senate Bill S5038A

Requires contracts between professional design firms and municipal corporations, state and local authorities, or state departments contain language concerning indemnification

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 07 / May / 2013
    • REFERRED TO LOCAL GOVERNMENT
  • 04 / Jun / 2013
    • REPORTED AND COMMITTED TO FINANCE
  • 08 / Jan / 2014
    • REFERRED TO LOCAL GOVERNMENT
  • 04 / Feb / 2014
    • REPORTED AND COMMITTED TO FINANCE
  • 10 / Feb / 2014
    • AMEND AND RECOMMIT TO FINANCE
  • 10 / Feb / 2014
    • PRINT NUMBER 5038A

Summary

Requires contracts between professional design firms and municipal corporations, state and local authorities, or state departments contain language concerning indemnification.

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Bill Details

See Assembly Version of this Bill:
A7275B
Versions:
S5038
S5038A
Legislative Cycle:
2013-2014
Current Committee:
Senate Finance
Law Section:
General Municipal Law
Laws Affected:
Add §103-h, Gen Muni L; add §2879-d, Pub Auth L; amd §136-a, St Fin L

Sponsor Memo

BILL NUMBER:S5038A

TITLE OF BILL: An act to amend the general municipal law, the public
authorities law and the state finance law in relation to contracts
with professional design firms

PURPOSE:

To make indemnification language in contracts with public entities
standard throughout the state and to prevent design professionals from
indemnifying clients for damages that fall outside their professional
standard of care.

SUMMARY OF PROVISIONS:

Section 1 amends article 5A of the general municipal law by adding a
new section 103-h.

Section 2 amends title 4 of article 9 of the public authorities law by
adding a new section 2879d.

Section 3 amends section 136-a of the state finance law by adding a
new subdivision 6.

Section 4 sets the effective date.

JUSTIFICATION:

Indemnification is an agreement between two parties for one party to
assume liability in the event of a loss. A consultant may at times
indemnify a client and assume some of the client's legal liabilities
and thereby acts as an insurer for the client. Some public clients in
New York State have been asking consultants to indemnify them for
things that cannot be insured. If a consultant signs an indemnity that
is not limited to just consultant's negligence they are accepting
liability beyond that required by law and beyond that for which they
are insured.

Professional liability insurance covers consultants against damages
resulting from negligent professional acts, errors or omissions. To
prove negligence, a claimant must establish the consultants' duty to
adhere to standard of care, and establish their failure to do so and
then prove that this failure proximately resulted in injury or damage
to the claimant.

This legislation will make indemnity language standard throughout New
York State fox public entities. Professional firms will indemnify and
hold clients harmless from all third party claims, liabilities,
damages and costs arising cut of negligent acts, errors and omissions
for whom the design consultant is legally liable.

LEGISLATIVE HISTORY:

This is a new bill.

FISCAL IMPLICATIONS:


None to the state.

EFFECTIVE DATE:

This act shall take effect immediately.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5038--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               May 7, 2013
                               ___________

Introduced  by  Sens. MARTINS, SEWARD -- read twice and ordered printed,
  and when printed to be committed to the Committee on Local  Government
  -- recommitted to the Committee on Local Government in accordance with
  Senate  Rule  6,  sec. 8 -- reported favorably from said committee and
  committed to the Committee on Finance --  committee  discharged,  bill
  amended,  ordered reprinted as amended and recommitted to said commit-
  tee

AN ACT to amend the general municipal law, the  public  authorities  law
  and  the  state finance law in relation to contracts with professional
  design firms

