With Construction, Compromise is Always an Option (guest post)

Chris Hill, attorney, construction law.

Chris Hill, attorney, construction law.

Today, we have a guest post from one of our favorite  Virginia lawyers- Chris Hill. 

As always, he knocks it out of the park with another worthy post explaining why biting the bullet and settling your claim sometimes is the way to go. 

Here is Chris’s official bio:  Christopher G. Hill, LEED AP is Virginia Supreme Court certified mediator, construction lawyer and owner of the Richmond, VA firm, The Law Office of Christopher G. Hill, PC.  Chris authors the Construction Law Musings blog where he discusses legal and policy issues relevant to construction professionals.  His practice concentrates on mechanic’s liens, contract review and consulting, occupational safety issues (VOSH and OSHA), and risk management for construction professionals. 

Without further adieu, take it away Chris!

As always, thanks to Melissa for letting a Blue Devil invade her blog. I always enjoy the opportunity. Now, on with the post.

I know, you read a title like this and your first thought is “I’ll never have to compromise, if I get into trouble, I’ll be in the right!” You followed your friendly construction attorney’s advice, drafted a great contract (using a “belt and suspenders” approach) and do good work! What could possibly go wrong?

Well, among other things: 1. An owner may not pay the general contractor that you subcontracted to, 2. Weather could cause delays beyond your control, or 3. (yes, I’ll say it here) the architect may not like your work and what you did with his or her masterpiece of design. [Editor’s note: architectural plans exist for a reason, people!]. These three were just off the top of my head. Given that “Murphy was an optimist,” there are many other things totally beyond your control as a construction pro that can and likely will go wrong. The question is how to make the best of that bad situation.

Lets skip the easy points and head straight for the title of the post. You’ve already done all you can to “fix” the situation: increased manpower, shuffled your workforce, and gotten the work done as soon as possible. The party that should be paying you has decided not to do so. You decide that you need to do something besides beg for your money.

At this point you have a couple of options (not mutually exclusive): Mediation or Litigation/Arbitration. The second option is the “nuclear” option and to be used as a last resort. Remember, this is a zero sum game with no winners once the lawyers start filing papers. You will spend money that you didn’t plan to spend and take focus away from your business.

The first option is where you compromise. While you may not get the result that you may get by going to the mat in litigation, namely a judgment for everything that you would have gotten had you been paid in full, mediation has its advantages.

What are they? 1. The big one is control. With litigation or arbitration, you are turning your fate (and possibly the fate of your business) over to a third party. In mediation, you get some control and get to creatively determine the best way to solve the problem. 2. After anywhere from a few hours to a day, the dispute is resolved. Compare this to the several months to several years of litigation and you see where this would help. 3. It cuts off the attorney fee spigot much sooner than the alternative. While I as a construction attorney don’t mind being paid, you can’t run a business profitably with a monthly legal bill.

While a compromise is never the ideal, it is in most cases far better than the alternative.

Thanks, Chris!  It is a tough message to hear when you are in the thick of battle, proving that you are right, but the economic realities should always be considered before starting down the long path toward a court trial. 

Now it is your turn.  Have you settled or mediated a claim purely to put the economic pain of litigation to rest?  Do you regret that decision, or feel it was for the best?  Share in the comment section below.

PS:  Final reminder to VOTE for this blog in the “Best Legal Blog” competition. TODAY IS THE LAST DAY!  It takes, literally, about 1 second, and does not require your name, email, or anything else.  (It tracks IP numbers only).  THANK YOU for your vote!!!!!


3 Unusual Signs that You Will *NOT* be Sued (tip)

good sign

So often, lawyers are the bearers of bad news.  What will get you sued.  Signs a lawsuit is coming.  What you can’t say (even though you’d really like to say it!).  What “wouldn’t be prudent”.  (h/t SNL).

Today, we’re turning that on its head, with 3 signs that you will NOT be facing the business end of a lawsuit in the near future.

