Read Before You Sign: Claim Waivers in Project Documents
July 06, 2020 —
William E. Underwood - ConsensusDocsNot all claim waivers are appropriately titled “Waiver of Claims.” In fact, claim waivers can be found “hiding” without any advertisement or fanfare in a number of project documents, including change orders and applications for payment. So although getting work quickly approved and paid for is important, taking time to read the specific language in your project documents is just as important. Failure to pay close attention to this language could result in the waiver of key, unresolved project claims.
Further, and although it should go without saying, it is also just as important to read all of the terms of your contract. Important waiver language might not exist on the face of form project documents, but rather might be contained in the general and/or supplemental conditions of your contract and automatically incorporated into your form project documents. And these types of incorporated waivers can be just as enforceable.
So it is critically important to understand what you are signing and the implications it might have on future claims. This article will explore some of the common types of claim waivers that can be found in project documents so that you are better positioned to avoid inadvertently waiving claims in the future.
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William E. Underwood, Jones Walker LLPMr. Underwood may be contacted at
wunderwood@joneswalker.com
A Court-Side Seat: An End-of-Year Environmental Update
January 09, 2023 —
Anthony B. Cavender - Gravel2GavelAs 2022 draws to a close, here is a brief description of recent environmental and regulatory law rulings, as well as new federal rulemaking proceedings.
United States Tax Court
Green Valley Investors, LLC et al, v. Commissioner of Internal Revenue
On November 9, 2022, the Tax Court agreed with the taxpayers that the IRS’s use of administrative Notice 2017-10 to impose substantial tax liabilities violated the Administrative Procedure Act (APA). The notice was the agency’s response to a provision in the American Jobs Creation Act of 2004 which increased the penalties for engaging in a reportable transaction understatement. Here, at issue was the value of charitable deductions generated by the creation of environmental easements made in connection with land transactions. These claimed deductions amounted to more than $60 million. The petitioners argued that IRS Notice 2017-10, which authorized such large penalties, was in fact a “legislative rule” whose promulgation should have complied with the notice and comment requirements of the APA. The agency contended that the Congress, by implication, absolved the IRS from the notice and comment requirements. The court agreed with the petitioners and set aside Notice 2017-10 and the imposition of penalties under Section 6662A of the Jobs Creation Act. On December 8, 2022, the IRS published a notice of proposed rulemaking that would correct the APA deficiencies noted by the courts. (See 87 FR 75185.)
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Waiving The Right to Arbitrate Under Federal Law
November 08, 2021 —
David Adelstein - Florida Construction Legal UpdatesIf there is an arbitration provision in your contract that you want to enforce, you do not want to take action inconsistent with those rights as this could give rise to a waiver argument, i.e., that you waived your rights to arbitrate, particularly if the other party has been prejudiced.
Under federal policy and law, establishing waiver requires the party arguing waiver to “bear a heavy burden of proof.” U.S. f/u/b/o John Wayne Construction, G.S.A. Division, LLC v. Federal Ins. Co., 2021 WL 4526727 (M.D.Fla. 2021) quoting Stone v. E.F. Hutton & Co., 898 F.2d 1542, 1543 (11th Cir. 1990).
“To determine whether the right to arbitrate has been waived, courts apply a two part test: i) whether, “‘under the totality of the circumstances,’ the party ‘has acted inconsistently with the arbitration right’”; and ii) “whether, by doing so, that party ‘has in some way prejudiced the other party.’” Id. quoting Ivax Corp. V. B. Braun of Am., Inc., 286 F.3d 1309, 1315-16 (11th Cir. 2002). Substantial participation in litigation prior to invoking the right to arbitrate supports a party acting inconsistent with the right to arbitrate. Id. And, “‘[p]rejudice has been found in situations where the party seeking arbitration allows the opposing party to undergo the types of litigation expenses that arbitration was designed to alleviate.’” Id. quoting Morewitz v. W. of Eng. Ship Owners Mut. Prot. & Indem. Ass’n (Luxembourg), 62 F.3d 1356, 1366 (11th Cir. 1995).
Hence the heavy burden for a party to support to prove waiver– establishing both substantial participation in litigation that is inconsistent with the right to arbitrate AND prejudice.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Keep it Simple with Nunn-Agreements in Colorado
June 28, 2021 —
Jean Meyer - Colorado Construction LitigationOn May 24, 2021, the Colorado Supreme Court published its decision in Auto-Owners Ins. Co. v. Bolt Factory Lofts Owners Ass'n.[1] There, the Colorado Supreme Court was tasked with answering whether an insurer, who is defending its insured under a reservation of rights, is entitled to intervene as of right under C.R.C.P. 24(a)(2) where the insured enters into a Nunn agreement with a third-party claimant, but rather than entering into a stipulated judgment, agrees with the third party to proceed via an uncontested trial to determine liability and damages. Interestingly, however, while the Court ultimately answered the above question in the negative, the real lesson from the Colorado Supreme Court’s decision is that Colorado litigants should not seek a trial court’s blessing as to liability and damages through non-adversarial proceedings when using Nunn-Agreements. Or, as articulated in Justice Carlos Samour’s vociferous dissenting opinion, Colorado litigants desiring to enter into a Nunn-Agreement should not proceed with a non-adversarial hearing, as doing so is “offensive to the dignity of the courts,” constitutes a “bogus,” “faux,” “sham” and “counterfeit” proceeding, and the hearing provides “zero benefit.”
