Construction Owners & Builders Law Blog

In a long awaited decision, the Mississippi Supreme Court ruled last week in Architex Association, Inc. v. Scottsdale Insurance Company (PDF) that construction defects caused by subcontractor negligence are occurrences(accidents) triggering coverage under the terms of a general contractors’s commercial general liability policy.

The Court’s decision is a huge victory for all the major players in residential and commercial construction. The biggest winners may be homeowners, developers, schools and state and local agencies. The cost of remedying a construction defect and the diminished value of a building caused by a construction defect often greatly exceeds the original cost of construction. Absent insurance coverage, homebuilders and general contractors often do not have the wherewithal to indemnify the owner for these legitimate damages.

For lawyers, maybe so, says Professor Peter Henning in an article for the Notre Dame Journal of Law and Ethics.

A California appellate court decision banning "binding mediation" is discussed over at May It Please the Court.

The Court will decide whether its earlier decision in State Farm v Campbell (i) mandates a reasonable ratio between compensatory and punitive damages when the defendants conduct was outrageous and (ii) prohibits the jury from considering the harm done to persons other than the plaintiff in making its award.

Make the arbitration clause one-sided and give yourself, but not the other party, a way to opt out and the clause is unenforceable according to a recent ruling by the Wisconsin Supreme Court.

The provisions of the Act are summarized and linked to over at Construction Lawyer-Utah.

Marc Mayerson over at the Insurance Scrawl does his usual masterful job discussing recent case law on when late notice results in forfeiture of insurance coverage.

I've joined the debate over the wisdom of the paperless office over at The Illinois Trial Practice Weblog.

Under the federal Contract Disputes Act, a construction contractor seeking to overturn a contracting officer's final decision must either file a notice of appeal to a board of contract appeals within 90 days of the decision or file a complaint in the U.S. Court of Federal Claims within a year after the decision.

The Times-Picayune presents an amazing animated graphic showing the time line for the levee failures and flooding in New Orleans during Katrina.

Punitive damages sometimes are awarded in construction claim cases and often awarded in insurance bad faith cases so I note with interest that yesterday the Oregon Court of Appeals overturned a $100 million punitive damages award in a tobacco case.

Point of Law Forum points to an article indicating other states are unlikely to follow Rhode Island's lead.

The ContractsProf Blog summarizes an appellate decision holding the trial court erred in allowing the jury to decide the intent of an unambiguous one year warranty of materials and workmanship.

Next time a client complains about a construction expert's fees and expenses, I'm going to send him or her a copy of "Expert Witness Industry Booming" from the Star-Telegram.

The presentation of construction claims sometimes suffers because not enough attention is given to whether the claim holds together logically.

That's what the Chair of the Ad Hoc Committee on Terrorism-Resistant Buildings (TRB) of the International Code Council suggested at a recent Washington meeting reports ENR.com

Mike Wallace's unqualified rating took me by surprise. He is a fine man and an outstanding lawyer, and I say that though politically we come from different places.

Day on Torts summarizes changes to the Federal Rules of Evidence that will go into effect on December 1 unless Congress overturns them.

The trial judge in the Rhode Island lead paint case cited the Rhode Island Attorney General for civil contempt and ordered him to pay a $5,000 fine reports the WSJ.com's Law Blog.

I am presently prosecuting a civil RICO/ business tort case in which one of the key issues was the contents of the defendant's web site in 2004.

Professor David Bernstien claims in a Point of Law Forum Post the federal rule governing expert evidence is stricter than Daubert and its progeny are; Blog 702 says Bernstein doesn't get it.

Jurors competently deal with expert evidence according to research articles cited at the Trial Advocacy Blog.

The ContractsProf Blog points to a contract damages flowchart prepared by Profesor Tom Bell for his law students.

That's the practical effect of a California appellate decision upholding a zoning ordinance barring "big box " retail stores. Read the summary over at the Real Estate and Construction Law Blog.

Not in Delaware!

The limits of peer review of articles and research relied upon by experts is discussed in today's New York Times (free subscription required).

Whatever the trial court decides about your expert "in the exercise of its sound discretion" is likley to stand up on appeal at least in federal court.

