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Sorry, but for claims involving design negligence, corporate entities offer no liability protection

 

Richard:

 

sorry this is not true

 

yes, the corporate veil can be pierced

but it is wrong to say "no liability protection"

 

Lew

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7 hours ago, Richard_Morrison said:

Sorry, but for claims involving design negligence, corporate entities offer no liability protection.

 According to our liability and contracts law attorney and at least ten others in my state I talked to it most certainly does. As I said, this law is VERY convoluted changing all the time not only by statutes, mainly state, but also case law. In the corporate friendly states where judges vs jury's determine the outcome, it is VERY difficult to pierce.  Alot also depends on how it's structured. For example, some states like them and ours allow Series LLCs...Put your assets in a corporate friendly state as big brother, series where you practice...In most states, where the error was practiced tries the case better protecting corporate. Alot of companies do that. We have two entities, one design, one build. 

 

I incorporated myself, it was easy for only $160/yr a no brainier. It' like having a ghost of a person that I insure mainly for personal liability if someone gets injured from a design E&O. Some Real Estate investors do this for every flip/rental. At most Secretary Of States a "Resident Agent" that can be anyone is public knowledge not company owners so you can hide, even better within a land trust. An internal Operating Agree(OP) in a multi-member offers the best protection since there are more split assets but, the members have to be "active"(not an inactive spouse....etc) vs sole propriety. If you walk into court as Sole Proprietor even insured your a much easier asset target than the above. Only issues are lending, banks want personal liability, some won't even lend to entities even though I include mine to build credit. I personally have to take liability for my entity there. Other, you can't take contractors to district court without an attorney. We just got out small claims with a client that failed to pay thats not an issue if it's under $4000 here, we don't leverage clients past $2K.

 

The only case your probably right is for complete negligence, where you acted as an unlicensed PE for example, and the entire building collapsed. In that case, no insurance or entity will protect. Most don't read insurance polices and they are convoluted and vague, not relieving every E&O situation so, if it fails, having an entity and other structured forms of asset protection is best. Also, we see enough tax breaks like no state & self-employment depending on how we file as s/c corps, as one to pay the entity fees many times. Its best when it comes to legal and accounting advice to seek an attorney and CPA in your state. 

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14 hours ago, RL-inc said:

My long winded way around to this point is I feel like anyone who is going to offer design services should have had some sort of field experience so they can understand that no matter what we draw or what jurisdiction stamps it- some poor guy has to put it together.;)

 

Consider yourself lucky since this is one of the few industries left building trades/any contractors can work themselves up through the ranks and take a design seat. Others require a science 4-yr degree, where there are Integrated Product Teams and sign-off procedures where trades have inputs to drawing releases only, I practice, however, when it comes to complex building science most trades are not educated nor trained and that includes many drafting functions. Where things have gone in other industries is auto-design requiring more and more complex IT skills on top of science most won't understand. My energy and moisture/mold models are hard to understand & interpret but, my quality is much higher than most. 

 

I do agree with your intent that most designers/Architects don't coordinate well with builders/trades. Don't have to be a jack of all trades to do that. That is the problem with the separation between designers and builders not integrated under the same roof. Builder's can't afford to pay designers to work out and define all their specific build criteria. Most don't realize how much that leans out the cost of their builds to pay for better upfront design-build-inspection processes. Again, today's computers have made it easier to look at build sequences, including estimating, reducing hazards, design E&O, and planning making sure the design is build process robust  lowering the need for timely communication with alot of trades, one good PM on a design-team could suffice. In alot of large commercial thats exactly what they do take one good production guy co-locate them with designers requiring coordnation. 

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My intent was not to imply that field experience is a substitute for quality design/drafting training, but to suggest what I believe is the best way to understand how the information that we provide in our CD's is perceived and implemented on the jobsite.

 

I have met project managers that can schedule subs, verify change orders, deal with HOA's, etc...but don't understand the basic structural aspects of residential construction.

