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Geotechnical News • March 2013
53
ASFE NEWS
warranty because the design contracts
did not expressly require the home to
be designed to ensure a specific view.
North Peak did not assert a claim for
ordinary breach of contract or for
breach of an express warranty. Rather,
the complaint alleges that by provid-
ing design plans that did not properly
align the house, Architect breached an
implied warranty that it had exercised
its skill with care and diligence and in
a reasonable, non-negligent manner. In
addition, nothing in Donnelly suggests
that implied warranty is dependent on
the design professional breaching any
specific contractual provision. Accept-
ing the allegations in North Peak’s
complaint as true, we conclude that
North Peak properly pleaded a claim
for breach of implied warranty against
Architect.
“Architect also argues that the judg-
ment in favor of Defendants Mark
Fredstrom and his wife should be
affirmed for the separate reason that
Mark Fredstrom signed the contract
with Scaramella in his capacity as
president of Architecture Plus, Ltd.
and not in his personal capacity.
We disagree, because North Peak’s
implied warranty is not based on Scar-
amella’s contract with Architecture
Plus, Ltd. Rather, the implied warranty
is based on (1) North Peak’s alleged
reliance on the architectural plans and
specifications, (2) Donnelly’s recogni-
tion that ‘design professionals’ warrant
‘that they have exercised their skills
with care and diligence and in a rea-
sonable, non-negligent manner.”
Bottom line: While the economic-
loss doctrine still exists in Arizona,
a breach-of-implied-warranty claim
creates an effective work-around. In a
word,
BEWARE
.
Terra Stock Achieves 96th
Record-High
ASFE-Member Firms that obtain their
professional liability insurance from
Terra Insurance Company saw their
investment in the company grow 7.5%
between June 30, 2011 and June 30,
2012, as the company announced a
new-record-high $312.95 book value
per share (BVPS) at the end of the
second quarter 2012. Terra is a risk-
retention group: By law, each insured
must also be an owner of the group;
only insureds may own the stock.
According to Terra CEO David L.
Coduto, “Since converting to risk-
retention-group status in 1988, Terra
has achieved positive earnings for 97
consecutive calendar quarters and a
new-record-high BVPS in 96 of 97 of
those quarters. But Terra is far more
than just an investment.”
Mr. Coduto explained that “Terra’s
refined corporate culture emphasizes
excellent financial and claim manage-
ment, the creation and continuing
improvement of outstanding insurance
products, and superior services to
support those products. By focusing
on the risk-management and loss-
prevention activities of our owner/
insureds, we help improve both their
and Terra’s profits and operating
efficiency. We never forget that each
policyholder is an owner and deserves
to be treated as such. We respond
immediately to their requests, be it for
contract review, negotiation guidance,
or other services. We reimburse many
of our policyholders’ professional-
development pursuits.
...we’re animals,
meaning that
conflict is
inevitable...
Our telephones are always answered
by staff members during normal
business hours; all Terra employees,
including upper management, are
readily available and easily accessible
to policyholders and anyone interested
in learning about the company. Poli-
cyholders and prospective policyhold-
ers speak directly with the decision
makers; there is no middleperson or
filtering device between manage-
ment and an insured or a prospective
insured. This strong corporate culture
and experience is what we call ‘The
Terra Difference.’”
A.M. Best Company, the internation-
ally recognized insurance company
rating organization, qualitatively
rates Terra “A, Excellent.” Terra also
enjoys an implied qualitative rating of
“A++, Superior,” pursuant to its score
on Best’s Capital Adequacy Ratio
(BCAR) analysis.
Terra provides a variety of profes-
sional-liability insurance products to
geoprofessional firms whose gross
revenues range from $300,000 to more
than $100 million annually.
More information about Terra and the
products it offers, as well as free risk-
management publications and videos,
can be found at www.terrarrg.com, or
by contacting Terra Insurance Com-
pany, 2 Fifer Avenue/Suite 100, Corte
Madera, CA 94925; tel. 1/800-872-
0077 (in CA, 415/927-2901); e-mail
terra@terrarrg.com.
Upcoming meetings
Mark your calendar! You don’t want
to miss any of the upcoming meetings
of
ASFE/T
he
G
eoprofessional
B
usiness
A
ssociation
.
April 25-27, 2013
ASFE Spring (Annual) Meeting
Wild Dunes Resort
Isle of Palms, South Carolina
October 10-12, 2013
ASFE Fall Meeting
Boston Marriott Copley Place
Boston, MA
April 10-12, 2014
ASFE Spring (Annual) Meeting
The Fairmont Orchid, Hawaii
The Big Island, Hawaii
Business 101
Why can’t we all get along? Because
we’re animals, meaning that conflict
is inevitable as long as food, mates,
and territory are limited. (In the case
of humans, add money to that list.)
These conditions are aggravated at
work because the workplace is com-