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Matt has written articles and given presentations on all aspects of construction law. Find a resource here.

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Best Practices top posts include claims preparation, contract drafting, and litigation pitfalls. You don’t want to miss these ones.

Matthew DeVries

Matt is a construction & litigation attorney at Burr & Forman LLP and father of seven young kids.

Provide Notice (and 10 Other Tasks) When Pursuing a Construction Claim

Posted in Best Practices, Case Law, Claims and Disputes, Project Management, Scheduling

When dealing with construction claims—whether one for construction defects, outstanding payment, or delay damages—an initial hurdle is making sure that proper notice has been given.  Generally, you have to make sure that you comply with the contract or insurance provisions by: (1) giving written notice of the claim; (2) to the correct party; (3) within the time required; and (4) identifying the event giving rise to the claim.


Notice is important because it is usually a precondition to recovery.  Recently, a court in New York held that notice to an insurance broker was not the same as the contractually required notice to the insurance carrier.  This decision illustrates the importance of following a process when dealing with a claim. Some other equally important tasks include:

  1. Identify the best person to manage the team.  You need to select someone who is responsible and can lead in the following areas, which may involve more than one person: (a) Project personnel, who have detailed knowledge of the facts; (b) Estimator or project engineer, who has knowledge of the project, but is more objective than field personnel; (c) Legal representative, who can provide the proper legal framework for a claim and can identify and develop the legal strategy for recovery; and (d) Scheduling personnel, who can provide proper schedule analysis if there is a time consideration.
  2. Identify issues and establish a roadmap. This is often the starting point for reviewing a claim and the key to a successful analysis of issues.  The leader should: (a) Interview estimator/project engineer, superintendent and other project personnel; (b) Review aspects of project that changed from the time of bid; (c) Review cost reports with most knowledgeable person; (d) Review segregated job costs, if any; (e) Compare your bid with other bids; and (f) Prepare a roadmap for potential claim preparation.
  3. Review the contract terms.  As you develop the claim, the contract documents are the first set of documents that you should review.  The following provisions are important: (a) Changes (including notice provisions); (b) Differing Site Conditions (including notice provisions); (c) Delays (including notice provisions); (d) Disputes (specifically required steps); and (e) Schedule.  Also, you will want to identify any contract interpretation issues.
  4. Review the contractor’s plan of work.  This includes talking about the anticipated means and methods with estimator/project engineer; reviewing crew sizes and anticipated crew movements; analyzing the anticipated productivity (per cy, sf, etc.) and determine whether that productivity was realistic; identify anticipated equipment and expected time to be on project; and identify planned staffing (tasks and durations).
  5. Analyze the schedule. At first, take a look at the initial approved schedule to determine whether the logic makes sense, review the durations for reasonableness, and decide whether the has any restraints.  Next, check the updates which can include the Owner’s responses and any notes or memos reflecting status of the project each month. At this point, determine if contract procedure was followed. If not, why not?
  6. Review change orders and correspondence.  At this point, your focus should be on what has been documented on the project to date.  You are going to go back to the original scope of work to see if that was well defined, and changes have been made either in the field or as part of a negotiated, detailed change. You are going to review the actual change order to confirm that all costs and time have been captured and make sure you have not otherwise released any claims by language in the change order.  You need to confirm that the changes procedure in the contract was followed. If not, why not?
  7. Assess other pertinent documents. Make sure your files have been organized so that you can review the following: (a) requests for information (RFIs): determine the number of RFIs and the cause; (b) daily reports; identify pertinent ones (determined by roadmap) and use as supporting documentation for proof of events or impacts.
  8. Identify whether there was loss of productivity.  Determine actual productivity and compare it with the anticipated productivity.  Identify any trends and determine whether there is a causal event for any loss of productivity that may be compensable.
  9. Evaluate any costs that are recoverable.   Identify differences with plan on staffing (number and durations) and evaluate the reasons for any differences.  Perform a “bottom up” analysis, which starts with the cost reports and works up.  Review each major cost code in job cost reports and try to determine every possible reason for differences between budgeted and actual costs.  Determine which cost increases were caused by events for which the owner or other contractors may be responsible.
  10. Prove legal entitlement.  Too many facts and no law could hurt your claim, just as much as too much law and no facts could limit your recovery.  You need to paint the right story based upon the facts and use the law to prove your legal entitlement.  Your recovery could be based upon or limited by a contract provision, some applicable statute (such as a no damages for delay clause being invalid), or the applicable case law.

