Best Practices Construction Law : Construction Lawyer & Attorney : Matthew DeVries : Smith Cashion & Orr Law Firm : Green Building & LEED Litigation

It is hard to begin a day's work with a warm cup of coffee, a clean office and a (fairly) new computer ... knowing about the devastation in another country.  I heard the death toll in Haiti could be as high as 50,000. 

According to a BBC news article this morning, experts say that it is "no surprise that shoddy construction contributed to the level of destruction in Haiti  following Tuesday's earthquake."  The primary reason: "It's sub-standard construction . . . There aren't any building codes as we would recognise them," says London-based architect John McAslan, who has been working on a project linked to the Clinton Global Initiative in the country.

Also to blame is a lack of quality in building materials and cost-cutting measures for construction.  For example, "[p]eople are skimping on cement to try to cut costs, putting a lot of water in, building too thin, and you end up with a structure that's innately weaker," said Peter Haas, head of the Appropriate Infrastructure Development Group, a US-based non-profit group that has been working in Haiti since 2006.

What should our response be to a devastation like this?  First, we need to help through international aid organizations like the American Red Cross.  You can find a donate link here.  Second, we can start to learn that "best practices" is more than a buzz word.  In the construction industry, it is our job to promote good building standards, use quality materials, and work together with those less fortunate to help build a better future. 

My thoughts and prayers go out to the people and their families in Haiti.

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Everyone knows that this is a slow week for work ... unless you work in retail and there is a mad, crazy 75% off sale. For me, I am using the time to clean up my legal files, assess the deadlines for the next three months, evaluate what went right in 2009, contemplate what went wrong in 2009, and plan better for 2010. 

With so many ways to attack this evaluation process, I want to share with you my top sources of evaluation (in no particular order):

For career development ... Cordell Parvin is a fellow Richmond Spider (...although a few years before me...) and former construction attorney. I came across Cordell's name about 6-7 years ago when I was contemplating a move to Dallas, Texas and I reached out to fellow law school alums. While that venture did not turn out, I have kept in touch with Cordell regularly through his books, blog, and Tweets. While you can find a lot by browsing his blog, my favorite year-end posts include:

• Why You Should Create a 2010 Plan ... Cordell has a webinar on this topic today.
• Practical Tips on How to Do Year End Planning
• And today's post about Planning at the 50,000 Foot Level

For balancing family and career and life ... sure you have your Zig Ziglar's, your John Maxwell's, and even your Rick Warren's ... but my favorite, local, "living-life-right" model is Nashville's own Michael Hyatt, CEO of Thomas Nelson Publishing. I first started following Michael's blog, Leading with Purpose, at the beginning of this year when I revved up my career planning and life assessment. Michael is a model husband-father-businessman-leader, who Tweets about leadership and life. Here are a few of my favorite posts, including the year-end assessment:

• Seven Questions to Ask about Last Year ... the Year Ahead post is expected soon.
• Five Characteristics of Weak Leaders, which gives you a look at how not to lead.
• Two Approaches to Influencing the Family ... notice that Michael likes numbers!

For sheer motivation ... speaker and author Andy Andrew challenges you to evaluate the importance of halftime. As for me, this week is my "halftime" moment and the second half is about to begin. The year 2010 presents some great opportunities for my career, my family, my community and my church. How about you? I know. I have lived them, too. The past few years have been tough. But the best years lie ahead.

What are you going to do to make 2010 different? ... or better yet ... What are you going to do to make a difference in 2010?

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"Pay me less before the dispute erupts ... or pay me more after the dispute erupts ..." is a phrase that many construction litigators have said to their clients.  What that means, practically, is that if you invest the time and money to have your attorney review construction contracts before the job starts, you will save time, money and effort later when the dispute begins (and perhaps you may even fend it off). Despite the warnings, there are many out there who want to "go it alone" ... and that's okay.  This post is for you.

