Building a Case: Document Management for Construction Litigation

Robert A. Gallagher, Jane Fox Lehman and Michael I. Frankel | Pepper Hamilton | October 2, 2019

Success in construction litigation often turns less on counsel’s ability to craft legal arguments and more on counsel’s ability to gather, master and present the often complex set of facts underlying the case. In construction matters, most of the key facts are found in documents: contract documents, drawings, plans and specifications, schedules, submittals, progress reports, daily logs, change orders, invoices and payment records. Nowadays, these documents will almost certainly be created, exchanged and stored electronically; many will never exist in hard copy. As such, timely collection, organization and analysis of electronically stored information (ESI) is crucially important in construction litigation.

The construction industry has always involved a large quantity of records. Today, the majority of those records exist only as ESI: Design professionals use computer-aided design (CAD) software to create construction plans. Construction managers use Primavera or similar software to create schedules and workflows. Estimators use job cost control programs. Innovative firms capture digital photos of the project, from mobilization through the punch process.

Because ESI is created and exchanged at a higher rate than hard-copy documents, ESI has facilitated a dramatic increase in the volume of records associated with construction projects. Further compounding the increase is the proliferation of mobile devices. With a smartphone in every pocket, ESI creation has moved out of the home office and the site trailer and onto the site itself. As the volume of ESI expands, so too does the time and expense associated with storing, processing, reviewing and producing these records. This article will cover strategies for balancing time and expense with the requirements of the rules and the needs of the case.

Preserving Documents

The first and most important consideration in a thorough document collection is document preservation. In general, the duty to preserve documents arises when a party knows litigation is pending or likely. Construction practitioners should carefully consider when this occurs: The duty may arise as early as the time of the first differing site condition or change order, or as late as the service of the complaint. As soon as possible after the duty arises, counsel should devise and send a “litigation hold” to project personnel, instructing them not to delete ESI or discard hard-copy documents that may be relevant to the case. In a construction case, the litigation hold may need to cover personnel who are no longer actively working on the project, as projects often span multiple phases and several years.

The hold also may need to cover mobile devices, as project personnel, particularly those on site, commonly communicate via text messaging and voicemail. Preserving mobile device data can be tricky. Personnel may use their personal device — or devices — for work; they may lose, update or upgrade those devices; and they may store their data in the cloud. Preserving mobile device data is also expensive, as imaging a single device can cost a few hundred dollars. But these devices may hold facts critical to your story, such as photos that depict progress at a critical juncture, text messages that demonstrate constructive notice, or voicemails that evidence another party’s admission. Further, the failure to properly preserve, collect and produce discoverable mobile device data can subject a party to sanctions, up to and including dismissal of the case.

Collecting Documents

Today, it is standard for parties on large construction projects to use a dedicated server or share a cloud-based electronic document management (EDM) storage system to store, review, annotate and exchange project documents, including submittals, construction drawings and correspondence. These databases, which are typically hosted by the general contractor, can be a rich source of key documents for litigation. As such, the party hosting the databases should be aware that the database contents will almost certainly be the subject of discovery requests directed to them. Nonhosting parties may not have access to certain database contents unrelated to their scopes of work, or their access may have been severed after a contentious termination. For this reason, it likely will be the hosting party’s responsibility to export the contents for production. The hosting party should take care to preserve the database contents to avoid any charges of spoliation of evidence.

In addition to shared online document repository databases, parties on construction projects typically keep individual project files, which are internal repositories of all project documents. These too will almost certainly be the subject of discovery requests. As parties often have legal counsel (both in-house counsel and outside counsel, sometimes from multiple law firms) advising them at various stages of the project and on a variety of issues (including regulatory, permitting, land use, procurement, contract and litigation issues), parties should take care to segregate attorney communications, work product and similar documents from their files during the course of the project.

Parties should also conduct thorough screens of their project files for attorney communications, work product and similar documents before producing them to any other party. As parties often use third-party, nonlegal professionals, such as engineers, to assist attorneys in drafting contracts, permit applications and other documents, thorough screens require an understanding of the relationship between the attorneys and the nonlegal professionals to determine whether the presence of a third-party, nonlegal professional on an attorney communication destroys its privileged status.

