In this Issue:

Limiting Liability for Design Professionals in Construction Defect Claims
by Cassidy E. Chivers and Robert J. Romero.

Construction defect litigation claims against design professionals continue to increase, mirroring the growth of construction defect litigation nationwide. Design professionals, including architects and engineers, are often caught at the center of any given dispute because their plans and design decisions are typically the starting point for the construction project. Moreover, the recent trend is to sue, either by direct action or cross-complaint, all subcontractors involved (even tangentially) with the work that gave rise to the alleged defect because the exact cause of property damage is difficult to pinpoint. Often, causation issues cannot be fully developed until expert options are disclosed. Even then, the parties' experts' opinions often conflict. As a result, successful summary judgment motions and other pre-trial victories are challenging. This article discusses this dilemma from a design professional's perspective, and how, through careful contract negotiation and drafting, liability can be minimized, if not eliminated.

Recent Rulings

Insurance: Calculating Attorneys’ Fees
Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780(California).

Legal Malpractice: Third Party Complaints
Dennis v. Brown (2005)   2005 WL 767297   (Montana).

Insurance Brokers: Scope of Professional Services
PMI Mortgage Ins. Co. v. American International Specialty Lines Ins. Co., (9th Cir. 2005) 394 F.3d 761 (amended on March 10, 2005) (California).

Case Summaries and Conclusions

Insurance Brokers: Liability for Employee’s Error
Callea v. Hartford Ins. Co. of Connecticut (2005) 2005 WL 273547, 2005 N.Y. Slip. Op. 00871 (New York).

Escrow Agents: Standing to Challenge Non-Judicial Foreclosure Proceeding
Royal Thrift & Loan Co. v. County Escrow, Inc. (2004) 123 Cal.App.4th 24 (California).

This newsletter has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.