 

On the flip side one of the main things that fueled my fire to start my design business was dealing with "formally trained" architects that I had to bring to the site and explain why what they drew wouldn't work and then show them how we could fix it.

(That, coupled with CA's ability to create the 3d model that allows us to find problem areas that wouldn't be readily seen in 2d line drawings and fully understand the entire structure,made the transition into the design field an exciting and positive move.)

 

Again- I'm not trying to press an argument or state that the way I evolved my business is the right way.

Just trying to pass on some experience that has been valuable to me.

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It 's a catch 22. Most don't realize drafting or engineering, or a better word, "design-to-cost" realizes the build recurring cost processes. In commercial or product manufacturing that is as high an order of business "Lean Production" Just in Time" etc.....as a PE signing off non-recurring cost structures design what typically most Architects/drafters value most as seen in this thread. Now after lots of companies leaning out production and cases where conservative PEs over designed/cost, if you don't know production and can't communicate it well from your design seat, just like w/a PE or scientist, you get fired. PE over designing structures with positive margins past 1 pushes lots of cost to production & can be unnecessary PE E&O..  Most inclduing code is 2+. I've seen high load designs do fine @ .5. The smart competitive markets will move/grow this direction, whomever provides higher quality at lower cost wins. The synergy for that is the multi-role design-build seat. Inspection is getting that way more and more moving to design in 3D (Rapid Protoype would be an example). More and more is being placed on design along with automation, again requiring degree curriculums and roles to change to service. That is why/how I defeated the myth and my local competition, that high performance homes cost more, mine don't.

 

The problem is if you have a good PM you probably need them at the job site rather than sitting at a design or planning seat office. When I said "good PM" I meant good enough that understands all aspects of design-build-inspect well enough to facilitate a quality input to drawings, not necessarily the most knowledgeable or subject matter expert. Two entirely different roles, hard to find especially if there are labor shortages. Find one pay them well. We've had some PMs that did not get it, even Project Managers we use to put in sales roles. Now we learned to integrate the two combining Production and Project manager cradle-to-grave roles we have in our office that frequents the field/trades/clients and provides me with design inputs.  Our trades in the field know more than him but he can communicate with me and them well enough, if not I go to the site see whats happening or I do that by live video streams if it's too cold outside :)  

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On 1/7/2017 at 3:30 AM, ICTHOMES said:

 According to our liability and contracts law attorney and at least ten others in my state I talked to it most certainly does. As I said, this law is VERY convoluted changing all the time not only by statutes, mainly state, but also case law. In the corporate friendly states where judges vs jury's determine the outcome, it is VERY difficult to pierce.  

The reason that corporations offer no protection against negligence claims is that these will be brought against you as an individual (at least for most designers on this forum), so there is no corporate veil to pierce. While corporations offer protections against many types of claims, corporations offer no protection against tortious conduct by an officer or director of a corporation. Here are a few examples from a quick Google search. http://www.hbsb.com/individual-tort-liability-of-officers-and-directors/ for examples of California law. http://www.greenbergglusker.com/news/articles/When-Corporate-Officers-Are-Personally-Liable-, or http://www.centurycitybar.com/newslettertemplate/April11/article3.htmhttp://www.centurycitybar.com/newslettertemplate/April11/article3.htm for case law in NJ, or http://www.wolfbaldwin.com/Small-Business-Articles/Liability-of-Officers-and-Directors.shtml for Pennsylvania. The holdings have been consistent across most states. ICTHOMES, if you'd like to state your location, I would be happy to provide you with some case law from your state. (I have another business which involves a great deal of legal research, and I have subscriptions to a number of legal databases.) I suspect you have misunderstood the advice you were given. Lew, if you think you are correct, then provide some case citations.

