Stop! The Kiewit-Turner joint venture created to build the VA’s hospital near Denver stopped work on December 10 after the Civilian Board of Contract Appeals ruled that the VA breached the contract. Kiewit-Turner claims that the VA owes it over $100 million on the project. And, given the appeals board’s recent ruling entirely against the VA, the claim may get some traction. This project has been plagued with [...]
Last September, OSHA announced its final rules for reporting severe injuries and fatalities. The new rules take effect on January 1, 2015. Are you ready? OSHA The New Rule Requirements OSHA’s severe injury and fatality reporting requirements apply to all employers covered by OSHA, not just those with 10 or more employees. All employee work-related fatalities must be reported within 8 hours of the death. The previous rule [...]
Construction Insurance Coverage Ah, the age old question, What does my insurance really cover? A federal court in Georgia recently weighed in on this issue in Standard Contractors, Inc. v. National Trust Insurance Company, and ruled that a contractor’s commercial general liability insurer did not have to pay for damage caused by a subcontractor. Standard Contractors was hired to renovate the pool on an army base. Standard hired [...]
Late last month, President Obama issued a number of Executive Orders on immigration policy. One main point of the President’s action grants work permits to millions of immigrants who were ineligible for lawful status. If one of your employee’s qualifies for this program, called Deferred Action, you may have to update employee I-9s. Deferred Action The executive order allows qualifying immigrants to remain in the U.S. It also allows individuals [...]
I hope you all have a wonderful holiday and have a moment reflect on all the wonderful experiences over the last year for which we can all be thankful. I'd also like to thank you all for reading this blog. I truly appreciate your interest, sharing, and comments over the past year. If you ever have an idea or a question you’d like me to write about, please let me [...]
What are your personal obligations? The demise of Truland Group, an electrical contractor on the east coast, raises an interesting question as to the extent of an owner’s personal liability to the bonding company. As has been revealed in the litigation surrounding Truland’s fall from grace, it is far from clear which of the owner’s assets may be seized to reimburse the bonding company for payments on projects. [...]
Risks on Construction Projects The latest Engineering News Record had an interesting article on Best Practices in Construction written by Deron Cowan of Zurich Services Corporation. In the articles, Mr. Cowan emphasizes the importance of best practices and the methodology to develop them. As Mr. Cowan notes, best practices are intended to eliminate, reduce and manage risks and all construction companies should be fully engaged in correctly executing [...]
Help Wanted in Construction Industry Over 1,000 contractors participated in Associated General Contractors’ (“AGC”) survey asking whether they were facing a labor shortage. AGC crunched the numbers and provided an Analysis of its survey. The survey revealed that 83% of construction firms were having trouble finding qualified workers. This survey certainly confirmed comments from construction firms in and around Omaha. AGC also provided a regional analysis and below are some [...]
The Department of Labor's regulations can impact your construction project. The Department of Labor issued its final regulations to implement President Obama’s Executive Order raising the minimum wage to $10.10 per hour for workers on federal construction projects. The new minimum wage will not be effective until January 1, 2015, and will apply to most workers and most federal projects. Covered Contracts Executive Order 13658 applies to four [...]
Construction insurance coverage can be confusing and counsel may be necessary to review coverage decisions. The ever changing landscape of insurance coverage for contractors continues to be clarified in Texas. The Fifth Circuit Court of Appeals applied Texas law in Crownover v. Mid-Continent Casualty Company, concluding that contractors do have insurance coverage to cover claims that a project was not constructed in a good and workmanlike manner. In [...]
Can an owner use a related entity to purchase the construction loan from the lender and then foreclose on that loan to wipe out a contractor’s construction lien? Not in Florida. Nebraska construction projects can involve webs of difficulties and even deceit. In CDC Builders, Inc. v. Biltmore-Sevilla Debt Investors, LLC, the Florida appellate court refused to allow an owner to avoid a construction lien through the owner's web [...]
Looking for assistance with a construction problem? Whether a contractor will be liable to a second purchaser, even though the contractor never contracted with the second purchaser, varies state to state. The Pennsylvania Supreme Court, in Conway v. The Cutler Group, is the latest court to rule that a subsequent purchaser lacks privity and cannot pursue an action against the builder. In that case, the Conways purchased a [...]
