Do We Really Want Courts Deciding if Our Construction Contracts are Fair?
March 19, 2015 —
Christopher G. Hill – Construction Law MusingsAs I posted recently, the Virginia General Assembly has passed, and I can see no reason why the governor won’t sign, a bill that would
essentially invalidate preemptive contractual waivers of lien rights as they relate to subcontractors and material suppliers. It does not apply to General Contractors, but it is a step in what many (including those attorneys that represent subcontractors and suppliers) believe is the right direction.
Of course, as soon as I posted last week, my friend and colleague
Scott Wolfe (@scottwolfejr) commented on that post and then
gave his two cents worth at his Zlien blog. The gist of the comments here at Musings and the post over at his blog was essentially that these contractual provisions were inherently unfair and therefore should be abolished because of both a relative disparity in leverage between the Owner or GC and the Subcontractor when it comes to negotiations and the fact that subcontractors often don’t read their contracts or
discuss them with a construction attorney prior to signing them. I hear this first of his arguments often when I am reviewing a contract after the fact and a client or potential client acts surprised that a provision will be enforced and the courts of the Commonwealth of Virginia will actually enforce them. As to Scott’s second reason, I have always warned here at Musings that
you should read your contracts carefully because they will be the law of your business relationship in the future.
The first of his two points is more interesting and in some ways more easily supported. However, where we are speaking of contracts between businesses where both sides are bound by the terms of the contract, it begs the question of whether in seeking to make contracts more “fair” we could add a layer of uncertainty that could cause more problems than it solves. Do we really want courts stepping in after the fact to renegotiate the terms of a deal that was struck months or possibly years before because one judge believes that the deal was too one sided? Do we really need such “Monday morning quarterbacking?” Is one person’s idea of “fair” better than another’s when both parties to the contract had the full ability to read, negotiate and possibly reject the deal long ago? Personally, I think that the answer to these questions is, in all but the most egregious cases or where the legislatures have stepped in adding certainty (whether to the good or bad), “No.”
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Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
North Dakota Supreme Court Clarifies Breadth of Contractual Liability Coverage
October 30, 2018 —
Michael S. Levine & Latosha M. Ellis - Hunton Insurance Recovery BlogNorth Dakota’s highest court delivered a blow to Mid-Continent Casualty Company in Borsheim Builders Supply, Inc. v. Manger Insurance Co., ruling that a contract between a policyholder and general contractor fit the insured contract exception of contractual liability.
Commercial General Liability (“CGL”) policies generally exclude an insured’s contractual assumption of another party’s liability. The exclusion typically contains an exception for what is known as an “insured contract.” However, many policyholders and insurance claims personnel often miss the significance of the insured contract exception. This was the case in Borsheim.
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Michael S. Levine, Hunton Andrews KurthMr. Levine may be contacted at
mlevine@HuntonAK.com
Beyond the Statute: How the Colorado Court Upheld Modified Accrual in Construction Contracts
November 13, 2023 —
Hal Baker - Colorado Construction Litigation BlogIn a case of first impression, the First Division of the Colorado Court of Appeals recently reviewed whether parties may contractually alter the accrual time established by Colorado’s statute of limitations for construction defect actions, C.R.S. § 13-80-104, in South Conejos Sch. Dist. RE-10 v. Wold Architects, Inc., 2023 COA 85 (2023), decided on September 21, 2023. The Court held that sophisticated parties may contractually alter the accrual time standards, enlarging the accrual time as was the issue in this case. Notably, the Court’s decision was made in the context of commercial construction, not residential.
The issue in South Conejos Sch. Dist. RE-10 arose from the construction of a school in Antonito, Colorado. Prior to construction, the South Conejos School District RE-10 (the “School District”) and Wold Architects, Inc. (“Wold”) entered a contract that provided:
Unless a longer period is provided by law, any action against [Wold] brought to recover damages for deficiency in the design, planning, supervision, inspection, construction or observation of construction or for injury to person or property shall be brought within two years after the claim for relief arises and is discovered by [the District]; … “Discovered” as used herein means detection and knowledge by [the District] of the defect in the improvement that ultimately causes the injury, when such defect is of a substantial or significant nature.
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Hal Baker, Higgins, Hopkins, McLain & Roswell, LLCMr. Baker may be contacted at
baker@hhmrlaw.com
Palo Alto Considers Fines for Stalled Construction Projects
November 20, 2013 —
CDJ STAFFThe city of Palo Alto, California is considering adopting a law that would fine residents with expired building permits. The City Council took up the issue in response to complaints from residents about stalled construction projects in their neighborhoods.
In the public testimony, one resident noted that a site near her home was fenced off in 2007, with the home demolished in 2008, after which nothing has happened. The City Council is proposing fines of $200 per day, after a 30-day grace period, increasing to $400 per day two months after that, going to $800 per day on the 121st day.
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Aarow Equipment v. Travelers- An Update
January 16, 2024 —
Christopher G. Hill - Construction Law MusingsPreviously here at Musings, I discussed the application of pay if paid clauses and the Miller Act. The case that prompted the discussion was the Aarow Equipment & Services, Inc. v. Travelers Casualty and Surety Co. case in which the Eastern District of Virginia Federal Court determined that a “pay if paid” clause coupled with a proper termination could defeat a Miller Act bond claim. However, as I found out a couple of weeks ago at the VSB’s Construction Law and Public Contracts section meeting, the 4th Circuit Court of Appeals reversed and remanded this case in an unpublished opinion (Aarow Equipment & Services, Inc. v. Travelers Casualty and Surety Co.)