Reviewing Documents

Construction practitioners now rely on advanced discovery technologies to limit the number of documents they collect and produce and the attendant costs to process, host and review those documents. Technology-assisted review (TAR) can reduce — or at least prioritize — large document volumes through deduplication, email threading, topic analysis and predictive coding. But practitioners should keep in mind that current TAR techniques rely on the text content of documents to reduce document volumes. As such, certain records common in the construction industry are poor candidates for TAR, including records that have no text, such as photographs and diagrams; records that have minimal text, such as schedules and drawings; and records that have text not in narrative form, such as spreadsheets and charts. These documents should be identified using available metadata (e.g., file extension or document name) and sequestered for human review.

Construction practitioners also frequently negotiate ESI protocols as a way to make discovery more efficient. Such a protocol might limit document collection from a particular custodian to the tenure of his or her time on the project. Or it might limit collection to those documents that hit on specific keywords, such as the project name, contract numbers, project acronyms, project locations and the names of other parties involved on the project. Using keywords to limit document collection can cut down on costs, but it does carry the risk of excluding relevant documents, as dedicated project personnel may not identify the project by name in their communications, especially informal communications.

Using keywords carries the risk of over-inclusivity, too. Construction personnel, especially at the management level, often have responsibilities across multiple projects, and so a keyword search for a particular project name may capture a substantial number of documents that cover more projects than the one at issue. Depending on the sensitivity of this “other project” material, care may need to be taken to identify the material and either redact it or withhold it. Counsel may also consider stipulating to a procedure for designating and protecting such documents as part of an ESI protocol.

Conclusion

Even as ESI has improved the quality and availability of documents associated with a construction project, it has dramatically increased the quantity of these documents. This increase in quantity has made collection, organization and analysis of documents more challenging, more time-consuming and more expensive. Fortunately, there are strategies available to ensure a proper, thorough and efficient process that will set the construction practitioner up for successful litigation.

No Rest for the Weary: Project Completion Is the Beginning of Litigation

Albert Li and Bob Fitzsimmons | Construction Executive | April 30, 2019

In today’s environment, most construction projects end up in some form of litigation. Construction is full-time employment for lawyers – from contract negotiation to project management, lien and payment issues. Years after project completion, a company still can face construction defect litigation and be served with a Notice of Opportunity to Repair, which in most states is now codified into statute. This is the beginning of what most likely will become a lawsuit, involving many of the subcontractors.

WATCH OUT FOR THE CONSTRUCTION CONTRACT BLAME GAME

The first phase of post construction litigation involves the review of contract and insurance policy language in an attempt to transfer responsibility in the litigation to other parties.

Before construction began, contract negotiation focused on budget and timeline. In the post-construction phase, two less noticed provisions of the contract are critical – indemnity and insurance.

Indemnity is a contractual obligation of one party to compensate the loss occurred to the other party due to the act of the indemnitor or any other party. The duty to indemnify is usually, but not always, coextensive with the contractual duty to “hold harmless” or “save harmless.” Many states have restrictions that must be observed in order to enforce a right to indemnification. Some states prohibit it altogether, and some allow the indemnitee to be indemnified for its own negligence. Frequently, standard contracts run afoul of state restrictions. Consequently, it is critical that local law be considered in the contract negotiation phase.

PROPER INSURANCE COVERAGE IS IMPERATIVE

Insurance can also provide an alternative means to transfer responsibility to another party in the litigation. Many construction contracts contain a provision requiring that one party make the other party an “additional insured” on its policy. Most insurance policies issued to construction companies contain a provision that automatically makes a company an additional insured if the contract requires it. The contract and policy language encounter are endless in their variety. The extent of the coverage provided may be dictated by contract language, so it important to be well advised in the contract negotiation process.

Obtaining the benefit of being an additional insured can get extremely complicated. Commercial general liability policies usually cover damages that occur within the policy period. In construction defect cases, the damage may have occurred in any of the years between the certificate of occupancy and the first notice of any problems. 

Generally speaking, all of the policies that provide coverage between the certificate of occupancy and first notice of damage would be “triggered.” For example, a general contractor in a litigation involving the work of 10 subcontractors, where the certificate of occupancy was five years before the first notice of damage, may be covered under 50 different policies (10 subcontractors multiplied by five years of policies), all with different coverage provisions.

The insurance industry has attempted to address some of the insurance complexity by offering wrap-up policies such as owner controlled insurance programs (OCIPs) and contractor controlled insurance programs (CCIPs), in which all of the contractors on a project are required to obtain coverage through one program. 