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The  general  municipal  law  is  amended by adding a new
section 103-h to read as follows:
  S 103-H. INDEMNIFICATION LANGUAGE IN CONTRACTS.   1.  DEFINITIONS.  AS
USED IN THIS SECTION:
  A.  THE  TERM  "MUNICIPAL CORPORATION" SHALL MEAN A COUNTY, TOWN, CITY
AND VILLAGE.
  B. THE TERM "PROFESSIONAL FIRM" SHALL BE DEFINED AS ANY INDIVIDUAL  OR
SOLE  PROPRIETORSHIP,  PARTNERSHIP,  CORPORATION,  ASSOCIATION, OR OTHER
LEGAL ENTITY PERMITTED BY LAW TO PRACTICE THE PROFESSIONS  OF  ARCHITEC-
TURE, ENGINEERING OR SURVEYING.
  2.  ALL  CONTRACTS SUBJECT TO THIS ARTICLE SHALL INCLUDE THE FOLLOWING
LANGUAGE:
  "TO THE FULLEST EXTENT PERMITTED BY LAW, THE PROFESSIONAL FIRM  AGREES
TO INDEMNIFY AND HOLD THE MUNICIPAL CORPORATION, ITS OFFICERS, DIRECTORS
AND EMPLOYEES HARMLESS FROM ALL THIRD PARTY CLAIMS, LIABILITIES, DAMAGES
AND COSTS (INCLUDING ALL REASONABLE ATTORNEY'S FEES AND COST OF DEFENSE)
TO  WHICH THE MUNICIPAL CORPORATION, ITS OFFICERS, DIRECTORS AND EMPLOY-
EES MAY BE SUBJECT TO, ARISING OUT OF THE DEATH OR BODILY INJURY TO  ANY
PERSON OR THE DESTRUCTION OR DAMAGE TO ANY PROPERTY TO THE EXTENT CAUSED