Some good signs are obvious.  Such as when a client sends you more work, refers you another customer, or says “Hey, swell job!”  But here are 3 unusual things that are good signs, if only you understand what they are really saying:

1.  The Complaining Client.

When your client complains to you about something you’ve done, not done, or promised but failed to do, that is a good sign.  Yes, you heard right.  Complaining is caring.  It is when you don’t hear anything that you could be in the most trouble.  If a client is complaining, they are telling you that you need to fix something.  That something may or may not be fixable, but at least you know that they value you enough to *want* you to fix it, so they can continue to do business with you.  So the next time a client complains to you, remember, it’s much better to have a complaining client, which you can fix, than a completely mad one that will disappear, without a word, to the architect or engineer down the street.  Or worse still, to their lawyer’s office.  To sue you.

2.  The Always-Calling Client.

If your client calls you to talk about the project a lot, that can be a good sign?  Yes, even if they interrupt your train of thought and your design process.  If your client is not afraid to pick up the phone and call you, then you are keeping the communication lines open.  It is when you don’t hear from clients regularly that expectations are missed, misunderstandings accrue, or unpaid invoices result.  A happy client is an engaged client.  An engaged client will be in touch- often.  This is not to say you can’t set parameters, such as what times of day you return client phone calls.  But calling is good, regardless of the subject (short of a Trump-like “You’re Fired”).

3.  The No-Boundaries Client.

When your client asks your opinion on non-design issues, that is a great sign.  She wants referrals to your accountant.  He wants to know where you think he should take an important investor to dinner.  Any time you find yourself having conversations about things that are not, strictly speaking, work-related, that is a very good sign indeed.  People do business with those they know, trust, and like.  They also tend not to sue those that they know, trust, and like.

Your thoughts?  Do any of these ring true to you?   Share in the comments below.


Photo: Good Sign (c) Melissa Brumback.  Creative Commons License

A trap for the unwary: Construction contracts under Seal (Law note)

signing contractHave you ever signed a contract that was “under seal”?  You probably have, and you probably have done so without really understanding what it means.  In North Carolina, a contract “under seal” means that the contract can be enforced for ten (10) years instead of the usual three.  In other jurisdictions, the contract can be enforced for even longer periods of time.  [For example, in Delaware, a contract under seal extends the time for brining a claim to twenty (20) years!]  Since a sealed contract extends your liability significantly, it is not something you should do lightly.

The phrase “under seal” comes from the old tradition of using a unique wax symbol (such as an engraved signet ring) to identify the owner signing the contract.  Today, however, you sign under seal when the words “under seal” or even just “[Seal]” is printed next to your signature, like this:

______________  [SEAL]
Melissa Dewey Brumback

While it is good to know about seals in general, construction professionals should be more concerned than ever about sealed contracts following a recent North Carolina Court of Appeals decision, Davis v. Woodlake Partners.  The Court in Davis held that in a contract to purchase improved property, signed “under seal,” extended the statute of limitations to the ten year statute as authorized by N.C. Gen. Stat. 1-47(2).  This is despite the fact that there is a six year statute of repose in North Carolina.  In the case, the lawsuit was brought within the 6 years, but outside of the 3 year statute of limitations for ordinary contracts.  The Court found the action was timely because of the “sealed” nature of the contract.

What does this mean for construction contracts?  You could find yourself liable on a construction contract longer than you intended.  Does this case apply in a situation where the 6 year statute of repose was violated?  The Court was not faced with that issue, so it’s too soon to tell.  The case was a divided opinion, so the state Supreme Court may be weighing in on the issue.  Stay tuned.

In the meantime, consider striking through any “seals” on your construction contracts.

Your turn.  Take a look at the last contract you were asked to sign.  Was it “under seal”?  Did you know what that meant when you signed it?  Share below.

Photo (c) Losinpun.

Emergency Bridge Repairs at Bonner Bridge (News Note)

Bonner BridgeThe North Carolina Department of Transportation (NCDOT) has shut down Bonner Bridge on the Outer Banks this week due to emergency safety concerns.  The life safety issues were discovered after routine sonar scanning identified excessive scouring (i.e., sand erosion) on the support structures of the bridge.

The bridge, erected in 1963, is the only road over Oregon Inlet, so the NCDOT is providing extended ferry service during the bridge repairs, which could take as long as 90 days.

