AIArchitect: Avoid Renegotiation with New AIA Contract Documents

Steve Cimino has posted an interesting update on the AIArchitect website concerning new AIA Contract Documents: 

Avoid Renegotiation with New AIA Contract Documents

The latest set of agreements allows for less time negotiating and more time designing

The AIA has released eight new contract documents, including a set of Master Agreements with Service and Work Orders designed to avoid the need for renegotiation when new tasks are added to a project.

The AIA Master Agreement set includes the following documents:

• A121™–2014, Standard Form of Master Agreement Between Owner and Contractor, where work is provided under Multiple Work Orders
• A121™-2014 Exhibit, A: Determination of the Cost of the Work
• A221™–2014, Work Order for use with Master Agreement Between Owner and Contractor
• B121™–2014, Standard Form of Master Agreement Between Owner and Architect for Services provided under Multiple Service Orders
• B221™–2014, Service Order for use with Master Agreement Between Owner and Architect
• C421™–2014, Standard Form of Master Agreement Between Architect and Consultant for Services Provided under Multiple Service Orders
• C422™–2014, Service Order for use with Master Agreement Between Architect and Consultant

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Illinois Public-Construction Bonds Are “Deemed” to Include Both a Performance and Payment Guarantee

The following post is courtesy of Daniel Dorfman at Harris Winick Harris, LLP.

Last month, in Lake County Grading Company, LLC v. Village of Antioch, the Illinois Supreme Court handed down a ruling concerning bonds procured under the Illinois Public Construction Bond Act. The Court held that performance bonds procured under the Act are deemed to include payment obligations, regardless of whether the bonds expressly include payment guarantees.

Take Full Advantage of the Opportunity to Mediate

Suzanne McSorley recently posted an interesting article in Under Construction concerning strategies for success at mediation.

Take Full Advantage of the Opportunity to Mediate: Prepare; Don’t Just Show Up!

We all know the Scout motto: Be prepared. Life is not merely showing up. It’s being ready when you do show up.  So, prepare for your mediation; don’t just show up!

In nearly 20 years of serving as mediation neutral, I have observed too many litigants who have intentionally or inadvertently adopted this attitude toward mediation:  they know that the mediation session will provide an opportunity to settle their case, and they show up, full of hope tempered with a little pessimism.  But they just show up! While I doubt any readers of Under Construction are guilty of this offense, I continue to be amazed at how infrequently parties – even parties with substantial claims – really prepare for mediation.  At best, lack of preparation prolongs the mediation process and increases its cost.  At worst, failure to prepare wastes a great opportunity to bring a dispute to an earlier and less expensive resolution. 

Preparation is as critical to success in mediation as it is to success at trial or in arbitration.  But, to a great extent, the kind of preparation needed for mediation is quite different from the kind of preparation needed for trial.  

[Read more]

On The Dispute Resolver: A Contractual-Liability Exclusion to Insurance Coverage Might Not Apply to Defective-Work Claims Against a Contractor.

The Dispute Resolver has a recent post of interest to owners:

The U.S. Court of Appeals for the Fifth Circuit recently held that, under Texas law, an insurer could not exclude coverage for property damage claims against a general contractor that were based on violations of express warranties of good workmanship and repair. Such claims did not fall within the typical contractual-liability exclusion used in the general contractor’s commercial general liability policy (“CGL policy”). The Fifth Circuit reversed the district court and rendered summary judgment in favor of the homeowners asserting the insured’s rights, remanding for a determination of attorneys’ fees.

Crownover v. Mid-Continent Cas. Co., --- F. 3d ----, No. 11-10166, 2014 U.S. App. LEXIS 20737 (5th Cir. Oct. 29, 2014), on reh’g from 757 F. 3d 200 (5th Cir. 2014).

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Be Careful What You Ask For: Understanding the Applicability and Enforcement of an Arbitration Clause

The following post is courtesy of Daniel Dorfman at Harris Winick Harris, LLP.

A Texas Court of Appeals has recently handed down an important opinion addressing the applicability and enforceability of arbitration provisions. The case offers important lessons to developers and owners in the construction industry whose contracts generally contain arbitration provisions. Seven Hills Commercial LLC v. Mirabal Custom Homes Inc., No. 05-13-01306-CV, --- S.W. 3d ----, 2014 Tex. App. LEXIS 8705 (Tex. App.--Dallas Aug. 7, 2014, no pet. h.). 

The appeals court in the Seven Hills decision made clear that even non-signatories to an arbitration clause may be compelled to arbitrate their disputes, depending upon the terms of the contract.  This means that corporate owner representatives can compel or be compelled to arbitrate claims pursuant to agreements that they did not enter into, or which they may not even had knowledge of before the claims arose.

Moreover, the Seven Hills case demonstrates that it is permissible for a court to make the initial determination as to whether claims asserted by any individual actor are subject to arbitration, by comparing the arbitration clause to the claims being asserted.  In other words, the court in Seven Hills served as a gatekeeper to arbitration: It simply determined that the arbitrator has the primary responsibility to decide whether parties to a dispute are bound by an arbitration provision. 

On the Dispute Resolver: Texas Supreme Court Reinforces that Subcontractors May be Liable to Property Owners

The Dispute Resolver has a recent post of interest to owners:

On August 22, 2014, the Texas Supreme Court ruled that both the trial court and the court of appeals improperly dismissed a property owner's claim for negligence against a subcontractor for improper plumbing installation in Chapman Custom Homes, Inc. v. Dallas Plumbing Company. The Court reiterated that a subcontractor has an implied duty to perform with both care and skill and that breach of this duty may result in liability to property owners. The Court's ruling in this case makes it clear that a subcontractor may be directly liable to a property owner even when the property owner and subcontractor do not have a contractual relationship. [...]

On the Dispute Resolver: No-Damages-For-Delay Provision Does Not Shield Owner from Liability for Deliberate Interference With a Contractor’s Work

The Dispute Resolver has a recent post of interest to owners:

In a much-anticipated decision, the Texas Supreme Court has ruled in favor of a general contractor seeking to recover funds withheld by an owner for delays that the jury found were caused by the owner’s deliberate and wrongful interference. The Court addressed the effect of a no-damages-for-delay provision in the construction contract, as well as whether language in the waivers the contractor submitted for progress payments also waived the contractor’s claims for delay damages. Finally, the Court analyzed at length whether the applicable statutes waived the governmental immunity of the owner, a local port authority. [...]