What do you get when you cross UK with KY?  I am not talking about UKKY (…pronounced "yucky" …), but that is something my kids would probably find funny.  I am talking about the BBC World Service, World Have Your Say Blog series that features the Green Building in Louisville, Kentucky on September 30 and October 1.

https://youtube.com/watch?v=lDNxlpFBb2Q%3Ffs%3D1%26hl%3Den_US%26rel%3D0%26color1%3D0x234900%26color2%3D0x4e9e00%26border%3D1

The Green Building opened in the Fall of 2008 in the East Market District.  Renovation of this 110 year old dry goods store began in the Sprin of 2007 when the owners decided to become the first LEED Platinum commercial building in Louisville.  According to the video, the owners are anxiously awaiting the certification results from the USGBC.

What makes an owner pursue sustainability at a premium cost during hard economic times?  In an interview with The Courier Journal, owner Gill Holland says it was a passion of he and his wife:

"And then my wife, Augusta, and I were still falling in love with this neighborhood, and a building a block away, next door to Toast, was for sale. When you come from New York City, everything seems so incredibly undervalued. We’d been living there. So we bought that building, and she’s kind of the one who opened my eyes to the whole concept of sustainability. So we thought, "Let’s make it the first, hard-core green, self-sustaining, run-the-electrical-meter-backwards building in Louisville."

In the interview, Holland described the details of green building process from demolition and recycling to material selection to construction.  He also explained why a green roof was important: 

It’s important because it saves you energy. A black tar roof in the summertime goes up to like 170 degrees Fahrenheit. Obviously, you’re air conditioning your building to 76 or whatever it is. You’re spending a lot of electricity to get your building down there. A green roof: the dirt, the grass collects all that heat. It doesn’t even make it to your interior.

Although it is a fairly long interview, Holland explains the features of The Green Building in simple terms.  He also has some great ideas about the future of green building in terms of public construction, infrastructure and private development.  And the interview was three years ago!

What has happened in the past few years? Sustainable or “green” construction practices have gone from fringe movement to mainstream.  A significant part of these practices, as reflected in the LEED rating system, concern energy conservation and efficiency.  There are literally hundreds of programs across the local, state, and federal level that provide some financial incentive for green energy projects.  The impact of these incentives on a project’s construction-cost bottom line can be significant and it pays (…literally…) for developers and contractors to thoroughly research programs that may apply to a particular project.

Construction projects (new and renovations) within the health care industry will undoubtedly see growth in the upcoming years.  Indeed, MedCity New reports that the Nashville medical mart (pictured below) is close to signing 15 new leases for the the new project, a major renovation of the existing convention center.   According to Medical Construction & Design, "Total spending on hospitals and other healthcare buildings continues to increase steadily, driven particularly by rapid expansion in public healthcare construction."

Not only does construction affect the health care industry, but health care affects the construction industry.  When Congress passed the new health care laws in March, it included some major provisions that will be "phased in" for the next few years.  According to the USA Today report, here are some of the provisions that may affect your construction company:

  • Business tax credit: Effective now, small business with no more than 25 employees can receive a tax credit to help provide insurance to employees.  The credit will be up to 35% of the employer’s contribution if the employer pays 50% of the total premiums.
  • Retiree insurance coverage:  The government has included a $5 billion reinsurance program to allow employers to provide health coverage to those retirees over the age of 55 who are eligible for Medicare.
  • High risk insurance coverage:  The government has also included a $5 billion temporary insurance pool for high-risk cases to provide coverage to individuals with pre-existing medical conditions or who have been uninsured for at least six months.
  • Potential increased premiums:  Based upon three key provisions, there will be a likely increase in your insurance premiums to account for the additional coverages.  These provisions include: (1) insurance companies are barred from denying coverage to children who have pre-existing medical conditions; (2) insurance companies must provide coverage for dependent children up to the age of 26; and (3) insurance plans are prohibited from placing lifetime limits on how much they pay out to individual policy holders.

There are numerous other provisions taking affect in 2011 that may increase the premiums for your employees as well.

As I blogged on Wednesday, I am speaking at two state construction law conferences in other jurisdictions this week: Texas and North Carolina.  Three different people asked me why I would speak to other lawyer groups who practice in other states.  Good question!

Here are a few reasons for stepping up to the mic in other states:

  1. To meet people.  Business development is about getting out and talking to others and I genuinely like meeting and talking to people. But it is more than that … as a lawyer, I may have a client that needs assistance in Texas or North Carolina.  This week, I ate, drank and was merry with a number of construction attorneys who I would not hesitate contacting to act a local counsel if needs arises.  
  2. To improve trial skills.  I cannot overlook the fact that every time I speak to a group (no matter the topic) I am practicing and improving upon one of the primary skills needed to be a successful litigator… public speaking.  Indeed, all of the skilled litigators I’ve met have been great public speakers, whether their audience was a judge, an arbitrator, a jury or even opposing counsel.
  3. To gain knowledge.  This week has presented me with an opportunity to learn about the various and new construction laws in other states. For example, at one conference I learned that in 2009 North Carolina passed its own False Claims Act, which dramatically affects public contracting in the state.  At the other conference, I learned that Texas has a residential construction liability statute that can substantially limit a contractor’s liability if they make a reasonable offer to cure the defects. The point here is … as a construction lawyer … I want to gain as much practical information I can about my industry, whether within my own jurisdiction or in others.