Risk or Reward? Using Drones on Your Construction Project

Posted in Best Practices, Claims and Disputes, Technology

In this week’s issue of ENR, technology writer Luke Abaffy details the use of drones by Minnesota Department of Transportation (MnDOT) to conduct bridge inspections.

We’ve all seen the YouTube videos or Facebook posts of a drone in action. The recent article in the ENR magazine highlights a new testing program by MnDOT that is starting to use the technology in an effort to save time and money on bridge inspections. According to the article, closing off traffic is part of the inspection process, which is a cost savings when the use of drone technology is introduced into the process. However, according to federal standards outlined in the ENR article, drones may only be used to inspect the bridge components and they cannot take over the job fully under current laws:

The Federal Highway Administration’s National Bridge Inspection Standards state that a drone can be used to inspect a fracture-critical bridge span but cannot replace a crew of on-site inspectors. Therefore, drones represent only added cost.

Compare Abaffy’s article with Tom Sawyer’s article in ENR, where a drone operator was recently fined $1.9m by the FAA for unauthorized flights over New York City and Chicago.  This was the largest civil penalty against an unmanned aerial-system operator.

The issue therefore raises the question of whether the use of new technologies, such as inspection by drones, present a risk or a reward?  As a construction attorney, I think the answer is: both risk and reward.

For example, photography has been used in the construction industry to document the progress of the work. Over the years, this process has become more efficient through the use of digital photography and more recently with smart phones. Project team members have the ability to document the status of work on a real-time basis and preserve the photographs in a project management system. This has become more useful when dealing with claims regarding delays and construction defects.

The problem arises, however, when the project management team does not have a protocol in place to preserve the evidence. When I am asked to represent a contractor in a dispute, the claim is most likely pursued or defended based upon the information known to the client, whether by witness statement, project records, or photographs/videos. Provided that this information is readily accessible, it helps in pursuit of the claim process, whether pursuing additional compensation or defending a claim of construction defects. The real challenge becomes getting access to this information as early as possible.

When you think of the rewards versus the risks, I think the use of drone technology will be helpful (just as photographic evidence is useful) to the claims analysis. At this stage, there does not appear to be any reported case law on whether a court or arbitrator would find any challenges to the use of drone technology on a construction project. Likely, the judge or arbitrator would apply traditional, evidentiary standards in reviewing the proposed evidence. Unless there is an issue like the limitations placed by the Federal Aviation Administration rules about the use of drone equipment (i.e., that the drone cannot fly within 500 feet of anyone who isn’t the operator of the drone), then I think there is a greater reward based on the cost savings to a contractor in using these technologies.

As they say, time flies… And only time will tell.

Integrity in Contracting: Lessons From A Young Princess

Posted in Best Practices

Essays are a great way to teach lessons. In our house of seven children, it seems that almost every day is an “Essay Day.” Last week, when caught in the middle of a lie—about an issue that was not even important— one of my young Princesses was required to write an essay about INTEGRITY.


Take a look at what she wrote.  Despite the trend of repetition, the Princess did a great job:

Integrity means to be honest when no one is looking. If you have integrity you will have more privileges and trust and friends. If you have integrity your friends will trust you because they know you are trustworthy in all things and at all times. . . . If you have integrity, you are honest, trustworthy and you are a good friend to have especially when your friend needs help with an outfit choice.

A career in the construction industry, just like the legal industry, can be made or destroyed based upon your reputation. What if you are known as the contractor who cuts corners, is hard to communicate with, or is just plain difficult? What if you are the owner-developer who has a reputation for never approving changes or for always delaying on responses to requests for information? The fact is … your reputation will follow you.

