2017 - a/e ProNet

On the Passing of David Shipley, a Founding Member of a/e ProNet

By Lynda

In mid-November, F. David Shipley passed away. He was 81 years old.

Dave ran a successful insurance brokerage–Shipley and Associates–for many years. Along the way, he and three colleagues co-founded a/e ProNet in 1988. Dave went on to serve as our Treasurer for more than two decades. Recently, he was deservedly named a Member Emeritus.

You can read about Dave’s long, productive, and fun-loving life in The Oregonian. He was a man who lived to serve his community, a priceless quality, and something the world could always use more of.

We are grateful for the time, effort and care he gave to our organization, and we’ll miss him very much. Our thoughts and prayers are with Dave’s lovely family.

a/e ProNet Welcomes New Associate Members

By Lynda

Next year, a/e ProNet will celebrate its 30th Anniversary. We’ve been around a long time, but we continue to be a dynamic organization. Now we’re proud to announce a new category of a/e ProNet membership.

Effective immediately, a/e ProNet’s members rolls will include Associate Members: invited attorneys who specialize in serving design professionals.

Associate Member information:

An Associate Member must be an attorney who specializes in providing services to design profession and companies providing professional liability insurance to design professionals
They must be involved in national and/or local design professional associations
They must be recommended by two members of a/e ProNet and complete an application
The application for membership and recommendations will be reviewed by the Membership Committee and approved by the board of directors before an invitation for membership can be extended
The Associate Member shall pay an annual membership fee
An Associate Member can attend all a/e ProNet meetings, receive all information distributed to the membership, and be listed on our website as an Associate Member

The Board of Directors has extended an invitation to the first two Associate Members: Kent Holland (Construction Risk, LLC) and Dave Ericksen (Severson & Werson). Both parties have been invited in recognition of their extensive work they have performed in support of a/e ProNet and on behalf of its members.

We’re looking forward to discovering the many ways this change will be to our benefit and help us to grow.

Richard Friedman to Speak at ProNet’s Fall Meeting

By Lynda

At the end of this month, a/e ProNet will hold its annual meeting in Chicago for our members, affiliates, and sponsors. ProNet has held these fall meetings for more than two decades, but the goal and capacity of the meeting continues to evolve to meet the climate of the industry. This year, we’re proud to host Richard Friedman, president of consulting firm Friedman & Partners as our guest speaker.

Richard has worked in and consulted for the A/E/C and environmental consulting industries for more than 25 years. Starting out in the trenches as an environmental consultant and business developer for Stone & Webster Engineering in Boston, Rich expanded his reach as the partner in charge of marketing and business development research, consulting and training for ZweigWhite. He also managed a variety of other projects involving strategic planning, mergers and acquisitions, and executive search. Since launching Friedman & Partners, he has worked with firms at all levels, from small niche consultants to large ENR 500 organizations. He’s also conducted hundreds of seminars and workshops for firms, design and environmental industry professional associations and venues, including AIA, SMPS, ACEC, AGC, NSPE, Build Boston/ArchitectureBoston Expo (ABX), WTS and Chief Executive Network. Friedman & Partners is a marketing and management consultancy serving the U.S. and Canadian AEC and environmental consulting industries.

On the final morning of our fall meeting, Richard will speak to our members on “Selling to Architects and Engineers: Market Research and Penetration Strategies that Work.”

Back to School: 2017 a/e ProNet Engineering Scholarship Winner

By Lynda

University students around the country are heading back to class. We’d like to recognize one of them today. In May, ACEC announced the winner of the annual a/e ProNet Engineering Scholarship as Emily Valenzuela.

Emily is working toward a master’s degree in civil and water resources engineering from Colorado State University. She is the winner of the first annual a/e ProNet Engineering Scholarship, a $5,000 award.

“Engineering is much more than the roof above our heads, it is the solid foundation of our society.” — Emily Valenzuela

Our organization sponsors two annual scholarships, one with the ACEC and one with the AIA. We are proud to support the next generation of architects and engineers as they pursue their education. You can find details about both awards, including lists of past winners, on the Scholarships page of our website.

