Category Archives: State law, policy & news

Hidden Lien Legislation Appears Primed for Approval in General Assembly

The train is on the track, and there’s no slowing it down.That was the impression left on construction industry stakeholders after House Judiciary Subcommittee B approved Senate Bill 42 unanimously yesterday.

Although the bill was initially re-referred to the Finance Committee, that referral was subsequently withdrawn, and a quick scan of today’s legislative calendar suggests the bill will be considered by the entire House at 11:00 a.m. this morning (the House calendar is here; see bottom of page 2).

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Filed under Lien Law, State law, policy & news

Latest on Lien and Bond Bills Pending in the General Assembly

Image from Wikipedia Commons

Monday is upon is, the beginning of what is likely to be the penultimate week of the General Assembly’s 2012 short session.

As my regular readers know, I’ve been tracking two key pieces of construction-related legislation: the lien law revision bill recommended by a legislative study commission, and the bill advanced by the title insurance industry to address the “hidden lien problem.”

This post provides an update on where those two bills stand, and also reports on a third construction-related bill that hit my radar last week.

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Filed under Lien Law, Local law, policy & news, Payment Bonds, Payment Bonds, State law, policy & news, Surety Law

Title Insurers Seek Profound, Immediate Changes to N.C. Mechanic’s Lien Law

My May 23 post about proposed revisions to North Carolina’s lien laws mentioned that protection against “hidden liens” had been omitted from earlier versions of the bill, due to a concern that the issue required additional study prior to legislative action.

The title insurance industry, however, has other ideas.

In recent weeks, title insurers have ratcheted up the pressure for the issue to be addressed immediately, prior to the General Assembly’s adjournment of its “short session” at the end of this month.   The legislation they are pursuing would make profound changes to the manner in which all potential lien claimants — architects, engineers, general contractors, subcontractors and suppliers included — would need to preserve their lien rights, before a claim of lien is ever filed.

This post provides background on the so-called “hidden lien problem,” summarizes the title insurers’ current legislative efforts, and identifies potential problems with their draft legislation.

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Filed under Feature story, Lien Law, State law, policy & news

No End In Sight: Managing Latent Defect Exposure in a Post-Jacobs Engineering World

Virginia construction attorney Chris Hill

Last week, I reported that the U.S. Supreme Court had refused to hear the Jacobs Engineering Group, Inc. v. State of Minnesota case, which arises from a decision of the Minnesota Supreme Court allowing that state’s legislature to retroactively revive long-expired latent defect liability.

This week, I provide a summary of the Minnesota Supreme Court’s decision and prognosticate about its consequences over at Chris Hill’s excellent blog, “Construction Law Musings.”  You can read my guest post on Chris’s site by clicking here.

Many thanks to Chris, a fellow Duke ’94 alum, for giving me the opportunity to guest blog at his place.  I’ll be back here with original content early next week.  Lots going on with mechanic’s lien law & policy to share…

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Filed under Construction Defects, Federal case law, State law, policy & news

BREAKING: U.S. Supreme Court OK’s Revival of Time-Barred Defect Claims By Legislative Fiat

As set forth in the attached order, The Supreme Court of the United States will NOT review the decision of the Minnesota Supreme Court upholding legislation by the Minnesota state legislature that revives long-extinguished design defect liability arising from the 2007 collapse of a portion of the I-35W bridge in Minneapolis.Prior to the collapse, Minnesota’s “statute of repose” (a statute that limits the time during which an action can arise) for design defects was 15 years.  Despite the fact that the design work for the bridge in question was performed in the mid-1960’s, and despite the fact that the designer of record — Sverdup & Parcel and Associates, Inc. — had been bought out by Jacobs Engineering in 1999, the Supreme Court’s denial of certiorari means that Minnesota is now free to pursue $37 million in indemnity claims against Jacobs Engineering that had expired under the 15-year statute no later than the early 1980’s.

This is a scary outcome for participants in the construction industry, with potential insurance, contract drafting and document retention repercussions.  I’ll be back in the days ahead with additional analysis.  In the interim, you can read AGC’s brief in favor of review here, which sets forth quite eloquently the reasons why the Supreme Court should have reviewed and reversed the Minnesota Supreme Court’s decision.

UPDATE (5/29/12 1:38 p.m.): Coverage from Engineering News & Record can be found here.

