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Paperwork, and more paperwork–Discovery in the construction lawsuit (Law & Order: Hard Hat files Part 4)

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lots of paperworkAs I mentioned at the start of this series, one of the reasons that I like watching Law & Order is that things happen fast, and there is always a smoking gun paper  to be found by the lawyers over a night of eating cold Chinese food.  Yes, well- about that.  In the construction world -not so much.

Depending on the size of the project, there may be massive amounts of paperwork involved.  Think about every email, of every employee who touched the project, from initial proposal through final punch list.  Add in the change order logs, pay applications (with backup), submittals, shop drawings, project correspondence, drawings, specifications, diaries, meeting minutes, daily reports, site inspections, etc—and you can begin to visualize the problems that the magnitude of documentation creates.  Naturally, in the age of electronic data, digital cameras, and cloud computers, the issue of quantity is even more magnified.

Now, let’s discuss the discovery process in a construction lawsuit—that is, what the other side can ask for, what you must give, and how the process works.  Then I’ll detail a few recommended practices to put your firm in the best position possible if and when it has to deal with the information overload of a construction lawsuit.

What is “discovery” in the legal world?

Discovery is the all-encompassing term for means and methods to get information necessary to prosecute or defend a lawsuit.  The main written discovery consists of interrogatories and requests for production of documents.  Interrogatories are written questions that you (with the help of your lawyer) must answer about the project.  Requests for production, on the other hand, are requests made for documents that may, or may not, be relevant or admissible.  Inevitably, in one form or another, your entire project files need will likely need to be produced to the other side.

Be aware: things that you may not consider part of your firm’s project files may still be demanded. 

  • Does anyone at your company keep an old-fashioned pocket calendar, filled with a mixture of both business items and personal information?  It can be demanded in the discovery process.
  • Does your company conduct internal post-mortem meetings to discuss ways to improve on future problems and what went wrong on this one?  Discoverable.
  • Does one of your employees have a personal relationship with an employee of the general contractor, such that they send good-natured barbs and sarcastic comments about the project or project personnel to one another?  Yep- you guessed it—discoverable.

Each and every document, paper, back of envelope note, or personal diary entry can be demanded.  Scary prospect, right?

What can you do to limit the embarrassment and lessen the pain?

To lessen the pain, be sure to adopt some best management project and personnel practices, including:

  • Consistent intake methods.  Every employee who brings in work should know to find, modify, and use the Firm’s contract and/or form proposals.  Educate both your employees and your clients on the importance of having good, written contracts and proposals, and procure them in a uniform and systematic way.  There should also be a follow up procedure in place, in case a signed contract or proposal is not obtained.  One suggestion I have made previously:  do not open a new client or matter number to bill against until the contract is in place.

 

  • Management of rogue employees.  Ideally, don’t let any employees only use their hard drive.  If you can’t achieve that level of cooperation, at least insist that documents be copied over to the Firm’s computer system on a regular basis, and at least weekly.

 

  • Decide on Firm-wide file management.  Everyone on your staff should be filing everything the same way, whether in paper records or in email folders.   As noted in my post on how to smartly handle project documents, all communications should be in one place, preferably in a chronological order.  Failing that, a master chronological file could be kept for future reference.  You also must decide whether and which emails need to be printed and/or saved, and institute a standard policy Firm-wide for those as well.

 

  • Create a Problem file(s).  If problems in certain areas arise, maintain a separate file and/or e-folder for all documents relating to that area.  Who knows, one of those may end up being the smoking gun that makes your case.

 

  • Use a separate Legal file, if necessary.  Related to the problem file, if you get any legal help or help from your insurance company, create a new “Legal” file for legal issues, communications, and the like.  Do NOT keep this file with the other project files.  Ideally, all legal files should be kept in a different location/drawer/desk/office to prevent inadvertent disclosure in a lawsuit.

 

And, the #1 Rule relating to document best practices?

