Construction Termination Issues for the Architect and Engineer: Part 1– Introduction to the Series

Earlier this year, I was asked to talk to other construction lawyers on the topic of termination.  My first question was– whose termination are we talking about here– the architect / engineer?  The contractor?  Is someone wanting to “fire” the owner?  The answer, as it turns out, is — yes.  That is, yes, any and all of the above termination topics were on the table.

As you may have suspected, even the threat of a termination is bad, bad news.  It is the “nuclear option” for a construction project.  Everyone risks getting harmed.  As the design professional administering a contract, you run a risk of being dragged into litigation no matter what you do.  So, how should you proceed?  Carefully.

Elmer Fudd and dead Daffy Duck

As Elmer Fudd would say, be very, very careful!

To start, follow along in my new limited series on Termination Issues for Architects & Engineers (and all Design Professionals).  For the next few weeks, I’ll be posting about all sides of the termination topic, including:

Part 2:  How to handle construction administration when the contractor is getting fired

Part 3:  How to handle contract administration when the contractor is firing the owner

Part 4:  What to do when they want to fire you, the architect or engineer

Part 5:  What if You are the one that wants to quit?

and finally:

Part 6:  This is the End (Construction Contract Termination quick facts for the design professional)

Stay tuned for the next several weeks to learn all you ever wanted to know about termination, resignation, and the breaking of contracts.

In the meantime, if you have any burning termination-specific questions or comments, drop them in the comments below.  See you soon!


Photo By Leon Schlesinger Productions, produced for Warner Brothers. – YouTube screen capture; Public Domain,

Certificates of Merit for NC lawsuits against engineers and architects? (still no)(law note)

Certificates of Merit  are documents intended to show that a true issue exists with a professional’s work, prior to that person being sued.  While North Carolina does require that a person suing a medical provider first have the matter reviewed by a professional (and attest to that in the Complaint), there is no requirement for any review prior to a lawsuit against an architect, engineer, or surveyor.  Thus, anyone can file a lawsuit against an engineer/architect/surveyor without first having their case eyeballed reviewed by another professional. magnifying glass

Over the years, there have been attempts at adding a Certificate of Merit requirement to design professional lawsuits.  See, for example, examples here: from 2005; from 2007from 2011; and from 2013.

While many states do have Certificates of Merit for lawsuits against licensed design professionals, North Carolina, to date, does not.  This is a shame, because having a professional review a potential error *before* a party spends the time and money to file a lawsuit, can only help eliminate frivolous, merit-less claims.   To win a lawsuit against a design professional, a party will need to have an expert testify that they were negligent.  The Certificate of Merit just ensures that there truly is a valid dispute before a design professional’s name and reputation get pulled into expensive, perhaps unnecessary, litigation.

Would a requirement for a Certificate of Merit eliminate unnecessary claims?  Perhaps not.  But, it gives all parties an honest “first look” at the alleged design errors before the lawyers sharpen their claws begin filing their lawsuits.

Share your thoughts on such certificates in the comments, below.

 

What you don’t know about construction law can hurt your engineering firm (law note)

truckbridgeWelcome to a new year!  By now, you’ve eaten the last of the Christmas cookies, opened all of your presents, and rung in 2019.  Back to business, right?  The new year is always a good time to remind your employees, and yourself, that there are no shortcuts on the success train.

Sure, you can sometimes skate by for awhile, but karma has a way of catching up with you.

One thing to keep in mind is that if you practice in multiple states: be sure you are well aware of the rules and regulations concerning your license in each state.   Each state does things a little differently, and what may be perfectly acceptable in one state may not be in another state.

For example, I had an out of state professional design firm that was unaware of the supervision requirements of non-professional staff that is required under North Carolina law.  Another client had some North Carolina references on its website without an appropriate disclaimer as to who was, and who was not, licensed in North Carolina.  In both of those cases, I was able to help the professional firms get out from under the violations with minimal damage, but it cost time, money, and aggravation.

Do violations always get discovered?  Not always, but- like speeding– a violation is a violation is a violation, and at some point, your number may be up.

Save yourself the headache, bite the bullet, and make sure you retain competent professionals in *each* state that you are licensed in make sure that you are playing by that state’s rules before you work in that state.  (Obviously, if you have North Carolina questions, I’d love to work with you!)

You’ll thank me later.

Your turn.  Have you ever been surprised to learn about a state’s specific requirements after you’ve already violated those requirements?  Anonymous confessions encouraged– let’s learn from each other!  (or, drop me an email!)