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Richard:

 

we have been doing this dance to over a decade

 

I'm done dancing - you will believe what you want to believe

 

In past dances I have provided case law - if you want them do searches for them

 

yes, the corporate veil can be pierced - IF there is negligence - gross negligence

 

yes, liability can be transferred via contract and disclaimers

 

that's it in a nutshell

 

Lew

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Richard, I appreciate the offer I'm w/Lew I don't want to get into a pissing contest with a non-attorney I can tell you are.Heck, I don't even like disagreeing with most of them since I usually go away with my tail between my legs, and I bet I have done as much if not more internet research than you they have many times corrected me on. I'm willing to bet you have not taken nor spent the money to take any of this internet info and run it by your states attorney more less nationally.  Most states don't maintain the statutes on the Attorney Generals Website, only foolish people buy into internet sites and sales hype, people that think they are in the know. They are written vaguely and ambiguous case law & insurance same, attorneys debate over, judges ultimately interpret after lots of $$$$. Your really foolish if you think an internet site or any person keeps up with it all. If you end up paying to defend yourself you lost.

 

"“Directors and officers have frequently been held liable for negligent nonfeasance where they knew that a condition or instrumentality under their control posed an unreasonable risk of injury to the plaintiff, but then failed to take action to prevent it "

 

Dah, I already stated and anyone in business should know you do this nothing will protect. This has little to do with having and entity that operates under legal standards. In construction contract law you have to be able to point to standard practices, one of many especially if deviated that should be in your contracts fully defined/qualified, or, insurance within known stated, otherwise in writing if not clear & you can get, exclusions of E&O and contract/liability law, usually best advised by an attorney and accountant for IRS law that fully understands your specific states business entity. 

 

Also, bad idea getting case or any other law from a competitive legal firms site out to win sales, often twisting complex law in their favor. Best to start by getting the latest statutes, case law, at law libraries then part educated go talk to attorneys. 

 

I also took the LSAT back in 1990, had a kid dropped out of liability and patent law and know how complex it gets. Not easy, perhaps you should go take it with the internet info you have.... let us know how that works out for ya :)

 

Just because you subscribe to some legal sites and found some case law does not make you a 40 year practicing attorney like mine and many of the others in the large firms he has worked in and is still in, along with the same as his wife. I'm tempted to give you his phone number so you can tell him and his legal teams made a mistake, my entity is worthless according to you and some cheap google info. I could only hope he wouldn't charge me since he does have a sense of humor but, I don't want to risk it. Or, it could tick him off and he tries to go after you legally. I've seen him already do that with a state Workers Comp clerk challenging his contracts with wrong opinion over an insurance audit( missing outdated SP disclaimers) we were protected by under contract, that the state fired. WC more complex than liability/PI. He's agressive, puts up w/little, thats why I hired him, and knows his stuff as seen by many of these construction cases he won. Richard, how many have you won can you put up links to those cases? 

 

It does not appear you understand statue/case law relations, only that you wasted your money on legal subscriptions to not practice any of it, or be allowed to in court, so you resort to the internet? It's amazing how informed and misinformed the internet has become, and I hope people are smart enough to only get legal advice from several local state attorneys, NOT the internet.

 

It's the same with Building Science and designing, more bad info ruining this industry. Now some believe all they have to do is some cheap goggle searches they don't need a Bachelors, Masters, or PHD and decades of practice. You can see this by trades like framers that are somehow now "Building Scientist" or "Green Building Advisers" just by launching an internet site and writing blogs/Q&A.... One of the main reasons homes especially "air tight" energy efficient "greens" are such a mess because of internet bad advice these clowns take no legal liability for. I guess if the traffic that visits these sites they and their sponsored products profit by, mainly DIY's looking to save money by not hiring degreed pros, then they get what they paid for.

 

I certainly hope the internet does not fool some into thinking that it can replace an education and experience in this country and the generations to come still seek it over the internet. We have already fallen behind some countries and that includes AEC. 