Reputation, however, is not the only thing that should concern you. There are countless federal and state regulations and statutes that address (and sometimes require) ethical practices in contracting. Indeed,  the Federal Acquisition Regulation requires contractors receiving awards in excess of $5 million on a government contract adopt written codes of business ethics and conduct.  The Associated General Contractors of America published a Five-Star Ethics and Compliance Program (pdf).

The point is … ethics and integrity should be part of our everyday lives … no matter where in the construction diagram you fall. And it should not be treated as a marketing trend. In the words of one eleven year old: “You should be honest even when no one is looking.”

ATTN: Federal Contractors, Beware of Harassment and Discrimination on Construction Sites

Posted in Best Practices, Federal Construction

“Did you hear the one about . . . ?”  Of course you have.  We have all heard the racial and discriminatory jokes at the work place.  If you are a federal contractor, you should be aware of Executive Order 11246.


In separate investigations, a staffing agency and a construction company were recently charged with violating Executive Order 11246, which prohibits certain acts on federal projects. In lawyer-speak, Executive Order 11246 expressly prohibits federal contractors and federally–assisted construction contractors and subcontractors, who do over $10,000 in Government business in one year from discriminating in employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identity or national origin. The Executive Order also requires Government contractors to take affirmative action to ensure that equal opportunity is provided in all aspects of their employment.

But what does that really mean?  In the case of WMS Solutions, a staffing agency that provided laborers on demolition and asbestos removal projects in Washington, D.C., the Office of Federal Contract Compliance Programs (OFCCP) alleged that WMS allowed other federal contractors to physically assault, make racial slurs and threaten to deport Hispanic workers.  The OFCCP also alleged that WMS intentionally paid women less than men and assigned fewer work hours to African American, non-white and female laborers.

In the case of Fort Myer Construction Corp., the OFCCP charged the contractor with discrimination in its hiring practices of women, African American and Hispanic laborers.  Compliance offers received more than 30 calls from employees who had reported harassment, threats, and intimidation in the work place. Significantly, Fort Myer’s vice president allegedly attempted to keep employees from talking to OFCCP compliance officers during the investigation. One of the female compliance officers personally was subjected to inappropriate sexual jokes during her investigation.

So What?  While the WMS Solutions case is the subject of a lawsuit filed by the OFCCP, the Fort Myer’s complaint settled when the contractor agreed to pay $900,000 in back wages and interest to class members and make new job offers as positions become available.  But here is what you really need to know:

  1. Know the law.  OFCCP enforces Executive Order 11246, the Vietnam Era Veterans’ Readjustment Assistance Act and Section 503 of the Rehabilitation Act of 1973, which, as amended, prohibit those  doing business with the federal government, both contractors and subcontractors, from discriminating in employment on the basis of sex, race, color, religion, national origin, sexual orientation, gender identity, disability or status as a protected veteran. Surf the Department of Labor OFCCP’s website to get a good overview, or contact your attorney if you have received noticed of an investigation.
  2. Know your management.  If you are the owner of your company, set the standard for integrity and character.  Get to know, really know, your key executives, managers and project supervisors, and how they are treating employees and laborers.  Conduct training sessions at all levels.  It does not have to be a stuffy, legal presentation—it can be entertaining, exciting and thought-provoking. Just ask me!
  3. Know your employees.  As an employer, the best way to avoid a disconnect with your employees is to connect with them.  You will get greater rewards on their efforts, and you will create an environment of trust in the event a racial and discriminatory allegation arises.  They will feel comfortable coming to you (…as opposed to a federal investigator…) before a real issue arises.

While treating employees equally, fairly and in a non-discriminatory matter is the right thing to do, it is also the law.

Image: Elvert Barnes

Tony Piazza and Eric Green: Ask The Experts Any Mediation Question!

Posted in Alternative Dispute Resolution, Arbitration, Best Practices, Mediation

When it comes to identifying the best mediators in the country, Tony Piazza and Eric Green are at the top of the list.  And, on October 8, 2015, they will be sharing the stage in Austin, Texas for the Construction ADR Summit (pdf) sponsored by the American Bar Association’s Forum on Construction Law.

tony and eric

The program.  When a construction dispute involves new technologies that can only be understood by expert testimony, complex scheduling issues involving multiple trades, or large “bet the company” claims, the mediation process itself takes on an added significance. In this session entitled, Blue Chip Mediation: Settling Complex Construction Disputes, we will learn from these world renowned mediators.

