Say What? The Rise of Criminal Liability for Construction Accidents

Today’s guest post is by Chris Meyers and Cheri Gatlin, two of my fellow partners at Burr & Forman, LLP.  Chris is a partner and Cheri Gatlin is Chair of the firm’s Construction and Project Development Practice Group. The Group counsels clients throughout the U.S. on safety policies, OSHA and regulatory compliance, contracts, disputes, and all areas where law and construction intersect.

“To err is human; to forgive divine.” – Alexander Pope, “An Essay on Criticism.”

Last week marked the end of Construction Safety Week 2018, a combined effort by the Construction Industry Safety (CISI) group and the Incident and Injury Free (IIF) CEO Forum. Together these entities are comprised of 80 national and global construction firms, with a goal of promoting safety in the construction industry. Concern for safety is apparent on construction projects throughout the country and world, as evidenced by daily/weekly construction briefings and the familiar “___Days Since a Lost Work Accident” signs. People that work in the Construction Industry know firsthand the dangers and want to see their co-workers go home safely to their families after a long day. In addition, time is money in this business. Safe projects are more likely to be profitable projects due to lack of delays and prevention of claims for jobsite injuries. For employers, criminal liability for job site construction accidents is more and more a concern. Mainstream headlines highlight several cases where construction accidents = criminal charges.

From the well-publicized October 21, 2016 drowning of two construction workers in Boston after a trench in which they were working collapsed, to the March 18, 2018 pedestrian bridge collapse at Florida International University (FIU), which killed 6 and injured 9 more, construction accidents that result in loss of life are commonly viewed as more than “accidents.” There appears to be a trend toward construction incidents being investigated by various agencies for criminal liability. Inevitably, accidents happen in every area of life, from “fender bender” automobile accidents to high profile construction accidents, which result in extensive property damage and, unfortunately at times, loss of life. When, though, is an accident something more?

With regard to the Boston trench collapse, the Suffolk County District Attorney’s office presented evidence of manslaughter against the employer—both as a corporate entity and the company’s owner—related to the accident. There, the deceased were killed when underground materials supporting a hydrant in an allegedly unshored hole they were digging gave way and the hydrant burst, flooding the trench. Prosecutors claim the employer was pushing the men to work faster because the project was behind schedule. Motions to Dismiss manslaughter charges were considered and denied, leaving the employer and its owner subject to criminal prosecution. In an industry where liquidated damages and other pressures lead to acceleration, this is a headline of note.

In Florida, we await all the facts on the FIU bridge collapse, a decision by the Dade County State Attorney’s office on possible criminal action. However, a charge of “Culpable Negligence” could be in play. In Florida, the crime of Culpable Negligence is defined as a course of conduct “showing reckless disregard for human life, or for the safety of persons exposed to its dangerous effects, or . . . which shows wantonness or recklessness . . . [or] an indifference to the rights of others as is equivalent to an intentional violation of such rights.”

As Construction Safety Week concludes, Burr congratulates all our clients that participated in the activities. Focusing on safety is critical to the industry’s success and the life and livelihood of those who rely upon it.

Say What? The Rise of Criminal Liability for Construction Accidents

How Important Is That Little Green Card? Pretty Darn Important Says One Court.

We live in a world of e-mails, IMs, texts, Snapchats, Instagrams and the occasional fax.  Although information is transmitted instantaneously in today’s environment, proof of receipt of that information (often called “Notice”) remains subject to some very strict rules imposed by contract, case law or statute.

Notice of Claims.  In a recent transportation case involving a personal injury, Department of Transportation v. Jones, the Court of Appeals of Georgia explained the importance of strict compliance with certain notice provisions.  The plaintiff was injured in a single-car accident on State Route 42 and he sued the Georgia Department of Transportation (“GDOT”). The plaintiff claimed that GDOT’s improper maintenance of the roadway led to an accumulation of water, which caused his truck to hydroplane into a tree, severely injuring him.  GDOT filed a motion to dismiss, arguing that the plaintiff failed to strictly comply with the notice provisions of the Georgia Tort Claims Act (“GTCA”).  The trial court denied that motion and the Court of Appeals reversed.

