You may recall a blog post from last year in which I explained that a contractor should not use PPP loan funds to buy a motorcycle or for golf outings. Well, another contractor was just convicted of PPP loan fraud with similar allegations. Last Friday, a jury deliberated for 2 hours and found the roofer guilty of falsely acquiring $2 million in PPP loans. That was about enough time for [...]
Your work on the project is done, but your final payment is delayed. You then hear that the owner and general contractor are arguing about final payment. The owner contacts you directly to pay your final pay application. You sign the release and get your check. But, the check bounces. Now what? You may be out of luck. When entering into a settlement agreement on a construction project, you need [...]
Which is it? Admittedly I keep going back to the well. Maybe it is because the rules and procedure for arbitrating a crop insurance claim are too complicated. Or maybe it is a dead horse and I need to get past feeling the Nebraska Supreme Court improperly ruled against my client in an arbitration claim in 2017. In that case, Karo v. NAU, an arbitrator ruled against the [...]
Legal malpractice claims are an unfortunate part of the practice of law. Nebraska’s professional negligence statute is ‘occurrence based.’ See Neb. Rev. Stat. § 25-222. That means the two-year limitations period is triggered by, and begins to run from, the date of the alleged negligent act or omission. As straightforward that may sound, as with most things there are exceptions. So here are 5 things you should know: 1.The limitations [...]
The Nebraska Court of Appeals has again answered the age old question of whether a worker is an employee or an independent contractor. In Wight v H&S Contracting the court found that an individual who held himself out as a single employee operation was an independent contractor. In this case, Navarro Robles fell off of a roof while working on a job site. His widow claimed that he was an [...]
Throughout a project, and especially at the end, you are likely being asked to sign a lien waiver. Given the significant impact that these waivers may have on your opportunity to get paid, how closely are you reviewing lien waivers before you sign them? Here are some points to think about before your sign. Is the lien waiver conditional or unconditional? The concern here is whether the lien waiver goes [...]
It's tough to reclaim cattle once they get to the feedlot While we are no longer living in the days of the Wild West, livestock dealers continue to face theft—particularly, in sales transactions gone wrong. Unfortunately, common remedies generally are inadequate to recover the full amount lost. In response, Congress has taken an active role in protecting the interests of the livestock industry. Statutory Trusts Under the Packers [...]
I’d like to say that the answer is clearly yes, but that’s rarely the case with construction contracts. Ultimately, it will come down to the facts of your situation and whether the construction contract specifically allows you to pull off the job. Not Getting Paid Not getting paid is probably the most popular reason contractors terminate a construction contract. The difficulty arises when we look closely at the circumstances leading [...]
The Biden Administration issued another executive order, this one focusing on the application and enforcement of the Buy America Act. As the name indicates, the Buy America Act is intended to increase the amount of American goods used on and in government contracts. President Biden’s executive order focuses on enforcement and the administration of the Act. The most significant change created by the executive order is to create a Made [...]
President Biden recently issued an Executive Order (copy here) requiring OSHA to issue “science-based guidance” to help keep workers safe from COVID-19 exposure. The Executive Order does not create immediate changes, but calls for quick action by OSHA to update its guidance. The Executive Order requires OSHA to: issue, within two weeks, revised guidance to employers on workplace safety during the COVID-19 pandemic; consider whether any emergency temporary standards on [...]
In a multi-phase litigation, the United States Court of Federal Claims in Washington, D.C. recently entered its trial order against the United States Army Corps of Engineers. The December 14, 2020 order found the plaintiff landowners were collectively entitled to damages for certain losses. Back in 2018, the Court issued its order in the Phase I trial of a “takings” action under the Fifth Amendment: The government’s physical invasion—via [...]
It seems that more and more general contractors are using pay-if-paid clauses in their construction contracts. Pay-if-paid clauses are some of the most controversial and heavily negotiated clause in construction contracts. This article will explain what pay-if-paid clause is and provides some guidance on how to negotiate around these difficult clauses. A pay-if-paid clause, if properly drafted, pushes the risk of non-payment from the general contractor to you. The clause [...]
I’d like to say that the answer is clearly yes, but that’s rarely the case with construction contracts. Ultimately, it will come down to the facts of your situation and whether the construction contract specifically allows you to pull off the job. Not Getting Paid Not getting paid is probably the most popular reason contractors terminate a construction contract. The difficulty arises when we look closely at the circumstances leading [...]
