Duane Morris Partner Richard Lowe to Present at ABA’s “Yes, You Can Try a Construction Case: Planning and Handling a Construction Trial from Voir Dire to Closing Argument” Program

Duane Morris partner Richard Lowe will be presenting at the American Bar Association (ABA) Section of Litigation’s Regional CLE Workshop, titled “Yes, You Can Try a Construction Case: Planning and Handling a Construction Trial From Voir Dire to Closing Arguments,” which will be held on Wednesday, September 9, 2015, in New York City. Mr. Lowe will participate in a panel discussion on “Wrapping It Up; Closing Arguments and Effective Use of Jury Instructions in a Construction Case” from 4:00 p.m. to 5:00 p.m.

For more information about the CLE workshop, please visit the event page on the Duane Morris website.

Mayor De Blasio Appoints Maria Torres-Springer As Next NYC Economic Development Corporation President

New York City Mayor Bill de Blasio appointed Maria Torres-Springer as the next president of the New York City Economic Development Corporation (EDC). EDC is a not-for-profit corporation charged with using New York City’s assets to promote economic growth, create jobs and improve the quality of life in in each of the City’s five boroughs. EDC also helps create affordable housing, new parks, shopping areas, community centers and cultural centers.

Torres-Springer will be the first woman to lead EDC. She has been the Commissioner of the NYC Department of Small Business Services (SBS) since 2014. Former EDC president Kyle Kimball resigned in March to join Consolidated Edison as Vice President of Government Relations.

“Maria has a proven track-record opening doors for New Yorkers and working closely with businesses to grow our economy. We are proud to have her lead EDC. Maria will focus on growing vital sectors in our economy, and preparing New Yorkers to seize those opportunities so they can be a part of our economic success story,” said Mayor Bill de Blasio.

Before being appointed Commissioner of SBS, Torres-Springer served as the Executive Vice President and Chief of Staff at EDC. Torres-Springer has also served at the Office of the Deputy Mayor for Economic Development & Rebuilding as a Senior Policy Advisor and as the Chief Operating Officer of Friends of the Highline. Torres-Springer received a B.A. in Ethics, Politics and Economics from Yale University and a Master’s in Public Policy from Harvard University’s Kennedy School of Government.

Jose A. Aquino (@JoseAquinoEsq on Twitter) is a special counsel in the New York office of Duane Morris LLP, where he is a member of the Construction Group and focuses his practice on commercial litigation with a concentration in construction law, mechanics’ lien law and government procurement law.. This blog is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this blog are those of the author and do not necessarily reflect the views of the author’s law firm or its individual attorneys.

Calculating Lost Labor Productivity: Is There a Better Way?

The calculation of lost labor productivity, also termed labor inefficiencies, is one of the most significant elements of damages in a construction dispute and one of the most controversial. If these damages are proven, the monetary value claim can be a considerable amount. This is far from surprising seeing as labor costs can make up to 30 to 50% of overall project costs and if these projects lose money, the unanticipated labor costs result from lesser unexpected productivity. Lost labor productivity has become controversial since owners and general contractors are skeptical of the methods in curating these calculations can be considered questionable, speculative, and illusory. The article will further define how lost labor productivity claims developed; the interplay of Daubert in the pursuit of, and defense against, such claims; and recent federal and state  case law addressing loss productivity.

The full article, written by Duane Morris partner Daniel E. Toomey and Duane Morris associate Joshua S. Marks, along with Dr. Tong Zhao, P.E. and J. Mark Dungan of Delta Consulting Group, Inc., is available on the Duane Morris LLP website, courtesy of The Construction Lawyer.

 

Duane Morris’ Construction Group Nominated for 2015 Chambers USA Award for Excellence

Duane Morris is pleased to announce that the firm’s Construction Group has once again been nominated for one of the prestigious Chambers USA Awards for Excellence. This is the fifth overall nomination for the group, which has been recognized among the top national practices by Chambers for the past several years. Duane Morris is one of only six firms to be finalists in the construction category this year.

The Awards for Excellence honor outstanding firms based on research conducted for Chambers USA 2015. These awards reflect a law firm’s preeminence in key practice areas, as well as notable achievements over a 12-month period, including outstanding work; impressive strategic growth; and excellence in client service.

The Chambers USA Awards for Excellence winners will be announced on Tuesday, May 19, 2015, at Cipriani 42nd Street in New York City.

