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Larryhd2

Larryhd2

Structural
Dec 10, 2004
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We provided the structural engineering on a new winery and the construction has just been completed.

Turns out the owner is now looking to go after the people they bought the land from because the site is in a high seismic region which resulted in higher construction cost. The Sds for the building was 1.15, which is high but not near the max of 1.93 in California. I don't know how they wouldn't have known... it seems to me their own diligence in the purchase was lacking.

They have asked for copies of our plans and calculations to give to their expert to review. I don't see how we can't give these to them since they paid for them. They could probably get copies through other means anyhow.

We are wondering whether we should notify our insurance company. This isn't a "claim" against us or even a "circumstance" per-se, but it's never good when attorneys get involved. We don't really want to notify them because of the risk of them jacking up our rates at renewal..... maybe we wait to see if a real "claim" comes??

Any suggestions?

 
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Wow, that's a first. I tell my clients all the time how to mitigate the seismic effects on their buildings. Not one yet has taken my advice..... however, they do complain about construction costs associated with not listening to my opinions.
 
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So they decide to sue after the project is complete? They bought a property, developed it and then realized they are over budget? My guess is, when the first lawsuit is dismissed, they will be looking to file another. Notify your insurance company, somebody is looking for a free lunch.
 
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I would offer them the plans. The calculations are not a part of your services (they are a tool to provide your paid-for services)
Your plans should clearly show the seismic design criteria anyway so the calculations wouldn't tell them anything new.

I would notify your insurance carrier (per WillisV above) - just to keep them in the loop.

 
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Hold the phone before you call anyone....

Do not notify your insurance carrier until you are notified of a claim. Your insurance is triggered on a "claims made" basis, so don't get them all excited that you might be working for litigious clients when the litigation probably has nothing to do with you.

This is a purchase "due diligence" issue between the current landowner and the former landowner. If no representations were made about the seismic classification by the former landowner, it probably won't go anywhere. If representations were made by the former landowner and those representations are wrong, then perhaps the current landowner was "harmed". That's for the lawyers to decide. Check YOUR contract for ownership of documents. You might be able to initially control what you give to the owner (plans/specs for construction only...no calcs, no admin file, etc.). If you gave up ownership of documents (hopefully you didn't) to your client, then you'll probably have to give them all of your work product. If you get a subpoena for documents from the other side, you'll have to honor it anyway.

Go through your file and clean it up. Make sure you don't have extraneous info in there and make sure you don't have drafts of reports or correspondence.
 
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When lawsuits are filed, lawyers like the shotgun approach, so you will be a target. Notify your insurance company and then wait. Unless you are indemnified, don't provide any further information.
 
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Ron, I'm not sure I agree with you totally on this. I do believe there is a "time" when it is prudent to contact your carrier. In this case, I guess I felt like the "owner" here was fishing for ammo against any and all who might have cost him $$.

In this case, asking for plans and calculations is either one of two things: 1) the owner needs "proof" that the building was in a high seismic area or....2) the owner wants to also look at the design and calculations (hiring a peer reviewer?) to see if the engineer over-designed and cost him $$.

In the second case the engineer might be eventually "blamed" and the concern is that if you wait too long to notify your carrier, you risk a situation where they might pull away from defending you because they had no chance to advise or respond to the situation.

But too early calling of your insurance, and too often calling, can be bad as well, I would agree.

 
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How does this involve you if you went by the IBC and the local seismic values? This should be between the owner and his realtor. This is ridiculous.

I trust that no contractual constraints were placed on you as the designer to keep these values to the absolute minimum...



Mike McCann
MMC Engineering
 
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JAE...you make a good point about the overdesign issue. Usually not valid, but would require defense, nonetheless. If the OP feels good about following a standard of care, it shouldn't be an issue as Mike noted.

 
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Thank you all for your responses. We have decided not to call our insurance carrier at this time.

In reading our policy we are required to notify them if we become "aware of a possible claim arising from a specific wrongful act in performing professional services". At this point in time nobody has accused us of any wrongful act, so I don't think there is any legal obligation on our part to make the call.

I think we may look into purging our files as Ron suggests..... prepare for the storm....
 
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If it comes to that, you should delete this thread too!

Good luck and I hope that pending shotgun blast doesn't come near you.
 
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I'd watch it. Getting rid of things as part of a standard process is fine. As soon as it looks like you're destroying information because of a perceived pending legal issue you start getting into thorny territory.
 
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Sometimes, depending on your insurance carrier, when you notify them, you are liable for the deductable; they open up a file on notification. Might be prudent to wait until you are notified, before you advise them... you're just speculating at this point.

I've often, over the course of 40 years, informed a client that something would be made available to them... not bothering to inform them that this would only happen with a court order... and only once has this been provided.

Dik

 
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We have dollar one defense meaning insurance pays for everything until judgement. We only pay our deductible if there is a settlement.

I've been doing this for 25 years with only one claim... and we were dismissed from that suit for lack of cause...
 
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Maybe it varies with location and insurance companies, but in my experience, early notification to an insurer is looked on favorably, whether a claim eventuates or not. I think you are already "aware of a possible claim", whether you are faultless or not.
 
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This is one of the few times I disagree with Ron as well - I agree totally with hokie66 above. As I said previously, to me this is a clear cut situation where filing a loss prevention notice with your carrier is prudent. I guess it depends on your carrier, but mine certainly encourages filing LPs and I have seen no major negative issue come of it regarding price increases etc if claims were not made.
 
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Maybe I am wrong, but instead of trying not to be sued, work with the owner and show the codes, loads, etc. Show that he could have found all that prior to starting construction, or even buying the land. Defend your work up front, and hopefully he will leave you out of it.
 
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