Depeche Mode on contracts psoted at ContractsProfBlog.

leads to?

The New York Times reports prosecutor Sean Berkowitz made a nationally known trial consultant's woodshedding skills an issue in his cross examination of Jeffrey Skilling.

Blog 702 reports on a recent federal appellate case affirming exclusion of a physician's opinion that toxic mold caused plaintiifs' respiratory illness.

The Washington Supreme Court joins the Mississippi Supreme Court in holding that damages for the diminished value of property as well as cost of repair damages may be recovered for construction defects.

Professor Suja Thomas argues it is in a provocative article scheduled for publication in the Virgina Law Review. Link

The Clements "knew something was wrong the November day in 2003 they moved into the Airmont home, which they first saw in August and purchased for $430,000. The windows in the front of the house were so fogged up the Clements couldn't see out of them..."

The public, lawyers and jurors see jurors as passive vessels for each sides stories and evidence. The recent jury verdict against lead paint manufacturers explodes that myth.

Here's the story from the Wisconsin State Journal.

The ContractsProf Blog discusses whether potential business insolvency constitutes grounds for an injunction in a breach of contracts case.

Is the building or your lousy job the cause of your headache, cough, dry eyes, fatigue, rashes, sore throat, and wheeze?

A most excellent post over at Creating Passionate Users.

Peter Nordberg over at Blog 702 posts on whether the Daubert standards for scientific expert testimony should be applied to engineering testimony on defective product design.

Thanks to the Online Guide to Mediation for providing us with a directory of alternative dispute resolution blogs.

How good are you at it? To see, check out the links to eye opening tests over at the Online Guide to Mediation.

Read all about it in USA Today.

Check out this report on how the USDA is using satellites to monitor farmers for false crop insurance claims. Could they be used in construction cases? You betcha!

Construction consultant William Langton posts on what law governs when a construction dispute is decided by international commercial arbitration.

The U.S. Court of Appeals for the Fifth Circuit held last month that the existence of a written agreement to arbitrate may be proven by testimony if the agreement itself cannot be found. Link

Kathy Sierra's posts over at Creating Passionate Users almost always strike a responsive chord with me. She's done it again with a "Crash course in learning theory."

Construction lawyers write a lot of letters, motions and briefs. We learned in legal writing 101 if we didn't learn it in freshman english we should write most of our sentences in the active rather than passive voice? But how do we tell the difference?

The Supreme Court is being asked to decide: "May a judge who receives more than $1 million in direct and indirect campaign contributions from a party and its supporters, while that party's case is pending, cast the deciding vote in that party's favor, consistent with the Due Process Clause of the Fourteenth Amendment to the United States Constitution?"

The InHouseBlog points to an article of some of the e-discovery considerations corporate counsel should consider before suit is filed.

The Online Guide to Mediation posts on research suggesting avoiding loss influences our choices more than maximizing gain.

As a follow up to my recent post on jury research, read Clay Conrad's criticism of the misinformation the public is given about jury selection over at Jurygeek and my comment about "deselection" of jurors.

Amazing Firms Amazing Practices points to legal service maven David Maister article characterizing lawyers as either transactional experts or beloved advisers.

Washington Construction Law posts on a case holding arbitration awards are not final judgments and, therefore, do not accrue interest.

Check out these articles at Trial Behavior Consulting on juror attitudes and trial tactics in cases involving toxic mold , construction defects, insurance coverage, insurance bad faith and insurance company witnesses.

Houston based Williams Brothers Construction Company agreed to pay the federal government $3 million to settle False Claims Act and administrative claims for knowingly violating Disadvantaged Business Enterprise contracting requirements on federally funded highway projects.

Point of Law points to a PrawfsBlawg post by David Hoffman explaining the use of "Allen" or "Dynamite" jury instructions telling jurors to continue deliberating even though they report being deadlocked.

Robert Ambrogi's LawSites points to the annual Gallup poll rating the honesty and ethical standards of professions. Lawyers and building contractors rated near the bottom.

The Online Guide to Mediation lists construction law blogs including yours truly.

The Illinois Trial Practice Weblog points to Wickilaw and Wex both of which aim at the whole of the legal universe and to the Katrina focused Lousiana Law blog Ernie the Attorney is promoting.

