Thoughts on construction law from Christopher G. Hill, Virginia construction lawyer, LEED AP, mediator, and member of the Virginia Legal Elite in Construction Law

Some Construction Nuggets to Consider

Brett MarstonFor this week’s Guest Post Friday here at Musings, we welcome a good friend, Brett Marston. Brett is the head of the construction law practice group at Gentry Locke Rakes & Moore in Roanoke, Va. and a member of the firm’s management committee. He is AV-rated by Martindale-Hubbell and has extensive experience in construction contract negotiations and preparation, payment disputes, mechanic’s liens, bond claims, construction defects, delay claims, insurance, litigation, and OSHA matters. He handles significant construction matters in federal and state courts, arbitration, and mediation for general contractors, subcontractors, owners, design professionals, and suppliers. Brett is a 1993 graduate, with honors, from the George Mason University School of Law, and a 1990 graduate of the University of Virginia. Prior to starting with Gentry Locke in 1994, Brett was a law clerk to the Honorable J. Calvit Clarke, Jr., Sr. Judge of the United States District Court, Eastern District of Virginia (Norfolk Division).

In the spirit of the word “musings,” I’d like to offer some thoughts I have about several construction law and construction litigation topics.

First, one of the most prevalent incongruities I see in the contract documents I review during litigation, and one that could be easily corrected, is the lack of coordination of the front-end contract documents for construction projects. Often owners leave these to the design professionals to prepare as part of the Construction Documents. While preparing project drawings and specifications is best placed in the hands of design professionals, it is a bit much to ask them to also be responsible for preparing the contract, including the general conditions and supplemental general conditions, between the owner and the general contractor or construction manager. This should be coordinated by the owner’s counsel to make sure that the contract for construction is correct in form and content, and that it syncs up with other contracts for the project and state law. Recently, I have seen contracts where the names of the parties are not included correctly, for example, where they are listed as the “name you hear on the radio commercial” rather than the name listed on the State Corporation Commission website. This can have legal effects later on, depending upon who signs that contract, in what capacity, etc. I have even seen contracts for public entities that do not include provisions required by the Virginia Public Procurement Act. Further, the owner may have contractual obligations to a lender or some third-party that requires certain provisions be included in that construction agreement. An experienced attorney can be beneficial in this process to ensure that the contract complies with the other project documents and the law.

Second, does anyone remember how the new “paperless” and “email communication” world was going to make life so much easier? In the world of construction litigation, it has certainly provided much more fodder for discovery and in many instances unexpected entertainment when e-mails are produced in litigation that were never meant to see the light of day. More than anything, though, it has drastically changed how construction cases are litigated, and how much they cost the client to handle. The massive number of e-mails exchanged between the owner, general contractor, architects, and subcontractors simply make construction litigation more expensive.

Third, as this blog has previously covered in detail, the recent efforts in the General Assembly to amend the notice requirements for the filing of mechanic’s liens is most interesting. If there was ever a collection of statutes that could be described as a “house of cards,” it is the Virginia mechanic’s lien statutes, because of the many inter-linked requirements built into the statutes and the strict interpretation of these statutes by Virginia courts. Moving and tinkering with just one piece of these statutes will impact other aspects. The recent legislative efforts (HB 1265) to require earlier notice to owners of real estate by persons intending to file mechanic’s liens is a prime example of dangerous tinkering. Although a layperson may perceive the changes originally proposed in HB 1265 as a reasonable suggestion, these proposed changes might have completely negated the efforts to grant mechanic’s and materialmen statutory lien rights to provide protection in the event of nonpayment. Requiring written notice to the owner more than 60 days before a claimant records a memorandum of mechanic’s lien would lead to an unnecessary increase in dispute-oriented paperwork on construction projects where payments often lag by more than 30 days, but are ultimately paid in the normal course of business. The substitute bill that recently passed the House of Delegates is viewed by most as a sufficient compromise, however, should HB 1265 become law, subcontractors and suppliers to residential construction projects need to be aware of, and comply with, the new notice requirements. Even more, great care needs to be taken in modifying one aspect of this “house of cards” set of statutes, lest the entire structure be damaged.

For my final musing, I encourage attorneys who practice construction law and government contracting in Virginia ─ whether as a predominant part of their practice or not ─ to get involved with the Virginia State Bar Construction Law and Public Contracts section. I currently serve as the Vice Chair and look forward to chairing that section’s Board of Governors starting in mid-June. Involvement in this group is an excellent way to network with other attorneys practicing in this interesting and challenging area of law, to share ideas, and to be a part of a network of attorneys (including this blog’s author who is a member of the Board). If you haven’t attended the Section’s annual seminar, you should put November 2-3, 2012 on your calendar to be with us in Charlottesville, Va. at the Boar’s Head Inn. The conference planning committee, headed by Shannon Briglia, is well on its way to planning another strong program.

As always, Brett and I welcome your comments below. Please subscribe to keep up with this and other Guest Post Fridays at Construction Law Musings.

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4 Responses to Some Construction Nuggets to Consider

  1. Brett,

    I could not agree more with your recommendation that outside counsel review the front-end contract documents prior to procurement. By way of anecdote, I recently arbitrated a case on behalf of an of a commercial owner whose supplemental general conditions were arguably ambiguous on various issues, most notably the assessment of liquidated damages. While we prevailed in proving entitlement to LD’s, our quantum ended up being less than hoped, I believe in part because the language contained in the SGC’s was not as clear as it could have been.

    Our challenge is to overcome the reluctance of our clients to involve legal counsel early in the game. Ultimately it’s up to us to communicate the value-add of a pre-procurement review of the contract, emphasizing how the investment could mitigate litigation expense down-the-road.

    Cheers,
    Matt.

  2. Brett- I think you make a great point regarding new technology and “email communication” as it relates to litigation. People need to be really careful as to what they say especially online because much of this information can be traced back even if you believe you’ve gotten rid of it.

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