Are You Liable?

A Seminar Given at the 10th Anniversary Conference of the
Association of Professional Landscape Designers (APLD)
"The California Green Rush"
March 5, 1999
at the Ramada Fisherman's Wharf Hotel, San Francisco, CA
by Donald L. Connors, Esq.
and Samuel T. Swansen, Esq.

TOPICS

1. Background
2. Case Study – Chronology
3. Approaches to Solution
4. Recent Developments

PROJECT CHRONOLOGY

July, 1995

Prospective client visits LD's display at Home and Garden Show. Thereafter prospect visits LD's office several times to interview LD and see portfolio. Asks LD to read books about Feng Shui because prospect is interested in it.

Oct. 5, 1995

LD visits site to prepare proposal. Project involves landscape design for a bed and breakfast inn. LD asked about irrigation system. Gives name of irrigation contractor although LD normally would give several names on a list. Didn't give list here since prospect didn't ask for potential bidders. Prospect hires irrigation company. There is no financial connection between LD and irrigation company.

Oct. 16, 1995

LD faxes letter of engagement to Client (see below).

Oct. 20, 1995

Prospect accepts LD's proposal and becomes a client. Work on design begins; necessary county approvals sought.

Nov. 1995

Final design completed and delivered, payment received. Client sends nice note complementing LD on design.

March 15, 1997

Client calls LD suggesting that "if I were in the area I might like to drop by to see the project and how it was developing;" no indication client wishes to engage LD.

March 25, 1997

LD visits site for 30 minutes as a courtesy, meets Client and Foreman of irrigation company. LD discovers problems and contention. Landscape work had begun but was at a standstill. Major revisions had been made in plan. Less than 2 months until scheduled opening.

LD: "What I saw was not the area which I had designed. When I asked why the changes were made and who authorized them, I was told by (the Client) that 'they were necessary for economic and permit reasons. During this visit I made no design changes of substance, although it has been claimed that I did so. In response to requests…I did suggest the rounding off of one or two squared-off concrete corners of a path which had not yet been poured and, at the specific request of the Client, I suggested that some large boulders placed around a portion of the pool area might be an improvement."

Regarding changes that were made: “The Client liked the idea and asked me if I could possibly stop by a local supplier's yard and select some appropriate boulders, she would go by the following day to pay for them and arrange delivery. Since it was on my way home I agreed to do so. I selected several large boulders, had them tagged with her name and arranged for purchase at a discount from the normal retail selling price. I subsequently learned that the Client had stopped by the supplier's yard but selected other, much smaller boulders than I had suggested which were less expensive but did not serve the purpose at all."

May, 1997

LD receives invitation to grand opening of bed & breakfast inn.

Nov. 10, 1997

Suit filed (see below).

Nov. 19, 1997

LA who will be expert witness for client visits site.

Feb. 25, 1998

LA makes second visit to site; reviews LD's plan and an architect's plan of 2/12/96.

June 1, 1998

Date of LA's "Preliminary Defect Report." LA defines defective conditions as those that do not conform with the landscape plans. After describing the structures on the site, the LA's report continues: "A long, gravel driveway leads to a gravel parking area in front of the lodge. The patio and swimming pool are at the rear of the main building. A concrete slab for a tennis court also exists on the site."

Headings in Report

I. Grading & Drainage

II. Gravel Driveway

The specifications for the driveway and on-site parking have a "stipulated condition."

"Site Development Review S-1468 Landscape Plan Details #5

The driveway and on-site parking will be on all weather  surface composed of 1/4 x dust tan graphite 6" deep. Each inch must be rolled to compact."

These are not proper specifications for a surface for vehicular traffic. There are no provisions for either adequate drainage or compaction of the sub-base. The specifications should have required Class II 3/4" base rock for structural support of the driveway and on-site parking.

III. Headerboards

IV. Tennis Court

V. Irrigation

Sample Letter

October, 1995

Dear Client:

Inasmuch as we have not previously discussed the terms or fee arrangement for my services, this letter will constitute my formal proposal to complete the exterior landscape design within the "building envelope" of your property at ____, CA. I hope that you will find this proposal satisfactory as I look forward to working with you on this most interesting project.

