May/June 2018

Legal Beat
Unlicensed Practice, Compensation and Care, PE RIP

BY ARTHUR SCHWARTZ, DEPUTY EXECUTIVE DIRECTOR AND GENERAL COUNSEL

Question: Is a contract valid if the engineer performing the services under the contract is not licensed in the state in which the individual is performing or holding him/herself out as a professional engineer? (Utah)

Answer: Clients and customers of unlicensed engineers have sometimes taken the position that when an individual is unlicensed in the state in which the engineering services are offered and performed, the contract is illegal and therefore unenforceable. However, the unlicensed individual sometimes seeks “equitable relief” in court through what is generally referred to as “quasicontract” or “equitable estoppel,” arguing that it would be unjust for the client to receive services for free because this would constitute an “unjust enrichment” to the client. This of course is separate and apart from the state engineering licensing board’s authority and responsibility to take enforcement action against the unlicensed practice of engineering under state law. These cases tend to be very fact specific. If the service provider misled or deceived the client, arguing quasicontract will be more difficult for them. If the client knowingly accepted the services, knew or should have known that the service provider was unlicensed, or where the service provider was only in technical violation of the law (e.g., a recently expired license), the service provider will have an easier time proving quasicontract and obtaining his or her professional fee.

Question: I was recently retained by a client to design a mechanical system for a facility being constructed. However, since the client did not want to pay for complete design services, I prepared a very basic set of drawings for submission to local building officials. While I provided exactly what the client was willing to pay for, does this situation raise any risks? (Mississippi)

Answer: Professional engineers are required to use reasonable care when providing professional services, regardless of the compensation level for those services. In addition, code enforcement officials expect to receive documents that can be evaluated by the reviewing agency. Documents submitted to a code official for review should be complete enough and accurate enough to allow the code official to effectively evaluate the contents. When code officials or clients receive documents that do not demonstrate the required reasonable care, they may question the individual’s competence or whether the professional acted in a negligent manner. Ultimately, these matters may result in investigations and disciplinary action by the state licensing board.

Question: A professional engineer colleague in my community recently passed away. The engineer owned an engineering sole proprietorship and had several employees. Following the engineer’s death, the firm apparently continued to perform professional services without a professional engineer’s involvement in the practice. Do any states address practice procedures when a professional engineer passes away? (Texas)

Answer: As one example, the Oklahoma State Board of Registration for Professional Engineers and Land Surveyors has reported that if the death of a professional engineer or professional land surveyor in responsible charge of a firm occurs, it is very important to notify the board as soon as possible. The board acknowledged that there is no provision in the law regarding how long a firm is allowed to operate prior to replacing the professional engineer or land surveyor if they are the only licensed professional in charge of the work. If the firm notifies the board of the situation, the board noted, it may be able to assist the firm during the transition.