The American Bar Journal posted an article two weeks ago about a federal bankruptcy judge who was fed up with "superfluous words and too much capitalization."   The judge took a stand against legalese and issued some guidelines (pdf) to the practicing bankruptcy attorney.  Some of my favorites include:

• Lawyers apparently disfavor articles, both definite and indefinite. Use the
  articles “the,” “a,” and “an” as appropriate. Write the way you would speak.
• Never use and/or.
• Eliminate superfluous words. They serve no purpose other than to make the
  document sound more legal ... Examples of such words are: “hereby,” “herein,”
  “in and for,” “subject,” “that certain,” “now,” “that,” “undersigned,”
  “immediately,” “heretofore entered in this case,” “be, and hereby is”–the list
  goes on and on.
• Keep plurals and possessives straight and consistent. Know when to use
  debtors (plural), debtor’s (singular possessive), and debtors’ (plural
  possessive). Make sure the verb matches the subject of the sentence.

You can tell by the terse language in the judge's guidelines that he likes clarity and he wants litigants (and particularly their attorneys) to follow those guidelines.  If I were a construction litigator ... which I am ... I wonder what my suggested guidelines would be for construction contracts.  Here are a few:

• Keep the names consistent.  I know this will take some searching and replacing in your form contracts, but it is important to track the parties' names correctly.  Many times, I have found a "subcontractor" listed as "contractor" in one section and "subcontractor" in another section.
• Identify the "contract documents" for the parties.  Too many disputes arise because someone thinks the proposal or purchase order is part of the parties' agreement only to learn later that it has not been incorporated as part of the contract documents.  Many form contracts have an "order of precedence" clause that ranks the precedential value of the documents in the event of a dispute.  Make sure to expressly include every document that you want into the contract documents.
• Evaluate and clarify the "dispute" provisions.  Again, I have seen a number of lawsuits between parties spend too much time on the procedural issues such as litigation, arbitration, mediation (because the contract was not clearly written), rather than getting to the heart of the matter.  Make sure your contracts clearly identify your method of dispute resolution.

Do you have any other guidelines for your construction contracts?

Photo: Flckr - LucasTheExperience

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Seth Godin is the bestselling author of ten books on topics about marketing, the spread of ideas and managing both customers and employees with respect.  This week, Seth released an e-book, a FREE DOWN-LOADABLE BOOK, that addresses some exciting ideas for the new year. 

Why is this important for the construction industry?  Just download the book and find some of the following nuggets of encouragement and advice for the new year:

• Seth Godin (blogger and speaker): "...the more you give the more you get..."  Seth speaks of the importance of generosity in our lives.
• Howard Mann (entrepreneur and author): "They do business through personal relationships, by delivering great customer service and it's working for them."  Howard suggests that you stay connected and build personal relationships, which does not always  mean that you Tweet or blog more.
• Michael Hyatt (CEO of Thomas Nelson Publishing): "When times are tough, vision is the first casualty. Before conditions can improve, it is the first thing we must recover."  Michael highlights that vision is the lifeblood of any organization.

Are you being generous in your business?  Are you investing in personal relationships?  Do you have the vision that your company needs to get you through these difficult times? 

Some of the most successful construction business owners I know are also some of the most generous people that I know.  Even if they are not blogging, Twittering, or Facebooking, they know how to build personal relationships with their clients.  They also treat their employees well and they have the ability to stand at the helm of their company, encouraging their people through the tough times.  Are you doing the same?

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In this day of Blackberries and iPhones, one of the best communication tips I have ever heard was at the American Bar Association, Forum on the Construction Industry's fall meeting in Philadelphia a few months ago.  Since we live in world of mobile communication and technology, you have to assume that everyone else is on the same mobile playing field and are working on-the-go.  What does that mean?

