How Restrictive Covenants Affect the Permit Application
In South Carolina, a local planning agency is required by S.C. Code § 6-29-1145 to inquire in the permit application, or in written instructions provided to the applicant, if a parcel of land is restricted by a recorded covenant.
The planning agency itself is not required to conduct a search of public records, but if the agency has actual notice of a covenant that "is contrary to, conflicts with, or prohibits" the activity for which a permit is being sought then the permit may not be issued.
Actual notice may be derived from the application, materials or information submitted by the person requesting the permit, or from other sources, including, but not limited to, other property holders. The planning agency may not issue the permit until such time as it receives confirmation that the restrictive covenant has been released for the parcel of land.
An example of this requirement can be seen in the Charleston County Site Plan Review Application Package.
This site and any information contained herein is intended for informational purposes and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
Buyer's Claims Against Architect Dismissed
A property buyer brought suit against the developer and architect after the commercial building he purchased began showing the tell-tell signs of water intrusion. The buyer originally instituted claims against only the developer, but after the developer filed a third party complaint against the architect for improper design, the buyer decided to add the architect to his complaint as well.
The architect defended the purchaser's negligence claim by arguing he owed no duty to the purchaser because he only had a contractual relationship with the developer. The architect cited several cases in support of his defense, suggesting that a design professional owes no duty to parties with whom he lacks privity. The court distinguished these cases from the present case because there was actual property damage in lieu of mere economic damages. The court found that a limited duty of care may still exist in spite of the fact that the parties are not in privity. However, the complaint in this case failed to allege sufficient facts to establish a limited duty. The court granted the purchaser leave to amend his complaint.
In reference to the purchaser's claim of breach of implied warranty, the court determined that under Texas law, a design professional does not have a specific duty to design a building with good and workmanlike quality. Again the lack of privity issue posed a problem for the purchaser when the court determined that an owner cannot recover from a subcontractor for breach of implied warranty when the two parties lack a contractual relationship.
This site and any information contained herein is for informational purposes only and is not to be construed as legal advice. Seek a competent attorney for advice on any legal matter.
Contractor Indicted for Fraud
A New Jersey contractor was recently indicted on 27 counts involving fraudulently obtained public contracts. The contractor had previously been prohibited from bidding on public contracts due to prevailing wage violations and unpaid fines.
To get around this prohibition, the contractor stole a Social Security number from an acquaintance and used it to obtain a public works contractor registration certificate under a fictitious trade name. He listed the acquaintance as the sham company's president.
The contractor then used the fraudulent certificate to successfully bid on a public dam project worth almost $700,000 and two other public contract projects. However, his scheme fell apart after a job site accident led to a lengthy investigation revealing his use of an alias.
In addition, the contractor made false representations as to workers' compensation coverage and employer's liability insurance, performance bonds, and notarizations connected to the dam contract. Because the state-funded dam project had to be rebid, the state lost additional time and money.
The contractor may be facing serious jail time and hundreds of thousands of dollars in fines and restitution. Click here for the full text of the indictment.
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
Small Business Jobs Act of 2010
On September 27, 2010 President Obama signed H.R. 5297, the Small Business Jobs Act of 2010 into law. This legislation will establish a $30 billion dollar small-business lending fund and provide $12 billion in small-businss tax incentives. Through these and other directives, it is expected to create hundreds of thousands of jobs.
Of particular interest to the construction industry are the provisions relating to contract bidding. Prime contractors will be required to honor their initial bid list or submit documentation to federal contract officers justifying a change. The Act will establish stricter federal contract bundling requirements, allow small businesses to team up in competing for federal contracts, and require the prompt payment of subcontractors. All federal restricted competition contracting programs will be placed on equal footing when competing for government contracts.
Many are hailing the Small Business Jobs Act as a victory for small businesses, but others are skeptical of another "bailout." You can form your own opinion of the Act by clicking the link above.
This site and any information contained herein is for informational purposes only and is not to be construed as legal advice. Seek a competent attorney for advice on any legal matter.
