District Court Allows DBE False Claims Act Case to Proceed
February 23, 2017 —
Wally Zimolong – Supplemental ConditionsLast week, I posted about how whistleblowers continue to receive large settlements related to DBE fraud. A somewhat recent case from the federal court in Maryland shows how whistleblowers are ferreting out DBE fraud on construction projects receiving any form of federal funding.
The Case
The case involves a bridge painting project in Maryland that was let by the Maryland State Highway Administration. The contract required the prime contractor to meet a 15% DBE participation goal. The prime contractor submitted a bid stating it would have 15.12% DBE participation. After it was awarded the contract, the prime contractor – as is typical – submitted additional forms certifying to the MSHA that 15.12% of its contract price would be performed by a DBE firm. The prime contractor indicated that one DBE subcontractor, Northeast Work and Safety Boats, LLC (“NWSB”), would perform the 15.12% of the work.
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com
Triable Issue of Fact Exists as to Insurer’s Obligation to Provide Coverage Under Occurrence Policy
March 08, 2021 —
Valerie A. Moore & Kathleen E.M. Moriarty – Haight Brown & Bonesteel LLPIn Guastello v. AIG Specialty Ins. Co. (No. G057714. filed 2/19/21 ord. pub. 2/23/21), a California appeals court held that triable issues of material fact exist which precluded summary judgment for an insurer seeking to disclaim coverage on the basis that the “occurrence” pre-dated the policy period where a dispute exists as to the timing of the subject “occurrence.”
In Guastello, a subcontractor built retaining walls from 2003 to 2004 for a housing development in Dana Point, California. In 2010, one of these retaining walls collapsed causing damage to a residential lot owned by Thomas Guastello.
Reprinted courtesy of
Valerie A. Moore, Haight Brown & Bonesteel LLP and
Kathleen E.M. Moriarty, Haight Brown & Bonesteel LLP
Ms. Moore may be contacted at vmoore@hbblaw.com
Ms. Moriarty may be contacted at kemoriarty@hbblaw.com
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Invest In America Act Offers 494 Billion In Funding to U.S. Infrastructure and Millions of New Jobs
July 20, 2020 —
Stefanie A. Salomon - Peckar & AbramsonThe Investing in a New Vision for the Environment and Surface Transportation in America (INVEST in America) Act was approved by the House Transportation and Infrastructure Committee on June 18, 2020 and is making its way up to Congress. The bill will create millions of jobs and provide substantial investment in the nation’s deteriorating highways, bridges and public transit systems. The bill also endeavors to leave behind a smaller carbon footprint, a major improvement for the nation’s biggest source of carbon pollution.
Investing in a New Vision for the Environment and Surface Transportation in America Act
According to the American Society of Civil Engineers, the current condition of the nation’s infrastructure earns a grade of D+, and there exists an estimated $2 trillion funding gap to bring it into a state of good repair by 2025. While Americans have benefited from a century of infrastructure building, neglect has befallen our once greatest achievements – the roadways and arteries that led to the explosive growth of our nation. In the 1930s, 4.2 percent of the country’s GDP was spent on infrastructure investment. Unfortunately, by 2016 that number fell to 1.5 percent resulting in the substandard conditions that now confront us. Stated more bluntly, our nation’s infrastructure is crumbling and immediate investment in required to bring it up to par. The INVEST in America Act is our “immediate” opportunity to start replacing the outdated systems of the past with smarter, safer, and more resilient infrastructure.
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Stefanie A. Salomon, Peckar & AbramsonMs. Salomon may be contacted at
ssalomon@pecklaw.com
What is a Personal Injury?
September 03, 2019 —
Bremer Whyte Brown & O'Meara LLPEssentially, a personal injury is when an individual is hurt during an accident. Whether driving on the road, walking down the street, or sitting in a chair, accidents happen. When there is an accident, medical treatment may be necessary. Individuals who sustain injuries usually seek compensation for their medical treatment and pain and suffering in the form of a personal injury lawsuit.
Personal injury lawsuits can result from a variety of claims including negligence, strict liability, or intentional torts. Yet, for the most part, personal injury lawsuits tend to arise from a claim of negligence. The individual or entity injured in the accident, “Plaintiff”, files a lawsuit against the individual or entity, “Defendant” who allegedly caused harm. Personal injury lawsuits resulting from claims of negligence tend to have two main components: liability and damages. Yet, in order to prevail in a suit for negligence, a Plaintiff must demonstrate the following: (1) a legal duty to use due care, (2) a breach of that duty, (3) a reasonably close, causal connection between that breach and Plaintiff’s resulting injury, and (4) actual loss or damage to Plaintiff. Wylie v. Gresch (1987) 191 Cal.App.3d 412.
