The Design and Construction Management Professional Reporter: February 2010

Inside this issue:

Project-Specific Insurance Advisory: Recent Problematic Trends in Project-Specific Professional Liability Insurance Programs

By David J. Hatem, PC

For the last three decades project owners, design professionals, project grantors (federal and state), construction lenders, design-builders and others have all recognized the benefits of a well-designed and structured project-specific professional liability insurance program (“P-S PLI Program”), especially in connection with insuring, mitigating, and managing professional liability risk, and in (a) aligning professional accountability with adequate insurance coverage and (b) expediting the cost-effective resolution of professional liability claims especially on projects involving substantial risk and construction values.

Recent New York Office Summary Judgment Victories

  • New York Court Grants Summary Judgment for Structural Engineer Against Adjoining Property Owner
  • New Jersey Court Grants Architect Summary Judgment Against General Contractor
  • New Jersey Court Grants Architect’s Summary Judgment Motion Against Adjoining Property Owner

California Supreme Court and New Mexico Court of Appeals Strictly Interpret the Defense Obligation Routinely Found in Indemnity Provisions

By Michelle R. Epstein, Esq.

The California Supreme Court and the New Mexico Court of Appeals recently issued opinions that broadly interpreted defense obligations routinely found in design professionals’ indemnity clauses. In summary, both courts compared the defense obligations in the professional services agreements to those found in insurance contracts where, regardless of liability or an ultimate duty to indemnify, the defense obligation is triggered by an allegation in a complaint that is an act encompassed within the parties’ scope in their contract.

Mississippi Court Affirms Decision in Favor of Architect Whose Design Did Not Meet OSHA Regulations

By Rita C. Mercado, Esq.

A Mississippi Appellate Court recently affirmed that a violation of the Occupational Safety and Health Administration (OSHA) regulations is not deemed negligence on the part of a design professional. Specifically, the court in Rogers v. Barlow Eddy Jenkins P.A. 2009 WL 2232226 (Miss.App. Jul. 28, 2009), held that the failure of an architect to design a ladder in compliance with OSHA’s dimensional guidelines does not, in of itself, prove that the architect’s design caused the roofing subcontractor’s accident.

Florida Court of Appeals Further Restricts Applicability of Limitation of Liability Provisions in Professional Services Contracts

By Peter C. Lenart, Esq.

Florida’s Third District Court of Appeals recently decided Witt v. La Gorce Country Club, Inc., 2009 WL 1606437. The decision prevented a professional geologist, who was sued in his individual capacity, from successfully claiming the benefit of a limitation of liability provision in his company’s contract. In the underlying litigation, the geologist was sued personally along with his company which was named in the action in its corporate capacity.

Substantive Differences Between New Jersey and New York Regarding Arbitrators’ Interpretation of the Issues to be Resolved

It is often considered that “alternative dispute resolution” is a valid alternative to ease the burden of the civil court system’s caseload. Recently, a New Jersey Appeals Court demonstrated the viability of arbitration in New Jersey by holding that a “deferential standard of judicial review,” applies to arbitrators’ interpretations of the issues submitted to them, similar to the federal model.

Hawaii Court Finds No Duty of Care to Seller

By Sa’adiyah Masoud, Esq.

In a recent case, a Federal District Court in Hawaii affirmed that consulting engineers providing services to a buyer in a business transaction do not typically have a duty of care to the seller in the transaction. This holding helps protect engineers and other similarly situated design professionals who may provide services to a buyer from a number of claims that disgruntled sellers may seek to allege.

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