Construction contracts can take on many shapes and sizes and there are several important provisions that you should review. But, the most important, in my mind, is the scope of work to be provided. Preventing Costly Overruns Ideally, the scope of work will detail, and limit, the work that is to be provided for the money that the owner is obligated to pay. We recommend that the scope of work [...]
Another year is drawing to a close and we want to thank all of our construction clients with whom we have had the pleasure of working this past year. We really do appreciate the opportunity to help you with your business operations. We look forward to working with you in 2021. Happy Holidays
Today's post is by Eric Tiritilli, one of our Employment Law specialists. Currently, there is no formal guidance from federal agencies regarding whether an employer may require an employee to be vaccinated for COVID-19. But, the EEOC has previously allowed mandatory vaccinations in the context of flu. Given that the EEOC considers the COVID-19 pandemic a “direct threat” to health in the workplace, it is likely that it would similarly [...]
Wait. Did you say Hemp? Nebraska has amended the definition of “farm products” for statutes that govern security interests on farm products. For the first time, the list of farm products now includes goats and hemp. Really, goats are just now being added? The Secretary of State has published a revised Nebraska Effective Financing Statement (Form EFS-1) that includes goats and hemp, which is in effect now. Effective [...]
Around this time last year, the 8th Circuit Court of Appeals found that an arbitrator did not exceed his authority when a dispute over the interpretation of a crop insurance policy provision arose after the arbitration proceedings. Balvin v. Rain and Haill, LLC. Why is this important? It is important because in 2015, the Federal Crop Insurance Corporation ("FCIC") issued Final Agency Determination ("FAD") 230* which stated the following: A [...]
Just because an employee gets hurt on the job does not mean you are facing an OSHA penalty. Employers have a defense to an OSHA citation when the violation of a safety rule was due to unpreventable employee misconduct. However, proving this defense requires substantial planning, well before an incident or investigation. Unpreventable Employee Misconduct Defense OSHA requires that an employer do everything reasonably within its power to ensure that [...]
Contractors sometime believe that once the lien is filed, they are home free for getting paid. Unfortunately, that is often not the case. There are always concerns about whether the owner has sufficient funds to pay the contractor and subcontractors. Obviously, that is why the lien was filed. There are also concerns about whether there is any equity in the property to satisfy the liens. But, even if you file [...]
Construction contracts often contain an arbitration or litigation provision. While each forum has its advantages, a question often times overlooked is whether an arbitration provision is enforceable. Litigation is the Default Litigation is the default method of dispute resolution. This is not to say that litigation is the best way to resolve a case. But unless the contract contains an enforceable arbitration agreement, the parties will have to take their [...]
Ask anybody who has attempted to overturn an arbitrator's award in a crop insurance arbitration; the struggle is real even when the arbitrator is dead wrong. Crop insurance arbitration is held to the standards of the Federal Arbitration Act (the "Act"). The Act strictly prohibits overturning an arbitration award unless "the arbitrators exceeded their powers, or so imperfectly executed them that a mutual final, and definite award upon the subject [...]
On September 22, 2020, President Trump issued an executive order entitled Combatting Race and Sex Stereotyping. The Executive Order requires contractors to review the anti-harassment training they provide to their employees and include additional language in their subcontracts. The Purpose of the Executive Order The express purpose of the Executive Order is to combat “misrepresentations of our country’s history and its role in the world.” According to the EO, these [...]
Hail damage to corn field near Hastings, Nebraska Every year farmers face multiple weather events that can instantly undo the hard work of planting and maintaining a crop. Widespread drought and flooding can wipe out entire crops across a large area. On the other hand, hail and wind storm damage may be extremely variable. Notwithstanding the recent derecho event, a hail or wind storm might affect one farmer [...]
You know the situation, the project manager or superintendent just cornered you on the job site and told you that he needs some extra work. But, what you do next may very well make the difference on whether you get paid for that extra work. Document the Conversation The first thing you should do is confirm the conversation in an e-mail to the project superintendent or whomever is your point [...]
There are few, if any, construction projects that were not impacted by COVID-19. Now that we have all dealt with these impacts, it’s time to look ahead and determine if your construction contracts should be updated to address these impacts. Below are some provisions that you should review to address future COVID type situations. Notice Provisions Delivery of notices is a critical obligation under construction contracts. But, what if the [...]
