In Miami Valley Fair Hous. Ctr., Inc. v. Campus Vill. Wright State, LLC, 2012 U.S. Dist. LEXIS 137922 (S.D. Ohio Sept. 26, 2012), the Miami Valley Fair Housing Center, Inc. (the "Owner") alleged that its developers, contractor and architect designed, built, and/or operated an apartment complex in a manner that failed to provide disabled individuals with full access to, and use of, the apartment complex facilities in violation of the Fair Housing Act ("FHA"), 42 U.S.C. 3601, et. seq.
The developer defendants raised cross claims against the architect for indemnity and contribution. The developer defendants' claims also incorporated breach of contract and negligence allegations against architect. The architect filed a motion to dismiss the developer cross claims arguing that the claims asserting derivative liability for violations of the FHA failed as a matter of law. The primary issue before the court was whether the FHA permitted "flow down" claims against third parties for asserting express or implied rights to indemnity or contribution. The Miami Valley court concluded that the FHA did not allow such claims.
The court granted the architect's motion to dismiss the developer defendants' cross-claims in their entirety because the breach of contract and negligence claims were merely reiterations of claims seeking indemnity and contribution for proven FHA violations.
IMPORTANT VIEWS: Owners and developers of real estate projects should be mindful of the Miami Valley decision even though it is not a published opinion, and thus does not establish a binding legal precedent in Ohio. Owners need to make sure that their design services contract establishes or preserves the Owner's rights to assert direct claims against the designers hired by the project's developer.
Categories: Accessibility, Design Negligence, Fair Housing Act, Indemnity