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10794-02-4

S. 5038--A                          2

BY THE NEGLIGENT ACTS, ERRORS OR OMISSIONS, OR WILLFUL MISCONDUCT OF THE
PROFESSIONAL  FIRM'S PERFORMANCE OF PROFESSIONAL SERVICES PROVIDED UNDER
THIS AGREEMENT AND THOSE OF ITS SUB-CONSULTANTS OR ANYONE FOR  WHOM  THE
PROFESSIONAL FIRM IS LEGALLY LIABLE."
  "TO  THE  FULLEST  EXTENT  PERMITTED BY LAW, THE MUNICIPAL CORPORATION
AGREES TO INDEMNIFY AND HOLD THE PROFESSIONAL  FIRM  HARMLESS  FROM  ALL
THIRD  PARTY  CLAIMS,  LIABILITIES,  DAMAGES  AND  COSTS  (INCLUDING ALL
REASONABLE ATTORNEY'S FEES AND COST OF DEFENSE) TO THE EXTENT CAUSED  BY
THE  NEGLIGENT  ACTS,  ERRORS OR OMISSIONS OF THE MUNICIPAL CORPORATION,
ITS CONTRACTORS, CONSULTANTS OR ANYONE FOR  WHOM  THE  MUNICIPAL  CORPO-
RATION IS LEGALLY LIABLE."
  3. NOTHING IN THIS SECTION SHALL BE CONSTRUED AS REQUIRING A NOTICE OF
CLAIM  OR  OTHER  CONDITION  PRECEDENT  IN  LITIGATION FOR ANY PARTY NOT
OTHERWISE ENTITLED TO RECEIVE ONE, NOR SHALL IT REQUIRE ANY ACTION TO BE
BROUGHT BY OR AGAINST ANY PARTY IN THE COURT OF  CLAIMS  UNLESS  SUCH  A
REQUIREMENT PREVIOUSLY EXISTED AS TO THAT PARTY.
  S  2.  The  public  authorities law is amended by adding a new section
2879-d to read as follows:
  S 2879-D. INDEMNIFICATION LANGUAGE IN CONTRACTS.   1. DEFINITIONS.  AS
USED IN THIS SECTION:
  A.  THE TERM "STATE AUTHORITY" SHALL MEAN A PUBLIC AUTHORITY OR PUBLIC
BENEFIT CORPORATION CREATED BY OR EXISTING UNDER  THIS  CHAPTER  OR  ANY
OTHER  LAW  OF  THE  STATE  OF NEW YORK, WITH ONE OR MORE OF ITS MEMBERS
APPOINTED BY THE GOVERNOR OR WHO SERVE AS MEMBERS BY VIRTUE OF HOLDING A
CIVIL OFFICE OF THE STATE, OTHER THAN  AN  INTERSTATE  OR  INTERNATIONAL
AUTHORITY  OR PUBLIC BENEFIT CORPORATION, INCLUDING SUBSIDIARIES OF SUCH
PUBLIC AUTHORITY OR PUBLIC BENEFIT CORPORATION.
  B. THE TERM "LOCAL AUTHORITY" SHALL MEAN: (A) A  PUBLIC  AUTHORITY  OR
PUBLIC  BENEFIT CORPORATION CREATED BY OR EXISTING UNDER THIS CHAPTER OR
ANY OTHER LAW OF THE STATE OF NEW YORK WHOSE MEMBERS DO NOT HOLD A CIVIL
OFFICE OF THE STATE, ARE NOT APPOINTED BY THE GOVERNOR OR ARE  APPOINTED
BY  THE  GOVERNOR  SPECIFICALLY  UPON  THE  RECOMMENDATION  OF THE LOCAL
GOVERNMENT OR GOVERNMENTS; (B) A NOT-FOR-PROFIT  CORPORATION  AFFILIATED
WITH,  SPONSORED  BY,  OR  CREATED  BY  A  COUNTY, CITY, TOWN OR VILLAGE
GOVERNMENT; (C) A LOCAL INDUSTRIAL DEVELOPMENTAL AGENCY OR AUTHORITY  OR
OTHER  LOCAL  PUBLIC BENEFIT CORPORATION; (D) AN AFFILIATE OF SUCH LOCAL
AUTHORITY; OR (E) A LAND BANK CORPORATION CREATED  PURSUANT  TO  ARTICLE
SIXTEEN OF THE NOT-FOR-PROFIT CORPORATION LAW.
  C.  THE  TERM  "PROFESSIONAL  FIRM"  SHALL MEAN ANY INDIVIDUAL OR SOLE
PROPRIETORSHIP, PARTNERSHIP, CORPORATION, ASSOCIATION,  OR  OTHER  LEGAL
ENTITY  PERMITTED  BY  LAW  TO PRACTICE THE PROFESSIONS OF ARCHITECTURE,
ENGINEERING OR SURVEYING.
  2. ALL CONTRACTS SUBJECT TO THIS ARTICLE SHALL INCLUDE  THE  FOLLOWING
LANGUAGE:
  "TO  THE FULLEST EXTENT PERMITTED BY LAW, THE PROFESSIONAL FIRM AGREES
TO INDEMNIFY AND HOLD THE  STATE  AND  LOCAL  AUTHORITY,  ITS  OFFICERS,
DIRECTORS  AND  EMPLOYEES  HARMLESS FROM ALL THIRD PARTY CLAIMS, LIABIL-
ITIES, DAMAGES AND COSTS (INCLUDING ALL REASONABLE ATTORNEY'S  FEES  AND
COST  OF  DEFENSE) TO WHICH THE STATE AND LOCAL AUTHORITY, ITS OFFICERS,
DIRECTORS AND EMPLOYEES MAY BE SUBJECT TO, ARISING OUT OF THE  DEATH  OR
BODILY INJURY TO ANY PERSON OR THE DESTRUCTION OR DAMAGE TO ANY PROPERTY
TO  THE  EXTENT  CAUSED  BY  THE NEGLIGENT ACTS, ERRORS OR OMISSIONS, OR
WILLFUL MISCONDUCT OF THE PROFESSIONAL  FIRM'S  PERFORMANCE  OF  PROFES-
SIONAL  SERVICES PROVIDED UNDER THIS AGREEMENT AND THOSE OF ITS SUB-CON-
SULTANTS OR ANYONE FOR WHOM THE PROFESSIONAL FIRM IS LEGALLY LIABLE."

