Breaking Legal News, Guides & Counsel
Generally speaking, SB 465 amends the Construction Lien Act, to allow architects, engineers, and surveyors to have a construction lien on recording a notice that they have entered into a professional services contract with a landowner, without an actual physical improvement having been made yet on the property.
By Stephen Hilger, Esq. This is part 1 of a 15-part series on the changes to the AIA A201 General Conditions. This part deals with section 1.1.8. In the 2017 changes, particularly section 1.1.8, there are some additions to the Initial Decision Maker clause. The additions are as follows: Section...
By Stephen A. Hilger, Esq. This is part 2 of a 15 part series on the changes to the AIA A201 General Conditions. This part deals with section 1.2.1.1. Section 1.2.1.1 is new and reads as follows: § 1.2.1.1 The invalidity of any provision of the Contract Document shall not invalidate the Contract...
By Stephen A. Hilger, Esq. This is Part 6 in a 20-part series of blogs dealing with issues of arbitration in the construction industry. Once in arbitration, you will come to the crossroads of a decision on how many arbitrators to use. Should you use a single arbitrator? Or should you use a panel...
By Stephen A. Hilger, Esq. This is Part 5 in a 20-part series of blogs dealing with issues of arbitration in the construction industry. Once you have made the decision to utilize arbitration as a dispute resolution mechanism, the next question becomes what vehicle you should use to accomplish that...
By: Mark A. Rysberg The short answer is: no. From the perspective of some people, the reduction in the corporate tax rate from the rate that existed in 2017 to the rates that will be applied in 2018 eliminates the incentives for captive insurance participants to elect 831(b) taxation. To some...
Attorneys Aileen Leipprandt and Suzanne Sutherland will present “The Art & Law of Living Neighborly,” to the National Association of Women in Construction, in Grand Rapids, Michigan on February 14, 2018.
Aileen Leipprandt practices in the areas of commercial and real estate litigation and construction law. Her clients include owners, developers, design professionals, contractors, suppliers, manufacturers, and insurers/sureties. Aileen assists clients with transactional and litigation matters, including negotiations, contract review, preparation, and pre-suit claims evaluation and facilitation. For more than 20 years, Aileen has been a lecturer and author on many topics involving contract and construction law including Construction Contract Clauses, Sustainable (LEED) Construction, Building Information Modeling (BIM), and MIOSHA Compliance.
The enforceability of prehearing arbitration subpoenas after CVS Health Corporation, et al vs. Vividus, LLC, fka HM Compounding Services, LLC
By Stephen A. Hilger, Esq.
This is Part 4 in a 20-part series of articles dealing with issues of arbitration, mediation and alternate dispute resolution in the construction industry.
Those who have participated in arbitration proceedings understand the difficulty of getting documents from non-parties. For example, in a Contractor – Subcontractor dispute, litigants may want documents from the owner, architect, testing lab, and the like. However, those non-parties may not be connected to the Contractor – Subcontractor arbitration agreement. The litigants can require or request that the arbitrators issue subpoenas, which arbitrators typically do, but what happens when the third-party simply refuses to comply?
This is Part 3 in a 20-part series of articles dealing with issues of arbitration, mediation and alternate dispute resolution in the construction industry.
Over the last decade, a requirement has slipped into the dispute resolution clauses of many construction contracts requiring the CEOs of the various parties to meet as a condition precedent to any arbitration. If something is a “condition precedent” and the contract uses those specific terms, then the meeting must occur before a party can either demand arbitration or file litigation.
Since the parties negotiate their contract, the question becomes whether this is a prudent requirement to place in the contract. The answer is, in most instances, yes. Often times, the parties’ representatives who are involved in the dispute are not the CEOs of the companies. The CEOs, generally speaking, have cooler heads when it comes to resolving heated disputes. They may be one step removed. Forcing the CEOs to meet and discuss the claim has a general influence on either resolving the disputes or substantially narrowing them.
The recent case of Abhe & Svboda Inc. v MDOT (Court of Appeals, August 2017), underscores the difficulty in challenging Liquidated Damages, particularly where a contractor does not comply with delay claim provisions.
This case arose from the late completion by Abhe & Svboda, Inc (ASI) of a contract with the Michigan Department of Transportation (MDOT) to clean and paint part of the Mackinac Bridge. The contract specified Liquidated Damages (LDs) of $3,000 a day for each day of late completion. The contract also gave ASI the right to seek a time extension for bad weather, provided that ASI asserted the request within the time period required by the contract. ASI did not timely complete the project and the State assessed LDs of about $1.9 million for being 644 days late.
ASI sued the State challenging the LDs assessment for a number of reasons. For instance, ASI argued that the LDs should not apply to 362 days of the planned winter shutdown during which it was impossible for MDOT to suffer any losses and that the LD clause was void for failing to be a good-faith effort to estimate losses. ASI also argued that MDOT’s dilatory behavior in approving ASI’s scaffolding plan caused 56 days of delay. ASI argued that 459 days of work were caused by environmental circumstances beyond its control. The trial court rejected all of ASI’s arguments and granted summary disposition to the State. ASI appealed.