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CAO 99-25 ~ << . " CITY OF MIAMI BEACH OFFICE OF THE CITY ATTORNEY MEMORANDUM c.A.O. NO. 99-25 SUBJECT: Lawrence A. Levy Interim City Manager Mun-ay H. Dubbffi J 1/ I~ ..6V City Attorney //fI. 'ij'~ BASS MUSEUM TRACK LIGHTS C.M.O. NO. 1-11/99 TO: FROM: DATE: December 22, 1999 This legal opinion is prepared in response to City Manager Sergio Rodrigueis memorandum, dated November 29, 1999, requesting an opinion regarding a possible error and omission on the part of the- City's architect, Spillis Candela and Partners (SC&P), for the specifications for the track light fixtures required for the illumination of art relative to its work on the Bass Museum Renovation and Expansion Project (project). From the facts provided by the Administration, at the time of issuance of the bid for the construction contract for the Project (the Bid), specifications which anticipated track light fixtures were included in the Bid documents, as evidenced by the inclusion of the tracks themselves. However, quantities for said track light fixtures were not specified and, consequently, the successful bidder, Danville-Findorff, Inc. (DFI), did not include them in its bid. In mitigating this dispute, the City has informed SC&P that it was never informed, in writing, prior to the Bid award, that quantities for the track lights were not included in the Bid specifications/contract documents. The City and SC&P further agree that it was not the intention to include the track lights as part of the FF&E. The City alleges this matter to be an error and omission on the part of SC&P, or an error by DFI in addressing the bid documents. The cost of the track light fixtures for the Project, totalling approximately $55,280.00, must now necessariJ.y be included as a Change Order, and represents an increase to the overall Project budget. In its response to the City's allegations, SC&P acknowledges the absence of proper notification to the City that the track light fixtures were to be purchased directly from the supplier and outside of the DFI contract; hence the omission of same in the Bid specifications. SC&P contends that the reason quantities for track light fixtures were omitted was so that the City could purchase same outside the Bid, directly from the supplier, and therefore realize a cost savings. With said acknowledgement by SC&P, the instant matter carmot be viewed as an error and omission by , , , DFI, as it was only able to bid on what was specified in the Bid and, as stated, quantities for the track light fixtures were omitted. Additionally, pursuant to the City's directive to SC&P to provide the track light fixtures for the Project by whatever means appropriate, SC&P has issued proposal requests to both DFI and directly to the supplier (outside the DFI contract) to establish a cost for providing said fixtures. Said costs will remain a Change Order, representing an additional cost to the Project as it nears completion; however, it is likely that the City will obtain the best price possible for the track light fixtures by purchasing them outside the DFI contract and going directly to the supplier. The City contends that SC&P is responsible for absorbing the Change Order, representing the additional cost of the omitted track light fixtures. It relies on Section 2.7.1 of its Agreement with SC&P, stating as follows: 2.7.1 Responsibility for Claims and Liabilities Approval by the City shall not constitute nor be deemed a release of the responsibility and liability of the Architect, its employees, subcontractors, agents and consultants for the accuracy and competency of their designs, working drawings, specifications or other documents in the works; nor shall such approval be deemed to be an assumption of such responsibility by the City for a defect or omission in designs, working drawings, and specifications or other documents prepared by the Architect, its employees, subcontractors, agents and consultants... . SC&P contends that, since the Project will have the benefit of the light fixtures, the alleged omission adds value to the Project. Under Florida law, an owner carmot benefit from an omission so as to receive value, that if not for the omission, the owner would have paid for in the first place. Costs incurred that are "value added" have an established legal precedent under Florida law. Under the theory of unjust enrichment, an owner carmot benefit from an omission so as to receive value, that if not for the omission, the owner would have paid for in the first place. See Zaleznik v. Gulf Coast Roofin~ Co.. Inc., 576 So.2d 776, 778 (Fla. 2d DCA 1991); People's National Bank of Commerce v. First Union National Bank of Florida, 667 So.2d 876, 879 (Fla. 3d DCA 1996); W. R. Townsend Contractini. Inc. v. Jenses Civil Construction. Inc" 728 So.2d 297,303 (Fla. 1st DCA 1999); Swindell v. Crowson, 712 So.2d 1162, 1163 (Fla. 2d DCA 1998); Hiers v. Thomas, 458 So.2d 322 (Fla. 2d DCA 1984); Robert L. Weed. Architect. Inc. v. Hornin~, 33 So.2d 648. It would follow that if the track light fixtures were not included in the specifications prepared by SC&P and, consequently, not accounted for in the Bid, that the City would have to purchase the fixtures anyway. As they would benefit the City through the added value to the Project, under the theory of unjust enrichment, the City carmot benefit and/or receive value from an omission that it wold have paid for in the first place. 2 "" \ ~ The responsibility of the professional is limited to any premium costs incurred by the owner. SC&P has acknowledged its responsibility for said premium costs, and is therefore proceeding with obtaining the aforestated cost estimates for the purchase of the track light fixtures by the City. It is anticipated that by having the City buy the fixtures directly from the supplier, the need for any premium cost will be eliminated. t;-"- l1i conclusion, SC&P's contention is substantiated by Florida case law. The City would necessarily have to provide for the track light fixtures for the Project; therefore, it carmot benefit from this type of omission. Notwithstanding the preceding sentence, the City is not responsible for any premium or other additional cost(s) that may be incurred as a resUlt of this omission (and SC&P has acknowledged this). Should you have any questions, please feel free to contact me. RJA\kw P,IATTOIAGURICA0\99.2S.CAO cc: Mayra Diaz Buttacavoli, Assistant City Manager Jorge Chartrand, Capital Projects Coordinator , 3