Tort-Based Indemnity/Contribution Remedies Not Available to Shift Contract Damages

The economic loss rule is alive and well in California. In State Ready Mix, Inc. v. Moffatt & Nichol (2015) 232 Cal.App.4th 1227, the Court of Appeal ruled that a concrete supplier (State Ready Mix, Inc., or “Supplier”) could not seek equitable indemnity or contribution from an engineer for the cost to remove and replace Supplier’s concrete that was non-compliant with Supplier’s own contract.  Although the Court minced no words when it described the factual basis for its ruling (“If [Supplier] wants to see who is at fault, it should look in the mirror.”), the most notable aspect of the opinion was its analysis and rejection of the legal theories of potential liability. Continue reading “Tort-Based Indemnity/Contribution Remedies Not Available to Shift Contract Damages”

Prevailing Wage Violation Invites Unsuccessful Bidder’s Tort Claim

Failing to pay prevailing wages on a public works project can have consequences beyond labor code penalties and claims for unpaid wages.  Contractors who “unlawfully deflate their labor costs” by intentionally violating prevailing wage laws in order to win contracts are also subject to tort claims by the second lowest bidder for interference with prospective economic advantage.  Traditionally, the disappointed second bidder’s only recourse has been to challenge the bid process or the bid itself for irregularities via a bid protest.  But under the tort theory of interference, the runner-up can seek tort damages from the winning bidder if it can establish that the winning bid was the result of the contractor’s manipulation of the bidding process.

The recent case of Roy Allan Slurry Seal, et al. v American Asphalt South, Inc. (2/20/2015) 2015 Cal App Lexis 164, illustrates this point.  In Roy Allan, two slurry seal contractors brought five separate actions against a third contractor after finishing second on 23 public works road sealing projects involving almost $15 million in contract work in five counties in Southern California.  Plaintiffs filed complaints in each county, alleging that they would have been awarded the contract as the lowest bidder in each instance had the defendant’s bids included labor costs based on paying the prevailing wage.  They asserted a tort cause of action for intentional interference with prospective economic advantage, as well as claims for defendant’s alleged violations of California’s Unfair Practices Act (“”UPA”) and Unfair Competition Law (“UCL”).

Continue reading “Prevailing Wage Violation Invites Unsuccessful Bidder’s Tort Claim”

President Orders Federally Funded Construction Projects To Plan For Flood Risks From Climate Change

On January 30, 2015, President Barack Obama signed an executive order requiring all federally funded construction projects to take into account flood risks linked to climate change.  Federal agencies will now be required to account for the impact of possible flooding from rising sea levels resulting from global warming by meeting one of following three requirements:

  • Use the best-available climate science.
  • Build two feet above the 100-year (1 percent annual chance) flood elevation for standard projects and three feet above for critical buildings like hospitals and evacuation centers.
  • Build to the 500-year (0.2 percent annual chance) flood elevation.

The objective of the new policy is to build federal buildings and highways at safe distances away from flood areas that are expected to deteriorate as a result of climate change. “By requiring that Federally funded buildings, roads and other infrastructure are constructed to better withstand the impacts of flooding, the President’s action will support the thousands of communities that have strengthened their local floodplain management codes and standards, and will help ensure Federal projects last as long as intended,” the White House Council on Environmental Quality said in a fact sheet.

Rachel Cleetus, the lead economist and climate policy manager with the Climate and Energy Program at the Union of Concerned Scientists, called the President’s action common sense. Below is Ms. Cleetus’ statement.

“This should be one of the least controversial executive orders the president has ever released. Why would the federal government build or repair buildings in ways that continue to put communities at risk? And why would we waste taxpayer dollars rebuilding in ways that are likely to result in repeated future flooding damages? This executive order is simply common sense. In fact, many communities across the country already recognize this and have issued building design guidelines that call for two feet of freeboard above the 100-year base flood elevation.

“This standard hasn’t been substantially changed in 37 years. Meanwhile, flood losses have increased and will continue to get worse with climate change, which is increasing flooding risks by contributing to higher seas and more severe storm surge along our coasts, and also heavier rains in some parts of the country. At the same time, more development in coastal areas is putting more people and property at risk.

“We’re also now seeing flooding on sunny days. Flooding during high tides—something that rarely occurred in the past—is now common in some places on the East and Gulf coasts of the U.S. Tidal flooding is expected grow to the point that sections of coastal cities will flood so often they’ll become unusable in the near future, according to a study the Union of Concerned Scientists released in October. Most of the 52 coastal towns we looked at could see a tripling in annual tidal floods in 15 years and a tenfold increase in 30 years.

“It’s bad policy to rebuild in ways that perpetuate our risk of flooding and to sink taxpayer dollars into risky rebuilding efforts. Federal funds should instead be spent on making coastal communities more resilient to sea level rise and coastal flooding.”

To read the Executive Order, click here.

