Duane Morris Construction Law

February 2, 2015February 2, 2015 by Jose A. Aquino

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.

January 9, 2015February 2, 2015 by Jose A. Aquino

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.

December 19, 2014February 2, 2015 by Jose A. Aquino

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.

November 24, 2014November 24, 2014 by Duane Morris

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.

September 22, 2014June 15, 2015 by Duane Morris

U.S. Department of Labor Proposes Pay Transparency Rule for Employees of Federal Contractors

On September 17, 2014, the U.S. Department of Labor Office of Federal Contract Compliance Programs (OFCCP) published a Notice of Proposed Rulemaking in the Federal Register to implement Executive Order 13665, which was signed by President Obama on April 8, 2014. Generally, the proposed rule would prohibit federal contractors from maintaining pay secrecy policies and would amend the equal opportunity clauses in Executive Order 11246 to provide protections to workers who talk about pay. The rule would apply to federal contractors with a federal contract worth more than $10,000 and entered into or modified on or after the effective date of the final rule, as well as to federal subcontractors working under such a covered federal contract.

To read the full Duane Morris Alert, please click here.

July 16, 2014July 25, 2014 by Duane Morris

Pennsylvania Mechanics’ Lien Law Amended, Clarifying Open-End Construction Loan Mortgage Priority

On July 9, 2014, Pennsylvania Governor Tom Corbett signed into law Act 117 of 2014, which amends the Pennsylvania Mechanics’ Lien Law (MLL), 49 P.S. 1101, et seq., to provide that a construction loan secured by an open-end mortgage where at least 60 percent of the proceeds are “intended to pay or used to pay” all or part of the “costs of construction” will have lien priority ahead of any filed mechanics’ lien claims, even when the visible commencement of work was prior to the recordation of the open-end mortgage.

Click here to read the full Alert, written by Duane Morris associate Louise S. Melchor.

July 11, 2014July 26, 2014 by Duane Morris

California Supreme Court Addresses Architect’s Duty of Care

The California Supreme Court issued a unanimous decision in Beacon Residential Community Association v. Skidmore, Owings & Merrill, S208173, on July 3, upholding a homeowners association’s right to pursue a common law negligence claim against the project architects of a 595-unit condominium project in San Francisco.

Building on substantial case law and the common law principles on which it is based, we hold that an architect owes a duty of care to future homeowners in the design of a residential building where, as here, the architect is a principal architect on the project — that is, the architect, in providing professional design services, is not subordinate to other design professionals. The duty of care extends to such architects even when they do not actually build the project or exercise ultimate control over construction.

Continue reading “California Supreme Court Addresses Architect’s Duty of Care”

June 10, 2014July 26, 2014 by Patrick J. Kearney

Legislation Proposed to Allow ERISA Trusts to Pursue Mechanics’ Liens

On April 17, 2014, the Supreme Court of Pennsylvania issued a decision in Bricklayers of Western Pennsylvania Combined Funds, Inc. v. Scott’s Development Company, et al., that held that union workers (employees of the primary contractor) were not “subcontractors” as that term is defined in the Pennsylvania’s Mechanics’ Lien Law of 1963, and that trustees of the union’s employee benefits trust funds were not entitled to file mechanic’s lien claims on the employees’ behalf for unpaid contributions to the trust funds.

Following this ruling, Rep. William Keller, D-Philadelphia, introduced HB 2319 to the General Assembly which would amend the Mechanic’s Lien Law to classify union benefit fund trustees as subcontractors allowed to pursue claims for non-payment against employers and property owners under the Mechanic’s Lien Law.

Duane Morris will continue to monitor the progress of this legislation.

May 23, 2014July 26, 2014 by Patrick J. Kearney

The Service-Disabled Veteran-Owned Business Act Becomes Law in New York

The Service-Disabled Veteran-Owned Business Act (the “Act”) was signed into law by Governor Andrew M. Cuomo on May 12, 2014. Under this new law, veteran business owners will be eligible to become certified as a New York State Service-Disabled Veteran-Owned Business (SDVOB). The goal of the Act is to encourage and support eligible businesses to play a greater role in the economy of the State by increasing participation in New York State’s contracting opportunities. Towards that end, New York will award 6 percent of state contracts to businesses owned by disabled veterans and create the new Division of Service-Disabled Veterans’ Business Development within the New York State Office of General Services (“OGS”) for the establishment of a statewide certification program. The Division will be responsible for certifying eligible SDVOBs, and assist and promote the compliance of SDVOB participation in the state’s procurement activities.

The statute provides that rules and regulations must be issued within 90 days of the effective date of the Act. However, understanding the strong interest in the program and the need to commence certifying businesses as soon as possible, OGS will be issuing emergency regulations on or before the week of June 2, 2014 prior to the adoption of permanent regulations.

April 11, 2014July 27, 2014 by Duane Morris

Duane Morris’ Construction Group Nominated for 2014 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 fourth 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 five firms to be finalists in the construction category this year.

The Awards for Excellence honor outstanding firms based on research conducted for Chambers USA 2014. 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 Thursday, May 22, 2014 at Cipriani 42nd Street in New York City