Christine McAnney explained that as general counsel for a large construction company, Balfour Beatty Infrastructure Inc., she is pulled in all directions.  On some days, she will be tied up in depositions, while other days she is traveling to meetings across the country.  Given her on-the-go career, it helps that messages sent to her mobile device actually explain what is attached to the email.  In other words, when sending an attachment, you should do the following:

• Do not use "FYI" ... This assumes that the recipient knows what the email string involves and what has transpired prior to this particular email.  You don't have to write a novel about the attachment, but include more than an "FYI."
• Explain what the attachment is ... "Attached is a copy of the draft change order language  from ABC Development Co. on the USA Zoo project."  Since many construction contracts are lengthy and legal pleadings are voluminous, it is often impossible to download the full attachment and actually read it on a mobile device. 
• State whether the matter is urgent or whether you need a response ... The owner will be out of town for a week so we do not need to respond immediately.  Again, if the attachment is a letter from the opposing party that requires an immediate response, then you should say so in the email. Don't assume that your recepient can or has read the attachment.

You may think these tips are no-brainers, but they have changed the way I communicate with my clients over the last month.  For example, I regularly sent the "Please see attached" emails to my clients without even thinking that the email was sent to a Blackberry or iPhone (...even though I carry my phone everywhere and expect the same communication from my assistant ...)  Thanks to Christine, I am taking the extra minute to explain my attachments and include a response line.

How about you?  Do you have any tips for communicating in the digital age?

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Although I am out of town this week preparing for a trial, I promised a few attendees that I would share with them my webinar presentation last month.  If nothing else, the first slides are entertaining.  Let me know if you have any questions and I will chat with you on the other side.

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One of my favorite leadership gurus, Michael Hyatt (CEO of Thomas Nelson Publishing) posted a few good recommendations a couple months ago about using templates for greater efficiency.  Michael wrote:

For years, I have used the concept of “templating” to improve my productivity. The idea is that you create a template for any task that you find yourself doing repeatedly. So instead of “reinventing the wheel” every time, you do it once, save it as a template, and then reuse it.

In my construction litigation practice, I have used various templates to make my life easier during various stages of a construction disputes.  This week, I want to share with you a couple of those templates.

The first one is a mechanic's lien information sheet (pdf) that outlines the background information that is needed for me to file a Notice of Non-Payment or Notice of Lien on behalf of a client.  The type of information that I need to file a lien includes the following:

• Is the project residential or commercial?
• Is the Contract with the owner of the property or the prime contractor?
• Name and address of property owner and prime contractor.
• Name of project/subdivision; property location map; and property address and/or lot number.
• Type of service/material/labor supplied to the project.
• Commencement date (ground breaking) of the project.
• Beginning date of your work on the project.
• Total amount invoiced to date with a copy of the invoices.
• Amount owed or unpaid on the project.
• Last date of your work on the project.
• Date entire project was completed.
• Any “Notice of Completion” recorded?
• Any payment bonds issued?

While this information appears to be a no-brainer request for those contractors who file liens on a regular basis, I have found over the years that my clients appreciate the template that I send them.  This way, there is no confusion about what information I need from them and I am able to more effeciently help my client pursue their rights.

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I have my Google reader set to search various blogs, news sites, and Twitter feeds to help me keep current with the latest trends in the construction industry.  There remains one major problem: the words we use have different meanings for everyone.  

Take, for example, my search of Twitter feeds (above) for Building Information Modeling (BIM).  If you were to do the same search during a weekday morning, the majority of results would return various individuals involved in some aspect of the construction industry either praising or criticizing BIM. Now, if you were to do the same search on any given Friday or Saturday night, you might be surprised to get a varied assortment of results (and photographs) of individuals out for a night of partying.  You see, BIM is also slang for "bimbo" or ... how do I say this ... a "lady with questionable morals"? 

What's the lesson here?  Did you click on this article because you thought it related to LEED or Green Buildings?  It kinda does.  It kinda doesn't.  The lesson is that we live and work in a world where information spreads quickly.  In addition, we have become informal in our communications through the use of email, texting and Twitter.  (And in our personal lives, there may not be anything wrong with informality in our communications.)