Good luck this year, Emily!

ProNet Clients Among 2017 AIA Indiana Award Winners

By Lynda

Markle Branch Library of Huntington – City Township Public Library – krM Architecture+

Once again, we’re proud to see several of our clients on the list of winners at the AIA Indiana Excellence in Architecture Awards.

AXIS Architecture + Interiors

Honor Award – New Building – (Project cost greater than $5 million)

Project Name: Cummins LiveWell Center

Jury Comments:

The jury felt this project achieved a rich and simple elegance in both plan organization and exterior lines. We commend the connectivity between the indoor and outdoor environments, the palliative interiors, and use of calming tones and textures. The architectural team’s design response achieved the goal of challenging the stereotypical doctor’s office and exemplifies a holistic integration of architecture, building systems, function and site design.

Honor Award – Renovation / Addition

Project Name: Jarden Home Brands

Jury Comments:

This project creates a work environment successfully designed to foster collaboration and innovation. The design translates well from the initial concept sketches to the three-dimensional outcome with areas defined by varied use of color, texture, and architectural elements. Open collaborative workspace is balanced with quiet space for focused work. A courtyard and skylights enhance the experience for a seemingly large floor plate, bringing daylight to interior spaces. The client’s products are artfully integrated into the design in light fixtures and an art installation that serves a hallmark of the design.

Merit Award – Interior / Retrofit

Project Name: Business Furniture Corporation Office + Warehouse

Jury Comments:

The jury was particularly impressed with the design team’s expression of scale through forms, layers and textures. Marked attention was given to the importance of ceiling planes to define a space. The project clearly articulates a dynamic and collaborative work environment but also showcases the client’s passion for its product through its integration with the design.

Design Excellence

Project Name: Cummins LiveWell Center

Jury Comments:

The Cummins LiveWell Center garnered the jury’s unanimous support for the Design Excellence award. The beautifully proportioned, elegant building goes beyond ordinary expectations. The building’s transparency offers abundant, but managed views, to the mission within. The low-scale, “E” shaped building introduces daylight and affords occupants with views to the outdoors at every turn. Views to gardens in the courtyards and the landscape beyond support our biophilic connection to nature and embodies evidence-based, restorative concepts that support healing and wellness. Beautifully executed and well done.

arcDESIGN

Merit Award – Historic Restoration

Project Name: Indiana State University – Normal Hall

Jury Comments:

A respectful revival of a building allowed to badly deteriorated over time, and a commitment from the University to the future by restoring this oldest surviving building on-campus. The Jury admired that the design team studied archival photos to reproduce furniture and replace lost materials. The Jury applauds the restoration of the historic stained-glass dome as a centerpiece to celebrate this building. The addition articulates clearly the differentiation of new vs old building with a design reflective of its time, respectful of historic while clearly of a new century, and doesn’t compete but is compatible with original scale and materials. The outcome reflects patience with the process of restoring an old building where unexpected surprises were revealed through careful removal process. Congratulations – well-done!

Continue reading “ProNet Clients Among 2017 AIA Indiana Award Winners”

Benefit from Selecting the Right Professional Liability Broker

By Lynda

For design professionals, finding the right insurance broker can present a challenge. You need someone with ample experience handling the professional liability needs of architects and engineers, and who offers a wealth of value-added services. Only if your broker has a comprehensive understanding of what you and your firm are all about can he or she be of real use to you. Lacking this knowledge can leave your firm vulnerable in a shifting insurance marketplace. A good specialist broker is committed to investing the necessary time and resources to your account. They find you the best coverage for the best price, and they save you the considerable time it would take for you to do so on your own.

What is professional liability insurance and why is it important?

A professional liability (errors and omissions) insurance policy provides coverage to defend and indemnify a professional firm against claims alleging negligent acts, errors, or omissions in the performance of professional services.

Any project can give rise to a claim. Even if your firm employs an excellent risk management strategy, it is vulnerable to being named in a lawsuit. The cost of that defense can mount fast, even if your firm wasn’t in the wrong. A professional liability policy covers the cost of defense.