 

  • Follow the Grandma/Newspaper rule.  That is, instruct your employees to be careful in what they say in any forum– website, newsgroup, email, etc.  Before sending off any questionable communications, each employee should ask himself:

How would my grandma feel if she read my message in the newspaper? 

If he feels comfortable that the message wouldn’t make Grandma hold her head in shame, then and only then should he press “send”.

 

While you don’t need to know all the details of how to answer discovery unless and until you’ve been sued, if you follow these document best practices, you will be far ahead of the curve should you have to defend yourself in court.

Questions, comments, observations?  Share in the comments below or shoot me an email. 

Next in our series:   Being deposed—not just for dictators! Depositions in the construction lawsuit.

 Photo (c) Veronica Robbins via CC.

You have the right to an attorney (but one will not be appointed for your construction lawsuit) (Law & Order: Hard Hat files Part 3)

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lawyerEvery criminal worth his salt knows that he has the right to an attorney.  What about in construction law?  Not so much.  You do have the *right* to an attorney; however, you do not get one for free.  Do you *need* an attorney?  Not necessarily.  Then again, I prefer not to pull my own bad teeth, but hire a professional to do it for me.  Maybe you prefer the string-tied-to-a-doorknob method.  Not me.

In some situations, actually, you *do* need an attorney.  Any natural person can represent himself in court, fool or not.  However, if your company or professional association is sued, a company employee cannot represent that company pro se. That is, unless you have a licensed attorney on staff, you must hire a lawyer to represent your company.

There are two general ways that attorneys can be retained to defend you in the construction lawsuit—either your insurance carrier can hire them, or you can.  This is one of many, many reasons to have errors & omissions insurance.

If you have E&O insurance and are sued for professional malpractice or negligence, then your attorney will be hired and paid for by the insurance company.  You simply report the claim to your agent, and the insurance company will tell you who it has hired to represent you.  Nice, yes?

If you do not have insurance, then you must hire your own attorney.  How do you figure out who to hire?  The simple answer, of course, is to simply hire me! (kidding).  You will want to do some due diligence – ask for referrals, find out what types of attorneys in your area handle construction disputes, and talk with some potential attorneys.  Important questions to consider include:

  • Experience in construction disputes.  You don’t want a personal injury attorney who “dabbles” in construction – you want someone who does a lot of it.  In some states, there may be special certifications of construction lawyers; however, in North Carolina there is not any such designation at this time.  But the attorney should make construction law a regular part of his/her practice.

 

  • Knowledge of the design professional’s role.  Some lawyers and law firms mostly represent subcontractors in lien claims.  Others represent owners & bankers.  Some focus on general contractors.  And yes, others (including yours truly) tend to represent design professionals.  All things being equal, it is helpful to have someone in your corner who understands your industry, your industry’s jargon, and your industry’s practices.

 

  • Defense mindset.  Often, if you have found someone who meets the first two criteria, you will have found someone that has a defense mindset.  However, this is not always the case.  Some lawyers and firms tend to consider themselves plaintiff’s law firms; others consider themselves defense law firms.  If you have been sued, you obviously want someone who is of the defense mindset.  You can usually tell who these lawyers are based on their affiliations—for example, they tend to be members of their state civil defense attorneys network (in NC, the NC Association of Defense Attorneys), or they are members of a national network such as the Defense Research Institute.  In contrast, a plaintiff’s attorney will more likely be a member of the Academy of Trial Lawyers, Advocates for Justice, or the like.

If you already have a lawyer who you feel confident in, and who is qualified, can you get your insurance company to pay for him/her to defend you?  Sometimes.   You usually have some say in who is retained to represent you—for example, the right to request new counsel if you don’t like “the buffoon” they hired on your behalf.

If you have a lawyer preference, you can ask (but not demand) that the insurance company retain your lawyer in the lawsuit against you.  Your lawyer may need to agree to certain compensation, reporting, and other rules to be considered by the insurance company.  After all, they will be footing the bill.