There’s a lesson to be learned here for construction executives and business developers:  The dynamics of the construction industry have rapidly changed to require a multi-state or national approach to business.  One of the hot topics at dinner last night (…other than the war stories of depositions gone wild …) was the increase of joint venture and teaming agreements to pursue work in states all across the country.  More and more you are seeing larger companies teaming with local companies to pursue the state or local work.  It will benefit your business if you get out of your comfort zone to start exploring opportunities in other areas.

Image: bionicteaching on Flickr

Where’s Waldo?  The real question is, Where’s Matt?  If you’ve wondered where I have been the past few days, try looking in Texas and North Carolina.  I have been preparing to speak at two construction law conferences in two different states.  Look closely and you might find me.

On Thursday, I will be speaking at the University of Texas School of Law 2010 Construction Law Conference in Dallas, Texas.  I am speaking with Jeffrey Peters of Rimkus Consulting Group and our topic will be: “LEED 101 and Beyond: Incentives, Design, Construction Pitfalls, Certifications and Contracts.”  In this workshop, Jeff and I will be talking about the design issues, contracts and certifications for green and sustainable development, including a look at the most common green standards and how they are used to certify green buildings.  We will also talk about the financial incentives driving developers to go “green” and some of the possible challenges with this type of construction.

On Saturday, I am speaking at the North Carolina Bar Construction Law Section Annual Meeting in Greensboro, North Carolina.  Our panel of regional construction lawyers will discuss common construction issues that arise in NC, SC, GA, TN and VA, including statutes of limitations and statutes of repose, lien and bond claim deadlines, contractual quirks and indemnity requirements.

What’s in it for you?  Well, if you check back with me on Monday … and send me an email, a direct message to Twitter @matthewdevries, or a LinkedIn message, I will send you a copy of one, the other, or both presentations.

Just because you may win on appeal in one claim does not mean that you have properly preserved your other claims.  This was a hard lesson to learn for one developer in the case of B&B Enterprises v. City of Lebanon (pdf), a decision recently issued by the Supreme Court of Tennessee on August 31, 2010.

Understanding Deadlines

In B&B Enterprises, the developer of a residential subdivision filed suit against the City, alleging that the planning commission had denied it all economically beneficial use of its property by wrongfully refusing to approve the final plans for two phases of its subdivision. 

Although there is more history to this dispute, the real rub occurred after the developer appealed to the trial court the planning commission’s refusal to approve the final plan.  Both the trial court and the appellate court held that the planning commission had acted arbitrarily and capriciously when it declined to approve the plans for Phases Two and Three.  Thereafter, the developer filed a complaint seeking monetary damages based upon claims of regulatory takings and violation of civil rights.

In those proceedings the City argued that the applicable one year statute of limitations barred the developer’s claims.  Ultimately, the Supreme Court of Tennessee concluded that the claims were untimely because the developer "knew" that the City’s conduct occurred when the planning commission denied the final plans.  The Court rejected the developer’s claim that the City’s actions were not "permanent" or "complete" because it sought (and won) judicial review of the planning commission’s denial.  The Court reasoned:

The Planning Commission’s action on February 26, 2002, put B & B Enterprises on notice that its reasonable investment-backed expectations for the use of its property had been frustrated. Regardless of the eventual outcome of the judicial proceedings, the Planning Commission began interfering with B&B Enterprises’s economically beneficial use of its property by no later than February 26, 2002.

Do you see the fine line here?  The Court focused on the planning commission’s actions and not the subsequent actions of the courts.  Again, it is the final decision of the agency that triggers the claim and not whether subsequent review of that decision provides relief.  Since I am a visual-learner, it may be easier to understand the time line this way:

UNTIMELY LAWSUIT = Planning commission’s denial→ judicial and appellate review of denial → appellate reversal of denial → suit to seek damages relating to denial.

TIMELY LAWSUIT = Planning commissions denial → review of denial and suit to seek damages relating to denial → judicial and appellate review if necessary.

While you make not agree with the reasoning of the court’s decision in B&B Enterprises, the lesson learned is one about preservation of rights at the earliest stage possible.  Know and understand your deadlines.