In the event that your firm is found negligent, and that the firm’s negligence gave rise to the claim in question, your professional liability policy will cover your firm for the damages you’re

legally obligated to pay, up to the policy limit. (Note: In most cases, defense costs erode the policy limit. Having adequate limits to cover both defense and indemnity is important.)

Why do I need a specialist insurance broker? Shouldn’t I be able to purchase my professional liability policy directly from an insurance company?

For architects and engineers, maintaining an active and adequate professional liability insurance policy is very often a legal requirement. And while a basic professional liability policy is straightforward enough for anyone to acquire, the insurance needs of design professionals are more complex than that.

The insurance industry is full of companies who want your business, but no two professional liability insurance carriers are exactly alike. Among the major differences are:

the size of policy limits offered;
whether multiyear policies are available;
underwriting appetites for types of engineering services;
and claims service.

Some companies require a 10-year loss history from design professionals, while others only require a five-year loss run. A specialist broker knows what the markets are doing, who the underwriters are, and how to present your firm in the best possible light. He or she will have understand each insurance company’s application and is quick to assist you in providing requested information. The cost of your insurance depends on this knowledge and attention to detail used on your behalf.

Here it should be noted that insurance companies often reward longevity. If your firm has been insured by a single company for a number of years and doesn’t have an especially adverse claims history, it’s likely that your premiums have been fair and endorsements (e.g., per project limit increases) have been easy to come by when needed. This does not mean that your current insurance company should be the only one to see your renewal application, however. A specialist broker understands the importance of approaching multiple markets periodically, either to reassure you that your policy is in the right hands or to grant you the opportunity to trade up.

Whether the market in a given year is hard or soft, a skilled professional liability insurance broker’s experience will benefit your firm. You need competent advice from a broker with the right perspective, both on your industry and the needs of your firm, as well as on the insurance marketplace as a whole.

This has been an excerpt of the January 2017 issue of ProNetwork News. Download the full free PDF version of Benefit from Selecting the Right Professional Liability Broker here.

About the Author

Audrey Camp is the Web & Social Media Consultant for a/e ProNet. She spent six years with a/e ProNet member IOA Insurance Services in California as a licensed account manager, specializing in the professional liability needs of architects and engineers. Today, Audrey works as a freelance writer living in Oslo, Norway. Her work has appeared in several literary magazines, journals and anthologies, and she is a founding member of the Oslo Writers’ League (OWL). She has also written for English-language Norwegian news sites and magazines. Most recently, Audrey co-authored two books—Startup Guide Oslo (Oct 2016) and Startup Guide Vienna (March 2017)—for a Danish company called Startup Everywhere, a process that inspired her appreciation for social entrepreneurship and intrapreneurship. Audrey has managed the a/e ProNet website, blog, social media presence and other publications since 2011.

Winners of 2017 a/e ProNet AIA Scholarships Announced

By Lynda

Each year, we partner with the AIA to present two $5,000 awards to architecture students who demonstrate a particular interest in the principles of management in architecture practice. We’re proud to announce that the following students have won the 2017 David W. Lakamp a/e ProNet Scholarship:

Emmanuel Cofie always had an eye for art and design. This desire led him to obtain a B.S. in Architecture from Florida A&M University (FAMU) in 2007. Subsequently, he landed a full-time position at an architecture firm in Florida. The job exposed him to team collaboration, the risks involved with poor communication, and the means by which stakeholders, with different interests, mitigate issues. Wanting a more technical education, Cofie enrolled in FAMU’s Construction Engineering Technology Program and completed the degree in 2016 with knowledge of how to plan out projects to suit the owner and minimize financial loss. While enrolled, he went on a missionary trip to Peru where he saw the effects of inequality and forced urbanization first-hand. It’s apparent that such education will be needed for a future design professional to solve such complex issues. This experience further strengthened his desire to study architecture at the graduate level. Cofie will start a two-year Master of Architecture (M.Arch) degree at the University of Michigan this fall.