 

 

Apologize for a design error? (law note)

SorryHave you ever apologized to a client for a failure in your professional work? Is that a good idea, or one that will get you in trouble with your partners/ lawyers/ insurance carrier/ the Court? As always, the answer is “it depends”.

Clients are people too. Even institutional clients are made up of people, and all people appreciate being told the truth and having a sincere apology when warranted. However, in general, anything that is said against your own interests can be used against you in Court. What’s a responsible engineer or architect to do?

Last week, I attended a thoughtful presentation on apologies by Burns Logan, Corporate Counsel for Jacobs, at the American Bar Association’s Construction Law Forum. Burns Logan

Burns’ main take aways:

1. You don’t have to actually say you are “sorry” (especially if you aren’t) to get the benefit of the strategy. You only have to include an explanation, accept responsibility, and make a reasonable offer of repair.

2. Deliver the “apology” in mediation where you don’t run the risk of it being used against you as evidence in court (most apology statutes don’t help in construction-related disputes)

 

The second point is key– mediation in most states (including North Carolina) is confidential.  Nothing can be quoted or held against you if it is part of mediation.  So, consider taking responsibility (with explanation), but do so at your mediation conference.

If you’d like to see Burns’ entire slide show, it can be found here.  Thanks, Burns, for a very informative presentation.

Questions/thoughts/comments?  Share below, or drop me an email.

“Sorry” photo (c) myguitarzz via Creative Commons. 

Insight into the AIA changes from an insider (law note)

Arlen SolochekAfter my series on the Top 10 Changes to the AIA 201, I heard from the Chair of the Task Group for the A201-2017, Arlen M. Solocheck.  Arlen is also both an architect and in-house owner’s representative at Maricopa Community Colleges, where he is the Associate Vice Chancellor for Capital Planning & Special Projects.

Arlen’s Task Force was responsible for the Herculean task of updating the A201 from the 2007 version, a process that took over 3 years.  He writes:

 

As chair of the Task Group that updated the AIA A201, I want to provide some additional thought to your AIA documents update, #10, Hidden Conditions. The objective of most notices, claims processes, etc. in the A201 is to keep the work proceeding while problems are resolved. Delays due to any reason harm both the contractor and owner. Once hidden conditions are discovered, the contractor is to notify the architect, who then is supposed to observe the conditions. The longer it takes to provide the notice, the more the hidden condition may be modified, impacted, or delay other work as that work progresses. We suggest that parties who are concerned about adverse impacts from shortening the notice period also note that no solution, no additional pricing, etc. is required with the notice. All that 3.7.4 requires is notice. A contractor should know pretty quickly if he’s seeing something that he didn’t expect. All that 3.7.4 requires is for him to say that.  

 

Arlen also notes that the process involved in making changes to the AIA documents is extensive:

I want people to understand that AIA and our task groups don’t make quick, willy-nilly decisions and changes, but they come from a lot of discussion, balance, reviews, feedback, etc. from the entire 30+ person document committee, AIA staff attorneys, and dozens of outside liaison reviewers we have who read every word and offer literally thousands of review comments on our drafts.

We can’t catch everything, even over 3 years of working on the document, so we enjoy and respect the outside comments and analysis, including those after publishing the updated version. If we goofed something up, it goes into the list to review for the next update.  I like to add some of the behind the scenes thinking so that even if someone doesn’t necessarily agree with the change we made, at least there’s an understanding of the reason behind it. 

In the particular comments made in the article, the comment seemed (to me) to overstate the risk due to and reasons for the change. Your caution in the article is reasonable for readers and clients, but I wanted to balance it with what the language really requires and effectively that it did not change a lot of the risk from the prior version.  The big picture is that there’s a reason for proper notice to be given on a project and lack of that notice puts a contractor or owner in a bad position should the claim later be lost or denied due to lack of Notice

 

Arlen also commented on the changes to the notice provisions

In A201-2007, there was capital N Notice, small n notice, “notify”, etc. not used consistently. We tried to clean that up with how when notice (small n) needs to be made, how notice (small n) can be made (including electronic/email if agreed upon), and that only Notices for a claim (capital N Notices) must be made in writing with proof of receipt possible.  We felt that this was the kind of Notice that was important enough to continue as formal, in writing, and proof of receipt. 

 

Thanks, Arlen, for your dedication to the design community, and for sharing your comments with us today.  I invite other readers to ask questions (for Arlen or me) in the comment section, below.