Virginia Real Estate, Land Use & Construction Law : Virginia Construction Lawyers & Attorneys : Bean Kinney & Korman Law Firm : VA Real Estate, Land Use & Zoning

A recent decision from the US Court of Appeals for the Fourth Circuit should be sending cold chills up and down developers' spines regarding complaints under the Americans with Disabilities Act (ADA) and Fair Housing Act (FHA).  The case, Equal Rights Center and Archstone v. Niles Bolton Associates, basically ruled that a developer was not entitled to recover its claims against the architect for a failure of a multi-family project to meet ADA and FHA requirements.

ADA and FHA claims have a long history at this point, particularly since the 1991 passage of the ADA.  After a huge wave of litigation, often spawned in the arena design and construction area, ADA claims seemed to die down for a while.  We have heard and seen ADA and FHA complaints have a huge spike over the last several years, in particular with large scale multi-family developers.  (The anecdotal word was that testers and advocacy groups were proceeding alphabetically, so those in Z's may not have heard this yet).

Owner/developers understandably attempt to lean on their design consultants for advice and direction in this arena.  Many include broad form requirements for certifications of compliance from their design professionals accompanied by equally broad indemnification provisions if something goes wrong.  In the Archstone case, Archstone faced a number of complaints on 71 buildings, including 15 buildings designed by Niles Bolton.  Archstone settled those issues and then sought to recover expenses associated with the consent decree from its architect.  Archstone's claims included express indemnity, implied indemnity, breach of contract, and negligence.

During three years of litigation and discovery, Archstone resisted disclosing how it allocated the consent decree repairs and expenses across the various properties.  Archstone claimed it had no such duty and was entitled to recover all expenses for the 15 Niles Bolton buildings from teh architect based on its indemnification style claims.  The court agreed and granted Archstone a protective order from having to disclose that information.

That resistance may have been a big mistake.  The trial court held, and the appeals court ultimately agreed, that permitting pure indemnification under any theory was "antithetical to the purposes of the FHA and ADA".  According to the court, allowing indemnification would permit Archstone to shift its entire responsibility for federal violations and undermine the preventative aspects of ADA and FHA.  As the court stated:

Allowing an owner to completely insulate itself from liability for an ADA and FHA violation through contract diminishes its incentive to ensure compliance with discrimination laws.  If a developer of apartment housing, who concededly has a non-delegable duty to comply with the ADA and FHA, can be indemnified under state law for its ADA and FHA violations, then the developer will not be accountable for discriminatory practices in building apartment housing. 

As such, federal law preempted not only the pure indemnification claims, but also even the state law breach of contract and negligence claims of Archstone because it sought to recovery all costs and expenses.

This may be a case of Archstone going to far by asking for the whole nut.  It is tempting to do so at least in the alternative, but by asking for only 100% of the claim and not including a request for damages directly caused by proven negligence, Archstone may have unwittingly taken a big risk.  That risk appears compounded by its resistance to producing allocation information along with the likely credibility gap that disclosure may be demonstrated.

We can take a few lessons away moving forward:

1. You still want to include certification and indemnification provisions in the contracts if you are the owner/developer; consider tying the indemnification clauses to damages caused by the negligence of the designer.
2. Be wary of asking for too much, it can blow up in your face.
3. Be wary of resisting discovery, such a position can ultimately box your case into a position of unexpected weakness.  Far better to just product all the documents and fight the case in the well on all the facts than to try and get cute and end up getting burned.
4. In ADA and FHA cases, include claims that are tied to specifically demonstrated negligence as opposed to a straight pass-through of all claims.
5. Understand that if you are resolving and negotiating claims with one set of claimants, passing through claims to third parties may prove tougher than you think.

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I don't know how many people out there tracked the events at the sustainability forum out in Portland a few weeks ago, but one of the notable take-aways from the event was that HUD Secretary Donovan used the event as an opportunity to announce that HUD was launching it's new Office of Sustainable Housing and Communities (OSHC) under Deputy Secretary Ron Sims.  OSHC is funded in HUD's 2010 budget.  This follows on the heels of the announcement to create the Inter-agency Partnership for Sustainable Communities between DOT, HUD and EPA last June.

