May | 2010 | Construction Law in North Carolina

Just a quick resource note:

Photo by Andres Rueda via Flickr*

As anyone who has had the misfortune of sitting through the North Carolina General Contractor’s exam can tell you, there are two very important deadlines to keep in mind if you are not getting paid on a project– 120 days and 180 days. These are dates associated with filing a Notice of Claim of Lien on Real Property and Notice of Claim of Lien upon Funds, and the date associated with perfecting a Claim of Lien with a Complaint. Once these dates have passed, you may still sue to collect unpaid fees, but your statutory lien rights are lost (and with them, your most likely chance to get attorney fees). There is no room for error here. One good site to bookmark is this online Date Calculator. Use it to plug in the date of last furnishing to determine your notice and complaint deadlines. For future reference, I have added a permanent link to this calculator to the “Resources” page.

50 state lien law resource:

If you need to know the basic notice and filing requirements of lien laws in other states, check out this article which details mechanic lien law information in all 50 states.

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Photo “ASIO fx-991MS SCIENTIFIC CALCULATOR” by Andres Rueda via Flickr and made available via an Attribution-Noncommercial-ShareAlike 2.0 License.

A building can be designed to meet energy efficiency and sustainability goals, without actually obtaining LEED certification. However, LEED certification is becoming one of the most recognized ways of demonstrating your commitment to green building. It does not come, however, without a cost. In addition to the registration fee to the Green Building Certification Institute, costs depend on the square footage of the building, ranging from $1,750 to $17,500 for GBCI members to $2,250 to $22,500 for non-members. There are also commissioning fees and the soft costs associated with a green design.

Enter the Town of Cary and the new fire station. While meeting many green goals, the Town has elected to forego getting it LEED certified because of the estimated $41,000 costs involved in doing so. Is this the next trend in green building? If not LEED certified, what is to stop unscrupulous builders from unilaterally declaring their work to be green without actually making it environmentally friendly? Is the cache of being green worth multiple thousands of dollars in these lean economic times? Is this a way to avoid risks associated with failing to meet LEED certification?

For more on this issue, check out Matt DeVrie’s article on this same subject, “What are the benefits of Leed Certification?”

Construction don’ts:

2. Don’t worry about how someone will actually reach the threshold to get into the building– that’s what step ladders are for!

Photo by William Veerbeek via Flickr*

3. Don’t worry your head about such petty issues as structural integrity– it’s only a shed, right?

Photo by RogueSun Media via Flickr*

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* Photo credits: “An extra room” by JaviC; “Entrance, Ufa/RU, 2009” by William Veerbeek; “Bad Construction P1000892” by RogueSun Media. All via Flickr and made available via an Attribution-Noncommercial-ShareAlike 2.0 License.

While we have previously looked at direct contractor-to-contractor lawsuits and contractor-to-design professional lawsuits, I have said very little about the role of subcontractors in the multi-prime system.

In the Bolton case addressed earlier, Bolton made a claim against another prime contractor on behalf of itself and its subcontractor.

However, in 2004 the Court of Appeals dealt with the issue of a subcontractor making a direct claim against a prime contractor other than the contractor for which the sub performed its work. Pompano Masonry Corporation v. HDR Architecture, Inc., 165 N.C. App. 401, 598 S.E.2d 608 (2004).

That case involved the Biological Science Research Center at UNC-CH . HDR was the “project expeditor” under a separate contract with UNC, responsible for preparing the project schedule and coordinating work between the prime contractors.

Metric Constructors served as the prime general contractor, and Pompano Masonry was a subcontractor to Metric. Pompano sued HDR directly as the project expeditor, and the court allowed the case to proceed, holding that subcontractors to prime contractors could sue other prime contractors directly.

The court held that HDR could be sued directly by a subcontractor to which it had no contract for economic injury resulting from its alleged negligent performance of its duties as project expediter. Citing its earlier decision in Davidson, the court held that liability exits due to the “working relationship” and “community of interests” despite the fact there was no contractual privity between Pompano and HDR.

Conclusion

The moral of the story with regard to this series of cases? Never assume that you cannot be sued by someone because you don’t know them, you have no contract with them, you are a licensed professional, or they are on a different “tier” than you on the project. You have duties to all parties on a construction project, and the multi-prime statute in North Carolina gives yet another arrow in the litigator’s arsenal which could be pointed at your chest.

Are you having fun yet? Next blog post will be on a less “scholarly” topic, I promise!

As noted in my last post, the state multi-prime bidding statute provides for liability between separate contractors on state projects.

A specific case from the Middle District Court of North Carolina (federal court), interpreting state law, further extended this liability to architects and engineers on state multi-prime projects. RPR & Associates v. O’Brien/Atkins Associates, P.A., 24 F. Supp. 2d 515 (M.D.N.C. 1998).

In that case, which involved the George Watts Hill Alumni Center at UNC-Chapel Hill, the court held that an architect and consulting engineer could be held accountable to contractors who rely on their work on North Carolina construction projects based on the same statute as that imposing liability on multi-prime contractors on one another.

The issue in the RPR case was whether the statute applied to architects and engineers, since they are not “prime contractors” under the North Carolina multi-prime contracting statute. The RPR court held that for purposes of the statute, design professionals were “separate prime contractors” such that they could be sued directly by prime contractors on state jobs.

While this case is now over a decade old, it still surprises many design professionals who incorrectly assume that since they are not one of the enumerated prime contractors that they are not subject to statutory liability to the prime contractors.

In my next and final (for the time being) post on this subject, I will address the application of the statute on subcontractors.

Construction Law in North Carolina

The ORIGINAL blog for architects, engineers, designers, & other construction professionals

Monthly Archives: May 2010

Need to caclulate 120 days from date of last furnishing for a notice of lien?

Just a quick resource note:

50 state lien law resource:

Green Design—is it for the cache or the environment?

Bad Construction Design– a lighthearted post

Construction don’ts:

Even Subcontractors can sue other Prime Contractors Directly on State projects (Law note)

Statutory liability of Architects and Engineers to Contractors on State Construction projects (Law note)