Construction

• Residential Defect Claims
• Commercial and Industrial Disputes
• Delay Claims
• Disruption and Productivity Claims
• Mechanic’s Liens/Payment Remedies
• Public Contracting Disputes
• Insurance and Bond Issues
• Advisory Services
• Contract Drafting and Negotiations

Residential Defect Claims [Top]

Recently, the number of disputes between homebuilders and homebuyers has risen dramatically. A wide range of issues can be involved, including problems caused by expansive soils, mold and exterior stucco. The firm has extensive experience dealing with all of these issues, as well as a host of other types of defects.

Jim Bain represents large national homebuilders in their Colorado defect cases. He and Al Cohen also represent a number of custom homebuilders in their defect disputes. In appropriate cases, the firm also represents buyers in defect litigation.

Representing homebuilders involves counseling them long before claims arise. Most importantly, we draft purchase contracts consistent with the homebuilder’s market niche. When the transaction warrants it, we negotiate modifications to a standard contract or create an entirely new one. An important element of these contracts is the dispute resolution provision. Including provisions which address such issues as the choice between arbitration and trial in civil court, waiver of the right to a jury trial, limitation on warranty obligations and recovery of attorneys’ fees, facilitates a successful outcome of the dispute process before the contract is even signed.

Commercial and Industrial Disputes [Top]

Commercial and industrial projects are not immune from disputes. The firm represents owners, developers, contractors and suppliers in resolving defect claims, delay and disruption claims, mechanic’s liens, design defect claims and other disputes that arise during the design and construction of commercial buildings and industrial projects. Below are more details about our work on commercial and industrial projects, such as delay claims, disruption and productivity claims and design problems.

Delay Claims [Top]

Time is a critical element on construction projects and often drives profitability. When delays occur, the question invariably turns to responsibility for the resulting damages, whether that be an owner’s delay in making the site available or delivering owner-supplied materials, defects in the architect’s plans or another issue. Partners Al Cohen and Jim Bain have handled countless delay claims since they began practicing law in the late 1970s.

Sorting out the cause and effect of delays is the goal of every party to a delay claim. For large projects, this will involve a critical path scheduling analysis and the retaining of a qualified scheduling expert, which can be costly. We are adept at controlling costs by ensuring that the analysis is a cooperative venture between expert and client. We are also experienced in exposing the “tricks of the trade” used by scheduling experts to reach a desired result, including the use of programming techniques which are not readily visible in the Primavera schedules produced in a final report.

Lawyers can best assist clients in managing delay claims before disputes arise through careful contract drafting. We help our clients by drafting or reviewing contracts so that the contract manages risks in ways which make those risks predicable, and which allocate those risks to the parties who are best able to control them. We have experience working with standard form contracts to ensure they satisfy our client’s needs based on the specifics of the project at hand. Examples include careful consideration of the standard AIA A201 clause waiving consequential damages, such as lost profits, and including provisions for routine schedule updates on larger projects.

Disruption and Productivity Claims [Top]

Often, the contractor is able to stay on schedule in the face of delaying events only through extraordinary measures which may reduce productivity and increase costs. For example, overtime or additional workers can be used to accelerate the work, or the construction schedule can be modified to avoid a disruption. These measures may prevent the project from being delayed, but they have real costs. Capturing these costs, however, is extremely difficult. Our attorneys are experienced with the ways in which these claims can be quantified, such as a measured mile analysis and the use of industry estimating guides for disruptive conditions, such as crowding and winter weather.

Mechanic’s Liens/Payment Remedies [Top]

The mechanic’s lien is a fundamental tool for securing payment on construction projects. We have handled numerous mechanic’s liens, from filing the notice of intent to lien, to recording and filing the lien, and, finally, to litigating the lien foreclosure lawsuit. In rare cases, we have pursued mechanic’s lien cases through judgment and the foreclosure sale.

Mechanic’s liens are a highly technical area of the law and require a thorough knowledge of the strict notice and time limitations. Because of our experience in construction law, we know these technical requirements well and can help ensure compliance.