Construction projects around the country are experiencing delays. These delays can lead to extended general conditions, idle labor and equipment costs, material cost escalation, and de-mobilization and re-mobilization costs. But, how do you recover those damages? Notice The first step to recovering delay damages is to provide notice. But, your notice has to be timely and it has to follow the requirements of the contract. So, review the contract and [...]
The U.S. Attorney for Minnesota recently indicted a contractor for defrauding the Paycheck Protection Program ("PPP"). Given the broad uses of PPP loans, this contractor went pretty far out of bounds to get himself indicted. The U.S. Attorney’s press release explained the underlying allegations. Strike One: The contractor applied for a PPP loan well after his construction company had stopped operation. Strike Two: The contractor submitted false employee and expense [...]
How often have you read that the terms of the prime contract are incorporated into the subcontract? If you read your subcontracts, you’ve probably seen that language in every contract over the last 10 years. But, what does that mean? It means you are bound by the terms of the prime contract, even if you haven’t seen it. Contract Language Most construction subcontracts incorporate the prime or upstream contact. A [...]
Much as the economics of a construction project must make sense, the same is true when you are considering litigation. The costs associated with litigation must be considered in light of the potential recovery. A recent decision from the Nebraska Court of Appeals drove this point home. The case, Scheichinger v Swain Construction, involved the sale of a skid loader and a claim that Swain Construction misrepresented the number of [...]
Throughout the summer we received several requests to review production contracts between livestock producers and meat packers. The requests were made due to concerns that one party was not living up to the terms of the agreement. Consequently, it came as no surprise when one of the larger hog producers, Maxwell Foods, filed suit against one of the largest packers, Smithfield Foods, for breach of contract. The suit is likely [...]
As you all know, you must complete an I-9 for all new hires. And, as of last May, you should be using the most recent I-9 form. The U.S. Department of Homeland Security’s Immigration Customs and Enforcement (ICE) takes I-9’s very seriously and while I-9s are not difficult to complete, the penalties for not having them completed properly can be significant. If ICE decides to audit you, you will first [...]
The Department of Transportation’s Federal Highway Administration (FHWA) suspended FIGG Bridge Engineers, Inc. from participating in any federally funded projects and has proposed a 10-year debarment, which would bar FIGG from performing work on any federally funded or assisted projects. The FHWA decision to bar FIGG is based on FIGG’s involvement with the 2018 pedestrian bridge collapse at Florida International University’s campus. As you may recall, the collapse killed six [...]
OSHA has issued new Frequently Asked Questions addressing when an employer must report work-related cases of COVID-19. Unfortunately, the FAQs seem contrary to the 24-hour hospitalization rule. As you likely know, section 1904.39(b)(6) requires employers to report an inpatient hospitalization only if the hospital admission occurs within 24 hours of a work-related incident. Applying this to COVID, if an employee is exposed at work and then goes to the hospital within [...]
If you are a federal contractor, you probably have equal employment opportunity (“EEO”) and affirmative action (“AA”) plans in place. But if you are scratching your head and wondering if you have implemented these policies, perhaps it’s time to contact your local construction attorney and get some help drafting and implementing these policies. Who Needs an EEO and AA Plan? Any contractor who does more than $10,000 of government contract [...]
Having a well drafted Buy-Sell Agreement is as important as having the right tool for the job. A recent Nebraska Supreme Court opinion serves as a reminder of this fact or you could spend thousands of dollars and years litigating about rights and interests in the company. This case involved three individuals who owned a construction company in Kearney, Nebraska. The majority shareholder passed away in 2015 and the deceased’s [...]
Last week the Nebraska Supreme Court decided an interesting appellate jurisdictional question. In Picard v. P& C Group I, 306 Neb. 292, the Supreme Court confronted allocation in a worker’s compensation case. The plaintiff had twice suffered work-related injuries, each to a different body part. Both injuries resulted in permanent partial disability and loss of earning capacity. The question was whether the worker’s compensation court could apportion any loss of [...]
An Illinois bankruptcy court was the first court in the country to issue an opinion on how a force majeure clause in a commercial lease would be applied to the COVID-19 pandemic. Not surprisingly, the language of the underlying force majeure clause and the Illinois’ Governor’s executive order played critical roles in the court’s analysis. As it turned out, take-out food saved the contract. The case involved a restaurant that [...]
