Affiliates Archives - a/e ProNet

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!

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.

SmartRisk Checklist Can Help Your Firm Shore Up Cybersecurity

By Lynda

Architecture and engineering firms are still learning how to cope with a growing cybersecurity threat. According to this year’s Global Application and Network Security Report from Radware, nearly half of all companies experienced a cyber ransomware attack in 2016. Vulnerability to loss of personal data, exposure of sensitive or proprietary information, etc., is also on the rise. Tim Corbett of SmartRisk LLC, a longtime affiliate of a/e ProNet, has recently analyzed the report findings. He writes that the gravest irony is that while “Employees are the first line of defense” against cyberattacks, they are also a company’s “greatest cyber security weakness.”

Employees’ personal habits regarding company data and digital interactions open doors for hackers, viruses, and the siphoning of information. If your employees aren’t aware of basic threats and/or best practices regarding cybersecurity, your firm is more likely to lose out. The costs of these attacks can be severe. They are also avoidable. SmartRisk’s post recommends regular and up-to-date cybersecurity trainings for your firm “[t]o obtain a broad understanding, and buy-in from the entire organization.”

Arm yourself with SmartRisk’s Checklist

According to SmartRisk, cybersecurity training should take place annually. Corbett offers a checklist for these trainings. Remember to include “all members of the organization, including senior management… so they are knowledgeable of recent trends, monitoring methods, and controls used to prevent the installation of malicious code on the organization’s computer systems.” He also recommends making cybersecurity training a standard protocol for new hires. It’s probably a good idea, as well, to encourage your IT department to be accessible for even basic questions on cybersecurity. Demystifying the response to the threat will empower your employees to be proactive in protecting the company’s interests.

October is Cybersecurity Awareness Month, so you can find a/e ProNet’s past posts on related issues here:

Federal Trade Commission Releases How-To Cybersecurity Guide (Oct 2016)

Cyber Security Awareness & Last Week’s DDOS Hack (Oct 2015)

As always, if you have further questions, please contact your a/e ProNet broker.

Indemnification Clause Templates for Architects & Engineers

By Lynda

We’ve posted several times about the confusion surrounding so-called “standard contracts,” as well as the most commonly misunderstood clauses in design professional contracts. When reviewing a new contract for the first time, it can be helpful to know what sound contract language looks like. In February, we published an issue of ProNetwork News titled Template of Reasonable Contract Clauses for Design Professionals. In it, author Kent Holland of ConstructionRisk, LLC lays out 16 templates to help architects and engineers deal with contract review and negotiation.

The following is an excerpt of the Indemnification clause portion of the newsletter, including six different templates for this deceptively complex contractual requirement:

In the examples provided below, some include an obligation to indemnify a client for reasonable attorneys fees and defense costs. To the extent the a/e is required to pay attorneys fees for its client only because it obligated itself do so by the indemnification clause (i.e., attorneys fees would not be imposed on the a/e by a court under common or law or statute), then these costs will not be covered by insurance. The contractual liability exclusion will bar their recovery.

Sample 1:

Consultant shall indemnify and hold harmless the Client, its officers, directors, employees, from and against those liabilities, damages and costs that Client is legally obligated to pay as a result of the death or bodily injury to any person or the destruction or damage to any property, to the extent caused by the willful misconduct, negligent act, error or omission of the Consultant or anyone for whom the Consultant is legally responsible, subject to any limitations of liability contained in this Agreement. Consultant will reimburse Client for reasonable defense costs for claims arising out of Consultant’s professional negligence based on the percentage of Consultant’s liability.

Sample 2: For California contracts must add that there is no duty to defend:

Consultant shall indemnify and hold harmless (but not defend) the Client, its officers, directors, employees, from and against those liabilities, damages and costs that Client is legally obligated to pay as a result of the death or bodily injury to any person or the destruction or damage to any property, to the extent caused by the willful misconduct, negligent act, error or omission of the Consultant or anyone for whom the Consultant is legally responsible, subject to any limitations of liability contained in this Agreement. Consultant will reimburse Client for reasonable defense costs for claims arising out of Consultant’s professional negligence based on the percentage of Consultant’s liability.

Continue reading “Indemnification Clause Templates for Architects & Engineers”

Two a/e ProNet Clients Win AIA Indiana Design Awards

By Lynda

Normal Hall in the evening shortly before unveiling. Photo credit: arcDESIGN

Last month, AIA Indiana announced the winners of their annual awards. Happily, a couple of familiar names were among the group.

ONE 10 STUDIO Architects came away with two awards. The first was a Merit Award (Preservation / Adaptive Reuse / Reservation) for the Marion County Public Defender Agency project.

Jury Comments:

Though entered as an adaptive reuse, this project was the strongest interior as well. A small number of elements (red doors, wood ceiling panels, white walls) are employed to create spaces that elevate the program – a public defender’s agency. The new systems are clearly articulated and juxtaposed with the historic shell that contains them.

ONE 10 STUDIO also achieved a Citation Award – New Construction (Project cost greater than $1 million) for their Reliant Partners project.

Jury Comments:

This small commercial building is expressed as a simple, wood frame pavilion placed upon a masonry plinth. This strategy allows the lower level bank to appear (appropriately) secure, while allowing the upper level office space to be airy and filled with daylight. The scale of the building appears to complement the neighborhood without copying the neighbors.

Also honored with a Citation Award (Preservation / Adaptive Reuse / Renovation) was arcDESIGN for their project at Indiana State University Normal Hall.

Jury Comments:

This project lovingly restores a series of public spaces lost and hidden by years of ill-conceived renovations. The preservation component of the project was thoroughly researched and painstakingly executed – recapturing the grandeur of this academic building. The work was very clearly communicated allowing the extent of the renovation to be completely understood.

Congratulations to all the Indiana design firms who won! And good luck going forward.

Shout-out Credit:

Holly Gill-Gaither, CIC
Agent, Professional Liability
Walker & Associates
Email: holly@walkeragency.com / Phone:317-759-9320