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.

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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.

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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!

 

Ask not for whom the bell tolls: it tolls for thee! The construction trial (Law & Order: Hard Hat files Part 9)

This is the final section of a 9 part series discussing the entire trajectory of a construction lawsuit involving claims of design errors or omissions.  If you missed any of the earlier posts, click on the Law & Order tag to read them all.
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The time has come.  You’ve been sued.  Suffered through discovery.  Talked about the project under oath til your throat turned raw.  And responded to the umpteen million request from your lawyer.  You’ve engaged experts, second-guessed your work, and looked at copies of legal documents that made your head spin.  Now, at long last, you will have your day in court.  Or will you?

church bellsWhen will your case be heard?

Your trial date is a moving target, at least in North Carolina.  Depending upon the county or jurisdiction the lawsuit is filed in, you are probably looking at your case taking from 1 year (for a small homeowner lawsuit) to 2 or 3 years for very complex cases.  This is one reason why court ordered mediation is required in all Superior Court cases in North Carolina.  It is also why most construction lawsuits do settle– at some point– prior to trial.  Some cases settle, literally, on the courthouse steps (or in the courthouse conference room).  Others settle during trial itself.  But if you find yourself settling at the last minute, you will have spent the time and money for trial preparation for naught.  A somewhat bitter pill to swallow.

What is involved in trial preparation?

Expect to review many documents relating to the project all over again with your lawyer(s), even if you’ve previously discussed them.  Expect to spend time with your expert(s) discussing your plans and design intent.  Expect to have some mock testimony sessions with your lawyers and others on their team.  Mostly, expect a lot of aggravation.  Trial preparation takes time.  A lot of time.  While much will be done by your construction lawyer, you will need to be actively involved.

How does the trial work?

The trial itself is probably the closest to a Law & Order scene that you will experience.  But don’t expect Jack McCoy (or Perry Mason) moments.  Very little happens in a trial that is completely unexpected.

If the trial is a jury trial (and most are), your lawyers will question the potential jury pool to try to weed out folks that have predisposed themselves to one side of the case.  The other side will do the same.  The result, ideally, is a group of disinterested, neutral folks that will decide your case.

After jury selection, opening statements are given.  These are speeches given by the lawyers to forecast the evidence that will be given to the jury.

The, the plaintiff (that is, the party suing you) will be told to call its first witness.  The plaintiff will proceed to call witnesses to the stand to testify.  The order that they are called in is up to their lawyers, and different lawyers have different strategies for deciding which witnesses they call first, middle, and last.

With each witness, the plaintiff’s counsel will ask open ended, non-leading direct examination questions.  After that, your counsel will ask leading questions on cross examination aimed at poking holes in the other side’s case, and establishing your own case theory.

After the plaintiff has presented its case and rests (and following some procedural motions at that point), the roles are reversed, and your lawyer will conduct direct examination, while the plaintiff will cross examine witnesses.

There are often legal sidebars during a trial, where the lawyers approach the judge and whisper about legal matters.  If extended debate on something is needed, the jury will be excused.  While you will not be invited to the bar to talk during sidebars, your lawyer can tell you what was discussed and how it effects your case.

At the conclusion of all evidence, the jury is given a set of legal jury instructions, and the lawyers present their closing arguments as to why their position should prevail.  Then, you wait.  And wait.  And wait, until the jury reaches a verdict.  The jury foreperson will read the verdict into the record.

What happens after trial?gavel

Depending on the trial results, one side may ask the judge to set aside the verdict (called a j.n.o.v.), which is rarely granted.  Whoever has lost may decide to notice an appeal of the verdict.  Appeals must be based on legal errors that the judge made during trial.  An appeal can take years, and the end result can be the same (that is, the verdict is upheld), overturned (set aside), or remanded for a new trial.  Yes, that’s right: you can be forced to re-try your case.

Is all lost, then, if you lose the jury verdict?  No; definitely not.  No one likes to spend time and money on appellate briefs.  So, even though the case is over, the parties may *still* negotiate a settlement.  Be aware, however, that you will have a judgment “on the books” against you if the jury found that way, and that can affect your credit ratings.  However, the judgment will also be rendered “satisfied” if you settle (or pay it off), which generally helps re-establish your good credit rating.

That’s it!  You now know just enough about the construction trial process to be dangerous!   I’ve obviously had to condense many details in this series, so if you have any questions or want me to expand on any area, drop me a note or comment in the comment section of the blog.

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