Image: husfse on Flickr

I previously blogged about the historic flooding in Nashville in May, including insurance flood claims,  building permits for repairs, and statute of limitations on mold claims. I also recently blogged about the leadership lessons from the flood recovery by Colin Reed, the CEO for Gaylord Entertainment. 

It seems that there is a trend of newsworthy items involving the flood damage at Opryland, including recent news that Opry Mills just sued its insurers for more than $150 million in flood coverage.  As reported in the Nashville Post, the owner of Opry Mills Mall filed a lawsuit against its property insurers yesterday afternoon, alleging that the insurance companies wrongfully refused to honor a majority of the $200 million in flood insurance policies.  The complaint, available here, alleges that the insurance coverage denial could delay work to repair damage from the historic flooding.

The complaint filed by Greg Cashion provides an outline of the types of causes of action involved in a major property loss such as the flooding at Opry Mills. These include:

  • Breach of contract.  This claim is for the insurance companies’ failure to provide coverage within the terms of the insurance policies.  At dispute will be the applicability and meaning of the insurance policy terms, exclusions, and exceptions.  Notably, this lawsuit will involve the issue of whether the mall is part of a "high hazard flood zone" for which a certain $50 million limitation applies. The lawsuit alleges that the mall is not listed in such a zone.
  • Estoppel.  This claim alleges that the insurance companies issued certificates of insurance to Opry Mills for full coverage and with "no mention" of any limitation of liability.  Under these circumstances, the complaint alleges, the insurance companies are estopped from relying on any limitation of liability clause.
  • Declaratory Judgment.  This claim seeks a determination from the court that the policy coverage is valid and that there is no limitation of liability of $50 million.  The importance of declaratory relief, particularly in this instance, is to get a judicial determination as soon as possible so that funds will be available to complete the construction repairs.  
  • Negligence.  There is a claim based upon the alleged negligent actions of the broker and agent of the insurers.  According to the complaint: (1) the broker/agent had a duty to Opry Mills to perform its services in a professional manner; (2) the broker/agent had a duty to correctly represent the coverages; and (3) the broker/agent breached that duty, which has caused in whole or in part the losses alleged. 
  • Consumer Projection Act.  Finally, the complaint contains a statutory claim for violation of Tennessee’s Consumer Protection Act for deceptive practices or practices declared unlawful for insurers.  If proven, this claim provides recovery for additional damages and attorney’s fees.

As noted in the Nashville Post article, the lawsuit may drive the construction efforts.  According to Opry Mills president Gregg Goodman, "work will cease, delaying the mall’s reopening pending its success in this suit."

 Image: Ritab38315 on Flickr

In case you could not get in touch with me on Friday, I was standing in the rain all afternoon.  But it was for a great cause, so please forgive me.  Beginning at 5:30am and lasting most of the day, 15 teams of local contractors and construction service providers weathered the storm for the AGC of Middle Tennessee, Construction Leadership Council’s First Annual BBQ in Red Shoes cook-off.  Both Stites & Harbison and Best Practices Construction Law helped sponsor the event.

In everything we do—whether you are a contractor, banker, painter, lawyer, parent—there is room for growth.  On a construction project, you may learn a better way to overcome weather delays.  On a construction loan, you may find a new way to structure the deal to benefit all the parties.  In a lawsuit, you may find a strategical advantage to filing a motion.  And in a BBQ cook-off, you may learn a thing or two.  What did I learn from working four hours in the rain?

Contractors love BBQ cook-offs.  I am not sure whether the attraction is getting an early start to the weekend … or the thought of an afternoon of meat and beer … but these guys and gals had a great time. 

Contractors love working hard.  We had over 25 volunteers that helped prepare for the day, set up tables at 5:30am, stand in the rain to sell tickets and t-shirts, and haul away bags of trash at the end of the day.  Just being a part of the team was a rewarding experience.

Contractors love helping others.  I was absolutely overwhelmed at the generosity of the individuals and teams that participated in the event.  The "Sustainable Smokers" from Waste Management took home BBQ Champion award (pictured above).  The event raised approximately $1,500 for Ronald McDonald House Charities, which was a good number given the heavy rain.  Better yet, though, the winning team at WM donated their entire cash prize of $1,250 to increase the total donation to close to $3,000!

The generosity did not end there.  As the teams were cleaning up for the day, the team from Turner Universal donated over 25 pounds of ribs, chicken and brisket to Lambscroft, an outreach that feeds up to 100 homeless individuals every Wednesday and Saturday night. 

Wow … what a great (rainy) day!

As I stepped out of the shower this morning, something stuck to the bottom of my foot.  It was Florida.  Actually, it was the puzzle piece of Florida from my daughter’s USA puzzle map. I chuckled because yesterday afternoon I found this map on various statutes of limitations and repose for the entire country (pdf).