Washington Construction Law links to the story.

InhouseBlog points to a "how to" article that will keep you out of legaL hot water.

Not if the defective product is EIFS cladding sold in South Carolina.

Read about this new game over at the Online Guide to Mediation.

The InhouseBlog points to Wex--a collaboratively-created, public-access legal dictionary and encyclopedia--sponsored by the Legal Information Institute at CornellLaw School.

Washington Construction Law points to McMilkle v Lang, a Washington appeals case holding the economic loss doctrine does not bar an owner from suing a subdivision developer and engineer for economic losses caused by defective construction.

When a witness's deposition testimony is presented at trial, is it better to play the jury a video of the witness testifying or to have a stand in read the witness's testimony?

The Construction Contractor's Digest explains the difference between these terms and the formula for calculating each.

Want a demographic snapshot of the potential jury pool or compare the panel you drew to the relevant population base to see if its skewed? Want to see what kind of housing predominates around a prospective juror's address--without a drive by?

Marc Mayer over at Insurance Scrawl discusses focus group research suggesting the lowering of expectations of jurors as to appropriate insurance company conduct.

Arnie Herz over at Legal Sanity points to a new "must read" book by negotiation gurus Roger Fisher and Daniel Shapiro entitled, Beyond Reason: Using Emotions as You Negotiate.

"Mississippi Burning" Trial

Here's a list of standard deposition topics and questions compiled by Evan Schaeffer at his The Illinois Trial Practice Weblog.

If your goal is to defeat a construction claim, you want the judge or jury to picture the claimant's burden like this:

Here's a checklist of basics courtesy of the Tennessee Business Litigation Blog.

The Delaware Corporate and Commercial Litigation Blog points to the excellent discussion of the duty of good faith and fair dealing in Dunlap v State Farm Casualty Co., a Delaware Supreme Court decision.

When exhibits are numbered in advance of trial, exhibit 1 should be the documents or items you most want the jury to see, exhibit 2 the second most important document and, so on, recommends The Illinois Trial Practice Weblog.

A joint venture of engineering and construction companies settled the claim brought by the federal government for allegedly submitting inflated claims on Amtrak's project to electrify the rails between New haven and Boston, reports the False Claims Act/Qui Tam Blog.

Read the report over at Build On This. on the Ohio appellate court's decision in Dugan & Meyers Constr. Co., Inc. v. State of Ohio Dep't of Administrative Svcs..

Public awareness of the importance of the jury system is hampered by many lawyers and judges ignorance of the history, purpose of the jury and social science research done on the jury system, according to Jurygeek.

A California Court of Appeals vacated an arbitrator's $3.3 million award because he failed to timely disclose he was retained as an arbitrator in another case involving the attorneys for one of the parties. The case is summarized over at the the Real Estate and Construction Law blog.

Here are reports from California, Illinois, Texas, Pennsylvania, South Carolina, Connecticut, Florida and Arkansas. Mold woes from summer humidity continue to torture school districts.

The Construction Risk.com Report points to a Wisconsin appellate court decision holding a contract clause permitting an architect to rely on reports from other firms does not relieve the architect of its duty to inform the owner of inadequacies in the report and the need for additional investigation.

The National Arbitration Forum Blog posts on the myth that arbitration is causing the decline in jury trials; the high cost of trying a case is behind the vanishing jury trial.

For many schools, the price of a hot summer has been bills for mold inspection and remediation. Here are reports on mold and other problems from Lousiana, Michigan, Pennsylvania, Virginia, Hawaii, North Carolina, Illionois, South Carolina, California, Washington and Florida.

There are useful links to material on retrieving and using archived information from companies' web sites as evidence over at Be Specific.

Declarations and Exclusions gives a real life example of how lawyers' manufacture of discovery disputes can make discovery needlessly more expensive for their own clients as well as the other parties.

Relying on federal precedent, a Florida appellate court held last month home office overhead calculated using the Eichleay formula cannot be recovered for a project delay when the contractor did not suspend all or most of its work.

Electronic Discovery and Evidence points out this excellent LA Times article on the battle between computer forensic experts and designers of programs to erase computer data.

