Architect Archives - a/e ProNet

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”

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.

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

By Lynda

Do architects owe a “duty of care” to the homeowners of a condominium project with whom the architects have no contractual privity? According to the California Supreme Court, they do. What does this mean in practical terms? The answer is that architects are now more than ever exposed to potential future claims and lawsuits brought by homeowners and the homeowners’ associations years after the project has been completed even where the architect’s design decisions are trumped by those of the project developer, and the architect’s role in the construction phase of the project is limited.

The purpose of this paper is to provide background on an architect’s potential liability to its client and third parties on condominium projects as well as guidance on how to prospectively address the concerns highlighted by a recent California Supreme Court decision and many other lawsuits in which architects have been sued by third parties. Specifically, we address the following topics: assessing your owner client, important contract provisions, and insurance issues. The intent is to provide a roadmap for architects in assessing their risks on condominium projects and a practical approach to addressing those risks. While it may not be possible to fully insulate architects from all risks, it is certainly a good practice to have a firm understanding of those risks and to address the risks up front. Benjamin Franklin is attributed with the statement: “In this world nothing can be said to be certain, except death and taxes.” For architects who design condominium projects, unfortunately, lawsuits should be added to that list. Continue reading “If You Build It, They Will Sue: Condominium Projects – Part I”

AIA Names Leddy Maytum Stacy Architects Nation’s Top Architecture Firm

By Lynda

pexels-photo-196642

Leddy Maytum Stacy Architects, an a/e ProNet client hailing from San Francisco, California, has received the coveted AIA Architecture Firm Award for 2017.

“Firm principals William Leddy, FAIA, Marsha Maytum, FAIA, and Richard Stacy, FAIA, began collaborating in 1983 and the belief that architecture is the synthesis of poetics, economics, technologies, and meaning has always been embedded in the firm’s culture. Dedicated to addressing issues of resource depletion, climate change, historic preservation, and social equity, LMSA and its leadership clearly demonstrate that architects can help their communities adapt to a complex and rapidly changing world. To that end, the firm’s proficiency in diverse building types – from affordable housing to the adaptive reuse of historic structures – has been recognized with more than 140 design awards and are only one of three firms to have ever received eight AIA COTE Top Ten awards.”

Founded in 2001 by principals Marsha Maytum, Bill Leddy and Richard Stacy, LMSA is well known in the region for its long list of modern, sustainable projects. This includes the Ed Roberts Campus in Berkeley and North Beach branch library, as well as multiple low-income apartment buildings in the Bay Area. LMSA’s Plaza Apartments and Rene Cazeneve Apartments house “formerly homeless residents who need on-site support services to try to rebuild their lives.”

As noted by SFGate.com, “In announcing the selection, the AIA praised Leddy Maytum Stacy for its ‘highly influential work that advances issues of social consciousness and environmental responsibility.’ Only two other San Francisco-based firms have received the national firm award in the past 45 years: EHDD in 1986 and Gensler in 2000.”

LMSA has consistently ranked among the Top 50 firms each year since 2011. It considers itself “a teaching practice committed to developing complete, well-rounded architects, leaders in the profession and effective global citizens.” Read more in Architect Magazine.

Congratulations to Leddy Maytum Stacy Architects on this honor from the AIA! Your commitment to social consciousness and environmental responsibility is an inspiration.

Shout-out Credit

Leslie Pancoast, CIC, RPLU
Vice President IOA Insurance Services – Pleasanton, CA
Email: Leslie.Pancoast@ioausa.com / Phone: 925-416-7862

Design Professionals and the Give-and-Take of “Standard Contracts”

By Lynda

The word standard implies many things. A bar to be cleared; a rubric to be followed. But for design professionals, the word becomes tricky when applied to contracts. Project owners often want to keep things simple by requiring so-called Standard Contracts for all parties. This is a problem for architects and engineers, especially from an insurance perspective.

Construction contracts cause problems for design professionals.

The following are a few Frequently Asked Questions we see from architects and engineers on this issue:

My project Owner insists on using their own contract for hiring my professional services. They are adamant this is a Standard Contract. How should I respond?

There is no such thing as a Standard Contract. Be sure to read each contract submitted by your clients carefully. You need to understand both the client’s expectations and your firm’s rights and responsibilities. It is a good idea to have all owner-drafted agreements reviewed by your attorney and/or insurance broker. This will help to determine whether you are accepting responsibility beyond what common law would hold you to in the absence of the agreement. If, for example, you agree to accountability beyond the protection afforded by your professional liability insurance, that’s a problem.

When I perform professional services for a Contractor in lieu of an Owner, should I be concerned?

Yes. Construction contracts are not meant to be used in this arrangement; they are not designed to meet the needs of the design professional.

What are some of the problems with using “construction contracts” for design services?

Construction contracts are problematic for design professionals. A General Contractor’s contract with a project Owner includes certain requirements (e.g. means, methods, procedures, sequences, safety, etc.). These requirements trickle down to construction subcontractors the verbiage of construction contracts. Beyond that, none of these requirements meet the test of what a design professional should required to do on the same job.

Contract document libraries available via the AIA and EJCDC can be a good place for design professionals to begin. These are standard in the sense that they are templates. However, it’s still important to seek individualized guidance from your attorney and/or insurance broker.

What are some of the other problems with utilizing “construction contracts” for design services?

Most construction contracts contain warranties/guarantees, and some have performance standards. To our knowledge, all professional liability insurance policies for design professionals exclude coverage for warranties/guarantees and (likely) performance standards. Remember: if you commit your design firm to more responsibility than the law expects of you, your insurance policy cannot protect you the way that it should.

