The good folks at Bricker & Eckler, an Ohio law firm, recently blogged about a New York appellate decision concering subcontract default insurance (“SDI”), often referred to as “SubGuard” based on a Zurich SDI product of the same name. The case involves a private owner who alleged it was misled by its construction manager (presumably at-risk) into believing that the SDI policy the CM had procured from the project’s largest subcontractor provided coverage to the owner in the event of that sub’s default. Turns out the policy only named the CM, but not the owner, as an insured, and when the owner discovered it had no coverage after the sub’s default, it sued the CM for fraud, among other claims.
Tag Archives: raleigh construction law
Is a 20-Year Express Warranty Good for Only Six Years in North Carolina?
Ten years ago, you had the roof on your office building replaced. Your roofer had assured you that the new membrane would be waterproof, wouldn’t crack and would be well-suited for your building over the long-haul. He even backed up these representations with a document stating that both the membrane and his workmanship were “fully warranted for 20 years.”
The work was substantially complete on September 15, 2003, and until recently, the new membrane hadn’t given you any problems. After storms passed through your neck-of-the-woods last week, however, your “new” roof leaked. Big Time.
Turns out you’re going to need to replace your roof immediately, ten years earlier than expected. Adding insult to injury, interior spaces were damaged, including common areas and rented space, and the operations of some of your tenants were disrupted. You suspect they might seek rent abatement, maybe more. Good thing you kept that 20-year warranty in a safe place, right?
Kind of. Under a recent North Carolina appellate decision, you might be able to compel the roofer to replace the roof, but you’re not likely to succeed in recovering any monetary damages from him.
N.C. Court of Appeals Fleshes Out the Scope of Design Professionals’ Mechanics’ Lien Rights
Embed from Getty Images
The North Carolina Court of Appeals (“COA”) this morning issued a 33-page opinion clarifying the types of professional engineering services entitled to a claim of lien under North Carolina’s mechanics’ lien statutes. One of the three COA judges, however, issued a dissenting opinion, which means further review by the North Carolina Supreme Court could be in the offing. This post explores the facts of Ramey Kemp & Associates, Inc. v. Richmond Hills Residential Partners, LLC et al., discusses the majority and dissenting opinions, and comments on the important points to take away from the decision.
Filed under Design Contracts, Feature story, Lien Law
10 Big Changes to Bidding, Performing & Making Verified Claims On NCDOT Projects
I represent a number of highway/heavy contractors, all of whom know that doing business with the North Carolina Department of Transportation (“NCDOT” or the “Department”) requires careful attention to the agency’s “Standard Specifications for Roads and Structures.” NCDOT’s Standard Specs contain both front-end “General Requirements” (what would be called “General Conditions” on virtually any other public or private construction contract) and back-end standards for all aspects of highway work — from earthwork, pipe culverts, subgrade and asphalt pavements to signing, materials, pavement markings and electronic signalization.As my highway/heavy clients also know, the NCDOT’s Standard Specs are regularly revised every 4-6 years. Last year, NCDOT issued the 2012 version of its highway construction bible, updating the 2006 version. This post focuses on what I consider to be the ten most significant changes to NCDOT’s front-end “General Requirements.” As you will see below, these ten revisions affect how contractors obtain, perform and make claims on NCDOT work.
Foul Weather, Contract Time and Excusable Delay
Would snow tonight give rise to excusable delay tomorrow? Image courtesy of The Weather Channel.
Is it just me, or has it been exceedingly gray and wet in Raleigh-Durham, NC so far in 2013? Heck, forecasters are even calling for 3-6 inches of snow overnight in the Triangle (note to self: pick up milk, bread and other essentials during the lunch break, before the grocery stores shelves are predictably and thoroughly picked over).
The unusually dreary skies around here of late have me thinking about the intersection between the weather and construction delay claims. Specifically, I’ve been ruminating on this question: when is a contractor’s project delay excused by nasty weather?