POTENTIAL FOR CONFLICT OF INTEREST

This concept works well in case of a single occurrence, such as a personal injury or property damage incident. All of the project contractors are covered under the same policy and, therefore, have the same interest and can be represented by the same lawyers. However, in construction defect cases, there are frequently issues that may affect the coverage provided under the policy. For instance, the type of damage may not be covered by the insurance, leaving the contractor responsible. If the damage is not covered, one contractor may want to argue another contractor is responsible. Consequently, a joint defense, even though agreed to in the contract, cannot ethically be provided by one law firm.

Most importantly, keep in mind that these issues need to be addressed before engagement with the owners concerning the alleged deficiencies. 

The Economic Loss Rule and Why It Matters in Construction Litigation

William S. Durr | Ward and Smith | March 20, 2019

In its broadest sense, the “economic loss rule” prohibits recovery in tort for purely economic loss incurred under contract law. 

The Merriam-Webster Dictionary online defines tort as “a wrongful act other than breach of contract for which relief may be obtained in the form of damages or an injunction.”  Negligence, the most common tort claim, is the failure to exercise the care that a reasonably prudent person would exercise in similar circumstances.  Thus, where a contract exists governing the subject matter of the dispute, claims between the parties must be based on the contract terms, and a tort-based claim between the parties will typically be barred.

The rationale for the economic loss rule is that where a contract exists, the parties have freely negotiated to include or exclude terms governing the parties’ respective rights, obligations, and remedies.  If a party to that contract could extend its remedies beyond those set forth in the contract, this would effectively allow the party to obtain something more than (or inconsistent with) what they bargained for in the contract.  This is especially true in the products liability context, where the economic loss rule first arose.

In 1978, some twelve years prior to the express adoption of the economic loss rule, the North Carolina Supreme Court addressed the essential elements of the rule (without referring to it by name in the decision) in a dispute between an owner and general contractor.  The case, North Carolina State Ports Authority v. Lloyd A. Fry Roofing Co., et al., 294 N.C. 73, 240 S.E.2d 345 (1978), involved a claim for damages arising from leaking roofs.  The owner, the North Carolina State Ports Authority, asserted two claims against the general contractor, as well as other project participants.  One claim was for breach of the construction contract, the other for negligence in constructing and installing the roofs.  The Court found that a tort claim is unavailable “against a promisor for his simple failure to perform his contract, even though such failure was due to negligence or skill.”

The North Carolina Court of Appeals expressly adopted the economic loss rule in a 1990 products liability case, Chicopee v. Sims Metal Works, 98 N.C. App. 423, 391 S.E.2d 211 (1990).  Since Chicopee, case law has intertwined the concepts set forth in Ports Authority and Chicopee and extended the economic loss rule to a number of other substantive areas.

There are exceptions to the economic loss rule.  Ports Authority identifies the following exceptions:

  1. The promisor’s negligent act or omission in the performance of the contract caused injury to the person or property of someone other than the promisee.  By way of example, if a crane falls over and injures a third party who had no connection to the promisee, a claim for negligence brought by the third party against the crane supplier would not be barred by the economic loss rule, as there was not a contract between the crane supplier and the third party.
  2. The promisor’s negligent, or willful, act or omission in the performance of his contract, caused injury to property of the promisee other than the property which was the subject of the contract, or personal injury to the promisee.  Thus, if a crane fell over and damaged the utility lines of the building and the contract with the crane supplier did not involve work on the utility lines, a claim for negligence against the crane supplier for damage to the utility lines would not be barred by the economic loss rule.  This makes sense as the contract with the crane supplier did not include or govern the utility lines and, therefore, there was not a contract that applied to the specific subject matter of the dispute (the utility lines that were damaged).
  3. The promisor’s negligent, or willful, act or omission in the performance of his contract, caused loss of or damage to the promisee’s property, which was the subject of the contract, and the promisor had a legal duty, as a matter of public policy, to use care in the safeguarding of the property from harm, as in the case of a common carrier, an innkeeper or other bailee. 
  4. The injury caused by the promisor to the promisee was a willful act.  