First, a finding of negligence rests upon a determination that the actor has failed to perform a duty of care owed to the injured party. Ronald S. v. County of San Diego (1993) 16 Cal.App.4th 887. This means that an individual or entity must act reasonably to avoid injuring others. When an injury occurs, a Plaintiff will generally argue that an individual or entity breached a duty owed to them.
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Bremer Whyte Brown & O'Meara LLP
Court of Appeals Upholds Default Judgment: Serves as Reminder to Respond to Lawsuits in a Timely Manner
October 02, 2023 —
Anna Basnaw - Ahlers Cressman & Sleight PLLCIn
Cyrus Way Partners, LLC. (“Cyrus”) v. Cadman, Inc. (“Cadman”), the primary issue on appeal was whether the trial court erred in denying Cadman’s motion to vacate the default judgment under Civil Rules 55 and 60. A default judgment is a legal ruling that can be entered in favor of the plaintiff when the defendant fails to respond to a lawsuit. If that happens, the court may resolve the lawsuit without hearing from the other side. In Washington, a party typically has 20 days to appear in a suit before being at risk for default judgment. If a default judgment is entered for the plaintiff, the defendant can move to vacate the default judgment, meaning the defendant hopes the court will set aside the default judgment as if it never happened. In this case, Cadman, the defendant, presents several ultimately unsuccessful arguments for why the default judgment in favor of Cyrus, the plaintiff, should be vacated.
Cyrus and Orca Beverage Inc. (“Orca”) are under common ownership. In 2018, Cyrus began a project to build a warehouse for Orca, which included the construction of a large concrete slab. Cadman was hired to supply the concrete. Cyrus hired Olympic Concrete Finishing Inc. (“Olympic”) to finish the concrete. On April 1, 2018, Cadman poured the concrete, and Olympic finished the slab. The next day, Cyrus noticed several problems with the slab, which experts hired by both Cyrus and Cadman opined were caused by an abnormally high air content in the concrete.
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Ahlers Cressman & Sleight PLLC
Design-build Trends, Challenges and Risk Mitigation
August 26, 2019 —
Bill Webb - Construction ExecutiveAs the commercial construction industry continues to evolve and grow, design-build methodologies are becoming increasingly popular for their ability to speed completion rates, control costs and produce an overall more efficient process under the guidance of the design-build contractor (DBC).
The Design-Build Institute of America (DBIA) predicts that “over half of owners have already or will use design-build in the next five years” due to the opportunities it provides for innovation and fast-tracking projects. The organization also expects that design build methodologies will account for approximately 45% of all nonresidential construction spending over the 2018 – 2021 forecast period.
Design-build provides many benefits to projects owners, however, holding contractual responsibility for both design and construction does accompany its fair share of challenges and risks for the DBC. Although basic risk management principles are inherent to design build through improved communication and collaboration, strong contractual language and proper insurance programs can greatly control risk exposures.
Reprinted courtesy of
Bill Webb, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Webb may be contacted at
Bill.Webb@rtspecialty.com
Practical Pointers for Change Orders on Commercial Construction Contracts
December 31, 2014 —
John E. Bowerbank - Newmeyer & DillionConstruction projects pose unique challenges, including keeping costs within budget, meeting project deadlines, and coordinating the work of numerous contractors and subcontractors in the wake of inevitable design revisions and changes to the plans. Anticipating potential project challenges and negotiating contract provisions before commencing work on a project is critical for all parties. Careful planning should reduce the number of contract disputes. This, in turn, can facilitate the completion of a project within budget and on schedule.
“Changes” Clauses in Construction Contracts
Most commercial construction contracts have a clause addressing changes to the contract. A “changes” clause typically requires the mutual agreement of the parties on the scope of any modifications to the contract, as well as the effect on the contract price and timeframe for the work to be performed. This results in what is generally referred to as a “change order.” Many projects have a large number of change orders, which can result in significant cost overruns and delays to the project if the contract contains a complicated change order process. Therefore, in order to minimize cost overruns and project delays, it is crucial to keep the change order process as simplified and streamlined as possible.
In the most basic terms, change orders memorialize modifications to the original contract, and typically alter the contract's price, scope of work, and/or completion dates. A typical change order is a written document prepared by the owner or its design professional, and signed by the owner, design professional, and affected contractors and subcontractors. An executed change order indicates the parties’ agreement as to what changes are taking place, including approval for additional costs and schedule impacts.
While the reasons for change orders and the parties initiating them may vary, all change orders have one feature in common. Effective change orders alter the original contract and become part of the contract. Therefore, from a legal standpoint, change orders must be approached with the same caution and forethought as the original contract.
