectural contract was terminated for
convenience by the owner before the alleged interference
occurred, the architect no longer had any contractual rights
which could be violated. The court observed that as a result
of the termination for convenience, there was in fact no
valid, existing contract with which the consultant could have
interfered.
The court’s ruling in this case stands for the clear proposition
that a party cannot tortiously interfere with a contract
that has been previously terminated. As a result of this case,
consultants should be aware that if they opt to continue on a
project or to take over for an architect after a falling out between
the architect and the owner, there are proper procedures
to be followed. It is not proper for a consultant to
interfere with an architect’s contract with an owner. However,
once the contract is terminated, it may be proper for a
consultant to communicate directly with the owner and ultimately
take over the architect’s position after termination.
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