To read the Federal Flood Risk Management Standard, click here.

To read the White House Council on Environmental Quality fact sheet, click here.

 

Updates to OSHA’s Recordkeeping Rule

Under the Occupational Safety and Health Administration’s (OSHA) Recordkeeping regulation (29 CFR 1904) covered employers are required to prepare and maintain records of serious occupational injuries and illnesses.  Revisions to the OSHA reporting requirements went into effect on January 1, 2015.  The revised rule expands the list of severe work-related injuries that all covered employers must report to OSHA.

Employers are now required to contact OSHA within 24 hours following any in-patient hospitalizations, amputations, or loss of an eye.  Additionally, employers are now required to notify OSHA of work related fatalities within eight hours following a fatality.  Previously, an employer was not required to report a single hospitalization, amputation or loss of an eye, as only work-related fatalities and in-patient hospitalizations of three or more employees were required to be reported.

Employers can provide notice to OSHA of an occurrence by either: 1) calling the nearest local OSHA office during normal business hours; 2) calling OSHA’s free and confidential number at 1-800-321-OSHA (6742); or 3) reporting the occurrence electronically using the new online reporting form that is expected to available in mid-January.

In addition to the new reporting requirements, OSHA updated the list of industries that are exempt from the requirement to routinely keep OSHA injury and illness records. The new list of exempt industries is based on the North American Industry Classification System and injury and illness data from the Bureau of Labor Statistics. Note that the new rule maintains the exemption for any employer with ten or fewer employees, regardless of their industry classification, from the requirement to routinely keep records.

The reporting requirement rule was revised to allow OSHA to focus its efforts more effectively to prevent fatalities and serious work-related injuries and illnesses. Assistant Secretary of Labor for Occupational Safety and Health, Dr. David Michaels, summed up the purpose of the new rule: “OSHA will now receive crucial reports of fatalities and severe work-related injuries and illnesses that will significantly enhance the agency’s ability to target our resources to save lives and prevent further injury and illness. This new data will enable the agency to identify the workplaces where workers are at the greatest risk and target our compliance assistance and enforcement resources accordingly.”

For more information about the new rule, visit OSHA’s website.

New York Public Authorities Law Amended To Establish That The Time To File A Notice Of Claim Against The NYC School Construction Authority Is To Commence At “Denial” Of Claim, As Opposed To “Accrual” Of Claim

On December 17, 2014, New York Governor Cuomo signed into law a bill to amend the New York Public Authorities Law, in relation to contractual claims and actions against the New York City School Construction Authority (“SCA”). The amendment adds an additional sentence to §1744(2) of the Public Authorities Law to provide that in the case of an action or special proceeding for monies due arising out of contract, accrual of such claim shall be deemed to have occurred as of the date payment for the amount claimed was denied.

Public Authorities Law §1744(2) is problematical to contractors engaged on SCA projects due to the three-month filing period from the “accrual of claims.” Courts have interpreted the three-month period to commence when the contractor’s damages are “ascertainable,” and “ascertainable” has been interpreted to mean “once the work is substantially completed or a detailed invoice of the work performed is submitted.” See C.S.A. Constr. Corp. v. NYC School Constr. Auth., 5 N.Y.3d 189, 800 N.Y.S.2d 123 (2005).

The failure to have a clear and precise point that determines when a claim accrues has led many contractors to lose a claim before it was denied by the SCA, or even before a contractor knew that the SCA disputed its claim. The purpose of the amendment is to establish an unambiguous point in time for the filing of a notice of claim against the SCA. Accordingly, the amendment establishes the accrual of a claim for notice of claim purposes as the point at which the claim is denied. The amendment will prevent the unintentional and unfair waiver of claims, and will reduce paperwork for both the SCA and its contractors.

The statute as amended brings §1744 of the NY Public Authorities Law into conformity with the similar notice of claim provisions of §3813 of the NY Education Law. Under §3813 of the Education law, the accrual date on any action or proceeding against a school district arising out of a contract shall be the date when payment was denied.

The amendment is effective only for SCA contracts signed on or after Dec 17, 2014. The text of NY Public Authorities Law § 1744(2) as amended can be seen here.

New Jersey Establishes Complex Business Litigation Program

The Supreme Court of New Jersey has announced the establishment of a Complex Business Litigation Program, effective January 1, 2015, with designated judges in each county assigned to provide individualized case management to complex business, commercial and construction cases meeting the program criteria. The Complex Business Litigation Program is likely to substantially improve and streamline the litigation of complex business, commercial, and construction disputes in the New Jersey courts, and foster the further development and refinement of New Jersey business litigation case law.
Click here for the full story.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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