Sometimes, you may find that your preferred attorney is already on the “qualifying” or “panel” counsel list of the insurance company, which makes it easy, and much more likely, that the insurance company will grant your request.  Remember, though, Jack McCoy and Lennie Briscoe didn’t ask to get to work together, they were just assigned to do so.  So it may be with you.  Regardless of who is your lawyer, read (or re-read) this excellent article on how to be an effective construction client.

Regardless of who represents you and/or your company, keep in mind that your attorney is your attorney, regardless of who is paying.  Anything you say to your lawyer must be held in confidence, and your lawyer is there to represent your interests.  Be honest with your lawyer, respond to his/her communications promptly, and work together.  Construction lawsuits are usually messy, but at least there is no funeral to deal with!

Next week in the series: Paperwork, and more Paperwork….Discovery in the construction lawsuit. Be sure to bookmark the blog, or sign up for email or the RSS feed, because you won’t want to miss any blog posts.

Photo (c) Dawn Hudson. 

The police are at the door! Service of the construction lawsuit on your company (Law & Order: Hard Hat files Part 2)

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sheriff carThe police?  Yes, that’s right.  If you are sued, at least in North Carolina, you may find Mr. Policeman (or Ms. Policewoman) at your door.  There are several ways that you may find out you or your company are being sued, but undoubtedly seeing the Sheriff at the door is the most nerve-racking.  Heck, we have Sheriffs in our law office occasionally to serve papers, and the sight never fails to startle me.  So be forewarned—the first you find out that there is a lawsuit may be when Johnny Law himself comes knocking.

While unnerving (as it is often meant to be by the party suing you), rest assured that all the Sheriff will be doing is identifying you and handing you papers showing you’ve been sued.  The Sheriff doesn’t actually have to hand you the papers personally- in fact, depending on if and how you are incorporated, he may be handing them to your spouse, another adult that resides in your house, your business partner, or an officer or manager of your professional association.  While the Sheriff is not supposed to leave papers with a mere employee, that can and does happen as well.

The Sheriff is not the only way you can be sued.  You can also get a certified mail package—you know, the type that requires you to go sign for it at the post office.  Or, you may get a Fed Ex package.  If you are being sued in federal court, or you know the lawsuit is coming, you may not get anything, as it may all come to your lawyer instead.

What should you do if you do get the lawsuit (called the Complaint)?  First, run, do not walk, to your insurance carrier and/or lawyer.  Do not pass go.  This should be the first thing you do.  If you don’t have a lawyer, but you have insurance, your agent should be able to help you report the claim, and a lawyer will be assigned to you by the insurance company.  If you have a lawyer, you can report to him/her, and ask the lawyer to make the claim on your behalf to your insurance company.

Remember, however, that you need to report it as soon as you can.  In state actions in North Carolina, you have 30 days from receipt to respond.  In federal actions, you have 20 days.  There are certain rules concerning weekends and governmental holidays that change these deadlines at times.  But the important thing to remember is that you must respond, timely, or you can end up with a judgment entered against you in default.  So, when you report the lawsuit, the first thing your agent or lawyer will want to know is the date you (or someone connected with you) first received the Complaint.

If you report the claim and do not hear back?  Follow up.  Never assume that an email went through or that the person you called isn’t on vacation or in the hospital.  Make sure that you speak with your agent and/or lawyer personally and that they know when you were served.

Questions? Comments?  Have you ever been sued?  Do you now know something you wish you knew then?  Drop me a line or comment below.

Next week in our series:  You have the right to an attorney! (but one will not be appointed for your construction lawsuit)

Photo (c) freefoto.com

 

Hurricane Sandy broke the record books! (News note)

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Hurricane Sandy map[This article was originally published on November 8, 2012]

Now that the waters are receding, and while the recovery work progresses, thought I’d share an interesting article I came across on the many and varied records that Hurricane Sandy broke, including:

 1. Strongest Hurricane to Make Landfall North of Cape Hatteras

With a record low barometric pressure of 27.76, Sandy was the strongest hurricane north of Cape Hatteras to ever make landfall. Although Hurricane Gladys of 1977 holds the overall record for the region at 27.73, she remained off the U.S. coast.

