Current Events Archives

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.

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.

a/e ProNet Holds Annual Spring Meeting in Arizona

By Lynda

For the last few sunny days, a/e ProNet members from across the country have gathered in Scottsdale, Arizona for our annual Spring Meeting (March 1-3). a/e ProNet brokers are independent. Technically, we operate as competitors. Membership is by invitation only. We come together voluntarily as recognized leaders in our industry, meeting the insurance needs of architects and engineers. Our combined premium volume, experience, and national reach make our meetings an attractive target for insurance companies, premium finance companies, and other professionals. With our two annual meetings, we keep our fingers on the pulse of the insurance industry and advocate for our clients.

The Spring Meeting

The purpose of our Spring meeting has changed over the last three decades. Invited representatives from the companies and industries mentioned above present to the group on educational topics. This year, attorney David Ericksen of Severson & Werson in San Francisco also organized a series of five panel discussions:

Non-Traditional Project Delivery Methods
Cyber Communication Conundrums
The Prime/Sub Team: Roles, Responsibilities & Risks
Contract and Claims Connections
Material Transparency & Building Green

Ericksen staffed these panels with underwriters, claims adjusters, etc. from companies like Victor O. Schinnerer, AXIS, Hanover, RLI, Beazley, and several other a/e ProNet sponsors. The panel environment increases the awareness of each company regarding their competitors’ products and services. As well, it gives our members a quick, comprehensive understanding of the market’s overall perspective on these issues. Continue reading “a/e ProNet Holds Annual Spring Meeting in Arizona”

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

a/e ProNet’s Fall Meeting to Commence in Chicago

By Lynda

Chicago - a/e ProNet Fall Meeting Location — a/e ProNet meets in Chicago each autumn

This week, a/e ProNet’s membership will gather in Chicago for the annual fall meeting (September 28-30, 2016). It’s an opportunity for the members to exchange insights about the climate of the design industry, broadening each broker’s individual knowledge base.

Established in 1988, a/e ProNet represents a combined annual professional liability premium volume exceeding $300 million. For this reason, representatives from the top tier professional liability insurance providers are eager to present to the group.

What Happens at the Meeting?

A dozen insurance companies are scheduled to present this fall, including: Beazley, Victor O. Schinnerer, Liberty, Travelers and Arch. These presentations update the membership on regional and national insurance trends. Hearing about real life claims scenarios, legal precedents and new policy/endorsement offerings equips our members to do their jobs well. The underwriters are eager for feedback on their programs and changes. a/e ProNet’s members actively advocate for their own clients during this portion of the meeting.

Members will also attend a reception one evening at the Driehaus Museum, just off Chicago’s Miracle Mile. This exquisitely restored 19th century mansion is a must-visit for lovers of Gilded Age architecture and art. Representatives from major design industry organizations, like the AIA and NSPE, are also invited to attend.

To close the conference, Douglas J. Palandech, Esq. of Chicago law firm Foran Glennon will present on the Fiduciary Liability Exposure of Design Professionals. These presentations often turn into articles for one of ProNet’s publications. Don’t miss out! Follow us on Twitter and/or LinkedIn for updates.

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