An architect recently pleaded no contest to an involuntary manslaughter charge stemming from the ceiling collapse at a luxury home that the architect designed and built. The architect was sentenced to three years of probation and one year in county jail. For more information regarding this story, see the recent ENR story, "Architect Will Serve Jail Term Over Blaze that Killed L.A. Firefighter."
While most construction professionals strive to meet their obligations based upon pride and professionalism, there are risks on any project that can go beyond those that can be insured. Preti Flaherty attorney Kenneth E. Rubinstein has written on the topic in the Constructor Magazine and has spoken on the topic at the American Council of Engineering Companies 2012 Annual Conference. For further information, Ken can be reached at (617) 226-3868 or (603) 410-1568 or by email at krubinstein@preti.com.
For more information on professional liability matters, contact Ken or any member of our Professional Liability Group.
Legal updates, news and commentary from Preti Flaherty's Professional Services Attorneys
Showing posts with label construction. Show all posts
Showing posts with label construction. Show all posts
Architect to Serve Jail Time Over Design and Construction Defects That Killed Los Angeles Firefighter
Wednesday, January 8, 2014
Mello Construction, Inc. v. Division of Capital Asset Management, 84 Mass. App. Ct. 625 (December 18, 2013)
Tuesday, January 7, 2014
The question presented on appeal was whether a general contractor may sue the Division of Capital Asset Management (DCAM) for money damages after a discretionary decision to deny an annual application for certification to bid on public construction projects. DCAM is the Massachusetts state agency within the Executive Office of Administration and Finance established to oversee public building projects and to administer the public bidding statutes. The Appeals Court affirmed the Superior Court’s dismissal of the contractor’s complaint.
From 1985 until 2004, Mello Construction, Inc. (Mello), a general contractor specializing in large-scale public construction projects, received annual certificates of eligibility from DCAM. In October 2004, Mello submitted its annual application for certification. On August 19, 2005, DCAM issued a preliminary determination denying the application based in part on two negative contractor evaluations. As permitted by the statute (M.G.L. c. 149, §44D), Mello timely requested reconsideration and submitted additional information and documentation to DCAM, including lengthy rebuttals of the allegedly biased evaluations. On October 27, 2005, DCAM, refusing to disregard the negative evaluations, denied Mello's application for four reasons: (1) failure to achieve a minimum average project rating required for certification; (2) receipt of two failing scores on projects; (3) failure to disclose on its application the termination from another project; and (4) failure to disclose the invoking of a performance bond.
After a hearing in January 2006, the Attorney General issued a decision on April 6, 2007, affirming the denial of the application. In July 2007, Mello commenced this Superior Court action against DCAM, seeking monetary damages. On December 1, 2009, DCAM filed a motion to have the case proceed pursuant to a writ of certiorari under M.G.L. c. 249, § 4, which was allowed. The parties then filed cross motions for judgment on the pleadings. DCAM's motion for judgment on the pleadings was granted, Mello's motion was denied, and the complaint was dismissed. Mello filed a timely notice of appeal.
Under the Massachusetts competitive bidding statute, every contract for the construction of public buildings estimated to cost more than $100,000 “shall be awarded to the lowest responsible and eligible general bidder.” DCAM was charged by the Legislature with the duty of certifying bidder eligibility, and eligibility is a prerequisite to bidding on any public construction contracts. Each year, a contractor must submit a detailed application to DCAM and DCAM is required to evaluate the applicant "on the basis of the application and on relevant past performance according to procedures and criteria" mandated by statute and the regulations and guidelines prescribed by DCAM. The contractor has the burden of establishing to DCAM's satisfaction that it is competent and responsible. DCAM has wide discretion in deciding whether to issue a certificate of eligibility.
DCAM's requirements and conditions for certification are lengthy. Some events occurring within the five-year statutory look back period require the mandatory denial of an application for certification, while others constitute justifiable cause for denial. Discretionary grounds for denial include, as herein relevant, the following events: termination for cause from a building project, a record of two project ratings that fall below the passing score established in DCAM's Contractor Certification Guidelines and Procedures (guidelines) on more than one building project, and a record of an invoked performance bond. DCAM may also deny an application based on the provision of either false or misleading information or the failure to provide all required information.