The Green Card.  The GTCA requires that notice of the claim be sent to “the Risk Management Division of the Department of Administrative Services.”  At the hearing, the plaintiff presented the following evidence: (a) the notice letter; (b) the green return receipt card sent to the Commissioner of GDOT; (c) a response letter from the Risk Management Division acknowledging receipt of the notice letter; and (d) a U.S. Postal Service tracking document showing that “something was sent by certified mail to the Department of Administrative Services.

The Holding. Despite this evidence, the Court held that the plaintiff failed to strictly comply with the statute because there was no proof by the plaintiff that the letter was sent by certified mail to the Risk Management Division.  The green card submitted showed proof of delivery to the Commissioner of GDOT.  The attorney for GDOT admitted in court that the notice letter received by the Commissioner of GDOT was then sent internally by the Commissioner’s office to the Risk Management Division, which then sent the acknowledgement letter.  Nevertheless, the plaintiff did not comply with the statute requiring that he sent notice of the claim to the Risk Management Division.

So What? While this may seem like a hyper-technical application of the rule, that’s precisely what “strict construction” means according to one court in George.  Whether you are contractor, developer, specialty subcontractor, or professional service provider in the construction industry, the real lesson learned is to read the express terms of any applicable contract or statute when a dispute arises, and follow both “the letter and the spirit” of the law.

How Important Is That Little Green Card? Pretty Darn Important Says One Court.

The Top 10 Changes to the AIA A201: What You Need to Know

For this week’s Guest Post Friday here at Musings, we welcome back Melissa Dewey Brumback.  Melissa is a construction law attorney with Ragsdale Liggett in Raleigh, North Carolina.  Aside from the fact that she is a UNC grad and fan, she’s okay!

In 2017, as it does every ten years, the American Institute of Architects (AIA) updated most of its standard form contract documents, including the A201 General Conditions.   This cycle, the contract changes are evolutionary in nature, not revolutionary.  Even so, it is crucial to know the changes to avoid making a fatal mistake that could cost you money on a construction project.  In reverse order, the top 10 changes you need to know include:

# 10:  Differing Site Conditions

Prior editions of the A201 provided that upon encountering differing site conditions, the Contractor was to promptly provide notice to the Owner and Architect, before the conditions are disturbed, and in no event later than 21 days after the conditions were first observed. A201–2017 shortens the time for notice from 21 to 14 days.

# 9: Owner’s Right to Carry Out the Work

Prior versions of the text allowing an Owner to carry out the Work after Contractor’s default required a Change Order.  Revised A201–2017 now provides that if the Owner undertakes to cure, the Architect may withhold or nullify a Certificate for Payment in whole or in part, to the extent reasonably necessary to reimburse the Owner. If the Contractor disagrees with the actions of the Owner or the Architect, or the amounts claimed as costs to the Owner, the Contractor can file a Claim.

# 8: Direct Communication Between the Owner and Contractor

Prior editions of the A201 provided that the Owner and Contractor were to communicate through the Architect.  A201–2017 recognizes that the Owner and Contractor may need to communicate directly and authorizes this approach, so long as the Owner promptly notifies the Architect of the substance of any such direct communications.

# 7: Contractor’s Means and Methods

The  Contractor is solely responsible for, and has control over, construction means and methods. Under A201–2007, when the Contract Documents gave specific instructions concerning construction techniques, the Contractor was to give notification if those instructions were unsafe and then await written direction.

Under the 2017 revision, the Contractor remains solely responsible for construction means and methods. If the plans give specific instructions concerning techniques which are unsafe, the Contractor is to give notice and propose alternative techniques. The Architect must evaluate the alternative for design intent.  Unless the Architect objects, the Contractor is to perform the Work using its alternative.

# 6: Notice Provisions

A201-2017 allows Notices to be delivered electronically.  Notices of Claims,  however, still cannot be delivered electronically.

# 6A:  Notice related to Evidence of Owner’s financial Arrangements

The provisions allowing the Contractor the right to request evidence of Owner’s financing have been modified.  The Contractor can request evidence of adequate financing prior to the start of Construction, and thereafter only (1) if the Owner fails to make payments; (2) the Contractor identifies in writing a reasonable concern; or (3) a change in the work materially changes the Contract Sum.