 

Richard, you seem a good drafter at giving good CA advice, I advice you stick to it. I know you want ppl to think you have vast knowledge & experience like many on the internet but, that can get you in trouble and harm others. As far as giving legal sounds like all over this site, your making a complete fool out of yourself. Also, here is some advice and some research you might find more interesting..... I'm seeing more and more become legally responsible for internet ill-advice, some forms of bulling as in individuals and legal firms like this, and acting outside ones legal capacity such as attorneys or challenging them, "Building Scientist"  "Advisers" (legal, tech, etc). IMO it's been a long time coming and some of these sites and their contributors that have caused bodily harm and injury or financial loss be held accountable, get sued, and the protective site disclaimers do not protect them, nor their liability E&O insurance probably does not in the "exclusions", nor an entity, are challenged by perhaps case law just like the ones you quoted above, to set an example. I think we are entering a cyber era " be careful what you say on the internet". Trying to impress, acting outside legal capacities may soon come at a price. Then people will ask themselves "was it worth it" ?

 

 It's been discussed above Designers should be licensed or qualified. I don't think thats the case as long as they follow code and/or engineers designs and don't act outside their capacities and within their insurance exclusions(beware, not all are possible to list and are on case-by-case, they work to find loop hole ways out of) and/or legal entities that as I said further protect. You can find all kinds of internet case law/statue on this too, here again seek a state attorney more situations are unique cannot always be compared to case law, or even statues w/o court. This holds more true for "Building Scientist" or "Green Building Advisers" and "Want to be Attorney's" many of which don't even have a degree or any practical experience doing engineering design including physics and law. 

 

This thread has got off track....I'd appreciate it if we leave silly legal debates to "real" attorneys and courts. I'm working trying to get some prints done this week for a build coming up soon and would like to get the subject matter back to CA drafting I'm sure I'll need some help with. Others that read this thread have to weed through a bunch of non-related info. I contributed to that I know, just seek an attorney for legal and qualified engineer for design/drafting and legal risk will be drastically reduced period! 

 

Thanks again for the help so far. Joey you are my idol. :) A master at your trade, alone w/others out here. Nice Job! 

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Question: Would it not make more sense to put applicable general notes (ie: structures, MEP, on those sheets vs "General Notes and Specs" in front sheets? Only put "Gen Notes and Specs" that apply to all trades on "General Notes and Specs". That way each trade does not have to weed through all the notes trying to figure out what applies?  I know lots of trades do as they please probably don't even read most of them but this may make it easier to inspect too. See attached. 

 

Pro's & Cons? 

 

 

Gen Notes_Specs.JPG

Gen Notes_Specs 2.JPG

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Excellent - Thanks Joey didn't even see that through all the chaos. Looks awesome!! What I had in mind you already sculpture very well thanks again.  Agree both locals probably best. 

 

Why not put more 3D ref views on each sheet just to help put things into perspective? IE: Framing, MEP if we had it, etc...Just curious we do that on manufacturing(mfg) drawings. 

 

Another: Why not combine the Layout Page Table &  Revision Table? Reduce clutter all info in one table? In mfg we do that in a "title block". 

 

Going to be more than a week for this noob I can see I better focus on foundation get it released. 

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Typically, I can point to a plat drawing by civil engineers in sub-divisions and do not have define it. This ones in rural most of the time they just wing a pad. I guess I better call the city. They don't return calls or support residential design around here, so frustrating! 

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Others I don't know. But for my template, the layout page index, and the revision index are separate, live entities that exist on the pages. If I add or subtract a page to my plan set, the index on the cover page updates automatically and I don't have to think about it. The revision index is also live, and per page. I note any revision on the cover page, but also each sheet has a live index of revisions for me to notate as needed.

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13 minutes ago, joey_martin said:

Others I don't know. But for my template, the layout page index, and the revision index are separate, live entities that exist on the pages. If I add or subtract a page to my plan set, the index on the cover page updates automatically and I don't have to think about it. The revision index is also live, and per page. I note any revision on the cover page, but also each sheet has a live index of revisions for me to notate as needed.