 2. Largest Atlantic Hurricane on Record

She was a big girl. Sandy made the record books as the largest hurricane to have formed in the Atlantic Basin, according to the National Hurricane Center, reaching a truly impressive gale diameter of 1,000 miles.

 3. Highest Storm Surge

The storm surge for New York City was expected to be around 8-10 feet, yet Sandy’s strength and unusual angle worked to create a surge far surpassing estimates. The surge level at Battery Park was a whopping 13.88 feet at 9:24 p.m. Monday, out-surging Donna’s efforts of 10.02 feet in 1960.

There are 9 more here, although some of the categories (most photoshopped disaster photos, anyone?) are not as impressive as others.

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Want to Help?

Want to give to help the victims of Sandy’s massive impact? The American Red Cross is accepting monetary donations in any amount through their website.

However, they do not accept donated goods directly, as noted here:

The American Red Cross does not accept or solicit small quantities of individual donations of items for emergency relief purposes. Items such as collections of food, used clothing, and shoes often must be cleaned, sorted, and repackaged which impedes the valuable resources of money, time, and personnel that are needed for other aspects of our relief operation.

The Red Cross, in partnership with other agencies, suggests that the best use for those types of donations is to support needy agencies within donors’ local communities.

The best way to help a disaster victim is through a financial donation to the Red Cross. Financial contributions allow the Red Cross to purchase exactly what is needed for the disaster relief operation. Monetary donations also enable the Red Cross to purchase relief supplies close to the disaster site which avoids delays and transportation costs in getting basic necessities to disaster victims. Because the affected area has generally experienced significant economic loss, purchasing relief supplies in or close to the disaster site also helps to stimulate the weakened local economy.

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While the impact of Sandy will be felt for some time, the sheer size of the “perfect storm” is something to behold!

Photo: (c) NASA Goddard Space Flight Center via CC.

Greenwashing–an Interview with James d’Entremont (guest post)

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James d’Entremont headshot

James d’Entremont

Today, a guest interview on the always timely topic of greenwashing. Alex Levin is a writer for Seeger Weiss LLP, a top ranking Plaintiff’s law firm specializing in consumer protection, commercial disputes, and defective product injuries.  Please welcome Alex to the blog, as he shares a greenwashing interview with us. ______________________________________

As the public grows increasingly aware of the environmental costs associated with the modern consumer lifestyle, it also grows increasingly concerned. Such public concern has become a major factor in driving the industrial world to the adoption of an environmentally friendly façade, which has come to be known as greenwashing. While such companies may strive to be seen as addressing environmental concerns, not all of them are actually doing so, and some may be responsible for severe harm to the environment even while claiming to be catering to it. To what degree then can the government or the public regulate such “false advertisement,” or discern between those truly conscientious organizations and those which mislead?

James d’Entremont may be something of an expert on the topic of greenwashing. A Baton Rouge – based attorney for Moore, Thompson & Lee, he is also on the board of directors for the Louisiana chapter of the United States Green Building Council (USGBC), having both spoken and written extensively on the subject of greenwashing. He spoke to us about the surprising degree to which this rapidly growing practice is illegal, and what the public can do to fill the void left by the government’s limited involvement.

What measures has the US government taken and what measures do you think it should take to dissuade greenwashing?

