## Facts

- The City of Seattle owned the Seattle Monorail System and contracted with Seattle Monorail Services Joint Venture (SMS) to maintain and exclusively operate it.
- SMS was required to obtain property insurance for the monorail system and purchased a fire policy from Affiliated FM Insurance Company (AFM).
- Separately, the City contracted with LTK Consulting Services, Inc. (LTK), an engineering firm, to examine the monorail system and recommend and make repairs.
- A fire occurred on a monorail car during operation, allegedly caused by an electrical problem, resulting in extensive physical damage.
- AFM paid SMS more than $3 million for the fire loss and, as SMS’s subrogee, sued LTK for negligence.
- AFM alleged LTK provided negligent design or repair recommendations regarding the monorail’s electrical grounding system that created or failed to correct a dangerous condition leading to the fire.
- In federal court, the Ninth Circuit certified questions to the Washington Supreme Court regarding whether Washington law recognized a tort duty owed by LTK to SMS/AFM in the absence of contractual privity.

## Issues

1. Whether an engineering firm providing professional services to a system’s owner owes a tort duty of reasonable care to a separate operator/maintainer (and its subrogated insurer) for foreseeable physical damage to the system, despite lack of contractual privity.
2. Whether Washington’s independent duty doctrine bars such negligence claims, or instead permits them when the alleged loss is physical property damage rather than purely economic loss.

## Decision

- The Washington Supreme Court answered the certified questions by recognizing an independent tort duty of reasonable care owed by LTK to SMS (and thus AFM as subrogee) with respect to risks of physical damage to the monorail.
- The court held that Washington’s independent duty doctrine did not bar AFM’s negligence claim because the alleged harm was physical property damage and the duty arose from common-law negligence principles, not solely from contract.
- The court’s answer permitted the negligence claim in principle, leaving case-specific questions (such as causation and timeliness) for the federal proceedings.

## Legal Principles

- A design professional who undertakes engineering services assumes a duty to exercise reasonable care in performing those services as to foreseeable risks of physical harm to persons or property.
- The absence of contractual privity does not preclude a negligence duty when the professional services foreseeably and directly implicate the safety and physical integrity of the property at issue.
- Washington’s independent duty doctrine allows tort claims when the defendant is alleged to have breached a duty imposed by law; it is not limited to the contracting parties’ expectations and is not displaced by contract where the claim seeks recovery for physical property damage.

## Conclusion

Washington law recognizes that engineers and similar professionals may be liable in negligence to noncontracting parties for foreseeable physical property damage arising from their services, because the duty of reasonable care is imposed by common law independent of contractual obligations.


Affiliated FM Ins. Co. v. LTK Consulting Servs., Inc., 243 P.3d 521 (Wash. 2010)