The Bonner Bridge has been slated for replacement for several years following damage from Hurricane Irene, but legal challenges from environmental groups as to the location of the replacement have prevented DOT from breaking ground on a $215.8 million repair contract.

As of midday on Friday, December 6th, NCDOT engineers report the following:

· The dredge is on location and the anchors are set.

·  The crew has been developing ideas on alternate discharge pattern/configurations etc.

·  The Army Corps of Engineers 404 & DENR Water Quality Permits are issued.

·  Permit modification for enlarged discharge area to allow flexibility in using the tides & attack angles to assist in filling scour holes has just been issued.

To follow the dredging and emergency repair efforts, go to the NCDOT website and Facebook pages.

To read the positions and concerns of the environmental groups related to the bridge replacement, go to the Southern Environmental Law Center’s webpage.

Your turn:  Now that the bridge is back in the news, what is your opinion as to where the replacement bridge should be located?  Do the environmental groups’ contentions have merit?  Share your thoughts in the comments below.

Photo (c) Smkybear.

Avoid Disaster: Have Your Contracts Reviewed (guest post)

Today, we have a guest post by on of my comrades in crime (that is, a fellow construction law blogger), Chris Hill.  Here’s his official bio:  Christopher G. Hill, LEED AP is Virginia Supreme Court certified mediator, construction lawyer and owner of the Richmond, VA firm, The Law Office of Christopher G. Hill, PC.  Chris authors the Construction Law Musings blog where he discusses legal and policy issues relevant to construction professionals.  His practice concentrates on mechanic’s liens, contract review and consulting, occupational safety issues (VOSH and OSHA), and risk management for construction professionals.


Chris Hill, AttorneyFirst of all, thanks again to Melissa for letting me post at her fine blog.  She’s one of the more knowledgeable and cool Tarheels I know (and this is coming from a Blue Devil!).  Now, on with the show.

As those who read my Construction Law Musings blog on a regular basis know, I am a huge proponent of getting a knowledgeable attorney involved in your construction contracting business early on.  While we construction lawyers are generally seen as last resorts, we can actually be helpful and (dare I even say it?) save you money.  How, you may ask, can paying a construction lawyer that ostensibly is only there when you have a claim actually save you money?  Well, as you may have gathered by the title of this guest post, I’m going to tell you.

Two words:  Disaster avoidance.

Litigation is a money, time and emotion draining process for those that don’t have the particular odd propensity of the litigator that makes them actually enjoy trials.  Litigation takes money from the bottom line because no business this side of a cigarette or pharmaceutical company can do business planning to sue or be sued.  For that reason, litigation cannot be treated as overhead and even in the case where you could get a judgment for any fees that you may spend, you are still out the cash and even then may never recover on the judgment.  A contractor cannot make money through litigation (at least in my experience).

Even in the case where you are “right” and “should never lose” there is risk in court.  Juries, arbitrators and judges sometimes go the other way.  These are humans.  They are fallible and in many ways unpredictable.  Litigation is (and should be) a last resort.

The best way to avoid this result is a good contract and good advice from those of us who have seen the results of litigation on numerous occasions and that therefore know how to avoid it.  Everything from the proper claim and notice procedures to a well scoped project are necessities up front.  Aside from the “common sense” issues that you as a business person will see coming, an attorney can see the picky “traps” that are there and are counterintuitive.  For instance, Virginia, unlike many other states, allows the waiver of mechanic’s lien rights in a contract.  You wouldn’t want to miss this thinking that you “knew” that such a clause was unenforceable.  [Editor’s Note: By comparison, in NC, such a waiver in advance is against public policy].

Much like your bi-annual visits to the dentist (yes, I compared my profession to one that is almost as popular), the relatively small expense of early review of your contracts and business practices can go a long way toward avoiding surprises and disastrous expenses later.  In short, and as you learned in kindergarten, doing it right the first time is always easier than fixing the problem later.

My final advice:  Add a lawyer to your team of advisers, you’ll be glad you did.


Thanks, Chris, for another fine post.  And I completely agree:  the number of hours spent on claims will vastly supersede the small cost for most companies/Firms to properly prepare and vet their contracts and proposalsChris and I welcome your comments, questions, and thoughts!


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