Insulating Design Professional from Individual Liability

Since the mid 1980s, the design professional community relied upon Florida Power & Light Company v. Mid-Valley, Inc., 763 F. 2d 1316 (11th cir. 1985) as an accurate statement of Florida law allowing individual design professionals to limit their liability for professional negligence by contract.

The design professional world was turned on its head with the decision in Witt v. La Gorce Country Club, Inc., 35 So. 3d 1033 (Fla. 3d DCA 2010), which held that a limitation of liability clause was unenforceable by the individual design professional.

In Witt, Gerhardt M. Witt and Associates, Inc., a design company, entered into various contracts with La Gorce Country Club, Inc. for hydrogeologic consulting services and overall project coordination relative to the design and construction of a reverse osmosis water treatment system. The system was intended to desalinize water used to irrigate an exclusive golf course on Miami Beach.

During the fourteen month period the system was in use, its performance deteriorated and irrigation became laden with salts. Ultimately, the system failed completely and the golf course was burned by salts in the water.

The Country Club filed suit against the design company, as well as against Gerhardt M. Witt, the design company’s principal, alleging professional negligence. Although Witt, individually, attempted to insulate himself from liability under a limitation of liability provision in his contract with the Country Club, the court ultimately found the provision to be unenforceable by Witt. Unfortunately, the Supreme Court of Florida did not have the opportunity to evaluate the decision in Witt. Witt filed a petition with the Supreme Court to accept discretionary jurisdiction based upon a direct conflict. However, the petition was voluntarily dismissed by the parties as part of the settlement of the case.

In the context of Witt, it is important to recognize two competing public policies. On the one hand, parties are free to contract for rights and remedies as long as the underlying purpose of that contract is legal and does not offend public policy. Exculpatory clauses, including limitation of liability clauses, are valid and enforceable in Florida, as long as they clearly and unambiguously express the parties’ intent to exonerate one party from its own negligence.

On the other hand, design professionals have an ethical duty to protect the health, welfare and safety of the public. They often have greater responsibilities to their clients than non-professionals because of the fiduciary nature of the professional/client relationship. The fiduciary relationship is commonly utilized as the basis for the exception in the professional licensing statutes providing for individual liability, in spite of traditional corporate protections.

So impactful was the decision in Witt, that the Florida legislature has several times taken upon itself to limit the effect of the decision. Unfortunately, the various proposed bills have died before coming to fruition. At this point, any attempt to limit the effect of the Witt decision has not been re-introduced, and the movement appears to have lost steam.

So what’s the take away?

Design professionals need to be aware of Witt and its impact on an individual professional’s ability and inability to insulate him or herself from liability by way of an otherwise enforceable limitation of liability clause. Whether the legislature will limit or eviscerate Witt is yet to be seen. In the interim, design professional organizations should lobby the legislature in an effort to return previously proposed bills to the floor.