An interesting green building litigation that was filed last fall last fall in Cook County (Illinois) Circuit Court has flown under the radar. Though details are slim and the only papers I have been able to pull thus far are the complaint, I thought it was worth mentioning here at GRELJ in the context of how ordinary green building projects – as opposed to the maligned Destiny USA mega-development – can still present additional risks for project teams.

The project – profiled here – contemplated the gut renovation of 5354 North Paulina Street in the Andersonville section of Chicago, a 3-story former farmhouse that dates from 1883 (pictured). The owner of the 2200-square-foot house, Laurie Bain, was aiming for a LEED Certified rating from USGBC under LEED for Homes. Vertex’s design earned accolades for its tight building envelope and was touted as “a fantastic example of how LEED can be done affordably.” Total projected construction costs were less than $100 per square foot; the design took advantage of cross-ventilation and other passive energy techniques to avoid the installation of any costly renewable energy systems.

According to the complaint, “the stated objective of the Architectural Contract was to ‘create a sustainable green modern single family home.’” The form agreement the parties used was the B105-2007 (or its predecessor B155-1993), which is the AIA’s standard form of agreement for a residential or small commercial project. (Vertex also served as the general contractor for the project, though there are no specific allegations relating to LEED for Homes certification arising out of the firm’s construction phase services).

The LEED-related allegations are contained in the first cause of action for breach of the architect’s agreement. Bain claims that, among other breaches, the architect “failed to pursue and obtain for the Project certification from the USGBC LEED for Homes Program.” Although the architect’s specific responsibilities under the agreement and its accompanying scope of work are unclear, this allegation is, as far as I can tell, the first to be included in a civil complaint against a design professional (or a contractor) where an owner has alleged breach of contract for failure to pursue and/or obtain LEED certification as required by the contract documents. Note that we will need to wait to review the actual contract language, including the scope of work, before making a more definitive assessment of the parties’ respective obligations and how and what might have gone wrong.

The second cause of action in Vertex is for breach of the construction contract (the AIA’s standard form of agreement between owner and contractor for a residential or small commercial project, the A105-2007, which was also attached as an exhibit). Both causes of action seek damages in excess of $50,000. According to the court’s docket, it appears that the architect has served an answer to the complaint that includes a counterclaim, and the sides are in the middle of exchanging written discovery.

The Cook County Circuit Court docket number for Bain v. Vertex Architects, LLC is 2010-L-012695. We’ll follow up if and when more details about the action become available. Until then, the suit should serve as an important reminder to architects, engineers, contractors, and owners that LEED-related risks are real and must be managed by, among other things, paying careful attention to the scope of work agreed to by contract.

At least in the commercial context, a jumping off point for plaintiffs who assert these types of claims could be the studies- many of which are promulgated by the USGBC and its constituents- that tout the higher leasing and purchasing figures for LEED-certified buildings. I have started to see the beginning of this inquiry in my own practice and recently pointed a client to the CoStar study in order to assist it in attempting to translate a lost LEED rating into a quantifiable dollar figure (litigation has not resulted – yet – in this particular matter).

It is obviously a bit different in the residential context and I do not believe there is a study comparable to CoStar’s out there just yet. However, I do agree with Mr. Anderson’s conclusions in the PB piece that the most critical threshold issue for green construction in either sector is contract language that clearly defines the parameters of a project’s anticipated green features. While litigation is always a possibility no matter the type of project, matching the parties’ expectations through tight contract language that clearly defines the term “green,” among other definitions, can help reduce the risk that sustainable design will increase the potential for a lawsuit or claim on a green building project.

• Green Lawsuits, What It Could Mean for Home Builders (PL)
• Critique of CoStar Study (gbNYC)