Emily Wirt, NCIDQ, LEED GA, completed her Bachelor of Fine Arts with an emphasis in Interior Design from the University of Georgia in 2012. She is currently a first-year Master of Architecture candidate at the Georgia Institute of Technology. She is an active member of Georgia Tech’s American Institute of Architecture Students and Women in Architecture chapters. Prior to her graduate studies, Wirt worked as a commercial interior designer for four years in Atlanta and Shreveport, LA, primarily in the corporate design and healthcare sectors. Her design work at smaller local firms provided opportunities to manage design projects with sustainability and risk assessment at the forefront. She served as the main point of contact during the contract administration phases of several larger projects, and during this role, she learned the importance of clear communication between contractors, clients, and the design team to ensure a successful and cohesive project. To further her professional standing and commitment to sustainable management, she has also obtained her National Council for Interior Design Qualification (NCIDQ) certification and LEED Green Associate accreditation. In her graduate studies, Wirt strives to further her studies of innovative technologies in sustainable design in regards to risk assessment.

“The scholarship applicants this year demonstrated strengths in diversified areas within the submission requirements that made it challenging to select our winners. The scholarship winners however, stood out among the rest because not only did their essays address the practice management topic in an articulate to-the-point manner, but also the suggested solutions demonstrated clear understanding of best practices such as peer reviews and the value of accountability, where risk is reasonably managed and future potential liabilities mitigated and the value of communication that includes in person interactions. In addition to the essay responses, the jury found the letters of recommendation to be strong while the experiences documented in their resumes indicated a conscious initiative to be educated in the business aspect of architecture while at the same time having strong design firm experience.” You can read the full AIA Press Release here.

This year, the essay prompt revolved around overseas collaboration. Excerpts of the winners’ responses can be found here.

Started in 1990, the scholarship was renamed in 1999 for David W. Lakamp. Mr. Lakamp was a founder of a/e ProNet and a trusted advisor to the profession. He left behind a legacy of professionalism and integrity that set new standards in the field of insurance services. The jury for the 2017 David W. Lakamp a/e ProNet Scholarship includes: Thomas G. Coghlan, A. Lira Luis, AIA, Matthew Shoor, AIA, and Muriel Watkins. Read more about our scholarship programs for architects and engineers, including a list of past winners, on the a/e ProNet website.

If You Build It, They Will Sue: Condominium Projects – Part II

By Lynda

Continued from the August 2016 issue of ProNetwork News including an analysis of Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP, et al. and its impact on future court decisions.

IV. Important Contract Provisions

A. Indemnity, Indemnity, Indemnity!!!

In the real estate business the often-touted phrase is “location, location, location.” In the design and construction industry, the most important contract provision is INDEMNITY. Indemnity is an agreement to assume a specific liability in the event of a loss. It may mean a shifting of risk from one party to another. More often than not, it is the client saddling the design professional with an onerous indemnity provision. Many articles have already been written about addressing the client-drafted indemnity. Avoid an express duty to defend (and in California especially, negate this duty). Tie the indemnity obligation to a determination of negligence. However, in the context of agreeing to perform professional services on a condominium project, you must not only be wary of the indemnity provision imposing a contractual obligation on the design professional, but serious consideration should be given to obtaining express indemnity language from the client developer and/or the client developer’s contractor and subcontractors. Since the design professional may be sued directly by an HOA or individual unit owners, express indemnity running in favor of the design professional is equally important.

B. Waiver of Consequential Damages

These damages are the “indirect damages and expenses” claimed by plaintiff(s) allegedly relating to asserted design and construction defects. Often, consequential damages include damages relating to delays, loss of use, lost profits, etc. It is a balancing provision in that it should recognize, much like a limitation of liability (discussed further below), that there are relative risks and rewards for each party’s participation on the project. As was commonplace during the recent recession, some client developers pursued claims against design professionals and contractors for missed market opportunities to sell their individual units before the housing bubble burst. The design professional has no control over such market factors. A properly-worded, mutual waiver of consequential damages is an appropriate way to address this.

C. Limitation of Liability

Given the increased risk of being sued on a condominium project, a limitation of liability (overall cap) of the design professional from the client developer is essential. A limitation of liability provision can be tied to the amount of available insurance, the architect’s total fee, or some other amount as negotiated between the parties to the contract. The limitation of liability provision should be negotiated at arm’s length such that both parties have the opportunity to accept, reject or modify the provision.