The purpose of OSHC is to work with DOT, EPA and other federal agencies to ensure coordination between housing and other departments involved with sustainable community public policies that effect transportation, utility infrastructure, jobs and environmental planning.  It will also "...strengthen HUD's Energy Efficient Mortgage product and other retrofit financing options - both for single family homes and multi-family rental housing - through a $50 million Energy Innovation Fund... and will also make available an Affordability Index that measures the costs of where a home is located in relation to jobs, schools and transportation."  Additionally, $100 million will be available for integrated metropolitan regional planning initiatives per the Sustainable Communities Planning Grant Program, and HUD expects to award grants to between 10 and 15 regions around the country.

HUD and OSHC are also seeking input from stakeholders related to creation of regional plans for sustainable development, execution plans and programs, implementation incentives and entities eligible for funding.  You can make recommendations via HUD Wiki, is pretty easy to do.  Also, Builder Magazine interviewed OSHC's Director, Shelley Poticha, last week, where she shed some light on her thoughts on how the federal government fits into regional land use planning.

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We are very pleased to have our inaugural guest post by John Salmen, AIA.  A licensed architect, John is President of Universal Designers and Consultants, Inc.. John has specialized in barrier free and universal design for 30 years and is a recognized expert on US accessibility regulations and a leader in the field of Universal Design.   We can think of no one better to start the accessibility discussion on our blog, and we also believe John makes an interesting, persuasive and important connection between economic, environmental and social sustainability that merits significant attention.

Inevitably, this question must be raised. As public awareness of green design swells to a tidal wave, many Students of Universal Design (UD) think we see the next wave approaching – and its name is Universal Design. But how do these waves relate to each other? Are they random swells? Or caused by undersea movement of the earth’s crust?

Valerie Fletcher, Executive Director of the Institute for Human Centered Design, and Elaine Ostroff, Founding Director along with Eric Mikiten, AIA of the Bay Area COTE, believe that they are both connected to the earth shaking movement of Sustainability. Eric presented his overview in detail at the AIA 2009 convention. The trefoil logo, developed by the Department of Public Works of Queensland, Australia for its Smart House program (www.build.qld.gov.au/smart_housing/elements/index.asp), communicated how these three universal design leaders visualize the “ three–legged stool of sustainable design.” The graphic above illustrates how universal design is a basic element of sustainable design, as it relates to resource efficiency and economic empowerment under the umbrella of environmental, economic and social sustainability.
Environmental sustainability relates to the green movement and natural resource conservation and efficiency. Economic sustainability relates to concepts of life cycle costing, equity and fair trade value of products and services. Social sustainability relates to systems that support people by creating safe, secure and independent communities.

When compared to financial and natural resources, human ability is arguably the most precious resource of all. Human ability is enabled, supported and encouraged by a universally designed environment that gives everyone the opportunity to participate with a minimum of outside support. Just as we must conserve our natural resources, we must also conserve our human resources. It is a waste of human potential to create environments that demand dependence when a simple change in the design of the path, space or element could allow un-assisted use. Like “green design”, universal design must be an integral part of design programming and the imaginative design process. It cannot be left as an add-on in a minimal compliance mode.

The relationship between two people who are locked in the care giver/receiver dance, while frequently a loving and enriching experience, is difficult, uncomfortable, and too often destructive of human dignity. Independence is best and can be extended with universal design. The obvious example is aging in place, which is facilitated by universally designed homes and communities.

As we struggle to make the most of limited resources, the value of universal design as a tool to conserve human resources will become increasingly apparent, and its relationship to the broader goal of sustainability will become clear.

Editor's post script: In response to Chris Cheatham's fair question of what is "Universal Design", here is a definition from John Salmen's website:

Ron Mace, one of the original universal design movement leaders, defined universal design as: "Universal Design is the design of products and environments to be useable by all people, to the greatest extent possible, without the need for adaptation or specialized design.

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