The Construction Attorney Blog posts on the copyright suit pending over the similarities in the design an architectural firm submitted for Freedom Tower at the World Trade Center site and a student architectural project.

The American Society of Professional Estimators (ASPE) reports the States of California, New Jersey and New Mexico, the General Services Administration, the U.S. Postal Service, the U.S. Army, U.S. Coast Guard and the U.S. Navy require ASPE certified estimators be involved in preparing, supervising or checking their project construction cost estimates.

Blog 702 points us to Searles v. Fleetwood Homes,Inc., a Maine Supreme Court decision affirming a physician's testimony that mold caused the plaintiffs' respiratory problems. The court also affirmed the trial court's refusal to give the jury a comparative negligence instruction.

Here's some good advice from the National Association of Home Builders on drafting a drafting a binding arbitration clause for non-commercial building projects.

Here's an update on mold, sick building and construction defect cases and news from around the country.

The mandatory arbitration clause in the American Institutes of Architects' General Conditions of the Contract of Construction does not survive termination of the contract, a Florida appellate court recently ruled in Aberdeen Golf & Country Club v. Bliss Construction, Inc.

"This story is about dirt," said Thomas W. Prewitt, the Dean of the Mississippi construction law bar, "It's a story about dirt wetted by the blood of friendship broken and packed by orders of hurry and get it done and I'll pay you later."

Maybe not says Jeff Boudreaux over at Louisiana Law Blog.

There's a good summary of the decision and you can download it over at the Construction Attorney Blog.

The importance of helping jurors understand the burden of proof is underlined by a recent New York ruling reported by Law.com throwing out a verdict because the jurors consulted a dictionary to try to figure out what the word "preponderance" meant. The trial judge had instructed the jury the plaintiff had to prove her case by a "preponderance of the evidence."

The Tennessee Business Litigation Law blog points to an article by a defense attorney about how the lower courts are applying the Supreme Court's decision in State Farm v. Campbell on the constitutional limits of punitive damages awards.

The principles were formulated by the American Bar Association (ABA); there's an excellent summary of the debate over some of the principles in this Virginia Lawyers Weekly Article. Thanks to Point of Law for pointing us to this article.

Construction defect experts' affidavits were held sufficient to create a fact issue over whether construction defects in numerous homes were the result of "willful misconduct" by the contractor by a California Court of Appeals in Acosta v. Glenfed Development Corp.

"I Don't Speak Latin, and Neither Do You" complains Evan Schaeffer over at the Illinois Trial Practice Weblog. My thought--Amen, Brother!

The federal Second Circuit Court of Appeals recognized preliminary agreements to enter into construction contracts create an enforceable duty to negotiate in good faith last month in Brown v. Cara.

The South Carolina Trial Law Blog describes the approach suggested by David Ball, a most excellent trial consultant.

Read a comment and click to the article, all at the Inhouse Blog.

When a claimant seeks attorneys fees under a contract clause providing for attorneys fees for breach of contract the claimant must prove both entitlement and the amount of the fees as part of his substantive claim the Fourth Circuit ruled earlier this week in Carolina Power v Dynergy Marketing.

A Lexis search turned up three opinions directly related to construction law issues and claims authored by President Bush's nominee for the Supreme Court, Judge John Roberts of the D.C. Circuit.

Last week the first circuit detailed the accounting standards applicable to long term construction projects in In re Stone & Webster, Inc., Securities Litigation. Download file

A recent post over at Point of Law by Jonathan Wilson unwittingly proves the existence of blind spot bias.

The Tennessee Business Litigation Law Blog points to an outstanding article on how a trial court's instruction may encourage candor in voir dire..

To limit construction defect suits, some developers are including clauses waiving any claims if notice is not given within 30 days and clauses requiring arbitration according to the Colorado Home Owners Association Law Blog.

Trying to avoid pre-trial disclosure rules and Daubert challenges by project professionals' testimony as "lay opinion" or "eyewitness" testimony is likely to backfire.

See the post on the Colorado Supreme Court's decision so holding over at the Construction Attorney Blog.

Applying the Federal Arbitration Act, a Texas appellate court ruled last week that the arbitrator, not the court, must decide whether a contractor's failure to demand arbitration within 30 days of the architect's final decision on its claim makes the architect's decision final and binding.