Statute of Repose State-by-State Map

What is a statute of repose?  A statute of repose provides a date upon which the legal action no longer exists . . . and here is the kicker . . . whether it has accrued by that date or not.  In other words, for a construction defect case, there may be an applicable statute of limitations that says the property damage claim is barred if not brought within three years of discovery of the injury.  If the defect is not discovered in the new building until seven years after completion, then the claim would not be barred by the statute of limitations.  However, the statute of repose for a particular jurisdiction may be five years and the the claim could not be brought after five years from completion of the project. 

What is the law statute of repose in Tennessee?  In Tennessee, claims regarding improvements to real property must be brought within four years of substantial completion of the project, regardless of the date of discovery.  There is an exception if the claim is discovered during the fourth year after completion. In this case, the claim must be brought within one year after discovery, or within five years after substantial completion of a project.

Statutes of repose are puzzling because the rules vary markedly from state to state.  As shown on the Construction Defects Statutes of Limitation and Repose map, each jurisdiction varies on the applicable limitations periods.  Some states like New Mexico have a ten-year statute of repose, while others have shorter periods.  Additionally, some allow for a discovery extension, while others do not. 

Here’s a  tip! One of the most important things you can do when you find out you have a potential construction dispute is to review your contracts and applicable limitations periods to determine the timeliness of your claim.

It is with great sadness to report that Tennessee construction icon, C. Ray Bell, passed away over the weekend due to heart complications.  

C. Ray Bell of Ray Bell Construction Co.

I had the privilege of working with Ray Bell Construction Co. during the time when the company was transitioning leadership from Ray to his two sons and top executives to form Bell & Associates Construction.  He leaves behind a great legacy: 

  • He helped build the skyline of Nashville. In 1970, Ray formed Ray Bell Construction Co. and within 10 years was awarded the James K. Polk State Office Building project and built the Tennessee Performing Arts Center.  By the 1990s, RBCC formed a transportation division to build highway projects. In 1994, RBCC built the BellSouth tower, a.k.a., the Batman building. In 2003, RBCC completed renovation of Shelby Avenue pedestrian bridge.
  • His imprint on Nashville will remain strong.  In 2010, Bell & Associates began working on construction of the $585 million Music City Center convention complex.  Just as much of the other great projects in this city, the Music City Center will transform Nashville’s economy for years.  Ray has been called "hard working, compassionate and politically connected" and a "vital asset" to the industry.  
  • He was a loyal friend to all.  I talked with Ray on few occasions, but his great passion and loyalty emanated from everything he did.  Many others in the community have great memories of Ray Bell, but the words of his son, Darek, have the most impact on me as a father of six young children: 

"My father was my hero, my mentor, and most importantly, my best friend. . . . Relationships were very important to him, and he was a master at cultivating deep and lasting friendships. He was a rock for many people. Fathers and sons don’t always have the best communication, yet we used to talk for hours like old friends. Because, quite simply, we were."

To Darek and Brad, and the rest of the family, my deepest condolences.  Hold tight to memories of a great man for your continued comfort. 

As many of you know, I am involved in the ABA Forum on the Construction Industry, which is the largest organization of construction lawyers in the United States and abroad.  Our Fall meeting is next week in Miami Beach, Florida.  The conference focus is “We Won’t Get Fooled Again: Lessons Learned from the Economic Downturn” and features exceptional construction lawyers offering hands-on experience the following:

  1. dealing with troubled and bankrupt projects;
  2. innovative ideas to assist your clients in securing payment in a tough economy;
  3. cutting edge tips for drafting takeover agreements;
  4. insight into where the ethical line is drawn with respect to expert reports;
  5. a primer on common mistakes in reading blueprints; and
  6. other practical survival tips intended to help you best serve your clients.  

This is going to be a great event (not only because of the programs and the location), but also because of the focus on social media.  Check out the following:

  • The Forum is now on YouTube.  Here is a personal invite from Steve Lesser, the governing committee liaison for this program.  I am glad to see the Forum leaders catching the digital wave:

https://youtube.com/watch?v=jQyRjYCfS9g%3Ffs%3D1%26hl%3Den_US%26rel%3D0%26color1%3D0x234900%26color2%3D0x4e9e00

 

     

  • The Forum will be Tweeting.  Just like Daniel Schwartz, who made headlines by tweeting on behalf of @ABAEsq at the ABA annual meeting two weeks ago in San Francisco, you can follow the tweets of the Forum’s Fall meeting in Miami at @forummiami and @ABAConstruction (or using the hastag #ABACF)
  • The Forum will teach you social media.   I am excited to announce that I will be teaching "An Early Morning session on Social Media," (pdf) where we will cover the basics of social media and give an overview of how the Forum intends to use the various tools and platforms.  Fellow construction Michael Murphy will also be there to give his advice on tweeting.  We hope you can join us at 7:30 a.m. for about 45 minutes on Thursday morning right before the event conference begins.

 See you next week on the sandy beaches!  I will send pics.