James d’Entremont: The primary federal regulations aimed at preventing greenwashing are set forth in section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a) (1), and enforced by the Federal Trade Commission (FTC).  The FTC’s Guides for the Use of Environmental Marketing Claims, commonly known as “the Green Guides,” sets forth its interpretation of federal trade regulations governing environmental marketing claims.  The Green Guides and accompanying regulations require that parties making environmental marketing claims pertaining to products and product-related services have a reasonable basis for substantiating their claims.  According to the Green Guides, this “will often require competent and reliable scientific evidence” to back up the claim, 16 C.F.R. 260.5.  Moreover, the Green Guides require that an “environmental marketing claim should not be presented in a manner that overstates the environmental attribute or benefit” of the product or service and, further, that marketers “should avoid implications of significant environmental benefits if the benefit is in fact negligible.”  -16 C.F.R. 260.6(C).

The existing FTC regulations, while perhaps not perfect in every case, can provide a solid framework for adjudicating greenwashing claims.  That said, because the Federal Trade Commission Act does not provide a private right of action, private litigants must resort to other federal or state laws to bring a greenwashing claim, citing the Green Guides and relevant regulations as a “measuring stick” to judge the reasonableness or culpability of the defendant’s conduct.  Such actions may be based in state consumer protection laws, breach of contract, fraud, misrepresentation, commercial law or product liability.  Depending on the nature of the claim, various federal statutes may also provide a basis for relief.

What measures has the public taken to discourage greenwashing and what should the layman do in response to this trend?

JD: Social media has played a big role in addressing claims of greenwashing.  There are numerous blogs and websites addressing greenwashing in general and issues with specific products. For example, www.greenwashingindex.com is a website promoted by EnviroMedia Social Marketing and the University of Oregon that is devoted to identifying and indexing greenwashing claims across various industries and products.  In addition to this and other similar sites, there are also websites, blogs and twitter feeds devoted to specific products such as sprayfoamdangers.com which is focused entirely on problems related to spray foam insulation.  There are also an increasing number of private lawsuits addressing greenwashing claims.

As far as how the public should protect itself, the key is to seek clarification as to why the product or service is supposedly “green” and document any representations concerning the purported environmental attributes – as well as any potential environmental hazards – of the product or service.  Often times, the purportedly green product or service has certain environmentally friendly attributes – which are being promoted – as well as certain not-so-environmentally-friendly attributes which are either not promoted or completely undisclosed.

What are some examples of products that might be greenwashed?

JD: For one example, polyurethane spray foam insulation (SPF) is widely touted as green because its superior insulating capabilities can make a home or other building dramatically more energy efficient.  While this is certainly true, what is less well known – and what is generally omitted from marketing claims by SPF insulation manufacturers and installers – is that SPF is comprised of ingredients that, when evaluated individually, seem far from green.  These include isocyanates, amines and various flame retardants.  These chemicals are known irritants and, in the case of isocyanates, may cause sensitization or cause or aggravate asthma and other adverse health effects.  As a result, if proper precautions are not taken or if the SPF insulation is not properly installed, building occupants may suffer adverse health effects caused by the chemicals in or emitted from the SPF insulation.

Moreover, SPF insulation may not be appropriate for certain consumers, such as people with pre-existing asthma, allergies or sensitivity to one or more constituent chemicals.  In addition, because the SPF insulation dramatically “tightens” the house, there is less fresh air coming in from the outside which, in turn, may cause or trigger allergies due to increased moisture or airborne allergens.  Unfortunately, homeowners are generally ignorant of this because these risks are typically not disclosed to them.  Making matters worse, many manufacturers do not disclose all of the chemicals contained in their products.  In contrast, the purported green attribute – energy efficiency – is typically highly promoted.  The EPA is currently investigating health problems associated with SPF insulation and there are several individual lawsuits as well as at least one national class action, with more expected, seeking recovery of damages arising from this purportedly “green” product.

What factors encourage greenwashing?

JD: Rising consumer demand for environmentally friendly and high efficiency products and services is leading to more claims of greenwashing.  I expect this market trend to continue with a corresponding increase in greenwashing claims.

Now, dear blog reader, it is your turn.  Do you believe the green washing problems will get worse before they get better?  Share your thoughts in the comment section of the blog.