By way of background, the case arrived in front of the Colorado Supreme Court based on the following fact pattern. A homeowner association (Bolt Factory Lofts Owners Association, Inc.) (“Association”) brought construction defect claims against a variety of prime contractors and those contractors subsequently brought third-party construction defect claims against subcontractors. One of the prime contractors assigned their claims against a subcontractor by the name Sierra Glass Co., Inc. (“Sierra”) to the Association. The other claims between the additional parties settled. On the eve of trial involving only the Association’s assigned claims against Sierra, the Association made a settlement demand to Sierra for $1.9 million. Sierra asked its insurance carrier, Auto-Owners Insurance, Co. (“AOIC”), which had been defending Sierra under a reservation of rights letter, to settle the case for that amount, but AOIC refused. This prompted Sierra to enter into a “Nunn-Agreement” with the Association whereby the case would proceed to trial, Sierra would refrain from offering a defense at trial, the Association would not pursue any recovery against Sierra for the judgment, and Sierra would assign any insurance bad faith claims it may have had against AOIC to the Association.
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Jean Meyer, Higgins, Hopkins, McLain & Roswell, LLCMr. Meyer may be contacted at
meyer@hhmrlaw.com
Exponential Acceleration—Interview with Anders Hvid
December 01, 2017 —
Aarni Heiskanen - AEC BusinessAnders Hvid is a Danish consultant, speaker, and author. He talks about digital disruption, exponential acceleration, and paradigm shifts that are taking place in a world that is moving from local and linear into global and exponential.
“I have a background in social studies. My interest is in humans, and systems in which they work together. I’ve always had a deep fascination with technology and how it influences our society, our jobs, our democracies, and systems,” Anders says. He visited Singularity University back in 2010, and that experience made a lasting impression on him. “It freaked me out, to be honest, and it opened my eyes to how important technology is.”
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
info@aepartners.fi
Finding Plaintiff Intentionally Spoliated Evidence, the Northern District of Indiana Imposes Sanction
March 14, 2018 —
Shannon M. Warren – The Subrogation Strategist On January 23, 2018, the Northern District of Indiana issued a decision that clarifies what constitutes spoliation of evidence under Indiana law. In
Arcelormittal Ind. Harbor LLC v. Amex Nooter, LLC, 2018 U.S. Dist. LEXIS 10141 (N.D. Ind.), the defendant filed a motion for sanctions, alleging that the plaintiff intentionally spoliated critical evidence. The defendant sought dismissal of the action, asserting that the plaintiff intentionally discarded and lost important physical evidence within hours of a fire that occurred while the defendant’s employees were performing work at its facility. The decision underscores the importance of taking immediate action to properly identify and secure potentially material evidence in order to satisfy ones duty to preserve pre-suit evidence and avoid any spoliation defenses and associated sanctions.
In
Arcelormittal, the court initially considered whether to apply state or federal law when analyzing a litigant’s duty to preserve pre-suit evidence and determine if that party committed spoliation. Since the case was brought in federal court based on diversity jurisdiction, the court held that Indiana state law governed the spoliation analysis.
As noted by the court, under Indiana state law, “the intentional destruction, mutilation, altercation, or concealment of evidence” is considered to be spoliation. Thus, under Indiana law, a party who knew or should have known that litigation was imminent “may not lose, destroy or suppress material facts or evidence.” The plaintiff argued that Indiana law requires a showing of improper purpose or bad faith to establish that a litigant spoliated evidence. The
Arcelormittal court rejected the plaintiff’s argument.
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Shannon M. Warren, White and Williams LLPMs. Warren may be contacted at
warrens@whiteandwilliams.com
Drug Company Provides Cure for Development Woes
November 18, 2011 —
CDJ STAFFVertex Pharmaceuticals is poised to become the holder of Boston’s biggest commercial lease, paying $72.5 million for 1.1 million square feet on Boston’s waterfront. Vertex’s new buildings are still under construction, but the plans have spurred other development in the Fan Pier area, according to the New York Times. The Times quotes Mary A. Burke, a senior economist at the Federal Reserve Bank of Boston that the Vertex project gives “a big push” to the “momentum for economic growth.”
The Fallon Company is building Vertex’s new laboratory and office space. They are separately planning to build a high-rise with 150 luxury condominium units. According to Joseph Fallon, the chief executive and president of the Fallon Company, there is already a waiting list of 50 buyers for the condominiums.
Across the street from the Vertex site, a group including Morgan Stanley and Boston Global Investors is planning a 23-block mixed use project that would include 1.2 million square feet of retail space. Additionally, the New England Development and the Hanover Group is building a 356-unit apartment building at the adjacent Pier 4.
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Wake County Justice Center- a LEED Silver Project done right!
October 01, 2014 —
Melissa Dewey Brumback – Construction Law in North CarolinaYesterday evening, I had the privilege of attending the Triangle USGBC’s “Talk & Walk” at the Wake County Justice Center. The 576,996 square foot Justice Center was completed 6 months early and over 30 million under budget. (The final cost, including soft costs, came in at ~$141,000,000). Now that’s what I call a LEED project done right!
Interestingly, the County did not endeavor for a LEED Silver rating– the plan was to aim for a Certification. However, as the process unfolded, the Team kept meeting the goals and points for a Silver certification without any appreciable additional costs.
The end result? An “iconic but energy efficient building,” according to Tim Ashby, current Wake County Facilities Project Manager. Tim was initially involved in the Project while working at O’Brien Atkins, which served as the architecture firm for the Project under the direction of Architect Andrew Zwiacher.
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Melissa Dewey Brumback, Construction Law in North CarolinaMs. Brumback may be contacted at
mbrumback@rl-law.com