In applying and, in many cases, expanding these exceptions, the relevant inquiry under North Carolina law is whether the injured party has a basis for recovery in contract or warranty.  If there is a basis for recovery under a contract or warranty provision, then the Court will generally recognize and apply the economic loss rule, provided that there is not an independent legal duty which is identifiable and distinct from the contractual duty.  See, Bradley Woodcraft, Inc. v. Bodden, 795 S.E.2d 253, 258-59 (2016).  By way of example, an architect is held to a professional standard of care.  While this professional standard of care may be referred to in the contract between owner and architect, the duty to adhere to a professional standard of care is an independent legal standard and the owners’ tort claims against the architect are not barred by the economic loss rule. Put simply, the architect cannot contract away its obligations to perform at a minimum professional standard of care.    

In Bradley Woodcraft, the homeowner entered into a contract with the general contractor to undertake some interior finish work and kitchen remodeling.  The homeowner became dissatisfied with the contractor’s work.  After meeting with the contractor the homeowner paid the contractor an additional sum, using two credit card transactions.  The homeowner testified that payment was made with the understanding that the contractor would complete the project.  The contractor took the funds but never returned to the job.  The homeowner disputed the two credit card charges, which were reversed by the credit card company.  The contractor sued the homeowner for breach of implied and express contract, and the homeowner counterclaimed, alleging among other claims, breach of contract and fraud.  The homeowner argued that their fraud claim should survive the economic loss rule defense.  The Court agreed, “…while claims for negligence are barred by the economic loss rule where a valid contract exists between the litigants, claims for fraud are not so barred…”  Bradley Woodcraft at 259.  Bradley Woodcraft seems to suggest that a tort claim, other than negligence, will survive in an otherwise clear contractual dispute and not be subject to the economic loss rule. 

Fortunately, a 2018 federal case rejected the broad statement that the economic loss rule barred only negligence claims and distinguished Bradley Woodcraft by stating that the proper inquiry is whether there is an independent legal duty, which is identifiable and distinct from the contractual duty.  Legacy Data Access, Inc. v. Cadrillion, LLC, 889 F.3d 158, 166 (4th Cir. 2018).      

An earlier construction case, Lord v. Customized Consulting Specialty, Inc., 182 N.C. App. 635, 643 S.E.2d 28 (2007), allowed the owners of a home to pursue a tort claim against a subcontractor, holding the economic loss rule did not bar claims of negligence given the particular facts of the case.  In this case, the homeowners (Lords) discovered the trusses used to construct their home were defective.  The Lords sued their contractor (Customized Consulting Specialty, Inc.) and the subcontractor who designed the trusses.  The claims against the subcontractor included a negligence claim.  The subcontractor argued the economic loss rule applied to bar the homeowners’ negligence claim, relying on the holdings from several cases involving damage resulting from the use of synthetic stucco, some decided in Federal Court. The North Carolina Court of Appeals rejected the subcontractor’s arguments.  The Court found that no contract existed between the subcontractor and the homeowners, that the economic loss rule did not apply and that the economic loss rule did not operate to bar the homeowners’ negligence claim.     

In summary, while the economic loss rule does not provide an absolute defense to all tort claims, it must certainly be considered in litigation that involves claims sounding in both contract and tort. 

More importantly, the protection of the economic loss rule begins with the contract itself.  Creating, maintaining, and properly executing well-drafted contracts is a foundational requirement to controlling and allocating risk in the construction industry.  If you give less attention to your contracts than you do other details of a project, you are placing your company at risk, as you may find yourself defending both contract and tort claims.

Avoiding ‘E-trouble’ in Construction Litigation

Judah Lifschitz | Construction Executive | August 14, 2018

During the 2016 presidential election, the FBI subpoenaed Hillary Clinton’s emails after she used a private email server during her time as Secretary of State. Separately, the more recent investigation into Donald Trump’s campaign policy adviser, George Papadopoulos, resulted in scrutiny over both his email and social media.

As shown the above examples, there are damaging effects of electronically stored information in politics, but how does it impact the construction industry?

If not used carefully and properly, emails will serve as “truth serum” in court. Attorneys can simply read an email to know employees’ thoughts or actions, meaning an impulsive email or social media post will most likely come back to haunt the company. Requests for ESI are inevitable in litigation today and the production of inappropriate emails and other ESI open the door for an opposing attorney to argue that a company fosters a culture of uncouth, unprofessional and unfocused project management.

