CALIFORNIA – On April 28, 2017, Governor Brown signed into law Senate Bill 496 (Cannella). The Bill, which is now codified in California Civil Code §2782.8, amended the statute to provide greater protection for design professionals. Under the prior law, design professionals1 that entered into contracts with public agencies where there was an indemnity provision would only be required to indemnify the public agency for claims arising out of the negligence, recklessness, or willful misconduct of the design professional. For private works projects, the state of the law was as interpreted by the court in the onerous case UDC v. CH2M Hill decision.2 In that case, a jury determined that CH2M Hill was not negligent in performance of its services. Notwithstanding the successful verdict, the courts determined that CH2M Hill was required to pay for the defense of UDC in the underlying complaint that gave rise to the dispute.
As amended, Section §2782.8 shall apply to all contracts entered into on or after January 1, 2018, wherein a contract that purports to indemnify the indemnitee is unenforceable, except to the extent that the claims arise out of the “negligence, recklessness, or willful misconduct of the design professional.”
In addition to providing this new protection for design professionals in private works projects, the new law also provides additional protection for those design professionals performing services for public agencies. That new pertinent language is as follows:
“In no event shall the cost to defend charged to the design professional exceed to the design professional’s proportionate percentage of fault.”
The law provides that the duty to defend as well as the duty to indemnify are limited as provided in this section and it may not be waived or modified by the parties.
Please click here to read the law in its entirety.
For more information, please contact partner William L. Coggshall.
1Design Professionals include licensed architects, landscape architects, professional engineers, and professional land surveyors.
2181 Cal. App. 4th 10 (2010).