#5: Liquidated Damages

In 2017, a specific fill point has been included in the Owner-Contractor agreements (except A105) to prompt the parties to consider including a liquidated damages provision.  A separate fill point is also included related to incentive provisions.

# 4: Dates of Commencement and Substantial Completion

The AIA articles dealing with the date of commencement (Article 3 in A101, Article 4 in A102 and A103) are now better defined in a check box as either (1) the date of the Agreement (the default), (2) the issuance of a notice to proceed (NTP) by the Owner, or (3) a different date as agreed by the parties.   A separate section has been added to address Substantial Completion of certain phases of the Project prior to the Substantial Completion for the entire Work.

# 3: Termination for Convenience

The revised Termination for Convenience now has a “fill point” in lieu of an automatic entitlement by Contractors and Architects to lost profits when the Owner terminates for convenience.  This is intended to facilitate a discussion of a fair fee in advance.

# 2: Digital Data

The 2017 Owner-Contractor and Owner-Architect agreements (except A105 and B105) expressly require the parties to agree upon protocols governing the transmission and use of digital documents, and require the use of E203™–2013 to establish digital data protocols. Using BIM information, without first having established and set forth the necessary protocols, is at the party’s own risk.

#1:  Insurance

The new AIA documents include an insurance exhibit for use with the A101™–2017, A102™–2017, and A103™–2017, Owner-Contractor agreements. This approach also resulted in substantial revision of Article 11. The use of an exhibit was intended to facilitate the ability to transmit the insurance exhibit to insurance advisors.

Revised Article 11 requires both the Owner and Contractor to purchase and maintain insurance of the types and limits of liability.  Owners and Contractors (as opposed to the insurers) now must also provide the other with notice of insurance cancellation within 3 business days. The party receiving notice has a right to stop the Work until the lapse is cured.


While the major changes made to the 2017 A201 are few in number, they could make or break your claim for payment.  Bookmark this article for future reference!

As always, Melissa and I welcome your comments below.  Please subscribe to keep up with this and other Guest Post Fridays at Construction Law Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 license.

The Top 10 Changes to the AIA A201: What You Need to Know

Residential Contractors, Be Sure to Have these Clauses in Your Contracts

construction photo

I have often “mused” on the need to have a good solid construction contract at the beginning of a project.  While this is always true, it is particularly true in residential contracting where a homeowner may or may not know the construction process or have experience with large scale construction.  Often you, as a construction general contractor, are providing the first large scale construction that the homeowner has experienced.  For this reason, through meetings and the construction contract, setting expectations early and often is key.

As a side note to this need to set expectations, the Virginia Department of Professional and Occupational Regulation (DPOR) and the Virginia General Assembly require certain clauses to be in every residential construction contract. DPOR strictly enforces these contractual items and failure to put them in your contracts can lead to fines, penalties and possibly even revocation of a contractor’s license.

These 10 provisions include the requirement of a written contract (something I know any reader of Musings does already), listing of your license number, class and classification, time of completion, etc. and are found in 18 VAC 50-22-260.  One recent 2015 change added a provision that requires a statement about the Virginia Contractor Transaction Recovery Fund that includes information on how to contact the Board for claim information.  While this change is one that is 2 years old now (effective July 1, 2015), the fact of the change highlights the need for residential contractors to continue to review their license requirements and the Virginia Administrative Code and statutes to assure that they are in compliance with these requirements.

As always, I recommend that any construction professional in Virginia consult with an experienced Virginia construction lawyer when drafting or editing their construction contracts.

As always, I welcome your comments below. Please subscribe to keep up with this and other Construction Law Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 license.

Residential Contractors, Be Sure to Have these Clauses in Your Contracts

Second Consecutive Election to Super Lawyers! Thanks!

2012 Virginia Super Lawyers Rising StarsI am always appreciative and humbled to join the great lawyers who populate lists such as Legal Elite and Super Lawyers. Needless to say I am even more thankful when I get elected to a great list like the Virginia Super Lawyers this year in 2018 in the Construction Litigation category.

So without further ado, thank you to my peers and those on the panel at Virginia Super Lawyers for the great honor. I feel quite proud to be part of the 5% of Virginia attorneys that made this list for 2018.