Filed under Delay Claims
Forecasting Governor-Elect McCrory’s Infrastructure Funding Priorities
I recently came across this blog post from The Council of State Governments’ “Knowledge Center” blog. The post forecasts the 2013 transportation funding challenges and priorities in 20 different states, North Carolina included. Here’s what the post had to say about what might be expected once former Charlotte Mayor Pat McCrory (R) becomes our governor in January:
The Associated Press recently looked at where incoming Gov. Pat McCrory (the longtime Charlotte Mayor) stands on transportation issues: “Don’t punish cities that must spend lots of money improving interstates, he says. Develop decades-long construction plans. Keep politics out of funding road projects and work with the private sector. And don’t be afraid to try something risky, like the Republican did in 1998 by lobbying for a referendum by voters that raised the local sales tax to help build Charlotte’s first light rail line.” Transportation advocates in the state are reportedly encouraged that the governor-elect, who championed transportation’s ability to improve the economy as Mayor of Charlotte, could endorse more sustainable transportation revenue sources and win support from legislators. But, as a Business Journal article pointed out earlier this fall, North Carolina’s gas tax is already among the highest in the nation and while the state has turned to tolling to help finance some projects, they have faced challenges with a couple of toll road projects.
Filed under State law, policy & news
N.C. Liens/Bonds, They Are A-Changin’ Part I: “Perfecting” Liens Under the New Regime
As 2012 draws to a close — faster than many of us can believe — the dawn of a new era under North Carolina’s mechanic’s lien and bond statutes quickly approaches. And that means it’s high time for me to end my brief blogging hiatus with a series dedicated to helping construction industry participants throughout the state understand the changes that are rapidly coming down the pike.
By way of brief recap, legislation protecting general contractors from double payment liability on public projects and legislation protecting title insurers from “hidden liens” on private projects made splashy headlines this past summer. I’ll be delving into the nuts and bolts of those significant changes as this series continues. This post, however, is dedicated to addressing a less-publicized, but no less substantial, alteration to the lien law that every potential lien claimant will need to bear in mind in 2013, and beyond: the process by which lien rights are “perfected.”
Filed under Feature story, Lien Law, State law, policy & news
“Who Are You?” To Preserve Lien Rights Against Owners, Get the Right Answer to that Question!
Image courtesy Sam Killermann / samuelkillermann.com. Lyrics from “Who Are You” by P. Townshend (c) 1978.
I’m psyched to present another guest blogger this week: Lewis & Roberts construction & surety law associate extraordinaire, Jessica Bowers. It’s been my distinct pleasure to work with Jessica since she joined L&R in October 2010. Jess has represented owners, developers, GC’s and subs, and her practice has seen an increasing emphasis on serving the needs of surety companies. A member of the State bar since 2005, Jess was a recipient of the bar’s Pro Bono Public Service Award that year.
If you’re like me, you might find yourself softly singing the catchy chorus from the Who’s “Who Are You” as you consider the North Carolina Court of Appeals’ June 5, 2012 decision in Young & McQueen Grading Company, Inc. v. Mar-Comm & Assocs., Inc. et al.
The case involved a good deal of confusion regarding the correct identity of the owner of a construction project, confusion that complicated the contractor’s assertion of its mechanic’s lien rights against the owner’s property.
Rest easy, the contractor ended up prevailing and holding on to its lien rights. But it sure wasn’t easy! The decision reminds us how critical it is at the beginning of a project to determine the correct identity of the owner of the improvement by obtaining an accurate answer to one simple question:
Who are you?
Filed under Feature story, Lien Law, NC case law
Bid Protests: Look Before You Leap
A $15 million school construction project is being let by a local board of education, and you really want this contract. Your team has been working relentlessly over the past week to accurately estimate the project and provide the school board with the most competitive price possible. You’ve sharpened your pencil, and reduced your margin to virtually nothing in the hopes of landing this project. Time to submit your proposal, fingers crossed…
…Well, the bid opening has now come and gone, and unfortunately, it looks like the work is going to be awarded to one of your competitors. However, you believe there was an irregularity in the bidding process, and the more you think about it, the more you want to contest what you consider to be an unjust result. Should you sue in an attempt to stop the contract from being awarded to your competitor?
The answer to that question depends substantially on the severity of the irregularity you’re concerned about.
Filed under Bid Protests
N.C. Construction Law, Policy & News 