Looking for assistance with a construction problem? General contractors that exercise control over the worksite can be sued by a subcontractor’s injured employee. The Nebraska Supreme Court’s recent opinion, Gaytan v. Wal-Mart, should serve as a reminder that general contractors may be responsible for the safety of all workers on a job site. In this case, a roofing subcontractor’s employee died after falling through the roof of the [...]
Thanks to everyone that attended last week’s Lunch & Learn on preparing claims. We had some great discussion from both the ranks of general contractors and subcontractors. For those of you that missed the meeting or didn't pick up the handout, A Winning Procedure to Develop a Request for Compensation, send me an e-mail and I'll send it to you. My e-mail address is cmartin@ldmlaw.com. In a nutshell, to develop [...]
Last week I presented to the Great Plains Chapter of the American Society of Professional Estimators on arbitration and litigation. Some of the questions related to the difficulty of appealing an arbitrator’s decision. A Florida appellate court recently confirmed this difficulty. In Village at Dolphin Commerce Center, LLC v. Construction Service Solutions, LLC, a contractor filed an arbitration claim against the owner to get paid for its work. The owner [...]
Some time ago, I wrote about union THUGS (The Helpful Union Guys) that tormented merit shops to force contractors to use union labor on projects. The THUGS set fire to equipment, beat contractors with baseball bats, and picketed apartment complexes where contractors lived. Recently two of the ten union members plead guilty to arson-related charges, including two counts of maliciously damaging property by means of fire, extortion, and RICO conspiracy [...]
The Office of Federal Contract Compliance Programs (OFCCP) has been busy. In the last several weeks, the OFCCP has proposed regulations that will require contractors and subcontractors to provide summary compensation data and another rule prohibiting federal contractors and subcontractors from discriminating against employees or applicants who inquire about, discuss, or disclose their own compensation or the compensation of another employee or applicant. Equal Pay Report The OFCCP has proposed [...]
The National Association of Home Builders recently conducted a survey asking its members about the legal issues they faced in the last 12 months and whether they consulted their attorney to deal with the problem. Below are some highlights of the survey. Legal Issue % of Homebuilders % Contacted Counsel Warranty/call back claims 34% 51% Contract disputes 22% 84% Defective Install/Workmanship 20% 83% OSHA Issues 13% 33% CGL Coverage Questions [...]
The Texas Supreme Court recently ruled that a “no-damages-for-delay” clause would not be enforced where the delay was caused by the owner. The court’s ruling flies squarely in the face of the contract language that attempted to insulate the owner from any delay claims, even those it caused. In the case of Zachary Construction v. Port of Houston underlying contract, proposed by the Port of Houston, was heavy handed, to [...]
The Nebraska Court of Appeals has ruled that a home builder that fails to adequately compact the soil does not have insurance coverage to repair damages to the home caused by the settling soil. In “insurance speak”, there was no occurrence to trigger coverage. In this case, Cizek Homes, Inc. v Columbia National Insurance Company, a home builder contracted with a buyer to build a house. A lot was selected and [...]
Join us for our Fall Lunch & Learn Thursday, October 16th at 11:30. We will be discussing How to Prepare a Winning Request for Compensation. The topics we will cover include: Developing a Roadmap to Prepare the Claim Determining Applicable Contract Terms The Impact of Change Orders Identifying the Important Documents Calculating the Amount Owed Seating is limited, so please RSVP to Craig Martin, (402) 397-7300, or via e-mail: [...]
Two more courts have weighed in on the “your work” exclusion in commercial general liability (CGL) policies, finding that contractors did not have coverage for work performed improperly. These cases highlight that whether you have coverage for poor workmanship will depend on the state’s law applied. It now appears that if you are in South Carolina or Massachusetts, you will not have coverage. The South Carolina case, Precision Walls, Inc. [...]
As is often the answer in this blog, maybe. And, it will likely depend on which state’s law is applied. Over the last few weeks, courts around the country have reached differing conclusions on whether a general contractor may sue an architect that it did not hire. Here’s the situation: The owner hires an architect to draft plans for a project. The project is then put out for bid and [...]
Associated General Contractors recently reported that employment expanded in 65% of the metro areas it surveyed. While this is great news for the construction industry, of great concern is that 25% of the companies responding to the survey noted that they were turning down jobs because of labor shortages. The survey revealed that construction management employees, including project managers, supervisors, and superintendents, are in the shortest supply, followed closely by [...]