"In Place" Provision Held Unambiguous
St. Mary Parish hired a general contractor to spread a sand drainage layer at the base of a landfill, install a geotextile fabric over the sand, then cover the fabric with a layer of clay. The terms of the contract stated that the sand and clay would be measured "by the cubic yard of in-place material based on surveys conducted by owner of pre- and post-installation conditions." The contractor spread approximately 98,000 cubic yards of sand and 111,000 cubic yards of clay. The Parish only paid for 52,000 cubic yards of sand and 53,000 cubic yards of clay, so the contractor sued to collect $800,000. As part of its suit, the contractor filed a motion for summary judgment on the issue that the contract is ambiguous.
The Parish's interpretation of the contract was that the parties would measure the sand and clay before and after installation to determine the measured amount. The contractor, however, argued that the contract was ambiguous because the phrase "in place" was not defined and did not indicate if the material was to be measured in a compacted or non-compacted form.
The court disagreed that the contract phrase was ambiguous, and held that "in place material" is a term of art recognized in the industry to indicate the "volume of fill in the cell after installation." This volume is based on the area filled, not the amount of sand or clay actually brought to the site and installed. Testimony by the contractor's representative that he understood in place material to mean "length times width times depth" further impaired the contractor's argument for ambiguity. The court denied the contractor's motion for summary judgment as to this issue.
This site and any information contained herein is for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
2010 ADA Regulations Affecting New and Existing Construction
Here are some quick facts regarding the Americans with Disabilities Act (ADA) regulations issued on September 15, 2010. The new standards affect both Title II and Title III of the Act. Title II focuses on nondiscrimination in state and government services, while Title III refers to nondiscrimination on the basis of disability by public accessibility and in commercial facilities.
Effective Date: March 15, 2011. By March 15, 2012 compliance with the new regulations will be required for both new constructions and alterations to existing construction.
Safe Harbor: Existing buildings in compliance with the 1991 ADA requirements or the Uniform Federal Accessibilities Standards (UFAS) will not be required to comply with the 2010 standards until such time as the elements are subject to a planned alteration. However, if the specific elements were not addressed in the 1991 standards, then the elements must comply with the 2010 standards.
Broader Coverage: Access regulations will be extended to a larger variety of buildings than in previous standards, including recreational facilities, children's play areas, state and local government facilities, and public housing units. The requirements are very specific and thorough, but here are a few examples:
-At least 5% of boarding piers at boat launch ramps must be accessible
-Lower handrails for fishing piers
-Accessible means of entry and exit for swimming pools
-For the first time, residential dwelling units built by or on behalf of public entities with the intent of selling finished units to the public are subject to the design requirements
Condominium Hotels: Condos that operate like hotels are subject to Title III. These facilities are not subject to the reservation requirements relating to "holding back" accessible units. Likewise, these buildings are not required to comply with the barrier removal of alterations requirements when the interior features of the units are controlled by individual owners.
New Construction Requirements: Significant changes are noted in the following areas:
-Reach ranges
-Bathroom clear floor space
-Mandated maximum and minimum heights for control switches
-Accessible paths from building arrival points to intrances
-Accessible cross slope standard modified from 1:50 to 1:48
-Access to parking structures
-Circulation paths
-Assembly areas
-Transient lodging
This site and any information contained herein is for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
"Or Equal" is not Always Equal
A subcontractor was ordered to pay $240,000 plus attorney fees and court costs to the general contractor after a dispute arose concerning an "or equal" provision in the contract. The contract engineer specified that the wastewater treatment project required a Linabond brand "or equal" tank liner. Because the sub only installs Ameron liners, it contacted Ameron to determine whether the two liners were in fact equal. After receiving assurance that they were, the sub informed the general contractor its intent to use another liner and submitted a subcontract bid. The subcontractor later failed to incorporate its original bid into the signed subcontract.
The engineer determined, pursuant to his discretion, that the two liners were not in fact "equal." With the possibility of triggering liquidated damages for failing to complete the job on time, the sub was faced with the option of installing the Linabond liner itself or paying to have a specialist install it. The sub opted instead to sue the general contractor for breach of contract and try to terminate the contract.