In addition, Colorado law provides additional, underutilized remedies with which we are quite familiar. These include (1) a notice to disburser requiring the construction lender to set aside funds for the claimant and (2) the trust fund statute, under which an owner or prime contractor who is paid for a subcontractor’s work, but does use those funds to pay lower tier contractors, is liable for civil theft and breach of fiduciary duty. Colorado law also allows a personal claim against corporate officers who are responsible for the breach, and for treble damages and attorneys fees.

Representing clients with respect to liens and payment issues does not begin when the dispute arises. Contracts and lien waivers should be carefully drafted so that important rights are not waived. Colorado law allows contractors and suppliers to waive their right to a mechanic's lien, and many contractors have found out the hard way that their lien rights were extinguished through little understood clauses in the contract or, more often, through a carefully worded lien waiver.

Public Contracting Disputes [Top]

Public works projects constitute a very large segment of the construction marketplace and we have substantial experience in representing contractors on local, state and federal projects. Partners Al Cohen and Jim Bain worked for a federal agency for many years where they developed considerable expertise in government contracts. Both attorneys are experienced in all aspects of government contracting, from bids and bid protests through the dispute resolution process.

Public construction projects differ from comparable private projects in many ways, but several areas are particularly important when disputes arise.

• First, the dispute resolution procedures are often dramatically different from those used for private projects. For example, the City and County of Denver requires that all disputes be resolved through private arbitration conducted by a representative of the Manager of Public Works, who is selected and paid by the city. On CDOT projects, AAA arbitration is mandated but the arbitration is advisory only; the final decision is made by CDOT’s Chief Engineer. On Federal projects, the contractor must obtain a formal Contracting Officer’s Decision, though it may be appealed to the Court of Federal Claims or the agency’s own Board of Contract Appeals.
  
  
• Second, mechanic’s liens cannot be used on public projects to secure payment. On state and local projects, there are two other remedies: 1) the payment bond and 2) a withholding remedy, under which the unpaid subcontractor or supplier sends a notice to the public entity, which then withholds the claim amount from funds otherwise payable to the prime contractor until the dispute is resolved. The absence of a lien remedy is particularly vexing on HUD projects, where lien rights are waived but HUD has not provided for alternative security. We have experience in finding other ways to secure payment.
  
  
• Finally, contractors must be extremely careful to ensure that directives are received only from those persons who have authority to direct and change work in light of the rule that the government is not bound by the unauthorized acts of its agents. For example, on Federal projects, direction can usually be taken only from the Contracting Officer, not on-site inspectors or others who may purport to exercise authority.

Insurance and Bond Issues [Top]

Insurance and performance bonds are important ways for the participants in the construction process to control risk. Many owners have – or require their contractor to have – commercial general liability insurance. But this insurance typically does not protect the owner from construction defects, thus other insurance and surety products are needed. We work with risk management and insurance consultants to ensure our clients have adequate coverage.

Advisory Services [Top]

Corporate Formation And Ownership Protection

As with our real estate development clients, the firm assists its contractor clients in various entity formation issues, such as liability protection and creating appropriate buy-sell provisions in the corporate documents.

Employment Issues

Employment problems are common for all businesses, and construction contractors are no different. The firm assists its construction clients with routine employment matters such as terminations, non-compete agreements, and wage claims. When problems arise in highly specialized areas, such as union formation or civil rights actions, we refer our clients to specialists.

Trademark Issues

For a successful construction business, the trademark can be an important part of the company’s goodwill, and an effective way of communicating the contractor’s high quality product to consumers. As a result, it is important for businesses to protect their marks. We assist our clients in registering their marks with the Federal and State authorities as soon as practicable. When competing businesses attempt to capitalize on the goodwill encompassed in an existing trademark, we represent clients in prosecuting and defending trademark-related litigation claims, including those that involve damages claims and injunctions prohibiting the infringing use.

Contract Drafting and Negotiations [Top]

Our lawyers have extensive experience drafting construction and design contracts for our clients. We work with our contractor, supplier, owner and homebuilder clients to ensure that their contracts adequately protect them in a way which is consistent with their market niche. We are also experienced in modifying standard form contracts, such as the AIA contracts, to fit the particular needs of our clients and their projects.

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