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Filed under Case law from other states, Defect Claims, Federal case law, Federal law, policy & news, State law, policy & news

7 Things You Need To Know About The Proposed Lien Law Revisions Filed in the General Assembly Yesterday

Legislation revising North Carolina’s mechanic’s lien law was filed in both the House and Senate sides of the N.C. General Assembly yesterday.  Text of the legislation can be found here.While not the ambitious rewrite that members of the construction bar and real property bar had envisioned when the process of revising the statutory scheme began a few years ago, the pending legislation would make several important changes to existing mechanic’s lien law, while leaving a couple other significant issues for future legislative effort.

Click “Continue reading” below for my thoughts on the five most significant proposed changes embodied by the current revisions — as well as my thoughts on the top two “non-changes” to existing law.

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Filed under Feature story, Lien Law, State law, policy & news

4th Circuit, Flawed NEPA Review Process Cast Doubt On the Future of the Monroe Connector Bypass

Image courtesy FreeFoto.com

Remember the headline to my March 12, 2012 blog post about the Monroe Connector Bypass (or just the Monroe Bypass, for short)?

It suggested that the legal saga surrounding the proposed $725 million highway construction project was nearing “the end of the road.”

On second thought, not so much.

The road has taken an unexpectedly sharp turn, and there’s no telling how long the project may now be delayed.  Why? Because according to the Fourth Circuit Court of Appeals (“4th Circuit”) in its May 3, 2012 decision in N.C. Wildlife Federation v. N.C. Department of Transportation, the North Carolina Department of Transportation (“NCDOT”) and the Federal Highway Administration (“FHA”) (collectively, the “Agencies”) failed to conduct a clear, transparent environmental review process that permitted meaningful public comment under applicable principles of federal environmental law.

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Filed under Feature story, Federal case law, Federal law, policy & news, Local law, policy & news, Projects of Interest, State law, policy & news

Public-Private Partnerships for Financing Public Improvements — The Potential Good, Bad and Ugly

Image by digitalart via FreeDigitalPhotos.net

I commend to your reading the current issue of NC Construction News, which includes this feature article on public-private partnerships (“PPPs” or “P3s”).  As those who regularly follow this blog know, I’ve dedicated a fair amount of cyber-ink recently to the utilization of P3s in the construction of public facilities (particularly highways); after reading the linked article, my thinking on the subject has coalesced around this admittedly simplistic notion: P3s have enormous potential for good, for bad and for ugly, and it likely will be up to the General Assembly to determine which of those adjectives ultimately will apply to this unique project financing and delivery system.

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Recommended Reading: The Basics of E-Verify in North Carolina

I’m a pure sticks-and-bricks construction and surety lawyer, focusing on construction contracts, change order claims, payment claims, defect claims, delay claims, etc. etc.  While I don’t dabble in either employment or immigration law, I fully recognize that construction participants — and particularly general contractors and subcontractors — confront a host of employment- and immigration-related legal issues on a regular basis.  I therefore endeavor to pass along important information authored by my colleagues in the legal community who, unlike me, are experts in the employment and/or immigration law fields.

In that vein, Jennifer Parser of PoynerSpruill has posted an excellent primer on E-Verify that I recommend to all North Carolina construction participants.  E-Verify is an internet based tool that allows employers to instantly verify the eligibility of their employees to work in the United States.  E-Verify became the “law of the land” here in North Carolina last June, and Ms. Parser’s article discusses how the legislation will be phased in, how employers can comply and the penalties for non-compliance.  Must reading.  And for more, head to the federal government’s E-Verify site.

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Filed under Federal law, policy & news, State law, policy & news

Proposal To Toll I-95 Proving To Be VERY Controversial: Rep. Ellmers Introduces Federal Legislation To Stop It

Rep. Ellmers (R-NC)

In my February 6, 2012 blog post announcing the $4.4 billion widening of Interstate 95 from the South Carolina to the Virginia borders, I boldly predicted that NCDOT’s proposal to finance the project through tolling could prove controversial.

They don’t call me Master of the Obvious for nuthin’.

As of this blog post, the nototollsi95.com website has 3530 signatures.  The North Carolina Trucking Association, the Roanoke Valley Chamber of Commerce and a host of other local organizations and municipalities have all registered their strong opposition.

And now U.S. House Representative Renee Ellmers, a Republican from Dunn, has taken the fight to Congress, introducing legislation aimed at preventing North Carolina from participating in the federal pilot project that makes tolling on I-95 possible in the first place.

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Filed under Federal law, policy & news, Local law, policy & news, State law, policy & news