corporate protection from lawsuits against ses

huangyhg

corporate protection from lawsuits against se's
sundale and i got into a somewhat off-topic conversation on this post:  
my understanding is that a client can sue you, your office or you and your office jointly.... as an employee, your office can sue you...
dik
jae...excellent question and point.
some states have joint and several liability clauses in their engineering laws, so the corporation can be sued and the engineer can be personally sued for the same activity.
for an employer who does not have an employment contract with the engineer (essentially employment at will), there is an assumption of indemnification of the employee since the primary benefit of the employee's efforts is for the corporation.  to my knowledge, there is nothing that makes the employer provide such indemnification; however, it is generally accepted to be the case, particularly in larger firms.
the good part of all of this is that attorneys usually chase the money and individuals usually have comparitively little to contribute in a sizeable lawsuit.  that doesn't keep them from making life miserable for you and causing one to spend a lifetime of savings or assets in the initial defense.  
the accuser also bears the burden of proof of negligence or incompetence, both of which are usually tied to a local standard of care.  one or the other is usually needed to cause license action and to affect a positive outcome for the accuser in court.
now...anyone for moving their assets to their wife's name?
moving your assets to your wife's name is only a valid scheme in a minority of states, i think.  fortunately, my home state of colorado does not make one spouse monetarily liable for the debts/torts incurred by the other spouse.  i learned this when i took a deadbeat client (and her husband) to small claims court for non-payment of a structural fee.
you could most likely protect your assets to some degree with such a spousal holdings scheme, but i have also heard this may work against you too.  plaintiff's lawyer: "you see, this guy knew he was incompetent and was intentionally planning on performing sub-standard engineering, and that is why he tranferred all his assets to his wife"
most lawsuits involving construction typically seem to entail a "shotgun" approach by the plaintiff's dung beetle lawyer: sue everybody remotely involved with the project in an attempt to obtain a monetary settlement out of as many sources of insurance as possible: blackmail of a sort.
i sleep ok (not great, just ok) at night about the assets issue, but i would hate to see some kind of lifetime wage garnishment result from a judgement against me personally as an eor.
i know a lot of engineers who set up corporations for the sole purpose of protecting (separating) their personal assets from the business so that lawsuits can't get at the personal.
this did not happen to an se, but something like it could have, i'll keep the story short. it's 1977, we (the contractor) had a bridge construction contact with the state dot. at the preconstruction conference an at&t engineer assured both us and dot that existing phone lines on the project site would be relocated by a certain date. they were not, causing us considerable delay & expense. we filed a claim for compensation with at&t - claim denied. we filed a law suit against at&t. in court - on the witness stand, our lawyer "tore apart" that at&t engineer for his "empty" promises - this was done in front of at&t executives. he had the "personal" shielding of his corporation, but i bet his future with at&t was "limited".
we won the law suit (and collected), even after at&t appealed the verdict to the state supreme court.
note that we did not have a contractual relationship with at&t. we sued at&t (a third party) under the doctrine of "promissory estoppel". we had reason to rely on what the at&t engineer had promised at the preconstruction conference as being true.
if you work for a corperation, you should be indemnified by the corperation if you are an employee (even a sloe employee. if you are malicious, you may incur personal liability. partnerships and sole propriterships i do not believe afford the same protection. different states are different. one place for exposure is if you are working for the owner managing the construction contract, and you recieve payment from the owner on behalf of the contractor and do not promptly pay the contractor, in some states the contactor can go after the officers. but as always, check with your lawyer.
great discussion.  i re  
              structural engineer          real estate agent
education:    bsce, perhaps msce           113 hour class
tutelage:     4 years                      zero to 2 years
testing:      fe, sei, maybe seii          8 hr exam
liability:    tremendous                   virtually none
fee %:        2% is wonderful              2.8% or 6%
work for fee: design and detail            drive, look, forms
you have to like our profession.  from a cost to benefit anaysis, you should have your head examined if you are a structural engineer.
the running joke among my local colleages is:  i wonder what i did in a previous life to deserve this?  most of our wives make more than we with far less responsibility to the public.  it's a curse, but i love the job.
jordan
woodengineer... you hear about the wooden cow...
wooden milk...
it might surprise you that even as an eit... you may still be liable although the court may hold you to a lesser standard...
sundale... the shotgun approach helps protect the lawyer... if there is someone he should have sued and didn't, he can be liable! and it gets sillier and sillier...
dik