You can participate.  If you want to ask Tony or Eric a question, please submit them to me at  All questions will be forwarded to Tony and Eric for consideration, and winners will receive a chance to win a copy of Construction ADR, published by the Forum.

Please send me your questions by September 15, 2015 so that they can be included in the drawing for consideration.

Have You Served As A Construction Arbitrator? Click Here!

Posted in Alternative Dispute Resolution

As you may know, I am the Co-Chair of the upcoming Construction ADR Summit (pdf) sponsored by the American Bar Association’s Forum on Construction Law to be held on October 8-9, 2015 in Austin, Texas.



As part of that program, I want to invite you to participate in a unique survey to learn firsthand from you – the construction arbitrator – about your arbitration practices, preferences and experience, including the application of frequently used rules. The results of the survey will be revealed at program in Austin.

If you have served as a construction arbitrator, we Forum would greatly appreciate your taking the Survey of Construction Arbitrators at the link below.

The survey takes less than 10 minutes to complete. To encourage complete honestly and candor, all survey responses will remain strictly confidential and anonymous. Thank you in advance for your participation.


Real Estate Development and Construction Contracts: What You Need to Know

Posted in Best Practices, Contract Docs, Development

Noted author and business attorney Peter Siviglia once said: “In this world, … there are two forms of writing: creative (such as novels, plays, and poetry) and expository (such as treatises, letters, memorandums, and briefs).  I’ve tried both and prefer a third: Contracts, which do not entertain, do not convey information or ideas, and do not try to persuade.

Contract (2)

In the world of commercial real estate and construction contracts, Siviglia hit the nail on the head.  Using some of Siviglia’s tips in Courses on Drafting Contracts, 12 Scribes J. Legal Writing 89 (2008-09), here are a few items to think about when drafting contracts:

  • A contract is about defining transactions and relationships.  This is more than the definition of “contract” that lawyers learn in law school (i.e., “An agreement between or among two ore more parties for the purpose of …”).  According to Siviglia, the contract will help define: (1) a transaction, such as the purchase of real estate; (2) a relationship, such as a partnership, or (3) a combination of both, such as a partnership to purchase and develop real estate.
  • A contract is a set of instructions.  Just like the building plans and specifications instruct the contractor how to build the water treatment plant, commercial condo or new hospital, the written contract instructs the parties on their course of conduct in the transaction.  And when problems arise … and they will … the written contract instructs the parties on how to perform in such circumstances. The contract defines due diligence issues on the front end; it defines performance obligations during the contract performance period; and it defines how disputes will be handled in the event of disagreement.
  • A contract should include standard provisions.   Although each contract is different, there are a number of terms and conditions that are part of the “A Player” list, including:
  1. Termination, which defines the parties’ rights to terminate the contract;
  2. Assignment, which outlines whether the parties are allowed to assign their rights to another party and the terms in which they are allowed to do so;
  3. Governing law, which defines the law (i.e., Tennessee, Virginia, New York) that will apply to the parties’ contract in terms of both substance and procedural issues;
  4. Disputes, which defines whether the the parties will litigate in court, mediate, or arbitrate;
  5. Notice, which identifies where legal notice of disputes, claims, changes, etc. are directed;
  6. Modifications, which outlines the procedures for modifying or amending the contract terms (not to be confused with a “changes” clause);
  7. Changes, which outlines the procedures for modifying or changing the scope of work by one of the parties (not to be confused with a “modification” or “amendment” clause);
  8. Claims, Rights and Remedies, which describes the method for submitting claims and may also include rights to recover or limit certain types of damages (consequential damages, liquidated damages for delays, attorneys’ fees, interest); and
  9. Indemnification, which describes the circumstance in which one party may have to indemnify (or pay the losses or claims) of the other party for some legal purpose.

Of course, each transaction or relationship should have a written contract tailored to its own project or development needs. In other words, while standard form agreements can be used on successive and multiple transactions, each project should nonetheless be reviewed for the applicability of particular standard form provisions to the particular project.  On occasion, circumstances dictate the necessity of revisions to your standard agreement.