I am a disciple of the negotiating approach explained in Fisher and Ury, Getting to Yes: Negotiating Agreement Without Giving In. One key to getting to yes in any negotiation is knowing and appreciating your "best alternative to a negotiated agreement" (BATNA).

A reminder everyone in business needs to heed from over at BizzBangBuzz Blog.

Dennis Kennedy's post on electronic discovery resources is a great place to start for those ready to finally dip their big toe into this important legal subject.

Thanks to the Tennessee Business Litigation Blog for summarizing this Corporate Counsel article on the advantages to businesses of retaining attorneys on a contingent fee basis. The article also discusses hybrid arrangements involving a reduced hourly rate plus a contingent bonus.

E-mails may be used to form an enforecable contract to arbititrate under a holding by the United States Court of Appeals for the First Circuit.

A Utah federal district court decided two whistleblowers may proceed under the False Claims Act against a consortium of contractors involved in a $1.59 billion Utah Interstate Highway project even though the allegedly fraudulent claims were presented to a federal grantee--the Utah Department of Transportation--not a federal officer. The court declined to follow a 2004 D.C. Circuit opinion that presentment of a false claim to a federal grantee rather than the federal government falls outside of the False Claims Act.

An Ohio appeals court recently ruled in Cementech v City of Flowood, Download file , that a disappointed bidder can recover lost profits as well as bid preparation costs in a lawsuit successfully challenging the wrongful award of a construction contract to another bidder.

Contrast this holding with our post on Hill Brothers Construction & Engineering Company, Inc. v. Mississippi Transportation Commission , a recent Mississippi Supreme Court decision, in which a majority declared damages were not recoverable.

Read this post from the Construction Law Blog briefing the Connecticut Supreme Court's holding in Medvalusa Health Programs, Inc. v. Membership, Inc that neither the due process clause in the 14th Amendment nor state public policy limit the amount an arbitration panel may award in punitive damages.

In Hill Brothers Construction & Engineering Company, Inc. v. Mississippi Transportation Commission, Download file , the Mississippi Supreme Court held cost savings could be considered by a state board in deciding whether to accept a bid that did not strictly comply with the bid specifications.

The difficulty of proving receipt by mail or facsimile is illustrated by last weeks decision of the Federal Circuit Court of Appeals in Riley and Ephrian Construction Company, Inc. v. United States, Download file reversing a summary judgment holding a contractor's suit under the Contract Disputes Act was time barred because it was filed more than one year after the contracting officer mailed and faxed notice of his decision rejecting the claim.

Contractors asserting claims for loss of productivity and delays often have difficulty proving damage causation. The impact damages sought by the contractor may result from the cumulative effect of multiple events some of which are compensable and some of which are not. Segregating the compensable impacts from the non compensable impacts on the contractor is often difficult to do. This difficulty often hampers the parties ability to negotiate a fair outcome.

A new tool to address this problem--the "weighted factor tool" (WFT)- was presented at the recent Denver leadership conference held by the Construction Owners Association of America(COAA). The creators, Patrick McGeehin of Rubino & McGeehin and Richard Martone of PMA Consultants, L.L.C. are nationally known and have played leading roles in negotiating settlements of contractor impact claims involving the controversial Big Dig project in Boston.

I see blogging as a new way to share knowledge and ideas with others interested in construction law and the construction industry. I've written my share of articles, spoken at many seminars and attended many more in the two decades I've been practicing. But these forms of communication flow one way, involve complicated logistics and cost too much for too little. Bloggers share knowledge and ideas on their schedule at modest expense.

Political bloggers are revolutionizing how elections are fought and changing the way many of us get the news. I'm with those who think blogging will change how we practice law too. Denise Howell at Between Lawyers sums it up this way: "Blogging will make more relevant, quality legal information more readily available, which will put its own pressures on the practice. It will serve to make clients and members of the profession increasingly better informed about resources and options." For a collection of comments on legal blogs check out the recent posts collected by Kevin O'Keefe, my blogging sensei, at Real Lawyers Have Blogs.

I've joined the discussion over at The Greatest American Lawyer.