This is an excerpt of the October 2016 issue of ProNetwork News. Download the full PDF of If You Build It, They Will Sue: Condominium Projects – Part II to continue reading. Along with further explanation of the relevance of The Beacon Case, the second in this two-part series provides an overview of several more important contract provisions, including: No Third-Party Beneficiaries, The Certification of Merit, and Provisions Requiring the Developer and Subsequent Owners to Include Maintenance Requirements and Manuals in CC&Rs and Purchase Agreements. As always, these newsletters are available to a/e ProNet clients the month they are published. If you’d like to take advantage of this value-added service, get in touch with your local a/e ProNet broker today.

About the Author

Trevor Resurreccion is a partner at Weil & Drage, and an experienced litigator representing architects, engineers, general contractors, subcontractors, and other members of the design and construction industry. Trevor has handled a wide variety of construction related cases, including claims for design errors and omissions, delays, cost overruns, mechanic’s liens, construction defects, as well as catastrophic personal injury and death claims. He received his undergraduate degree in Architecture with a concentration in construction management. Trevor’s background in the design and construction industry includes hands-on experience on construction projects, including construction administration for an international architectural firm on a high-profile project in Los Angeles and construction management for Georgetown University on a significant university project. As an attorney, he prides himself in his commitment to advocacy for his clients, small and large. He has experience in all aspects of litigation, including arbitrations, trials, and appeals. He is licensed to practice law in California and Nevada.

Indemnity Relief Coming to California Design Professionals

By Lynda

On April 27, 2017, Governor Jerry Brown signed Senate Bill 496 (“SB-496”) into law. SB-496 will significantly lessen the burden of indemnity provisions and the dreaded immediate duty to defend in both public and private contracts with design professionals. Efforts to obtain passage began several years ago and were spearheaded by the hard work of the American Council of Civil Engineering Companies, California Chapter (“ACEC-CA”) with the support of American Institute of Architects, California Chapter (“AIA-CA”), as well as member firms. Collins Collins Muir + Stewart LLP was involved with both ACEC-CA and AIA-CA in assisting with pushing the bill through.

Authored by state Senator Anthony Canella (R-Ceres), SB-496 significantly expands Civil Code section 2782.8 protections to add private contracts entered into by design professionals after January 1, 2018. Importantly, SB-496 limits the “duty to defend” to the comparative fault of the professional which puts both private contracts and public contracts on equal footing.

What does this mean in practical terms?

For all private contracts entered into by a design professional prior to January 1, 2018 (meaning those contracts without the protections of SB-496) that contain a provision obligating the design professional to indemnify and/or defend their client, the design professional could be on the hook for all of their client’s attorneys’ fees and costs by virtue of being sued, even if the design professional was ultimately found not to be at fault. For private and public contracts entered into after January 1, 2018, with the protections of SB-496, if the design professional is found to be 25% at fault, then the law provides that they would only be liable for 25% of the fees and costs of a party seeking contractual indemnity and defense reimbursement. If found 0% at fault, they would not be responsible for any of their client’s attorneys’ fees or costs.

Currently, there is no way to insure to cover the costs and exposure created by an immediate “duty to defend” provision because, though professional liability insurance is available to design professionals, it only covers damages that result from a design professional’s negligence. This bill is a fair compromise because it protects against the design professional’s uninsurable first-dollar defense indemnity obligation while allowing a client the ability to recover those costs and fees tied directly to the percentage of fault. Assuming the governor signs the bill which is expected, this is a big step in protecting design professionals from the harsh impact of indemnity provisions in future public and private contracts.

About the Authors

Justin D. Witzmann

Ryan P. Harley

Nothing contained in this article should be considered legal advice. Anyone who reads this article should consult with an attorney before acting on anything contained in this or any other article on legal matters, as facts and circumstances vary from case to case. This post was originally published as a newsletter by Collins Collins Muir + Stewart LLP in April 2017. It has been reposted with permission.