After three sessions of discussion and negotiation between owners, contractors, architects, and engineers, legislation limiting duty to defend clauses in contracts for architectural or engineering services is one step from final passage. HB 2116 by Rep. Matt Krause (R-Fort Worth) and Senator Beverly Powell (D-Fort Worth) amends §130.002, CPRC, to void a provision in a contract for engineering or architectural services to the extent that it requires a licensed engineer or architect to defend another party against a claim based wholly or partly on the owner’s negligence or breach of contract. It further provides that a covenant in such a contract may provide for the reimbursement of the owner’s reasonable attorney’s fees in proportion to the engineer or architect’s liability.
The bone of contention in this bill has always concerned the owner’s ability to tender the defense of a design defect claim to the person who actually did the design. As originally proposed, the bill would have nullified the right of a property owner to allocate risk in a construction contract to the party best able to defend the plans and specifications provided to the owners. Ongoing negotiations that extended all the way up to the Senate taking up the bill yesterday produced a compromise that permits the owner to require in the contract that the engineer or architect name the owner as an additional insured on any of the engineer or architect’s insurance coverage to the extent that additional insureds are allowed under the policy and provide any defense to the owner provided by the policy to the named insured. The compromise further exempts contracts in which the owner contracts with an entity to provide both design and construction services, as well as a covenant to defend a party, including a third party, against a claim for negligent hiring of the architect or engineer. Finally, the bill adds §130.0021, CPRC, to prohibit a contract for engineering or architectural services from requiring an engineer or architect to perform professional services to a level of professional skill and care beyond that which would be provided by an ordinarily prudent engineer or architect with the same professional license under the same or similar circumstances.
These changes to HB 2116 would not have been possible without the combined efforts over three sessions by TCJL, TXOGA, TCC, and TAM. While the outcome does not represent a perfect solution, HB 2116 continues to give property owners in Texas some latitude to require designers to defend them if a defect in the design is part of a lawsuit against an owner.