Tag Archives: Raleigh construction lawyer

Mediator/Arbitrator Hybrids: The Next Big Thing in Construction Dispute Resolution?

One of the oft-cited advantages of arbitration is that it is simpler, cheaper and faster than litigation.  Recent figures from the American Arbitration Association (“AAA”) suggest that while a commercial case may take up to two years to run its course through the judicial system, commercial cases can be resolved via arbitration between six months and a year.

Still not fast enough for you?  Then perhaps you might be interested in the following fast-track alternative dispute resolution procedure:

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Filed under Arbitration, Federal case law, Mediation

Who Benefits from Subcontractor Default Insurance? Not Project Owners.

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.

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Filed under Construction Risk Management, Performance Bonds, Subcontractors

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.

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Filed under Construction Defects, Defect Claims, State law, policy & news, Warranty Claims

Will QR Code Technology Provide Contractors Quick Relief in Filing Preliminary Lien Notices?

Ever since its passage last summer, North Carolina’s so-called “lien agent statute” has caused much consternation throughout the commercial construction industry, with many contractors, subs and suppliers worried that it will be inconvenient and expensive for them to comply with the statute’s various requirements (which I’ll be discussing in detail as my “Lien & Bond Law Revolution” series continues in the weeks ahead).  The title insurance industry, however, has tried to assure leery potential lien claimants that an online application will make filing preliminary lien notices convenient and inexpensive.This week, we’ll get down to where the rubber meets the road on that assurance.  Continue reading

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Filed under Events, Lien Law, State law, policy & news, Subcontractors

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.

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Filed under Contract Review & Negotiation, Delay Claims, Feature story, Highway Contracts, State law, policy & news

Foul Weather, Contract Time and Excusable Delay

Would snow tonight = excusable delay for contractors tomorrow?  Image courtesy of The Weather Channel.

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?

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N.C. Liens/Bonds, They Are A-Changin’ Part II: The (Bankruptcy) Fix Is In

Back in 2010, when a group of construction, real property and bankruptcy lawyers first started meeting to consider potential revisions to North Carolina’s lien and bond statutes, one of the driving forces behind those discussions — particularly for those who typically represent subcontractors and suppliers — was protection for downstream project participants after an upstream player filed for bankruptcy.  Such protection, known commonly as the “Bankruptcy Fix,” was included in the package of revisions signed into law last summer.  This post explores the origins of the Bankruptcy Fix and discusses how the 2012 lien law legislation protects the right of subs and suppliers to serve a Notice of Claim of Lien Upon Funds even after a party above them in the contractual chain files for bankruptcy.

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

Court of Appeals: Contractors’ Lien Claim Properly Dismissed Where “Owner” Owned Nothing on Date of 1st Furnishing

In a controversial 2-1 decision released October 2, 2012, the North Carolina Court of Appeals (“COA”) affirmed a trial court’s dismissal of a mechanic’s lien claim asserted by contractors who did not have a contract with the “Owner” of the improved real property as of the date of first furnishing — even though the “Owner” ultimately acquired title to the land during the course of the contractors’ performance.

Who is an "owner" under the mechanic's lien laws in North Carolina

Photo credit: tvland.com

The John Conner Construction, Inc. v. Grandfather Holding Co., Inc. decision is significant to the construction industry because it limits the reach of the term “Owner” as that term is used in North Carolina’s mechanic’s lien statutes.  Since there was one dissenting vote from the three-judge panel, however, the case is likely to be reviewed by the N.C. Supreme Court, which could elect to expand who qualifies as an “Owner” for the purposes of the lien law.

A full exploration of the facts, holding, dissent and practical implications of the John Conner Construction decision follows:

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

Barnstorming Tour on Revisions to North Carolina’s Lien and Bond Laws Kicks Off Tomorrow In Durham

I’m excited to be one of five North Carolina lawyers participating in a series of seminars sponsored by CarolinasAGC aimed at helping the construction industry understand the significant lien and bond revisions passed by the General Assembly and signed into law by Governor Perdue earlier this summer.

Over the coming weeks, CAGC is sponsoring five such seminars in Durham, Wilmington, Greensboro, Charlotte and Asheville.  CAGC’s website describes each seminar as follows:

This two hour seminar will cover the major, recently enacted revisions to North Carolina’s lien and public bond law statutes.  House Bill 1052 and Senate Bill 42 were signed into law this July, and will take effect respectively in January and April 2013.  The new laws substantially modify the steps that all parties will have to take to protect their interests — regardless of whether they are an owner, buyer, contractor or sub/supplier. In particular, the new laws impose significant new notice requirements for both public and private work.  This seminar will be taught by attorneys that were intimately involved in passing the legislation and will cover in detail what the changes are and what you’ll need to do to protect your interests starting in 2013.  Attendees will receive a written summary of the lien laws as amended and a copy of the Power Point
presentation presented and have ample opportunity to ask questions from the presenting attorneys.

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

Bucking the Trend: The “Completed and Accepted Work Doctrine” Lives On In North Carolina

Image by eschipul via Creative Commons license.

In recent years, a majority of states have ruled that a contractor can be found liable for personal injuries suffered by third parties from accidents occurring after the contractor’s work is completed and accepted.

Not North Carolina.

In a decision handed down on August 7, 2012, the N.C. Court of Appeals (“COA”) once again embraced the “completed and accepted work doctrine,” which provides that an independent contractor is not liable for injuries to third parties occurring after the contractor’s work is completed and accepted.  The doctrine has been the “law of the land” in the Old North State since 1946, and our appellate courts show no signs of reversing course.

This post explores the COA’s decision in Lamb v. D.S. Duggins Welding, Inc., considers the merits and drawbacks of the completed and accepted work doctrine and concludes with some observations about the rule’s exceptions and limitations.

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Filed under Construction Defects, Defect Claims, Feature story, NC case law, State law, policy & news