REQUESTS FOR ESI ARE INEVITABLE IN LITIGATION TODAY

It is estimated that 90 percent of all information is now created digitally – the majority of which is never printed. A comparison of the ESI and hard-copy documents produced in a recent construction case revealed that only 25 percent of email communication had been printed to paper. A Duke University survey revealed that the ESI Discovery costs in typical cases range from approximately $600,000 to just less than $3 million. And in large cases, the costs average from $2.3 million to $9.7 million.

ESI is created and stored in a variety of places, including computers, fax machines or copiers’ internal hard drives, voicemail, web pages, smartphones, jump drives, memory cards and external hard drives. It is important to remember that all of the data and information created and stored in these various places is subject to being produced to a litigation adversary in discovery, granting them access to a significant volume of information – some of which is produced in a very informal setting.

Opposing attorneys acquire this information through the discovery process, which includes:

  • The obligation to preserve potentially relevant information. Even before litigation is filed, any time that a company has reason to anticipate that it will be involved in litigation it has an obligation to ensure that it takes reasonable steps to preserve potentially relevant documents and ESI.
  • Requests for the production of information. If litigation is filed, the adverse party will be entitled to request the production of relevant information, including documents and ESI, from the company.
  • The obligation to identify, collect and produce relevant information. After receiving requests for production of information, the company will be obligated to identify, collect and produce documents and ESI responsive to the requests received.

In order to produce responsive information, a company will first need to review the ESI and documents collected in order to identify any that may be protected by the attorney-client privilege, work product or another relevant evidentiary privilege. Those documents and ESI should be withheld from the company’s production, but all other responsive documents and ESI must be produced, and through this process the company’s adversary will receive access to a large volume of company documents and ESI. Opposing lawyers will then comb through these materials searching for “ammunition” to use in court or arbitration.

WHAT IS E-TROUBLE AND HOW TO AVOID IT

A company may find itself in E-trouble either because it fails to preserve and produce electronic documents during the discovery process or when ESI is discovered and used against it by an adverse party in litigation. But, E-trouble can be avoided. There are steps to help a company avoid E-Trouble and protect itself from damaging information being discovered and used against it in litigation. Always consult counsel with any questions about the discovery process.

Implement and enforce a document retention policy

Documents should be retained for the duration of their useful life – and no longer. A well-drafted document retention policy is not enough. Implementation and enforcement are critical to avoiding E-Trouble and reducing electronic discovery and document production costs. A recent study found that while two-thirds of the companies surveyed have a document retention policy in effect, almost half of them don’t actively enforce it.

When litigation is on the horizon, a company must suspend its routine document retention and destruction policy and put in place a “litigation hold” to ensure the preservation of relevant documents. In furtherance of the litigation hold, legal counsel must become familiar with the company’s document and information retention policies and data retention architecture.

Counsel must communicate with “the key players” in the litigation to understand how they stored information. Both the company and its counsel should monitor compliance with the litigation hold. This will guard against damaging and potentially expensive monetary sanctions.

Use email appropriately

Do not send “ammunition” that the other side can use against the company. If there are company inside jokes, lingo or nicknames for other staff members, clients or project personnel, do not use them in emails. Additionally, ensure employees are not using company email accounts for inappropriate personal business.

Do not email while angry. Avoid hitting send on an email if upset about something that occurred on a job. At trial, opposition may use an angry email to portray the sender as a bullheaded and unreasonable general contractor who put a project on the fast-track to attorneys and costly litigation.
When searching through ESI, opposing attorneys search for certain phrases in emails. Avoid using the following when emailing.

  • “I could get into trouble for telling you this, but …”
  • “Delete this email immediately.”
  • “I really shouldn’t put this in writing.”
  • “Don’t tell [So-and-So]” or “Don’t send this to [So-and-So].”
  • “She/He/They will never find out.”
  • “We’re going to do this differently than normal.”
  • “I don’t think I am supposed to know this, but …”
  • “I don’t want to discuss this in e-mail. Please give me a call.”
  • “Don’t ask. You don’t want to know.”
  • “Is this actually legal?”

Be mindful of social media

The digital age of communication and information technology has drastically increased the scope and volume of what is now discoverable to include more than just email communication. Today, even personal social media accounts can be used against a company in litigation.

An appellate court in New York ruled that social media posts, pictures and messages may become evidence regardless of the privacy settings status. The court compared Facebook to a diary, stating “the postings on the plaintiff’s online Facebook account, if relevant, are not shielded from discovery merely because plaintiff used the service’s privacy settings to restrict access, just as relevant matter from a personal diary is discoverable.”