S. 5038--A                          3

  "TO THE FULLEST EXTENT PERMITTED BY LAW, THE STATE AND LOCAL AUTHORITY
AGREES TO INDEMNIFY AND HOLD THE PROFESSIONAL  FIRM  HARMLESS  FROM  ALL
THIRD  PARTY  CLAIMS,  LIABILITIES,  DAMAGES  AND  COSTS  (INCLUDING ALL
REASONABLE ATTORNEY'S FEES AND COST OF DEFENSE) TO THE EXTENT CAUSED  BY
THE  NEGLIGENT ACTS, ERRORS OR OMISSIONS OF THE STATE AND LOCAL AUTHORI-
TY, ITS CONTRACTORS, CONSULTANTS OR ANYONE FOR WHOM THE STATE AND  LOCAL
AUTHORITY IS LEGALLY LIABLE."
  3. NOTHING IN THIS SECTION SHALL BE CONSTRUED AS REQUIRING A NOTICE OF
CLAIM  OR  OTHER  CONDITION  PRECEDENT  IN  LITIGATION FOR ANY PARTY NOT
OTHERWISE ENTITLED TO RECEIVE ONE, NOR SHALL IT REQUIRE ANY ACTION TO BE
BROUGHT BY OR AGAINST ANY PARTY IN THE COURT OF  CLAIMS  UNLESS  SUCH  A
REQUIREMENT PREVIOUSLY EXISTED AS TO THAT PARTY.
  S 3. Section 136-a of the state finance law is amended by adding a new
subdivision 6 to read as follows:
  6.  (A) DEFINITIONS. AS USED IN THIS SUBDIVISION:
  (I)  THE  TERM  "STATE  DEPARTMENT"  SHALL MEAN THOSE STATE GOVERNMENT
DEPARTMENTS, DIVISIONS OR COMMISSIONS EMPOWERED BY THE  STATE  TO  ENTER
INTO CONTRACTUAL AGREEMENTS ON BEHALF OF THE STATE OF NEW YORK.
  (II)  THE  TERM "PROFESSIONAL FIRM" SHALL BE DEFINED AS ANY INDIVIDUAL
OR SOLE PROPRIETORSHIP, PARTNERSHIP, CORPORATION, ASSOCIATION, OR  OTHER
LEGAL  ENTITY  PERMITTED BY LAW TO PRACTICE THE PROFESSIONS OF ARCHITEC-
TURE, ENGINEERING OR SURVEYING.
  (B) ALL CONTRACTS SUBJECT TO THIS ARTICLE SHALL INCLUDE THE  FOLLOWING
LANGUAGE:
  "TO  THE FULLEST EXTENT PERMITTED BY LAW, THE PROFESSIONAL FIRM AGREES
TO INDEMNIFY AND HOLD THE STATE DEPARTMENT, ITS OFFICERS, DIRECTORS  AND
EMPLOYEES HARMLESS FROM ALL THIRD PARTY CLAIMS, LIABILITIES, DAMAGES AND
COSTS  (INCLUDING ALL REASONABLE ATTORNEY'S FEES AND COST OF DEFENSE) TO
WHICH THE STATE DEPARTMENT, ITS OFFICERS, DIRECTORS AND EMPLOYEES MAY BE
SUBJECT TO, ARISING OUT OF THE DEATH OR BODILY INJURY TO ANY  PERSON  OR
THE  DESTRUCTION  OR  DAMAGE TO ANY PROPERTY TO THE EXTENT CAUSED BY THE
NEGLIGENT ACTS, ERRORS  OR  OMISSIONS,  OR  WILLFUL  MISCONDUCT  OF  THE
PROFESSIONAL  FIRM'S PERFORMANCE OF PROFESSIONAL SERVICES PROVIDED UNDER
THIS AGREEMENT AND THOSE OF ITS SUB-CONSULTANTS OR ANY ONE FOR WHOM  THE
DESIGN CONSULTANT IS LEGALLY LIABLE."
  "TO  THE  FULLEST EXTENT PERMITTED BY LAW, THE STATE DEPARTMENT AGREES
TO INDEMNIFY AND HOLD THE PROFESSIONAL  FIRM  HARMLESS  FROM  ALL  THIRD
PARTY  CLAIMS,  LIABILITIES, DAMAGES AND COSTS (INCLUDING ALL REASONABLE
ATTORNEY'S FEES AND COST OF DEFENSE) TO THE EXTENT CAUSED BY THE  NEGLI-
GENT ACTS, ERRORS OR OMISSIONS OF THE STATE DEPARTMENT, ITS CONTRACTORS,
CONSULTANTS OR ANYONE FOR WHOM THE STATE DEPARTMENT IS LEGALLY LIABLE."
  (C)  NOTHING  IN  THIS  SUBDIVISION  SHALL BE CONSTRUED AS REQUIRING A
NOTICE OF CLAIM OR OTHER CONDITION PRECEDENT IN LITIGATION FOR ANY PARTY
NOT OTHERWISE ENTITLED TO RECEIVE ONE, NOR SHALL IT REQUIRE  ANY  ACTION
TO BE BROUGHT BY OR AGAINST ANY PARTY IN THE COURT OF CLAIMS UNLESS SUCH
A REQUIREMENT PREVIOUSLY EXISTED AS TO THAT PARTY.
  S 4. This act shall take effect immediately.

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