The full lists of Virginia Super Lawyers will appear in the May edition of Richmond Magazine. Please check it out.

If you want to see the lists before then, a digital version of the Virginia Super Lawyers magazine should be available shortly.

Thanks again to all of you who participated in my nomination and election.

As always, I welcome your comments below. Please subscribe to keep up with this and other Construction Law Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 license.

Second Consecutive Election to Super Lawyers! Thanks!

The General Assembly Adds Some Clarity to Contracts and Unlicensed Contractors

courthouse photo
Photo by Free-Photos

For years, the statute regarding performing construction without a valid license (Va. Code 54.1-1115) was a bit murky.  While that statute listed several prohibited acts, among them contracting without the proper class of license or use of the license of another, the consequences of such activity, in particular the effect that such action would have on the enforcement of a construction contract (Section C of the statute), were less than clear.

During the most recent General Assembly session, a few changes were made to sections B and C of the statute at the behest of the Virginia Bar Association Construction Section Council in hopes of clarifying the consequences for Virginia construction professionals that contract without a license and their customers.  HB 732 changes (effective July 1, 2018) Subsection C of the statute to read:

C. No person shall be entitled to assert the lack of licensure or certification as required by this chapter as a defense to any action at law or suit in equity if the party who seeks to recover from such person A construction contract entered into by a person undertaking work without a valid Virginia contractor’s license shall not be enforceable by the unlicensed contractor undertaking the work unless the unlicensed contractor (i) gives substantial performance within the terms of the contract in good faith and without (ii) did not have actual knowledge that a license or certificate was required by this chapter to perform the work for which he seeks to recover payment. (changes in original House Bill)

As you can see, the language is more direct and should be more easily interpreted by courts and importantly, more easily understood by the construction community in Virginia.  Even with this change, I recommend that you consult an experienced Virginia construction attorney to discuss your rights under the laws affecting construction in Virginia.

Have any thoughts on the above? I welcome and encourage your comments below, please share your thoughts.  Also, please subscribe to keep up with the latest Construction Law Musings.

© Construction Law Musings- Richmond, VA is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 license.

The General Assembly Adds Some Clarity to Contracts and Unlicensed Contractors

Do Not Pass “Go” You Out-of-State, Unlicensed Contractor

I forgot how much fun it was playing family board games as a child.  We recently dusted off some of the oldies like Sorry, Life and Monopoly to play with the kids.  I laughed uncontrollably the first time I got to say, “Go directly to jail. Do not pass GO. Do not collect $200!”

A contractor in North Dakota wasn’t laughing when it was not allowed to pass “Go” and could not immediately collect its $200,000  for work performed.  In Snider Construction v. Dickinson Elks Building, LLC, the court held a contractor was not entitled to recover for labor and materials during a time period when the contractor was unlicensed.  There, the out-of-state contractor entered into the construction contract on December 26, 2011, but did not get its contractor’s license until February 5, 2012.  The contractor later filed a lien for approximately $200,000.  The trial court awarded the contractor its claim for damages, and the owner appealed.

On appeal, the owner argued that North Dakota Code requires a contractor be licensed at the time of contract formation or commencement of work under the contract to maintain a claim or action related to the work performed under the contract. Because the contractor did not obtain a license until after it had entered into the contract with the owner and started working on the project, the owner claimed that the contractor barred from bringing any claim.

While the contractor was unable to pass “Go” to immediately collect its $200,000, its claims were not totally lost. The appellate court held that although the contractor could not recover for labor and materials during period that it had not received license (i.e., the lien claim), the contractor was entitled to recover in quantum meruit and unjust enrichment for labor and materials provided after it was granted a license.

Depending on your state, you may or may not be able to maintain an action as an unlicensed contractor.  For example, Arizona requires a valid license at entry into contract and when cause of action arose; Utah requires a valid license at time of contracting and “[c]ontinuously while performing the work for which compensation is sought”; and North Dakota bars all claims only during a period of time the contractor was not licensed.  If you work in another state, make sure you pass “GO” (…get licensed…) and collect your $200.

Do Not Pass “Go” You Out-of-State, Unlicensed Contractor