There are several ways that attorneys for both plaintiffs and defendants gain access to social media posts for the parties they represent. Attorneys today search social media updates and posts for anything that may be useful in court. For example, the typical fact pattern in a personal injury case is as follows:

  • a plaintiff claims her permanent injuries kept her confined to her home and bed;
  • her public profile page on a social networking internet site shows her smiling and “out and about” outside of her home; and
  • the defendant gets a court order requiring the plaintiff to grant access to her accounts on social networking sites, including her current, archived and deleted information and pages.

Top Five Strategies for Managing Construction Risks

Michael Gibbons | Lowndes, Drosdick, Doster, Kantor & Reed, PA | June 2, 2017

Construction is a risky business.  During construction, claims for personal injury, property damage and economic losses are foreseeable and must be managed.  After completion of construction, warranty claims and claims for latent defects are proliferating.  Owners, developers and contractors must proactively understand and manage these risks if they expect to survive and thrive in today’s increasingly complex construction marketplace.  Discussed below are five important strategies for managing construction-related risks and positioning your company for success in the context of construction claims and litigation.

1.    Avoid Inconsistent Dispute Resolution Contracts.  Owners, developers and general contractors typically find themselves executing multiple agreements relating to the design and construction of improvements.  Whether one is an owner contracting with design professionals and one or more contractors or a general contractor contracting with an owner and various subcontractors, it is important to avoid having some of the contracts call for dispute resolution by litigation while others require arbitration.  Construction disputes typically implicate both design professionals and different contractor trades.  The most efficient way to resolve these disputes is getting everyone in one forum (i.e. either a lawsuit or an arbitration) in order to avoid the added expense and uncertainty associated with pursuing binding dispute resolution in two different forums.  Having construction-related disputes decided in different forums greatly increases the cost of dispute resolution while adding a significant risk of inconsistent determinations.

2.    Contract Tiebreakers.  It is often said that there is no such thing as a perfect set of construction drawings free of conflicts and inconsistencies.  The same may be said of construction contract documents.  It is not unusual for a construction contract to have 15 to 25 separate attachments, including all exhibits, to the base form of agreement.  The documents are frequently prepared by different parties and not infrequently contain conflicting or inconsistent terms and conditions.  Without a contractual term establishing a hierarchy of precedential value among these contract documents, the setting is ripe for disputes as parties will defend their conflicting positions based on inconsistent terms in the contract documents.  Without a precedential hierarchy of documents established there is no ready way to resolve the conflict.

3.    Indemnification.  Owners and contractors traditionally rely on indemnification clauses to transfer risks of claim activity on projects.  In Florida, the content of indemnity terms and conditions is regulated by Florida Statute, § 725.06.  Failure to comply with the requirements of Florida Statute, § 725.06 renders the indemnity paragraph void and unenforceable as a matter of public policy.  Accordingly, it is important to have the indemnity terms reviewed by knowledgeable construction counsel.

4.    Insurance.  Insurance plays an important and increasingly complex role in allowing owners, developers and contractors to transfer risks arising from construction-related claims.  Specifically, the use and import of additional insured coverage provided to the owner by the general contractor and to the general contractor by subcontractors has increased significantly over the past few years.  Insurance carriers, however, have reacted to the increased exposure of such risk transfers by adding Endorsements to insurance policies that restrict the effectiveness of the additional insured coverage.  In the absence of specific terms in the underlying construction contracts, carriers now are frequently denying coverage for the additional insured or claiming their insurance is excess over the additional insured’s own insurance.  Again, it pays here to have a knowledgeable construction attorney review the contract terms to ensure the proper insurance language is present to avoid the coverage defenses frequently now being claimed by the insurance carriers.

5.    Limitation of Liability.  A frequently overlooked clause that can effectively create a significant amount of retained risks for owners and developers relates to express contractual limitations of liability.  These clauses are especially prevalent in professional services agreements prepared by architects and engineers.  For many years now, insurers for design professionals have required their insureds to include express contractual limits of liability in their form agreements for professional services.  Owners and developers not infrequently sign these agreements with little appreciation for the fact that the design professional that may be responsible for millions of dollars in economic losses has a contractual limitation of liability tied to the amount of their professional fees which are typically a small fraction of the damages that may be caused by professional negligence.