Photo: Steve Snodgras

Which Insurance Carrier Is Responsible for Damages on a Construction Project? Depends.

Posted in Best Practices, Case Law, Legal Trends

There are multiple types of insurance coverage for the various risks on a construction project.  However, when there are multiple insurance carriers covering the same risk (i.e., general liability, builder’s risk, workers’ compensation, professional liability) over different periods of time, there may be a dispute as to which carrier covers the loss.

In a recent case, Cincinnati Insurance Co. v. Motorists Mutual Insurance Co., the Ohio Court of Appeals addressed this very issue. In that case, an electrical contractor installed certain wiring and lighting in the owner’s home during construction. Insurance Company #1 provided a commercial general liability policy (“CGL”) and an umbrella policy from 2000-2004, which covered the period when the house was built.  From 2004-2005, Insurance Company #2 provided a different CGL policy.  In 20015, the electrical subcontractor went out of business.

In 2006, the home was severely damaged due to a fire.  The home owner’s insurance carrier paid out the losses, and subsequently tried to recover those monies from the electrical subcontractor’s insurance carriers, alleging that the electrical subcontractor was negligent in the construction and installation of the wiring in the home.


If you read the decision in the case, you can tell that there was a lot of finger-pointing among the parties and insurance carriers.  However, there are a few take-aways from the decision as to which insurance carrier may be responsible for damages:

  1. A CGL policy generally provides for coverage during the policy period.  In this case, the trial court concluded that the policy issued by Insurance Company #2 did not provide coverage because the property damage sustained by the Owners in 2006 did not occur during the policy period.
  2. There are different conclusions as to whether claims for defective work are covered, but most states say “no”.  In other words, there is a mess of case law all across the country about whether claims of defective construction or workmanship by property owners are claims for “property damage” cause by an “occurrence” under a CGL policy.  For purposes of the Cincinnati Insurance decision, the question was one of timing and whether the allegations of the complaint excluded the possibility that property damage was occurring during Company #2’s policy period.
  3. The duty to defend is definitely broader than the duty to indemnify.  In examining the complaint, the court in Cincinnati Insurance could not conclude that the “claims are clearly and indisputably outside the contracted coverage.” The court noted that the defective installation itself could not be considered an accident (and, therefore, could not be considered an occurrence under the policy). However, at the time the complaint was filed, it was possible that property damage occurred during the policy period and was of a continuous nature such that coverage could be implicated under the policy.

In this case, Insurance Company #1 participated in the defense of the electrical subcontractor and ultimately paid to settle the dispute. Insurance Company #1 then sought contribution from Insurance Company #2 for 75% of the settlement costs, attorney’s fees and interest.  Ultimately, the court concluded that Insurance Company #2 had the duty to defend the claim.

So What?  As an owner or developer, you should know and understand your policy coverage provided by your own insurance, as well as those provided by the contractors and subcontractors working on your projects. If you are a contractor or subcontractor, understand that you may have changed insurance carriers during a construction project and there may be multiple sources of coverage depending on the type of loss and when the loss occurred. You should keep an “insurance file” for each project that contains copies of all insurance certificates.

What the Supreme Court’s Decision on the Same-Sex Marriage Ban Means to Contractors?

Posted in Case Law, Legal Trends

Absolutely nothing! … to contractors that is … but to employers … a different answer.


Okay, so the Supreme Court recently ruled that state laws banning same sex marriage are unconstitutional under the 14th Amendment to the United States Constitution.

You may have your own personal opinion against or in support of the Supreme Court’s decision—that’s not the point of this post today. While the holding does not directly implicate employers or their policies, the ruling clearly means that persons legally married in any state, regardless of their gender, are entitled to the benefits of marriage in any other state in the union and that a state can no longer refuse to issue marriage licenses to persons based on their gender:

The Court, in this decision, holds same‐sex couples may exercise the fundamental right to marry in all States. It follows that the Court also must hold—and it now does hold—that there is no lawful basis for a State to refuse to recognize a lawful same‐sex marriage performed in another State on the ground of its same‐sex character. (Slip op. at 28).

