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August 2018

Construction Law Update

Third Quarter 2018

Gordon & Rees's Construction Group is pleased to publish the latest issue of our Construction Law Update, a quarterly take on trends of interest to design professionals, contractors, and developers throughout the country.

INSIDE THIS ISSUE
  1. THE NEXT DECADE OF P3 PROJECTS: Winners, Losers, Opportunities, and Impacts

  2. Oregon Construction Law Update

  3. Gordon & Rees Construction Attorneys Making Headlines

  4. Gordon & Rees Construction Law Blog

  5. About Gordon & Rees's Construction Group

I. THE NEXT DECADE OF P3 PROJECTS: Winners, Losers, Opportunities, and Impacts
     
  By J. Benjamin Patrick
   

That the market for public-private-partnership (P3) projects has exploded in the United States over the last 20 years is not news to anyone involved in the construction industry. Similarly, there is nearly universal consensus that the trend towards P3 projects in the U.S. will continue unabated in the medium-term future. Numerous papers have addressed why this is so, and have described the advantages P3 projects offer public owners versus traditional project delivery methods. The purpose of this article is not to retread these already well-worn paths. Rather, the question addressed here is: what impacts will the continuing trend of P3 projects have on the construction industry? Every change in any market has winners and losers, and growth in P3 projects will similarly benefit some industry participants and harm others. The last two decades of P3 projects in the U.S. give us ample information to forecast what will happen as the P3 trendline continues to climb.

To read a full, expanded version of this article, click here.

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II. Oregon Construction Law Update
     
  By Brian J. Kernan
   

Recently, the Oregon legislature has enacted some new laws that impact Oregon’s construction industry. The following summaries are selections of particular interest.

  • “Tiny Home” Building Standards. In 2017, in recognition of the recent “Tiny Home” craze, the Oregon legislature passed HB 2737. HB 2737 requires Oregon’s Building Codes Division to adopt construction standards for “small homes” by no later than January 1, 2018. “Small homes” are defined as dwellings that are 600 square feet or less. Pursuant to HB 2737, the Building Codes Division adopted temporary new rules on December 22, 2017, which amended the Oregon Residential Specialty Code to specifically allow for the use of sleeping lofts and ladders or alternating tread devices in small homes. The Building Codes Division is currently following up the temporary rule with a permanent rulemaking process – no “small” feat!

To read a full, expanded version of this article, click here.

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III. Gordon & Rees Construction Attorneys Making Headlines

Gordon & Rees Sacramento partner Kathy Rhoads and associate Nicholas Karkazis prevailed on a motion for summary adjudication in Federal Court to enforce limitations of liability in a contract between the firm’s client, one of the country’s largest roofing contractors, and an HOA. The HOA hired the roofing contractor to reroof the HOA’s condominium buildings. After the reroof was complete, roof leaks allegedly caused damage to other building components. The HOA sued for nearly four times the value of the original contract.

Although the main body of the contract did not have any limitations of liability, Gordon & Rees argued that limitations in other contract documents, including a warranty document, limited the HOA’s potential remedies in the case. The HOA’s counsel argued that the limitations in the warranty limited only its breach of warranty claim, not its claims for breach of contract or negligence. The HOA also argued that the limitations were inconspicuous and unconscionable. Gordon & Rees submitted evidence that the HOA voluntarily entered the contract and even made modifications to the contract before its execution.

The court ruled that the roofing contractor’s liability was limited to the contractor’s repair of the roof and capped total liability to the original contract price, significantly reducing the contractor’s potential exposure.
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On June 3, 2018, Boston partner Jay Gregory presented a 2-hour CE seminar entitled, “Alternative Dispute Resolution in Action: A Mock Mediation,” to fifty architects at the Boston Architectural College. What made this presentation a bit unique is that a contractor made a presentation immediately before on construction accidents and what design professionals can do to improve site safety. Mr. Gregory tailored the mock mediation on a real life fatal construction accident and explored the tension that exists for a design professional between: (1) minimizing the risk of accidents; and (2) minimizing legal exposure.

Louisville partner Angela Richie presented “Battle of the Forms: What Fabricators Need to Know About Conflicting Forms and Unexecuted Contracts,” for the Southern Association of Steel Fabricators on June 8, 2018 and "Every Rose Has Its Thorn: It’s Time to Take Another Look at Your Subcontracts," at the Texas Structural Steel Institute on May 11, 2018.

San Francisco partner Dion Cominos and Laila Santana of Berkley Alliance Managers co-authored “When Bricks Meet Bytes: Navigating 21st Century Technology Pitfalls for Construction Professionals” for The CLM’s publication of Professional Times.

On August 30, 2018, San Francisco partners Ernie Isola and Brendan Bradley presented on Design/Build and Alternative Project Delivery to a national engineering and environmental consulting firm in San Francisco, California.

Los Angeles partner Brenda Radmacher presented "Advanced Negotiating Skills: How to Tackle any Negotiation" at at the Marsh Women's Initiative on May 31, 2018.

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IV. Gordon & Rees Construction Law Blog

The Gordon & Rees Construction Law Blog continues to post new content addressing topical issues affecting the construction industry throughout the country. From analysis of new court decisions, discussions of timely legislation, and commentary on real-world, project-specific issues, Gordon & Rees’s Construction Law Blog provides insight on the issues that affect the construction industry now.

We invite you to visit the blog at www.grconstructionlawblog.com and see for yourself what we are up to. If you like what you see, do not hesitate to subscribe under the “Stay Connected” tab on the right side of the blog. There you can choose how you would like to be informed of new content (Twitter, LinkedIn, email, etc.). If you have any questions about the blog or would like to discuss further any of its content, please do not hesitate to contact us.

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V. About Gordon & Rees's Construction Group

Gordon & Rees's Construction Group consists of more than 100 lawyers in 50 offices throughout the nation. The firm continues to expand, opening five new offices in 2018 which include Detroit, Louisville, Missoula, Nashville, and New Orleans.

Gordon & Rees’s construction attorneys focus their practice on the comprehensive range of legal service required by all participants in the construction industry – architects, engineers, design professionals, design joint ventures, owners, developers, property managers, general contractors, subcontractors, material suppliers, product manufacturers, lenders, investors, state agencies, municipalities, and other affiliated consultants and service providers.

We serve clients who design, develop, or build all types of structures, including commercial buildings, single and multifamily residential projects, industrial facilities, universities, hospitals, museums, observatories, amusement parks, hotels, shopping centers, high-rise urban complexes, jails, airports, bridges, dams, and power plants. We also have been involved in projects for tunnels, freeways, light rail, railway stations, marinas, telecom systems, and earth-retention systems. Our experience includes private, public, and P3 construction projects.

If you have questions about this issue of the Construction Law Update or our nationwide construction practice, click here to visit our practice group page or contact partner Tom Cronin.

Thomas G. Cronin
Gordon & Rees, LLP
1 North Franklin
Suite 800
Chicago, IL 60606
(312) 980-6770
tcronin@grsm.com

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