Engineering News-Record had an interesting editorial commenting on the bid protests on the New Orleans airport. The article analogized bid protests to video reviews at a football game -- they cause delays, but more often than not, they provide a clearer picture of what occurred. The same can be said of bid legitimate protests. Bid protests allow for a review of the decision making process. In the New Orleans airport [...]
Nothing puts your record keeping practices under a microscope like litigation. Every piece of paper that you created or kept on a project may be reviewed and analyzed. And, every decision to throw away a document will be assessed to figure out why you didn't keep it. The best way to ensure you have the necessary documents to support your claim is to have a written document retention policy. Do [...]
On July 31, President Obama issued yet another Executive Order to crack down on “federal contractors who put workers’ safety and hard-earned pay at risk.” The new Executive Order, called Fair Pay and Safe Workplaces, will require federal contractors to report certain labor law violations from the previous three years when submitting a bid on projects. It also prevents the use of arbitration agreements to resolve employment discrimination claims. These [...]
Clients often times present problems with a project and explain the need to be compensated for the problems experienced. But, having a consistent theory for recovery and evidence that supports that theory is always paramount to recovery. I was reminded of this perhaps obvious corollary when reviewing an Armed Services Board of Contract Appeals decision. The appeal involved a $35 million request for additional compensation based on differing site conditions, [...]
Most construction contracts contain a “no damage for delay” clause that generally prevents a contractor from demanding compensation for a late starting or otherwise delayed project. But, if the owner or is representative actively interferes with the project, a contractor may still recover damages for delays. The recent case of C & C Plumbing and Heating v. Williams County, out of North Dakota found the owner liable for delays even [...]
A Massachusetts trial court recently ruled that a Construction Manager at Risk could not sue the owner for design defects even thought the owner provided the plans and specifications for the project. This ruling is a substantial shift from the Spearin doctrine which has historically made the party providing the plans responsible for any shortcomings or problems with the plans. In the case of Coghlin Electrical Contractors, Inc. v. Gilbane [...]
Fellow blogger Chris Cheatham posted an interesting article on his The Electronic Claim blog about ways a contractor may profit from the labor shortage. The blog is based on an article, 5 Ways to Profit from the 2014 Labor Shortage, published by McGraw Hill-Dodge. An important takeaway deals with how subcontractors are responding to the greater need for their services and whether they are profiting from this change in the [...]
We have all seen this situation before. The bids come in, the lowest is taken, and lo and behold, the subcontractor finds out that it cannot perform for the amount listed in the bid. When this happens, the subcontractor may take the position that the general contractor should have told the subcontractor that their bid was too low. The case of Fidelity And Deposit Co of Maryland v Casey Industrial [...]
I had the pleasure of presenting to the Omaha chapter of the National Association of the Remodeling Industry (NARI) last week on steps they could take to ensure that they get paid for their work. The majority of our discussion dealt with construction contracts and clauses that should be included in their construction contracts. The clauses that I recommended included: Identification of contract document Detailed scope of work Dealing with [...]
My friend and construction attorney, Chris Hill, raises a great point in his blog, Construction Law Musings, this week. He addresses the two questions you should always ask when pursuing construction litigation. The first, "Can you win the case and get a judgment?" The second, and as important, "Can you collect on that judgment?" I invite you to check out Chris's post Think Twice About Heading to Court with a Construction [...]
On June 17, 2014, the U.S. Department of Labor issued its proposed rules to implement Executive Order 13658 which requires federal contractors to pay a higher minimum wage. The Executive Order requires the hourly minimum wage to be increased to $10.10 an hour. Here are a few highlights of the proposed regulations: Effective Date The proposed rule will apply to contracts that are entered into after January 1, 2015. Covered [...]
Down in Florida, CH2M Hill and AECOM Technical Services were vying for the billion dollar project. CH2M Hill and AECOM submitted their proposal in the spring of 2013. CH2M Hill then submitted materials directly to county official prior to its August presentation. CH2M Hill was awarded the project. AECOM cried foul, claiming that CH2M Hill violated local rules when it submitted materials directly to county officials. The county’s ethics chief [...]
I recently came across an article in Construction Executive, by Edwin Foulke, listing 13 ways to improve your OSHA compliance record. Mr. Foulke is a prolific writer and presenter on occupational safety and health issues, and author of the Workplace Safety and Health Law Blog You can find a copy of his article here. Although Mr. Foulke’s article mentions 13 actions that can improve your OSHA compliance, a few of [...]