In the meantime, the general contractor paid to have someone else install the specified liner then sued the subcontractor to recoup these costs. The court looked to the subcontract which defined the subcontractor's scope of work as "that required in the main contract." The court found for the general contractor and awarded it a sizable judgment.
This site and any information contained herein is for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
Workplace Violence Covered Under Workers' Compensation Act
The 8th Circuit Court of Appeals determined that a worker injured in an assault by her coworker was only entitled to workers' compensation and was precluded from bringing a personal injury suit against her employer. The employee was attacked by her coworker at the place of employment and during working hours.
The employee wanted to bring claims of assault, battery, false imprisonment, intentional and negligent infliction of emotional distress, loss of consortium and negligent hiring, supervision and retention against the employer. Because the court found evidence of "specific, work-related" disputes between the co-workers and no out of work contact between the two, it determined that the injuries sustained were covered by Minnesota's Workers' Compensation Act.
The Act provides in part that an employer is liable for compensation based on employee death or personal injury that arises "out of and in the course of employment without regard to the question of negligence." Further, this liability exists as the exclusive remedy for the injured employee, meaning the employee cannot collect workers' compensation then bring a civil suit against her employer. The employee argued that her injuries should not be covered by workers' compensation, therefore entitling her to a potentially higher judgment. However, the court sided with the employer and decided that the attack was job related.
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
South Carolina Supreme Court Addresses Right to Cure Act
The Plaintiffs in this case brought a class action suit on behalf of themselves and those similarly situated against a plastering company. The complaint alleged defective stucco work on 2,673 homes in a subdivision in Bluffton. In answering the complaint, the plastering company asserted that the Plaintiffs failed to comply with the express provisions of the Notice and Opportunity to Cure Construction Dwelling Defect Act ("Right to Cure Act").
The Right to Cure Act "entitles a contractor or subcontractor to notice of any qualifying construction defect, and the opportunity to cure, before the action is commenced." There are two pertinent provisions to this matter: 1) the stay of action provision which requires the court to stay the proceedings until the claimant has complied with the act, and 2) the notice of claim provision which states that the claimant must serve written notice of the claim to the contractor at least 90 days prior to filing the action with the court. The notice of claim must contain a statement which alleges a construction defect, a description of the claim in reasonable detail to determine the general nature of the defect, and a description of any known results of the defect.
In the present case, the circuit court stayed the action pending compliance with the Right to Cure provisions. The class representative did comply with the notice provision, however the court ultimately found that the class action allegation was incompatible with the Right to Cure Act. On appeal, the South Carolina Supreme Court addressed the issue of whether the Right to Cure Act could be reconciled with Rule 23, SCRP (governing class action law suits).
The court addressed the policy concerns behind the Right to Cure Act: balancing the need for alternative dispute resolution with the protection of homeowners' rights and allowing the parties to resolve construction defect claims without litigation. The act does not require the parties to reach a settlement; it only requires that the would-be plaintiff provide the would-be defendant with notice and a reasonable time to cure the defect prior to commencing litigation.
Next, the court determined that the circuit court erred in finding that the notice provision is only applicable when the plaintiff mistakenly fails to provide notice. One dissenting opinion criticizes the majority for issuing an open invitation for plaintiffs to willfully ignore the act in order to file their claim within the applicable statute of limitations. Essentially, a plaintiff, although aware of the notice provision, could bypass this requirement and file a claim that could later fall into compliance after the court stays the action.
This site and any information contained herein is intended for information purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
Insurance Policy Excludes Water Damage From Construction Defects
After discovering the water damage and defects, the Plaintiff filed a claim with its insurer to cover the costs of repair. The insurer performed an inspection of the building but refused covered based upon this exclusion. Both the lower court and appellate court agreed with the insurer. The appellate court grappled with the interpretation of the policy, but finally determined that any other explanation of the policy language would render it ambiguous.
This site and any information contained herein is intended for informational purposes and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
