Orange County Branch Newsletter

December 2012

Law & CE - Do I Need to Report This?

What does a Professional Engineer need to Report to the Board of Professional Engineers and Land Surveyors Regarding Settlements and Civil Actions?


It is no secret that when it comes to a set of construction documents, there is no such thing as a perfect set.  Not every project is executed as planned, often resulting in lawsuits or threats of litigation.  Legal judgments may require you to notify the Board of Professional Engineers and Land Surveyors in order to remain in compliance with your obligations under the Professional Engineers Act. 

As a professional engineer, you are required to comply with state laws to keep your license active and in good standing.  This article examines the reporting requirements related to civil actions outlined in the Professional Engineers Act. (California Business and Professions Code §§ 6770 through 6770.6.)  If any of the events outlined below occur, engineers must report them to the Board, in writing, within 90 days of occurrence.  It must be noted that this article does not examine the reporting requirements for criminal convictions.

Who Must Report?

The reporting requirements not only apply to engineers, but also to owners of sole proprietorships, partnerships, firms, corporations and state or local government agencies where the engineer was responsible for the project that is subject to a civil judgment, settlement, or arbitration award.

Civil Actions - Business & Professions Code § 6770

Any judgment, settlement, arbitration award, or administrative action resulting from a civil action against an engineer in any action alleging fraud, deceit, misrepresentation, breach or violation of contract, negligence, incompetence, or recklessness by the engineer must be reported if the judgment, settlement, or arbitration award is $50,000 or greater.

Many engineers, at one point in their careers, will unfortunately be involved in a lawsuit.  The most common of these allege breach of contract and negligence.  Even if such a lawsuit is settled and the settlement value meets or exceeds $50,000, an engineer must report the settlement to the Board.  This includes confidential settlements and settlements that are paid directly from the insurer, whether or not there is any admission of wrong doing.

In reporting civil actions, the report submitted to the Board must set forth the facts that constitute the reportable event.  If the event involves a court, the report submitted to the Board must include the title of the matter, the court, case name, docket number and the date the reportable event occurred.  An engineer is obligated to “promptly” respond to oral or written inquiries from the Board related to the incident.  Failure to report such settlements within 90 days is grounds for disciplinary action.

If there is a looming lawsuit, either by way of a notice or demand letter, but where a formal complaint has not been filed, it is advantageous to try to resolve the dispute before a complaint is filed.  Besides saving financial drain and emotional strain associated with a lawsuit, an engineer can avoid reporting settlement to the Board.  The resolution of a pre-litigation matter is not reportable under the Professional Engineers Act even if the matter settles for $50,000 or more.  For example, if a civil action is not yet filed and the matter settles, an engineer is not required to report the settlement even if it meets or exceeds $50,000.

Always Report, Because the Board Will Find Out

Business and Professions Code sections 6770.1 and 6770.2 impose a duty on the court and your insurer to report the above incidents within 30 days.  Therefore, it is important that you promptly and properly notify the Board of any reportable incident outlined above, because the Board will likely find out.  A failure to report may subject you to disciplinary action.

Conclusion

The website for the Board of Professional Engineers and Land Surveyors (http://www.bpelsg.ca.gov) has numerous resources that can help professional engineers get started with the reporting process, including a standardized form to make the initial report.  Depending on the seriousness of the issues being reported, attorneys specializing in the representation of engineers can also provide valuable assistance in navigating the reporting process.

Please contact us at any of our offices located in Northern and Southern California to discuss further.


Michele L. Gamble, Esq.
750 The City Drive, Suite 400    
Orange, CA 92868
Phone:  (714) 823-4100
Fax:  (714) 823-4111
[email protected]
                    http://www.ccmslaw.com

Ashkan Yekrangi, Esq.
750 The City Drive, Suite 400    
Orange, CA 92868
Phone:  (714) 823-4100
Fax:  (714) 823-4111
[email protected]
                    http://www.ccmslaw.com

 

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