Thursday, July 20, 2017

Update: New VOSH Maximum Penalties as of July 1

As those who read Construction Law Musings know, as a construction attorney, I want to assure that not only are my clients successful in their litigation/dispute resolution endeavors, but that they stay out of trouble.  I take my problem solving and advising roles quite seriously.

As part of this role as advisor, I want to let those that read Musings know that as of July 1, 2017 the Virginia Occupational Safety and Health Administration increased their maximum penalties for safety violations.  The new maximum fines are as follows:

Type Violation                                               Old Penalty          New Penalty

Serious or Other-Than-Serious                       $7,000                     $12,471

Willful or Repeat                                              $70,000                  $124,709

Failure to Abate                                               $7,000/day           Unchanged

Criminal or Willful                                            $70,000                Unchanged

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

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 license.

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Update: New VOSH Maximum Penalties as of July 1

As those who read Construction Law Musings know, as a construction attorney, I want to assure that not only are my clients successful in their litigation/dispute resolution endeavors, but that they stay out of trouble.  I take my problem solving and advising roles quite seriously.

As part of this role as advisor, I want to let those that read Musings know that as of July 1, 2017 the Virginia Occupational Safety and Health Administration increased their maximum penalties for safety violations.  The new maximum fines are as follows:

Type Violation                                               Old Penalty          New Penalty

Serious or Other-Than-Serious                       $7,000                     $12,471

Willful or Repeat                                              $70,000                  $124,709

Failure to Abate                                               $7,000/day           Unchanged

Criminal or Willful                                            $70,000                Unchanged

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

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 license.

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Wednesday, July 12, 2017

Subcontractors Aren’t Helpless

Food chain in a swedish lake. From the bottom:...

(Photo credit: Wikipedia)

As a construction attorney here in Virginia, I often have the pleasure of assisting subcontractors seeking advice on their all important contracts with general contractors.  I often sense that these subcontractors feel that they are at the bottom of the food chain and don’t have the “clout” necessary to push back at all against the myriad clauses in these contracts that seek to push the risk downhill.  “Pay if Paid” clauses, subordination of lien clauses (which may or may not be enforceable), indemnification language that seems to make the subcontractor liable for way too much, and the dreaded incorporation clauses , would seem to make the subcontractor hold one big “bag of risk” on any construction project.

While this may seem bleak, never fear, as a subcontractor you are not totally helpless.  Remember, you don’t have to take a job from a general contractor that you get a bad feeling about.  Often the best indicator of whether you want to move forward is your “spidey sense” that something seems a bit off or that the GC is trying to cram too much down your throat.  Use your experience in the construction industry to guide your contracting activities.  It is better to avoid the bad job than to take it in the long run.  If you are a quality subcontractor (and I know you are or you wouldn’t be reading this), other work will come along because general contractors need good subs to get their work done.

You can also make certain reasonable changes to the language of most subcontracts presented to you.  In exchange for striking a “pay if paid” clause, you may be able to get the GC to accept a longer payment window (for example instead of 15 days from payment by owner, substitute 45 days from date of proper pay application).  Instead of liability to indemnify everyone for everything “relating to” your work, a simple change to assure any claim is “directly related” to your work and that you are only liable to indemnify for your or “those for whom you may be held liable” can and should be acceptable to a general contractor with whom you are going to do business.  These are just a couple of reasonable changes that can be made and this is not meant to be an exhaustive list.

Of course, these changes must be negotiated before the beginning of work, hopefully with the early advice of a construction attorney.  Once you’ve signed the contract and begun work, the terms of that contract will apply.  This is Virginia after all and the courts of the Commonwealth will enforce contracts as written.

So, in conclusion, you as a subcontractor may not have all of the leverage, but there are ways to make a job less risky.

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

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 license.

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Subcontractors Aren’t Helpless

Food chain in a swedish lake. From the bottom:...

(Photo credit: Wikipedia)

As a construction attorney here in Virginia, I often have the pleasure of assisting subcontractors seeking advice on their all important contracts with general contractors.  I often sense that these subcontractors feel that they are at the bottom of the food chain and don’t have the “clout” necessary to push back at all against the myriad clauses in these contracts that seek to push the risk downhill.  “Pay if Paid” clauses, subordination of lien clauses (which may or may not be enforceable), indemnification language that seems to make the subcontractor liable for way too much, and the dreaded incorporation clauses , would seem to make the subcontractor hold one big “bag of risk” on any construction project.

While this may seem bleak, never fear, as a subcontractor you are not totally helpless.  Remember, you don’t have to take a job from a general contractor that you get a bad feeling about.  Often the best indicator of whether you want to move forward is your “spidey sense” that something seems a bit off or that the GC is trying to cram too much down your throat.  Use your experience in the construction industry to guide your contracting activities.  It is better to avoid the bad job than to take it in the long run.  If you are a quality subcontractor (and I know you are or you wouldn’t be reading this), other work will come along because general contractors need good subs to get their work done.

You can also make certain reasonable changes to the language of most subcontracts presented to you.  In exchange for striking a “pay if paid” clause, you may be able to get the GC to accept a longer payment window (for example instead of 15 days from payment by owner, substitute 45 days from date of proper pay application).  Instead of liability to indemnify everyone for everything “relating to” your work, a simple change to assure any claim is “directly related” to your work and that you are only liable to indemnify for your or “those for whom you may be held liable” can and should be acceptable to a general contractor with whom you are going to do business.  These are just a couple of reasonable changes that can be made and this is not meant to be an exhaustive list.