 I can't imagine why these two can't be combined. All your page index is doing is denoting a page # and title that can all go along w/ "date, revised by, description" in one live table. If you delete a sheet all is gone. The only variables are "revised by, date, description I am assuming you use to give a brief on what changed, along with any rework to existing parts, assemblies...No biggie, just saying.  Think I'll try and combine until someone complains ;)

 

I see I can go schedule-to-text to modify how to get it back to live? 

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11 hours ago, ICTHOMES said:

This thread has got off track....I'd appreciate it if we leave silly legal debates to "real" attorneys and courts. I'm working trying to get some prints done this week for a build coming up soon and would like to get the subject matter back to CA drafting I'm sure I'll need some help with. Others that read this thread have to weed through a bunch of non-related info. I contributed to that I know, just seek an attorney for legal and qualified engineer for design/drafting and legal risk will be drastically reduced period! 

 

The main issue here is that I believe very bad information is being handed out regarding the extent of protection that incorporation is able to offer. I would be delighted if people investigate for themselves whether paying $160/yr. for incorporation is going to shield them from negligence claims, as you seem to believe. [BTW, as far as having attorneys in the family, my father was an attorney, and my wife is an attorney. I probably spend more time with attorneys than I do with designers and architects. Not very persuasive to my mind.] In addition to almost 40 years of professional architectural practice which has paid VERY close attention to legal issues in architecture, I also have a judgment enforcement business, and spend a fair amount of time writing legal briefs and appearing in court enforcing these judgments, some of which are against contractors and involve negligence claims. These are judgments which have been assigned to me for enforcement, so I am actually representing myself pro se for these; not representing clients. I spend more time in court arguing case law than many of my attorney clients. I also have appeared in both federal and state appellate courts. So, not exactly a dilettante surfing the 'net. However, I would not presume to offer legal advice. But I would hope that those reading this thread would educate themselves. I have offered independent articles by attorneys and would suggest that anyone considering incorporation seek excellent legal advice. You have offered nothing except an attitude of "my attorney is smarter than you." Maybe, maybe not. I've prevailed in court against some very smart attorneys.

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Richard:

 

I have been on this forum for over a decade

 

I can't think of one instance where a Chief user has reported being sued for "negligence"

 

I think we all agree that the corporate "veil" can be pierced for "negligence"

 

but being incorporated can offer protection IF "negligence" is absent

 

liability can be transferred via contracts and disclaimers

 

this is a recap of my positions and if you dispute that - then ???

 

I see no point in rehashing these concepts over and over as we have done for over a decade

 

the best advice anyone on this forum needs is:

see a lawyer in your jurisdiction that practices construction law and work with them

 

Lew

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Please refrain from further legal discussions I have asked the mods to look at Richards contributions. I don't think ppl come to CA looking for legal advice. I certainly did not ask for it in my OP. We need to keep this site topics on CA related discussions otherwise ppl can not learn it. Thanks! 

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Any "legal" discussion was in response to YOUR post #71, which was touting "double asset protection," a topic that YOU came up with. People come here for a variety of reasons, and you learn to take the good with the bad, and learn not to fan the flames if you don't want them to blaze out of control. You also should learn better manners and not insult people who have been here far, far longer than you. I am perfectly willing to stand behind any statement I've made, and don't insult people from the shadows of an anonymous user name and location, I think the mods SHOULD review the posts here.

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8 hours ago, Richard_Morrison said:

Any "legal" discussion was in response to YOUR post #71, which was touting "double asset protection," a topic that YOU came up with. People come here for a variety of reasons, and you learn to take the good with the bad, and learn not to fan the flames if you don't want them to blaze out of control. You also should learn better manners and not insult people who have been here far, far longer than you. I am perfectly willing to stand behind any statement I've made, and don't insult people from the shadows of an anonymous user name and location, I think the mods SHOULD review the posts here.

