FEBRUARY/MARCH 2008

Welcome to the inaugural AIA Michigan Government Affairs Committee (AIA GAC) E-Newsletter. This bimonthly e-newsletter is designed to keep our members informed about the activities of this committee and how you can get involved.

SB 865—Re-establishes the statute of limitations for malpractice claims architects and professional engineers at two years.
For as far back as records are available, the statute of limitations in Michigan for a malpractice claim against an architect has been two years from the date of the last professional service rendered.

In 1967, Michigan added a six-year “statute of repose” to protect architects from claims that were “discovered” long after a project was completed. In 1988, the Legislature passed an amendment to MCL 600.5805 to clarify which types of claims were covered by the statute of repose.

SB 865, sponsored by Senator Alan Sanborn (R-Richmond), and supported by AIA Michigan, would restore the statute of limitations for architects to a two-year period for malpractice as it was before Ostroth. The bill received a hearing on January 29, before the Senate Judiciary Committee, chaired by Senator Wayne Kuipers (R-Holland). AIA GAC appeared and testified in favor of the bill. On that same date, SB 865 was reported out of committee to the full Senate with a recommendation for passage.

HB 4937-4938—Would increase penalties for the unauthorized practice of architecture and professional engineer.
The unauthorized practice of architecture in Michigan is currently a low-level misdemeanor. The maximum penalties available are a $500 fine and 90 days in jail for the first offense, and a $1,000 fine and one year in jail for the second offense. It is difficult to motivate local prosecutors to take cases alleging non-licensed activity, as it is perceived as an insignificant crime. The deterrent effect of the current law is minimal. Increasing the penalties for the unlicensed practice of architecture should increase the interest in prosecution, and create a greater deterrent.

HB 4937-4938 was drafted with the assistance of the bill’s sponsors, Representatives Michael Sak (DGrand Rapids) and Barbara Farrah (D-Southgate). It increases the penalties available to a maximum fine of $25,000 for each offense, while maintaining the existing jail terms for first and second offenses.

The bill also includes a new felony provision that allows for a maximum jail sentence of up to four years, if an offense results in death or serious injury. A new provision also exists that would require restitution by the offender. Lastly, the bill precludes a party from maintaining an action for compensation in Michigan’s courts, if that party was unlicensed during the performance of the services rendered.

AIA Michigan supports HB 4937-4938. The bill has already passed the Michigan House. It is currently in the Senate Economic Development & Regulatory Reform Committee, chaired by Senator Alan Sanborn (R-Richmond).

SB 106—Requires a certificate of merit be filed by a plaintiff in the event of an action against an architect or professional engineer.
Architects face liability exposure for alleged negligence or malpractice in the course of their duties. They also are likely targets of suits from injured parties, who seek relief from anyone who may even be remotely involved in an alleged death, injury or damage connected to the built environment.

Faced with such risks, most architects carry malpractice insurance and most plaintiffs’ lawyers assume so. As a result, many malpractice and negligence claims brought against architects have no basis in fact or law, but are brought for strategic reasons by plaintiffs seeking to maximize the opportunity for recovery. Defending these groundless suits are a source of considerable cost to architects in the form of increased insurance premiums, lost productive time, and tarnished professional reputation, even if the suit is eventually dismissed.

To combat this problem, several states have adopted “Certificate of Merit” laws for architects. These laws require a plaintiff to review its malpractice claim with a third party architect and confirm the claim appears to have merit before a lawsuit may be commenced. The plaintiff must file a “Certificate of Merit” in the form of a sworn affidavit from the third-party architect, along with its compliant. The purpose of the law is to serve as a prophylactic device to filter out frivolous lawsuits. SB 106 was introduced by Senator Valde Garcia (R-Howell) and carefully crafted to assure that no meritorious claims will be affected.

SB 106, which is supported by AIA Michigan, is currently in the Senate Judiciary Committee, chaired by Senator Wayne Kuipers (R-Holland). SB 106 received a hearing on September 11, 2007. AIA GAC appeared and testified in favor of the bill.

Miller has instituted a profound change in established law and practice. In 1968, the attorney general issued an opinion that stated architects, although licensed professionals, could incorporate their businesses under the Business Corporation Act. Architects were not required to submit to the requirement that all shareholders must be licensees, which is mandatory for P.C.’s, (and for PLLC’s all members must be licensees).

AIA Michigan supports HB 5356-5358, which passed the Michigan House unanimously on December 6, 2007. The bill is currently in the Senate Economic Development & Regulatory Reform Committee, chaired by Senator Alan Sanborn (R-Richmond). HB 5356-5358 was given a hearing on January 23, 2008. AIA GAC appeared and submitted a statement of support.

HB 4770-4772—Amends Construction Code, Occupational Code and License Fee Act to license interior designers, create a state board and to allow interior designers to be issued building permits.
HB 4770-4772, sponsored by Representatives Bill Huizenga (R-Zeeland) and Andy Meisner (D-Ferndale) would establish “licensing” for interior designers and allow them to practice elements of architecture and engineering that are beyond their qualifications. HB 4770-4772 passed the Michigan House and is currently assigned to the Senate Commerce Committee, chaired by Senator Jason Allen (R-Traverse City). AIA Michigan opposes these bills and will continue to monitor their status.