However, the construction project is built on expectations and performance.  Where those expectations are accurately and correctly reduced to a writing, the parties have a written contract.  Where the parties use words that have different meanings (and both interpretations are reasonable), we now have an ambiguity.  A judge or arbitrator will then be asked to interpret that ambiguity based upon any number of legal tools (i.e., parties' words and conduct, other writings outside the four cornings of the contract, industry norms, etc.).  As the construction industry begins to employ new technologies, such as BIM, or new performance based goals, such as energy performance from a LEED certified building, then it becomes even more important that we use words that do not lead to miscommunication.

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At the end of yesterday's webinar on Construction Documentation and Record Management, I was overwhelmed with so many good questions. Due to time constraints, I did not get a chance to answer them all.  However, I promised to follow up on your inquiries ... below are some of your questions.

How long should project related documents be retained? Why would the timeframe for retaining documents be less than the jurisdiction’s statute of repose?

During the webinar, I said that this would depend on two factors: (1) any written retention policy in place; and (2) any advice given by your tax professional. As one of the participants asked in the chat questions, you may want to keep documents for as long as the statute of repose period in your particular jurisdiction. The statute of repose (like a statute of limitations) cuts off the right to bring action if not pursued within the applicable period. For example, the statute of repose for construction defects in Tennessee is four years after substantial completion, whereas Virginia has a five year statute of repose. Short answer: Keep ‘em 10 years, unless the statute of repose period is longer.

Is there a legal requirement for keeping project documentation and emails?

There are a few issues that are competing here: business issues and legal issues. Purely as a matter of business management, you want proper document controls in place … for the reasons discussed in the presentation. As a legal matter, the only “legal requirement” to maintain records is to make sure you comply with any document management/retention obligations that are required by the parties’ contract (public or private).

Do these project management tips apply to either/both public or private projects?

The lessons can be applied to both public and private projects. Of course, there may be different project controls in place or record management systems required for public contracts. For example, both Wisconsin and Texas now require use of Building Information Modeling (“BIM”) on certain public projects. Also, the general legal issues may differ if you are pursing a claim against a public owner because you may have the dispute resolved by an agency or administrative judge. However, most of the tips in the presentation are applicable to both public and private contracts.

Closing out a job: What recommendations do you suggest for Data Controllers in gathering electronic records from Project Managers, superintendents? Also--must such electronic files be printed and placed in a hard file?

During the webinar, I partially answered this question. Let me try again with the following recommendations for Data Controllers:

• Have the same person do the collection.
• Make sure the collection is complete and exhaustive—i.e., don’t collect emails from everyone’s computer except the “document clerk.”
• Have a written policy about what information is to be gathered and what will be done with the information.
• Create an index to describe or categorize the information.
• Back-up or save all the information in one location, preferably a portable hard drive that can be copied and sent to your attorney. It is hard to deal with 50 CDs or DVDs than one hard drive.
• It is not necessary (nor advisable for cost reasons) to print electronic files for long term storage.

Does using an Owner supplied management tool (Site Manager) for daily diaries (i.e. with a State DOT) relieve you from expanding the level of detail in documentation?

No. Use as much detail as necessary to accurately describe what is required in the report (i.e., conditions, scope of work, installed quantities, labor, man hours, etc.).

As you highlighted the advantages of using a one environment/system between all parties involved, what is the main disadvantage of such application?

Cost … depending on the size of your company and project. If you do not have this infrastructure in place, the initial investment can be costly in terms of licensing fees, usage and management fees, and additional costs for trained personnel.

In regards to emails, what about if you have a disclaimer on the bottom that states that the info is only intended for the person addressed? Can those still be used by the other party?

Yes. No. Depends. If you are talking about emails between individual employees of the parties, then they can certainly be used as party admissions. If you are talking about emails to/from a non-party to the litigation (what may be called a third party), then you can probably use the information in the email and even the email itself if you can get around one of a few evidentiary objections.

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