 

You've been on a legal advice rampage correcting and advising what should be on plans for court purposes since post # 97, along with unrelated topics I never asked for in my OP. Most smart people know that's why we have attorney's in this world you are not one. You went on to attack my and all entities quoting  "Sorry, but for claims involving design negligence, corporate entities offer no liability protection." in response to my attorney setting up an insured entity, basically it appears you are advising is wrong offering, " entities have no liability protection"..... How ridiculous!

 

So now you are basically advising that the many 1000's of entities in my state alone in construction even tried won cases, including mine, are wrong to call you and get some "real advise". I did try and straighten this non-sense out in post 83, Lew is right I should not have danced this dance with you it appears you have hi-jacked alot of threads with. As far as I'm concerned the mods can delete my and all legal advise post. I hope ppl don't come here for that. Im pretty sure CA does not solicit that or they'd have a legal section. 

 

I think I was clear in post 83 I'm not interested in your legal advice to please stay on topic you ignored. Following I had several CA related on topic questions you also ignored persisting on trying to impress this site with you so called self-proclaimed expertise on legal matters. 

 

Why would anyone in their right mind identify their company and self with people like you attacking them and their attorneys making them appear beneath your vast national legal expertise is beyond logic. It appears you have pushed your brand of internet legal advice off on others. It appears by post # 94 your legal experience comes from your family and wife whom I presume has tried countless construction, liability, personal injury cases national and briefed you on them all including client-attorney disclosures, in court testifying to no sited cases?, doing clerical judgement work, yet prior to post 21 all you sited was some national misleading info on attorney's sites from PA, NJ, and LA per you are a " few examples from a quick Google searches". Further, nothing in these goggle searches states, "Sorry, but for claims involving design negligence, corporate entities offer no liability protection."

 

Why someone with so much self-proclaimed expertise in legal matters, with so much court experience, and surrounding resources, would resort to a irrelevant cheap goggle search says it all. I certainly hope you provide better legal research to all these attorneys and courts you advice. A person of your legal caliber as a national consultant should have a law library of their own. When I asked for some cases (eg" case law, etc) links you won in construction entity vs SP or were part of nothing? Perhaps in all the time you spend with these attorney's of yours outside of here you spend lots of time you can find some legal research or cases #s, or statues as related to AEC that applies since what you have produced so far is worthless and opinion as stated in them. Why someone with your skills is wasting valuable time about everyday on a drafting sites trolling trying to criticize, impress, is beyond logic. 

 

Now it appears you think you have a right to attack people such as their business entities and attorney's knowledge, having them at all, and you have a right to since "you have been here "far, far, longer" than me, and safe to assume anyone else new that does not buy into your BS! In some twisted way you think if I, and I am going to assume others since it appears this is not your first rodeo attacking peoples business, don't back down to your criticizing "attitude" or how we and our attorney's are idiots compared to you we need to learn some "manners" ???? Your kidding right?  

 

I guess I completely missed something in the rules and purpose of this site. I had no idea it was to obtain unwanted unsolicited bogus legal advice and there is a senior pecking order allowing more rights than people that are new. If the mods don't step in here I call them personally and find out whats going here. I only started this thread to get help with CA drafting tools......my contracts, Con docs, entity is set up by a VERY knowledgeable court experienced qualified attorney, and if I did not win some popularity contest defending that or moved me up in the pecking order of rights to attack others business entities Richard alluded to oh well. It appears there are some senior contributors here that think they own the forums and can turn any thread they want into anything they want by right including a complete legal advise nightmare! 

 

Richard, it you want to boast about your legal, architectural, and other vast knowledge and services you have expertise and offer advice for your businesses, I'll politely ask again, do it on your own thread, perhaps in the -off-topic discussions. Again, let me make this VERY clear. I don't want your legal advise please stop hi-jacking this thread with it. 

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