In it’s opinion, the 4th Circuit looked at some of the more “interesting” aspects of this case. One of these circumstances was that Syska (the general contractor) directed Aarow to construct sedimentary ponds and other water management measures around the project (the “pond work”), which both agreed was outside of the scope of the work defined in their subcontract. Syska asked that the government agree to a modification of the prime contract and asked Aarow to wait to submit its invoice for the pond work until after the government issued a modification to the prime contract and Syska issued a change order to the subcontract.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Statute of Frauds Applies to Sale of Real Property
April 19, 2022 —
David Adelstein - Florida Construction Legal UpdatesIn law school, one of the first legal doctrines we learn is known as the “statute of frauds.” The statute of frauds is essentially a defense to a contract enforcement action claiming the contract is unenforceable due to the statute of frauds. In other words, this doctrine is raised when one party seeks to enforce a contract. The other party argues, “not so fast,” because the contract is NOT enforceable in light of the statute of frauds.
Common scenarios where the statute of frauds comes into play are with transactions involving real property or agreements where services are not to be performed within one year.
The statue of frauds doctrine is contained in Florida Statute s. 725.01:
No action shall be brought whereby to charge any executor or administrator upon any special promise to answer or pay any debt or damages out of her or his own estate, or whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriage of another person or to charge any person upon any agreement made upon consideration of marriage, or upon any contract for the sale of lands, tenements or hereditaments, or of any uncertain interest in or concerning them, or for any lease thereof for a period longer than 1 year, or upon any agreement that is not to be performed within the space of 1 year from the making thereof, or whereby to charge any health care provider upon any guarantee, warranty, or assurance as to the results of any medical, surgical, or diagnostic procedure performed by any physician licensed under chapter 458, osteopathic physician licensed under chapter 459, chiropractic physician licensed under chapter 460, podiatric physician licensed under chapter 461, or dentist licensed under chapter 466, unless the agreement or promise upon which such action shall be brought, or some note or memorandum thereof shall be in writing and signed by the party to be charged therewith or by some other person by her or him thereunto lawfully authorized.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Marlena Ellis Makes The Lawyers of Color Hot List of 2022
January 17, 2023 —
Marlena Ellis - White and Williams LLPIn just her first year of practice, Marlena Ellis, Associate, is included in the Lawyers of Color Hot List of 2022.
Marlena joined the firm in 2021 as a full-time associate practicing both Commercial Litigation, Insurance Coverage, and Bad Faith Practice. She advises a variety of clients including corporations, commercial entities and insurance companies in complex disputes and breach of fiduciary duty matters.
The Lawyers of Color Hot List of 2022 honors junior and mid-level attorneys of color who exemplify integrity, leadership, and a passion for diversity in their roles. The selection committee spent months reviewing nominations to identify the right candidates for the list, and Marlena was one of the few chosen for this year.
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Marlena Ellis, White and Williams LLPMs. Ellis may be contacted at
ellism@whiteandwilliams.com
ASCE Statement on Passage of the Water Resources Development Act (WRDA) of 2022
December 26, 2022 —
Maria Lehman - American Society of Civil EngineersWASHINGTON, D.C. – ASCE applauds Congress for passing the bipartisan Water Resources Development Act (WRDA) for 2022, which was included in the National Defense Authorization Act. The legislation authorizes construction for 25 new and existing U.S. Army Corps of Engineers (USACE) water infrastructure projects, including those related to dams, ports and inland waterways, flood risk management, and storm risk reduction. We are encouraged that the biannual reauthorization of WRDA continues to be a congressional priority.
ASCE applauds Congress for WRDA 2022 authorizing and establishing several programs dedicated to ensuring that our nation's water resources infrastructure benefits communities across the country. These accomplishments include reauthorizing the National Levee Safety Program; authorizing dredging activity in underserved community harbors; authorizing the USACE to recruit individuals more actively for careers in science, technology, engineering, and math (STEM); and enhancing infrastructure resilience, such as allowing the USACE to incorporate resilience measures into federally authorized hurricane or shore protection projects when performing emergency repairs. ASCE is also pleased to see that WRDA 2022 makes the current federal cost share formula for Inland Waterways Trust Fund projects permanent, with 65 percent coming from the general fund and 35 percent from the Inland Waterways Trust Fund (IWTF). ASCE strongly supports this provision, as it was a key recommendation to raise the nation's "D+" inland waterways grade in the 2021 Report Card for America's Infrastructure.
Additionally, ASCE strongly supports provisions in WRDA 2022 that will enhance the safety of the nation's dams and levees, which each received a "D" grade in the 2021 report card. The bill requires the Corps to establish a new National Low-Head Dam Inventory to account for the nation's low-head dams, which can pose significant public hazards. Identifying and monitoring these types of dams nationwide will contribute to the overall safety of the nation's dams and help to save lives.
Finally, the reauthorization of WRDA works hand-in-hand with the additional investments made in the Bipartisan Infrastructure Law. This reauthorization shows that infrastructure remains a bipartisan priority. We thank Congress for passing this legislation and look forward to translating these investments to critical water infrastructure system improvements nationwide.
ABOUT THE AMERICAN SOCIETY OF CIVIL ENGINEERS
Founded in 1852, the American Society of Civil Engineers represents more than 150,000 civil engineers worldwide and is America's oldest national engineering society. ASCE works to raise awareness of the need to maintain and modernize the nation's infrastructure using sustainable and resilient practices, advocates for increasing and optimizing investment in infrastructure, and improve engineering knowledge and competency. For more information, visit www.asce.org or www.infrastructurereportcard.org and follow us on Twitter, @ASCETweets and @ASCEGovRel.
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