[CLC-Discussion] SB 286 - Limitations on Individual DesignProfessional Liability

Fri Apr 26 21:06:29 PDT 2013

While not entirely on point, but at least in the vein of "but wait, if that's true, then . . . ? ", I would suggest that we all take a moment to ponder the ramifications of these very recent legislative pronouncements in light of the obiter dictum from the Florida Supreme Court in Moransais: "Indeed, it is questionable whether a professional, such as a lawyer, could legally or ethically limit a client's remedies by contract in the same way that a manufacturer could do with a purchaser in a purely commercial setting."  Obviously, the important part of that statement is "ethically".  I would, at least at this point, suggest caution in advising a client what these recent pronouncements truly mean, . . . at least until "the paint fully dries".  Just a thought.

From: Gene Atwood <GAtwood at rtlaw.com>
To: Bruce Partington <bparting at cphlaw.com>; "Roberts, Hardy L." <hroberts at carltonfields.com>; Construction Law Discussion <clc-discussion at lists.flabarrpptl.org> 
Sent: Friday, April 26, 2013 2:41 PM
Subject: Re: [CLC-Discussion] SB 286 - Limitations on Individual DesignProfessional Liability

Good questions, Bruce.  Here is my two cents at this early stage.

558.0035(1)(a) provides: “The contract includes a prominent statement … that … an individual employee or agent may not be held individually liable for negligence.”  You singled out a partnership, limited partnership or proprietorship.  However, each of those entities could employ a professional that would meet the exemption definition.  It would be those employees and agents of the partnership that would be exempt from personal liability.  I agree that the partners or proprietor of the company would not escape liability, but the liability would be indirect, through the lack of any liability shield provided by these forms of business entities, rather than direct from the partners status as a professional.  

Thus, while John Smith might be an Architect/Partner in Design Partnership and his work might be the target of a lawsuit for economic damages, he would not be a named party even though he may be liable for the judgment debt of the partnership.  Through the same theory, he would be liable for the errors and omissions committed by his professional employee, John Doe, even though Mr. Smith did not perform the work as well. 

The changes that were not made support this interpretation. For instance, section 471.023(3) still provides that “Partnerships and all partners shall be jointly and severally liable for the negligence, misconduct, or wrongful acts committed by their agents, employees, or partners while acting in a professional capacity.”  It would appear that the corresponding sections to 471.023 in chapters 472, 481 and 492 would all require modification if the legislature were attempting to eliminate design professional liability for purely economic damages.

I agree that the inclusion of a sole proprietor in 558.035(2) is confusing at best.  

Gene Atwood | Shareholder
Rogers Towers, P.A. | 1301 Riverplace Blvd., Suite 1500 | Jacksonville, Florida 32207
Direct 904.346.5721 | GAtwood at rtlaw.com| www.rtlaw.com
Florida Bar Board Certified Construction Attorney
From:clc-discussion-bounces at lists.flabarrpptl.org [mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Bruce Partington
Sent: Friday, April 26, 2013 1:14 PM
To: Roberts, Hardy L.; Construction Law Discussion
Subject: Re: [CLC-Discussion] SB 286 - Limitations on Individual DesignProfessional Liability

Since we’ve all been thoroughly studying this for the last 25 hours (and busily forwarding it to all our design professional clients and those who contract with them), it seems to me that there is a conflict or ambiguity within the bill (or at least one).

On the one hand, it seeks to limit the individual responsibility of licensees who are acting as the agent or employee of a “business entity” -- but then includes within the definition of “business entity” both traditional liability limiting entities, but also “partnership, limited partnership, proprietorship, . . . .[and] self-employed individual.”  It seems to me that the statute can’t do much good in those instances due to the inherent liability under those other forms.  In other words, a sole proprietor who would be personally liable for ALL debts and obligations of the proprietorship would seem still to be liable since a proprietor does not employ himself or herself, and cannot be his/her own “agent.”

Or, would the statute be construed to essentially eliminate claims for “solely economic” damages against design professionals?  It’s not written that way, but that would seem the only alternative construction that would give some meaning or value to partnerships, sole proprietorships, and “self employed individual.”  But, given that this elimination of economic damages claims would have to be inferred run afoul of the access to courts provision of the Florida Constitution (despite the staff analysis).  

I’d welcome the thoughts of others on this and any other issues on the bill.

Bruce D. Partington
ClarkPartington
bpartington at cphlaw.com
Direct: 850-432-1399
Fax: 850-432-7340
*Board Certified in Construction Law

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From:clc-discussion-bounces at lists.flabarrpptl.org [mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Roberts, Hardy L.
Sent: Thursday, April 25, 2013 11:03 AM
To: 'Construction Law Discussion'
Subject: [CLC-Discussion] SB 286 - Limitations on Individual DesignProfessional Liability

CLC’ers,
For your information, I understand Governor Scott signed the attached bill into law yesterday.
Hardy

Hardy L. Roberts
Attorney at Law / Board Certified in Construction Law by the Florida Bar
4221 W. Boy Scout Blvd., Ste. 1000
Tampa, Florida  33607-5780 
Direct:  813.229.4105 | Fax:  813.229.4133

hroberts at carltonfields.com | http://www.carltonfields.com/ 
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