Today I'm guest posting on Chris Hill's excellent blog, Construction Law Musings. I've written an article on the recent state court opinions addressing whether faulty construction is an occurrence under Commercial General Liability insurance. Click here to see my post on Construction Law Musings.
BuildZoom recently published an article on Rising Construction Activity. What I found interesting was that Omaha has had the most consistent growth since 2011. The article compared cities such as Atlanta, Durham, Sacramento, Portland, Seattle and Omaha. For the years 2011, 2012 and 2013, Omaha consistently outpaced the other cities listed in the survey. As set froth in the article, in 2011, Omaha issued nearly 35,000 building permits, nearly 40,000 in [...]
After last week’s blog about what is covered by a CGL policy, I received a number of questions about whether Nebraska courts would cover faulty workmanship. So, what is covered by a CGL policy in Nebraska? The latest Nebraska Supreme Court case on this issue, Auto-Owners Ins Co v Home Pride Companies Inc, in 2004, ruled that faulty workmanship is not covered under a CGL policy. But, the insurer was [...]
This post was written by Jessica Nolan, a summer associate at Lamson Dugan & Murray, LLP. The Nebraska Construction Prompt Pay Act, Nebraska Revised Statutes, §§ 45-1201 to 45-1210, was amended and approved by the Governor on April, 16 of this year. The approved changes to the statutes (§§ 45-1201 to 45-1210) will be effective July 17, 2014. Importantly, the changes will only impact contracts entered into after that date. [...]
The federal government takes very seriously the Disadvantaged Business Enterprise (DBE) regulations. When a contractor hires a DBE, the DBE must do the work with minimal involvement or control by the general contractor. A Chicago based contractor, James McHugh Construction, decided to ignore the regulations and hired a DBE that it could control and used them as pass-throughs in order to obtain over $156 million in projects. McHugh won the [...]
The Texas courts continue to wrestle with the problem of what is covered by a CGL policy.Readers may recall that in September, 2012, I wrote a blog about a Texas case winding its way through the federal courts and then being shipped to the Texas Supreme Court for additional analysis. Well, earlier this year the Texas Supreme Court finally issued its opinion, finding that a CGL policy does cover faulty [...]
Additional Insured language is contained in nearly every construction contract. But how many of you are actually reviewing the additional insured endorsement? And, does it provide the coverage that you are required to provide? Nearly every construction contract requires that general contractors add owners as additional insureds and subcontractors must add the general contractor as an additional insured. Sometimes, the subcontractors must also list the owner as an additional insured. [...]
I’m pleased to announce that the Construction Contractor Advisor blog was selected as the Best 2014 Best Construction Blog by Construction News and Report Group. The judges for the competition evaluated the various construction related blogs for frequency, design, writing quality and relevance, and found this blog to be a good resource for all things related to construction law. Thanks to everyone that voted for the blog and thanks for [...]
We all know that I-9s must be completed when employees start. But, how many of you are doing a good job of completing the I-9 form and, more importantly, keeping the I-9 form and documents which must be attached? Perhaps part of your spring cleaning should be a review of your I-9 process and documentation retention practice. First, some sobering thoughts. The U.S Immigration and customs Enforcement (ICE) is the [...]
April 23rd was Construction Safety Day. Did you take a moment to review your safety policies and tool box talks about safety? If you didn't, perhaps you should. Melissa Brumback, my friend and author of the excellent Construction Law in North Carolina blog, recently reminded her readers that falls are the #1 source of construction-site fatalities, followed by falling objects, electrocution and being caught between two objects. Together these make [...]
Imagine that you are on a job that is significantly delayed. You tell the upstream contractor that performance at this late date will cost more money. Instead of being offered more money, you are told that you have to "mutually agree" on a revised schedule. How do you do that? One subcontractor in Oklahoma found out the hard way that walking off the job was not the answer. The case, [...]
Are you confounded by change orders? Do you want to learn to better deal with them? Join us on May 15th at 11:30 for our Lunch & Learn on Change Orders. During this presentation, we will discuss two questions about change orders: 1. What is the change order process? and 2. What if the general contractor won’t sign the change order? Lunch Will Be Provided Seating is limited, so [...]
Earlier this month, President Obama took action to impose additional compliance obligations on federal government contractors. An executive order will prohibit federal contractors from retaliating against employees who discuss their pay with each other. He also directed the Department of Labor to adopt regulations requiring federal contractors to provide compensation data based on sex and race. Non-Retaliation: This executive order provides that contractors will not discharge or in any other [...]
