Florida Statute 558.0035: Limiting Design Professional Negligence

Starting July 1, 2013, a new Florida Statute will allow businesses to limit, by contract, their employee’s liability for professional negligence claims.  Senate Bill 286 and Florida Statute Section 558.0035.  The new statute applies to business entities architects, interior designers, landscape architects, engineers, surveyors, and geologists.  The business entities that will be able to utilize the provisions of the statute include corporations, limited liability companies, partnerships, limited partnerships, proprietorships, firms, enterprises, franchises, associations, trusts, and self-employed individuals, whether fictitiously named or not, doing business in the State of Florida.

Under current Florida law, employees of companies may be liable for professional negligence, even though the contract for professional services was between the employer and the claimant.  Moransais v. Heathman, 744 So. 2d 973 (Fla. 1999).  In Moransais, the Florida Supreme Court held that the economic loss rule did not bar the claim against the individual design professional employee, even though there was a contract between the claimant and the employer for the services that were the subject of the lawsuit.

In addition, there is Florida law holding that a contractual limitation of liability clause will not shield an individual design professional from a professional negligence claim.  Witt v. La Gorce Country Club, Inc., 35 So. 3d 1033 (Fla. 3rd DCA 2010).  Section 558.0035 of the Florida Statutes could significantly limit the types of claims at issue in Moransais and Witt, provided certain conditions apply.

In order for Section 558.0035 of the Florida Statutes to limit liability for professional negligence claims, the following conditions must be met:

1. the contract is made between the business entity and a claimant or other entity to provide professional services to the claimant;
2. the contract does not name as a party the individual employee or agent who will perform the professional services;
3. the contract includes a prominent statement, in uppercase font that is at least 5 point sizes larger than the rest of the text, that, pursuant to this section, an individual employee or agent may not be individually liable for negligence;
4. the business entity maintains any professional liability insurance required under the contract; and
5. any damages are solely economic in nature and the damages do not extend to personal injuries or property not subject to the contract.

If conditions 1-5 above are not met, a claimant may still have a professional negligence claim against the design professional employee, despite having a contract with his/her employer and not the employee.  Additionally, Section 558.0035 will not limit professional negligence claims by parties who have no contract with the design professional employee or his/her employer.