I will complete the design for the fixed sum of ---- to be paid upon delivery of the completed and approved final drawings. This proposal is predicated upon the following conditions:

1. I may rely upon your layout and elevation drawings, which have been provided, in lieu of my actual measuring of the building, building site, and siting of the new construction and features to be retained.

2. Irrigation plan is not included in this proposal. It is understood, however, that ---- Sprinkler Repair Inc. will complete an irrigation plan on the basis of my completed landscape design.

3. This proposal includes a preliminary design review to approve or order changes in the design or n the scope of the project. The completed design will include:

This proposal specifically does not include on-site construction inspection, supervision or oversight; nor does it include my presence at meetings or hearings other than the design review mentioned above and one meeting to present my design to the ---- County Planning Department. Additional services available at my usual consulting fee rate, currently ---/hr.

I understand you would like this design to be completed by the end of October. Although this would be a very tight schedule I will make every effort to meet it. In order to do so, however, I will need your notice of acceptance of this proposal and the drawings, referred to above, as soon as possible.

Please let me know if you require additional information. If accepted, I look forward to working with you.

Sincerely,

RELEVANT PARAGRAPHS FROM SUIT
BY SPRINKLER COMPANY
AGAINST CLIENT FOR PAYMENT
AND BY CLIENT AGAINST SPRINKLER COMPANY, LANDSCAPE DESIGNER, MANUFACTURER
OF EQUIPMENT, ETC.
FOR ALLEGED DEFECTS

5. Sprinkler Repair and LD are each other's agent: Plaintiff is informed and believes and thereon alleges that in all times pertinent hereto, each Cross-Defendant was the agent and employee of each of its co-Cross-Defendants, and in doing the things described herein, was acting within the course and scope of his/her authority as such agent and employee, and each Cross-Defendant has ratified and approved the acts of his/her agents and employees.

11. Inspections and Recommendations: Plaintiff is informed and believes and thereon alleges that from time to time during the approximate period from October 1996 to the date of this Cross-Complaint, but particularly during the construction of the Project, Cross-Defendants performed inspections and reported on conditions of the Project, and made recommendations as to said conditions to co-Cross-Defendants.

12. Piercing the Corporate Veil to get at Owner's Assets: Insufficient Coverage: Plaintiff is informed and believes and thereon alleges that there exists, and at all times herein mentioned existed, a unity of interest and ownership between SPRINKLER REPAIR and Roes 66-75 (hereinafter “Alter Ego Cross-Defendants”) such that any individuality and separateness between SPRINKLER REPAIR and Alter Ego Roes 66-75 ceased to exist, and that, if the acts that harm Plaintiff are treated as those of SPRINKLER REPAIR alone, an inequitable result will follow such that equity requires Roes 66-75 be held responsible for the acts of SPRINKLER REPAIR; the circumstances which such liability should be imposed include, but are not limited to, failure to adequately capitalize the corporation, the total absence of corporate assets, or undercapitalization; diversion of assets from the corporation by or to a stockholder or other person or entity, to the detriment of creditors or other third parties, or manipulations of assets and liabilities between entities so as to concentrate the assets in one and the liabilities in another; contracting with another with intent to avoid performance by use of the corporate entity as a shield against personal liability; and formation and use of the corporation to transfer to it the existing liability of another person or entity.

26. Failure to Supervise and Report Defects: Specifically, Cross-Defendants, and each of them, failed to supervise the work of other Cross-Defendants herein; failed to ensure that reported and known defects were repaired; failed to notify Plaintiff of the existence of defective conditions (California Administrative Code Section 2800(f)).

27. Failure to Inspect; Defective Equipment: Additionally, Cross-Defendants failed to properly inspect, repair and maintain said property, negligently advised Plaintiff that all Project Defects had been repaired, and negligently performed inspections and repairs using methods and materials which were and are below applicable industry standards.