We hope you’ve found this helpful. As always, be sure to contact your local a/e ProNet broker if you have further questions.

Demanding General Contractors and How to Meet Them Halfway

By Lynda

Some of the most frequently asked questions we hear are triggered by the disparities between the insurance coverage available to design professionals and the demands made for coverage by general contractors and their standard contracts.

This is a nuanced area, and you should call your local a/e ProNet broker if you have specific questions. In the meantime, here are a few quick answers to the biggest FAQs concerning this issue:

Is it wise of General Contractors to require professional subconsultants to sign their usual sub-contract form?

No. Contractors that require the use of the same contract form used for construction sub-contractors may unwittingly void the precise coverage they are seeking from their design professional. Professional Liability (Errors & Omissions, or E&O) policies for design professionals typically exclude warranties and guarantees, which are generally an integral part of construction sub-contracts. If the design firm “agrees” to the warranties and guarantees or any other responsibility excluded by their professional liability policy, the design firm will be assuming the defense costs and payment obligations if an award is granted by the courts.

The General Contractor has requested to be named as an “Additional Insured” on my professional liability policy. Can I accommodate this request?

It is not a good idea to name the contractor as an additional insured in the sub-consultant’s design E&O policy, because an “Insured vs Insured” exclusion exists in virtually all design E&O policies. If the contractor believes he has a cause of action against his subconsultant design firm, this exclusion will eliminate coverage for both the contractor and the design firm.

How can the General Contractor protect themselves?

The General Contractor may purchase Contractor’s Professional Liability insurance. This will protect the General Contractor from vicarious liability claims from third parties and also solves the problem of the “Insured vs Insured” exclusion that would apply if the contractor brings an action against the subconsultant design firm, when named as an additional insured. Another benefit is a separate set of insurance limits. The General Contractor would have their own set of insurance limits that would not be subject to dilution or reduction from other claimants against the design professional’s E&O policy covering their general practice.

Why would the General Contractor need Professional Liability coverage?

Several reasons:

The General Contractor has the same “vicarious liability” for the negligent acts, errors or omissions of their professional subconsultants as they do for the non-professional subcontractors.

The General Contractor cannot rely solely on the hold harmless indemnity clause in the contract document. The hold harmless may not be enforceable in certain jurisdictions because of the language of the indemnity clause.

The subconsultant may not have sufficient insurance or their policy limits may be reduced or exhausted from other claims.

The subconsultant’s policies may be cancelled by the carrier giving notice or for non-payment of premiums. The General Contractor is then left with a false sense of security if they rely on the general liability insurance of the subconsultant, which excludes professional design activities and responsibilities.

Meeting halfway, in this case, really involves helping everyone acquire appropriate coverage. If you are a General Contractor in need of Professional Liability (E&O) insurance, or if you are a design professional who needs someone to explain all this to a General Contractor demanding such ill-advised insurance/contract decisions, please don’t hesitate to call on us.

More answers to Frequently Asked Questions can be found on our FAQ page.

Certificates of Insurance: Why You Can’t Always Have It Your Way

By Lynda

Design professionals are often asked by their clients to sign contracts that include comprehensive—sometimes unreasonable—insurance requirements and indemnification terms. These are usually drafted with the goal of protecting owners, clients, contractors, or other project participants. But how does this work when the required coverages aren’t found in the commercial insurance marketplace?

Certificates of insurance (COIs)—which are also often requested in those professional service contracts—provide summaries or verification of current coverage, including policy effective dates, insurers, and certain policy limits. A certificate gives a snapshot to the requestor (usually known as the certificate holder) for informational purposes. It’s important to understand that in no way does a certificate endorse, amend, alter, or extend coverage; nor does it act as a contract. Certificates are often provided using a set of industry standard forms produced by ACORD (formally known as the Association for Cooperative Operations Research and Development), which indicate:

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS ON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE REPORTED BY THE POLICIES DESCRIBED BELOW.

Issuers of COIs generally strive to accurately reflect the insurance policies that are in effect, but those who are relying on the forms need to keep in mind that it’s virtually impossible to summarize an insurance policy of over a hundred pages in a form that contains a few boxes. Adding to this, those who are issuing insurance certificates often struggle as they try to confirm in a COI that specific and detailed contractual requirements are—or aren’t—being met.

One common challenge is meeting a request that an insurer provide notice of a policy’s cancellation to the insured’s clients. To do so, the insurer would need to track all such requirements for all insureds for the duration of each contractual requirement—which may even be unspecified. With this in mind, ACORD made changes in 2010 to clarify that insurers’ notification duties are as defined in the insurance policy, not in the professional services contract.

Generally, courts agree that a certificate of insurance is not a contract. One fundamental reason is that no consideration—or payment—is given by the certificate holder to the issuer. However, there is a duty to make accurate representations within the confines of the overall system. To consider this, we’ll review a few recent cases interpreting the obligations for COIs and their issuers. Continue reading “Certificates of Insurance: Why You Can’t Always Have It Your Way”

Farm-to-Table Community–The Cannery–Wins Gold Nugget Award

By Lynda

The Cannery–a master-planned, “farm-to-table” community in Davis, California featuring neighborhoods joined by beautiful sets of trails and bike paths–has received the Gold Nugget Award for the Best Residential Housing Community of the Year. Congratulations to a/e ProNet client Jeffrey DeMure + Associates, an integral part of the outstanding team of design professionals responsible for the win!

Shout-out Credit:

Leslie Pancoast, CIC, RPLU
Managing Partner
IOA Insurance Services – Pleasanton, CA
Email: Leslie.Pancoast@ioausa.com / Phone: 925-416-7862