“Legal Liability Issues for Minnesota Land Surveyors”[1]

Presented by Matthew J. Pfohl

To The Minnesota Society of Professional Surveyors

59th Annual Meeting

January 28, 2011[2]

INTRODUCTION

  • Role of Land Surveyors in real property transactions and land use activities
  • Possibility of mistakes and errors is real
  • Liability issues – What to expect if you are sued or threatened with a lawsuit, and how to protect yourself

I. LIABILITY CLAIMS GENERALLY

1.Types of Mistakes

2.Three general types of claims:

a.Boundary lines

b.Acreage

c.Physical Features

3.General Basis for Liability – Contract or Tort liability

a.Privity of Contract

b.Tort - Negligence / Negligent Misrepresentation

c.Duty of reasonable care, skill and diligence

4.Third parties typically - Purchaser of land brings action against surveyor hired by prior owner.

a.The surveyor may have made a mistake in drawing the boundary lines or in charting its features

b.Purchaser suffered a loss in value of the land or incurred some expense in correcting the situation

5.Christensen v. Bonnema, 395 N.W.2d 440 (Minn. Ct. App. 1986).

II. DAMAGES

  1. Most claims by third parties, and damages fall into two categories
  1. Purchaser suffered a loss in value of the land
  1. Purchaser incurred some expense in correcting the situation
  1. Attorneys’ fees to defend an action against the homeowner?
  1. Criminal violations of building ordinances and setback ordinances? (MN lakes)
  1. Neighbors’ Civil Actions?
  1. Costs to move a structure?
  1. Boathouse?
  1. Water line?
  1. Septic Tank?
  1. Home?
  1. Costs to re-survey?
  1. Other economic and non-economic damages?
  1. Interest?
  1. Trespass?
  1. Wright v. Wilcox, 586 S.E.2d 364 (Ga. 2003).

III. LEGAL DEFENSES

1.Statute of limitations – Minn. Stat. section 541.052 (2 years)

2.Statute of Repose (10 years)

3.Fraud exception

4.Discovery Rule

5.Duty/Breach/Causation

6.Granlund v. Lumley, 2007 WL 1412910 (unpublished) (Minn. Ct. App. May 15, 2007).

IV. RISK MANAGEMENT / HOW TO AVOID LIABILITY

  1. Know your client
  1. Past experience? References?
  1. Financial resources/solvent? Slow Payments?
  1. Reasonable expectations (quality work requires adequate budget)? Unusual requirements?
  1. Litigious history?
  1. Contingent fee arrangement?
  1. Use written contracts
  1. Commit oral agreements to writing
  1. What is the scope of services?
  1. Negotiate fees in advance, explain them clearly, formally identify expectations, costs, limitations
  1. Shift risk of loss if possible
  1. Avoid making warranties or performance guarantees
  1. Use attorney to draft or review contracts
  1. Complete and accurate reflection of your services and the obligations you have to other project participants?
  1. Fair in the allocation of risk that you retain?
  1. Consistent with other project documents?
  1. Perform your job
  1. If you perform, you will minimize potential for disputes
  1. Avoid conflicts of interest or the appearance of impropriety.
  1. Maintain training
  1. Encourage continuing professional education
  1. Support and encourage membership in professional associations
  1. Recognize and resolve potential problems
  1. Try to recognize and resolve immediately when they arise and before they develop into a dispute
  1. Good relationships with mutual respect, rapport and open communications are key
  1. Bill monthly, and discuss payment problems promptly.
  1. Document your Files
  1. Note significant events when they occur
  1. All file activity is preferred
  1. Keep clients informed with periodic status reports – Email is fine.
  1. Procure Professional Liability (Errors/Omissions) Insurance
  1. Provide you with legal support
  1. Provide risk management programs, review contracts, seminars, private reviews, written information
  1. Notify insurer immediately if you think might be a claim
  1. Don’t sign releases or settlements without insurance company approval
  1. Maintain reasonable workloads
  1. Consult specialists when necessary
  1. Don’t accept jobs beyond your firm’s scope unless you have an insured and licensed sub-consultant to do the work
  1. Have them indemnify you for your losses

End of Presentation

1

[1] Materials by Thomas B. Olson, Scott M. Lucas, Matthew J. Pfohl and Shaun D. Redford, Olson & Lucas PA, Edina, MN.

[2] NOTE: These materials are presented to provide information about the subject matter covered, are distributed for educational purposes only, and provided with the understanding that these materials and the oral presentation thereof do not constitute legal, accounting, or other professional advice. Attorneys using these materials in dealing with any specific matter should consult the original sources cited. These materials are not a substitute for consulting with an attorney to discuss any specific matter.