48. Non-conformance between Design Plan and Actual Construction: Plaintiff is informed and believes and thereon alleges that, Cross-Defendants, and each of them, obtained approval of Plans for the Project from the appropriate local building official, and subsequently changed, modified and altered those plans such that actual construction did not conform therewith, without authorization from the appropriate building official, said acts having directly and indirectly caused the damages and injury alleged herein.

53. More on Piercing the Corporate Veil: Failure to Maintain Corporate Separateness: Plaintiff is informed and believes and thereon alleges that SPRINKLER REPAIR is, and at all times herein mentioned was, a mere shell, instrumentality, and conduit through which Roes 66 through 75 carried on their personal business in the corporate name exactly as they had conducted it previous to incorporation, and as they continue to do so in the name of SPRINKLER REPAIR, exercising complete control and dominance of such business to such extent that any individuality or separateness between SPRINKLER REPAIR and Roes 66 through 75 does not, and at all times herein mentioned did not, exist.

54. More on Piercing the Corporate Veil: Failure to Maintain a Viable Corporation: Plaintiff is informed and believes and thereon alleges that SPRINKLER REPAIR is, and at all times herein mentioned was, controlled, dominated, and operated by Roes 66-75 as their individual business and alter ego, in that the activities and business of SPRINKLER REPAIR was carried out without the holding of directors or shareholders' meetings, proper records or minutes of corporate proceedings were not maintained, and Roes 66 through 75 entered into personal transactions with SPRINKLER REPAIR without the approval of other directors or shareholders.

LANDSCAPE DESIGN FIRM
DISCLOSURE AND CONDITIONS

1. It is understood by client that LD is a Landscape Designer and not a Landscape Architect as defined by the Landscape Architects Practice Act & California Code of Regulations; Title 16, Div. 26 (May 1998). Design services and consultation advice by LD are provided on a “best efforts” basis in conformity with the Standards of Practice of the Association of Professional Landscape Designers (APLD). Services and advice are limited to planning and conceptual design of exterior spaces and horticultural consultation and do not include any engineering services or structural analyses.

2. Unless stated otherwise, plans, sketches, diagrams, graphs, photos, etc. supplied by LD as part of design or consultation services, being intended as visual aids, are not necessarily to scale. Specifically, depictions of any and all features commonly known as “hardscaping,” including but not limited to decks, patios, retaining walls, driveways. parking areas, walkways, steps, pools and spas, benches, arbors, trellises, planters, boulders, storage areas, play structures and lighting fixtures are conceptual in nature and are not to be construed as engineered designs or specifications. It is understood that all construction and/or installation of such hardscape elements of the landscape design shall be done in accordance with all applicable standards, codes and regulations applying to such elements. In no case shall LD be held responsible for the structural integrity, safety, reliability or damage to persons or property resulting from improper engineering, construction or installation of such hardscape elements.

3. LD may, when requested or applicable, refer client to individuals or firms such as engineers, architects, arborists, growers, nurseries, contractors, gardeners, craftspeople, haulers or suppliers. Such referrals do not imply endorsement of any referred individual or firm or knowledge of valid licenses or permits that may be required to provide the services for which they were referred. LD will refer to a client only such individuals or firms believed by her to be competent to perform the services or supply products satisfactory to the project but cannot be responsible for damage or loss resulting from unsatisfactory performance by such individuals or firms.

4. Care has been taken to consider safety in the designs of landscapes. LD attempts to make the designs as free of hazards as practical for the application. However, LD cannot be held responsible for any liability arising from the use of the landscape developed from the designs. The client agrees to assume all such liabilities and to hold LD harmless from any such liability incurred including attorney fees.

5. LD assumes that the property is not in violation of any applicable codes, ordinances, statutes, or other governmental regulations and that any descriptions or measurements provided by the client are correct. LD is not responsible for changes not made known prior to completion of the design.

Agreed: ____________________

Client: ____________________


Samuel T. Swansen, PC

660 Sentry Parkway, Suite 200     Blue Bell, PA 19422

610-834-9810   610-834-9812 fax