So what? While the decision focuses on same sex marriage bans across the states, there are a few issues to be mindful of as an employer in the construction industry (or in any industry for that matter).

First, you may want to re-examine benefit policies to be sure that same‐sex married couples are not discriminated against.  Also, remember that the decision highlights the trend of extending constitutional protections to gay, lesbian, bi‐sexual, and transgendered persons. Arguably, there remains a debate about whether sexual orientation is a protected class (one side versus the other side).

Second, and more important, since harassment of persons due to their sexual orientation is considered to be sexual harassment prohibited by Title VII (and because the ruling in the same‐sex marriage case may be a topic of conversation in your workplace), it may be a good opportunity for employers to remind their supervisors that the company will not tolerate harassment based on sexual orientation and will not tolerate harassment based on sexual orientation between co‐workers either.

Special thanks to Clark Spoden, one of my partners who specializes in labor and employment law, for his contribution to this post.

Revised AAA Construction Rules Take Effect July 1, 2015

Posted in Alternative Dispute Resolution, Arbitration, Legal Trends, Mediation

The past week has been one of sweeping changes. (…no comment…)  But one set of non-controversial changes is the Revised Construction Industry Arbitration and Mediation Procedures released by the American Arbitration Association.


The Rules, which take effect July 1, 2015, can be downloaded here.  The major revisions include:

  • A mediation step for all cases with claims of $100,000 or more (subject to the ability of any party to opt out).  Under the revised Rule 10, “…the parties shall mediator their dispute” where the claim or counterclaim exceeds $100,000.  The mediation is to take place concurrent with the arbitration proceedings so as not to cause delay.
  • Consolidation and joinder time frames and filing requirements to streamline these increasingly involved issues in construction arbitrations.  Revised Rule 7 requires that all requests for consolidation or joinder must be made prior to the appointment of an arbitrator or within 90 days of the date AAA determines all administrative filings have occurred, whichever is later.  A response to a request for consolidation is due within 10 days and a response to a request for joinder is due within 14 days.  The AAA has the authority to stay the arbitration or arbitrations impacted by the request.
  • New preliminary hearing rules to provide more structure and organization to get the arbitration process on the right track from the beginning.  New Rule 23 provides that at the discretion of the arbitrator, and depending upon the size and complexity of the matter, a preliminary hearing is to be scheduled as soon as practicable following the appointment of the arbitrator.  The Rule also includes a checklist comprised of 20 items that depending upon the size, subject matter, and complexity of the dispute may be addressed during the preliminary hearing subject to the discretion of the arbitrator.
  • Information exchange measures to give arbitrators a greater degree of control to limit the exchange of information, including electronic documents.  New Rule 24 provides clarity to former rule regarding “Exchange of Information.”  The arbitrator has greater control over the exchange of information with a view toward achieving an economical resolution, while also balancing each party’s ability to present their case. As to electronic documents, the new rule provides that such information should be produced in the manner most convenient and economical for the producing party.
  • Availability of emergency measures of protection in contracts that have been entered into on or after July 1, 2015. New Rule 39 will enable parties to apply for emergency interim relief before an arbitrator that will be appointed within 24 hours of the AAA’s receipt of the request for emergency relief. The Rule provides that a party may seek emergency relief by notifying the AAA and the other parties to the arbitration, and then the AAA will quickly appoint an emergency arbitrator to address the emergency issue.
  • Enforcement power of the arbitrator to issue orders to parties that refuse to comply with the Rules or the arbitrator’s orders, including the following issues:  (a) confidential documents and information; (b) reasonable search parameters for electronic and other documents; (c) costs of producing documentation; (d) issues of willful non-compliance with any order; and (e) other types of enforcement orders.
  • Permissibility of dispositive motions to dispose of all or part of a claim. New Rule 34 This specifically provides that upon prior written application, the arbitrator may permit motions that dispose of all or a part of a claim, or narrow the issues in a case.

The revised rules also include provisions for giving arbitrators the power to award sanctions, disclosure provisions, and evidence by affidavits and post-hearing filings of documents.