Practice Pointers for Change Orders
In light of the foregoing, some practice pointers for change orders in commercial construction contracts are as follows:
- Carefully Negotiate and Draft Change Order Provisions in the Original Contract.
A carefully negotiated and drafted “changes” clause that accounts for “unexpected circumstances” or “hidden conditions” can protect the parties from downstream costly disputes.
- Immediately Address Changes by Following the Change Order Process, Including Obtaining Necessary Signatures.
Regardless if you are an owner, general contractor or subcontractor, you should address any proposed change order immediately. Even if a decision maker gives “verbal” approval to go ahead with changed work, the work should not proceed without following the change order process in the original contract. This includes making sure to obtain any necessary signatures for the change order, if at all possible.
- Analyze the Plans and Specifications to Determine Whether “Changes” are Within the Scope of the Original Contract, or Whether They are Extra Work.
Prior to entering an original contract, it is imperative that the parties review the plans and specifications for ambiguities regarding work included in the original contract, versus potential extra work that would require a change order. This is important because a careful review of the plans and specifications sometimes reveals that work believed to be a change order is, in fact, original work, or vice versa.
- Make Sure Requests and Approvals for Change Orders are Done by an Authorized Representative.
When a party requests or gives its approval to a change order, it is important to confirm the request or approval came from an authorized representative.
- Avoid Vague and Open-Ended Change Orders.
Indeed, the vaguer a change order, the more likely it can lead to a dispute. Vague and open-ended change orders, including change orders that provide for payment on a time and materials basis, can be difficult for an owner to budget and schedule. This can lead to disputes as to cost and/or time extensions.
- Oral Assurances for Payment Without a Signed Change Order May Not Be Recoverable.
When a party provides verbal assurances to another party for extra work without following the change order process, there is a much higher likelihood that disputes will occur. Although there is case law that may allow a contractor to recover for extra work in private contracts based on oral promises, the parties should avoid placing themselves in such a legal position. Notably, in public contracts, a contractor may not be able to recover for any extra work without a signed changed order, even with verbal assurances of payment from the owner.
About the Author:
John E. Bowerbank, Newmeyer & Dillion
Mr. Bowerbank is a partner in the Newport Beach office and practices in the areas of business, insurance, real estate, and construction litigation. You can reach John at john.bowerbank@ndlf.com
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Don’t Let Construction Problems Become Construction Disputes (guest post)
October 01, 2014 —
Melissa Dewey Brumback – Construction Law in North CarolinaTo start our week off right, today we have another important article from guest blogger Christopher G. Hill, LEED AP. Chris is a Virginia Supreme Court certified mediator, construction lawyer and owner of the Richmond, VA firm, The Law Office of Christopher G. Hill, PC. He authors the Construction Law Musings blog where he discusses legal and policy issues relevant to construction professionals. His practice concentrates on mechanic’s liens, contract review and consulting, occupational safety issues (VOSH and OSHA), and risk management for construction professionals. [His blog was also one of the first construction law blogs I found and followed, even if he is a Duke alum!] Take it away, Chris!
First and foremost, thanks to Melissa for inviting me back to post here at her great blog. She continues to invite me back despite my being a Blue Devil (and I try not to hold her Tar Heel status against her).
So much of discussion relating to construction law and construction lawyers centers on the litigation of disputes. This discussion comes in many forms from avoidance of such litigation through the early intervention of good counsel prior to getting into a project to what sort of resolution mechanism to use. Another branch of this discussion is essentially the right way to pursue your claim (or as some may read it start the dispute ball rolling). Sometimes a payment bond claim is the best method while others a straight up contractual suit is the best way to go.
Of course, all of this discussion presumes that there will be disputes. While I agree to some degree that in the Murphy’s Law riddled world of commercial construction, problems will arise. These problems need not rise to the level of a dispute that requires outside (read court or arbitrator) intervention. A few tips that are easy to write, but admittedly hard to practice at times can hopefully keep problems from blossoming into disputes. I’ve listed three big ones here:
1.Use “in house counsel.” Yes, I know that most of you engineers, architects, commercial general contractors and subcontractors out there aren’t big enough to either want or need a full time attorney on the payroll. What I mean by this is that when problems occur (or preferably before doing so), give your friendly local construction lawyer a call. As I learned from my dad, an ounce of prevention and all that. That 10 minute phone call may help avoid many hours of time and bills from your attorney later down the road.
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Melissa Dewey Brumback, Construction Law in North CarolinaMs. Brumback may be contacted at
mbrumback@rl-law.com