Of course, these changes must be negotiated before the beginning of work, hopefully with the early advice of a construction attorney.  Once you’ve signed the contract and begun work, the terms of that contract will apply.  This is Virginia after all and the courts of the Commonwealth will enforce contracts as written.

So, in conclusion, you as a subcontractor may not have all of the leverage, but there are ways to make a job less risky.

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

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 license.

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Thursday, July 6, 2017

Spearin Doctrine: A Construction Case Described in A Tweet!

I read in my Twitter feed this morning about a recent case where the Missouri Court of Appeals formally adopted the Spearin Doctrine.

I immediately wondered if I could explain the Spearin Doctrine in less than 140 characters.  Here you go:

US v. Spearin: Owner designs. Contractor builds. Owner accepts. Work sucks. Owner sues. Contractor absolved. Owner loses.

If you live in the government contracting world, don’t start sending me emails about how wrong I have described the Spearin Doctrine above.  Let me expand my statement beyond 140 characters and give you some more information about the 1918 decision in United States v. Spearin:

  • The Facts.  The case involved a contractor who agreed to build a dry-dock in the Brooklyn Navy Yard.  In order to build the dry-dock in the site selected for it, the contractor was required to relocate a portion of a sewer that ran through the specified site. The owner (the United States) provided the plans and specifications for the sewer that was to be relocated.  The contractor completed the work according to the plans and specifications.  The owner approved and accepted the work.  But wait … about a year after the relocation of the sewer, a dam in a connecting sewer caused flooding in the area excavated for the dry-dock. This dam was not shown on the owner’s plans and specifications.  That’s the background and here is my tweet:
  • The Rule. The Spearin Doctrine is legal principle that holds that when a contractor follows the plans and specifications furnished by the owner, and those plans and specifications turn out to be defective or insufficient, the contractor is not liable to the owner for any loss or damage resulting from the defective plans and specifications.
  • Exceptions to the Rule.  In 2007, the Ohio Supreme Court rocked the construction law world by significantly limiting the application of the Spearin Doctrine.  In Dugan & Meyers Construction Co. v. Ohio Dept. of Administrative Services, the trial court applied the Spearin rule in favor of the contractor based upon alleged damages from the impact of an excessive amount of design changes.  On appeal, the Ohio Supreme Court reversed, holding that the Spearin Doctrine did not apply to cases involving delays due to design changes. Rather, the court focused its decision on the “no damages for delay” and “written requests for time extension” clauses in the contract.  Specifically, the court concluded: “We observed that the Spearin Doctrine does not invalidate an express contractual provision.”

What’s the lesson for contractors?  First, make sure you know and understand the “governing law” for your particular dispute, whether it is federal law or state law. Second, make sure you read your contract to understand the notice provisions and changes clause.  Finally, make sure you are documenting any impacts of delays caused by defective specifications or plans.

Spearin Doctrine: A Construction Case Described in A Tweet!

I read in my Twitter feed this morning about a recent case where the Missouri Court of Appeals formally adopted the Spearin Doctrine.

I immediately wondered if I could explain the Spearin Doctrine in less than 140 characters.  Here you go:

US v. Spearin: Owner designs. Contractor builds. Owner accepts. Work sucks. Owner sues. Contractor absolved. Owner loses.

If you live in the government contracting world, don’t start sending me emails about how wrong I have described the Spearin Doctrine above.  Let me expand my statement beyond 140 characters and give you some more information about the 1918 decision in United States v. Spearin:

  • The Facts.  The case involved a contractor who agreed to build a dry-dock in the Brooklyn Navy Yard.  In order to build the dry-dock in the site selected for it, the contractor was required to relocate a portion of a sewer that ran through the specified site. The owner (the United States) provided the plans and specifications for the sewer that was to be relocated.  The contractor completed the work according to the plans and specifications.  The owner approved and accepted the work.  But wait … about a year after the relocation of the sewer, a dam in a connecting sewer caused flooding in the area excavated for the dry-dock. This dam was not shown on the owner’s plans and specifications.  That’s the background and here is my tweet:
  • The Rule. The Spearin Doctrine is legal principle that holds that when a contractor follows the plans and specifications furnished by the owner, and those plans and specifications turn out to be defective or insufficient, the contractor is not liable to the owner for any loss or damage resulting from the defective plans and specifications.
  • Exceptions to the Rule.  In 2007, the Ohio Supreme Court rocked the construction law world by significantly limiting the application of the Spearin Doctrine.  In Dugan & Meyers Construction Co. v. Ohio Dept. of Administrative Services, the trial court applied the Spearin rule in favor of the contractor based upon alleged damages from the impact of an excessive amount of design changes.  On appeal, the Ohio Supreme Court reversed, holding that the Spearin Doctrine did not apply to cases involving delays due to design changes. Rather, the court focused its decision on the “no damages for delay” and “written requests for time extension” clauses in the contract.  Specifically, the court concluded: “We observed that the Spearin Doctrine does not invalidate an express contractual provision.”

What’s the lesson for contractors?  First, make sure you know and understand the “governing law” for your particular dispute, whether it is federal law or state law. Second, make sure you read your contract to understand the notice provisions and changes clause.  Finally, make sure you are documenting any impacts of delays caused by defective specifications or plans.

Tuesday, July 4, 2017

Happy Independence Day from Construction Law Musings!

English: A chocolate cake during the 4th of July

(Photo credit: Wikipedia)

As things warm up as they always do in July here in Richmond, Virginia, here’s wishing you all a wonderful 4th of July from Construction Law Musings and The Law Office of Christopher G. Hill, PC.  I hope that you and your families can take some time off to reflect and relax, stay as cool as possible, and have a great Independence Day holiday.

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

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 license.

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