Construction Law Today : Construction Lawyer & Attorney : Joshua Glazov : Design Build Contracts, Construction Bankruptcy

According to the article Minnesota Sues Engineering Firm, Alleges Faulty Analysis of I-35W Bridge by Bill Salisbury at TwinCities.com, the State of Minnesota is suing for defective inspection and analysis of the I-35W bridge that collapsed two years ago.  The state is suing URS Corp., the engineering firm the state hired to inspect and report on the condition of the bridge.


This past Wednesday the State filed a Complaint Complaint against the engineer in Hennepin County District Court alleging claims for:

• Breach of contract - failure to adequately inspect, analyze, and evaluate the structural condition of the bridge under contracts with the State to provide those services

 

• Negligence - failure to comply with the engineering standard of care in inspecting, analyzing, and evaluating the structural condition of the bridge that, in part, caused the bridge collapse

• Statutory Reimbursement - seeking reimbursement of money the State has paid to collapse survivors out of a special fund established by the Minnesota Legislature

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In recent post, Florida Court Says Limitation of Liability In Consultant's Contract Is Unenforceable Against Individual Consultant Part -1, we talked about the recent Florida case on limitations of liability in a consultant's professional services contract - Witt v. La Gorce Country Club, Inc.   In that case, Florida's Third District Court of Appeal held that an individual consultant can't enforce the limitation of liability in his design firm's design services contract against the negligence claims of a dissatisfied client.  Today we'll talk about how that case could affect you if you're:

• An engineer, architect, other design professional, one of their insurers, or one of their lenders
  
• A prime contractor or subcontractor
• An owner
• A construction lender lending money to an owner
  

How Could This Case Affect You?

• If you're an engineer, architect, or other design professional.  This case is bad for you.  It re-affirms and expands the Florida Supreme Court's 1999 decision in Moransais v. Heathman.  That case says, among other things, that your professional firm can't contractually limit its liability for professional malpractice.  Under this new case, you can't limit your individual liability either.
  
  
Your insurers aren't going to like this case either.  If your firm has professional errors and omission liability insurance, the policy probably also covers you individually as an insured too.  This is one more liability you won't be able to contractually limit.  That increases your insurer's risk.  And that usually prompts your insurance underwriters to raise your premiums.

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Yesterday, Florida's Third District Court of Appeals sitting in Miami issued their opinion in Witt v. La Gorce Country Club, Inc. holding that a limitation of liability in a consultant's professional services contract is unenforceable.

The Backstory

La Gorce Country Club, Inc. (the "owner") wanted to improve the irrigation of their golf course using reverse osmosis.  They hired the geology firm of Gerhardt M. Witt and Associates, Inc. (the "consulting firm") to consult on designing and installing a reverse osmosis system.  Consulting firm principal, Gerhardt Witt (the "individual consultant"), personally provided the consulting firm's services to the owner.


The consulting contract between the consulting firm and the owner included a limitation of liability clause limiting the consulting firm's liability, not just for breach of the consulting contract, but for other, non-contractual claims as well (e.g., professional malpractice, a/k/a negligently providing professional services.  Here's the entire limitation of liability:

In recognition of the relative risks and benefits of the project to both the owner and the consulting firm, the risks have been allocated such that the owner agrees, to the fullest extent permitted by law, to limit the liability of the consulting firm and its subconsultants to the total dollar amount of the approved portions of the scope for the project for any and all claims, losses, costs, damages of any nature whatsoever or claims expenses from any cause or causes, so that the total aggregate liability of the consulting firm and its subconsultants to all those named shall not exceed the total dollar amount of the approved portions of the Scope or the consultant's total fee for services rendered on this project, whichever is greater. Such claims and causes include, but are not limited to, negligence, professional errors or omissions, strict liability, breach of contract or warranty.

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