A recent 8th Circuit Court of Appeals case, applying Missouri law, reminds us that shoddy workmanship may not be covered by your commercial general liability insurance. This also means that if an owner claims your faulty workmanship caused problems on the project, you may have to pay those damages out of your own pocket, not the insurers. In this case, American Family Mutual Insurance Co., S.I. v. Mid-American Grain Distributors, [...]
A recent case out of Pennsylvania refused to allow an owner to assess liquidated damages for project delay. This case serves as a reminder that if you are including liquidated damages in your construction contract, there must be some reasonable basis for the amount of liquidated damages. In this case, D.A. Nolt v. The Phila. Mun. Auth., the City of Philadelphia sought to enforce a $10,000 per day liquidated damages [...]
COVID-19 has created chaos in the construction world. One of the biggest problems is staffing projects to meet deadlines on the project. But, what if your company is hit with a COVID-19 outbreak and you cannot staff the job? Have you already agreed to indemnify the upstream contractor or owner for any damages stemming from a COVID-19 outbreak? We recommend reviewing your indemnity obligations to determine your risk and the [...]
We have all been dealing with the impact of COVID-19, but the situation becomes more personal when one of our own employees reports that he or she is suffering from COVID-19 symptoms. And, with all the guidance out there, it may be difficult to figure out exactly what to do. We sifted through the various CDC guidance and other governmental regulations on this and compiled these best practices on responding [...]
- A lien for the supplier of agricultural inputs for production of livestock or crops As we discussed, the agricultural production lien-notification can provide additional security on a debt for chemicals, feed, seed, petroleum, electricity or labor used in the production of livestock or crops. However, the lien-notification statement does not perfect the lien. To perfect the lien, the supplier is required to file a financing statement similar to the [...]
Over the past several months, EEOC, DOL, OSHA and other federal agencies have provided answers to dozens, if not hundreds, of questions regarding how employers should handle their responsibilities to employees during this unprecedented time. The EEOC has reminded employers of their obligations, even during the COVID-19 pandemic, to comply with federal anti-discrimination laws including the Americans With Disabilities Act. Recently, the EEOC provided guidance that appeared to allow employers [...]
With everything else going on this Spring, employers may have forgotten that they need to start using the new Form I-9. You can find a copy of the new Form I-9 here. This new form, which was published in January, 2020, went into effect on May 1, 2020 and employers should not use the older versions from this point on. Below are some answers to questions we’ve been receiving about [...]
Recognizing the difficulties employers are facing during the ongoing pandemic, the Occupational Safety and Health Administration (“OSHA”) released an enforcement memo, entitled “Discretion in Enforcement when Considering an Employer’s Good Faith Efforts during the Coronavirus Disease 2019 (COVID-19) Pandemic.” This guidance relaxes enforcement for failures to provide annual training or conduct other routine audits due to COVID-19. In the memo, OSHA stated that during an inspection, Compliance Officers should evaluate [...]
The coronavirus is interrupting life as we know it, including construction projects. Throughout the country, contractors are issuing notices of schedule delays and how you respond to such a notice will be crucial to protecting your rights under your contract. Here are some topics to consider when reviewing a notice of delay. Review the Entire Notice This may seem obvious, but dig into the notice to fully understand the basis [...]
As you have likely heard, the Paycheck Protection Program (PPP) funds have run out. While Congress battles about how to add more funds to the PPP, the Small Business Administration has released the specifics about the number of businesses that received loans, the industries and locations. In a nutshell, the SBA approved 1,661,367 loans from 4,975 lenders. The average size of the loans was $206,000 and about 75% were for [...]
- A lien for the supplier of agricultural inputs for production of livestock or crops On first look, the agricultural input lien may seem redundant to the fuel, fertilizer, pesticide, seed and electricity liens. However, the agricultural input lien can provide additional priority against other creditors in protecting a supplier's security interest if a certain hoop is jumped. Considering the current economic and social situation, the extra jump may [...]
I know we’ve all had a fair share of questions regarding what is an “essential business” that would be allowed to remain open if the Nebraska Governor issued a shelter in place/shutdown order. While Gov. Ricketts has said he doesn’t intend to issue such an order, as we know, things change. The Cybersecurity & Infrastructure Security Agency (CISA) in the Dept. of Homeland Security put together guidance on the essential [...]