This appeal turned on the meaning of "remedies at law" that an aggrieved party may seek following the exhaustion of its administrative appeal. Mello contended "the remedies at law" referred to in the second paragraph of M.G. L. c. 149, § 44D(4), was the right to bring a civil action for money damages against DCAM with a full jury trial on the merits. However, the court disagreed, noting that the Commonwealth of Massachusetts did not waive its sovereign immunity with respect to any claims arising from the denial of, or refusal to, issue a license or certificate. The court further noted that even if immunity was waived, the legislative intent necessary to infer an implied right of private action from the statute was absent in this case. The court also noted the statute provided an applicant with the remedy of an administrative appeal to the Attorney General and expressly empowered the Attorney General to institute enforcement proceedings, if warranted, against DCAM.
The court was also not persuaded by Mello's argument that a cause of action for money damages against DCAM existed at common law. The court noted that licenses are required to engage in many occupations and businesses; and the loss of a license may cause devastating financial and emotional consequences to an applicant. Nonetheless, there is no right to money damages flowing from an improper licensing action.
To learn more about this case, contact attorney Daniel Sonneborn at 617-226-3800 or by email dsonneborn@preti.com. To learn more about construction law or professional liability matters, contact any member of Preti Flaherty's Professional Liability Practice Group.
From 1985 until 2004, Mello Construction, Inc. (Mello), a general contractor specializing in large-scale public construction projects, received annual certificates of eligibility from DCAM. In October 2004, Mello submitted its annual application for certification. On August 19, 2005, DCAM issued a preliminary determination denying the application based in part on two negative contractor evaluations. As permitted by the statute (M.G.L. c. 149, §44D), Mello timely requested reconsideration and submitted additional information and documentation to DCAM, including lengthy rebuttals of the allegedly biased evaluations. On October 27, 2005, DCAM, refusing to disregard the negative evaluations, denied Mello's application for four reasons: (1) failure to achieve a minimum average project rating required for certification; (2) receipt of two failing scores on projects; (3) failure to disclose on its application the termination from another project; and (4) failure to disclose the invoking of a performance bond.
After a hearing in January 2006, the Attorney General issued a decision on April 6, 2007, affirming the denial of the application. In July 2007, Mello commenced this Superior Court action against DCAM, seeking monetary damages. On December 1, 2009, DCAM filed a motion to have the case proceed pursuant to a writ of certiorari under M.G.L. c. 249, § 4, which was allowed. The parties then filed cross motions for judgment on the pleadings. DCAM's motion for judgment on the pleadings was granted, Mello's motion was denied, and the complaint was dismissed. Mello filed a timely notice of appeal.
Under the Massachusetts competitive bidding statute, every contract for the construction of public buildings estimated to cost more than $100,000 “shall be awarded to the lowest responsible and eligible general bidder.” DCAM was charged by the Legislature with the duty of certifying bidder eligibility, and eligibility is a prerequisite to bidding on any public construction contracts. Each year, a contractor must submit a detailed application to DCAM and DCAM is required to evaluate the applicant "on the basis of the application and on relevant past performance according to procedures and criteria" mandated by statute and the regulations and guidelines prescribed by DCAM. The contractor has the burden of establishing to DCAM's satisfaction that it is competent and responsible. DCAM has wide discretion in deciding whether to issue a certificate of eligibility.
DCAM's requirements and conditions for certification are lengthy. Some events occurring within the five-year statutory look back period require the mandatory denial of an application for certification, while others constitute justifiable cause for denial. Discretionary grounds for denial include, as herein relevant, the following events: termination for cause from a building project, a record of two project ratings that fall below the passing score established in DCAM's Contractor Certification Guidelines and Procedures (guidelines) on more than one building project, and a record of an invoked performance bond. DCAM may also deny an application based on the provision of either false or misleading information or the failure to provide all required information.
This appeal turned on the meaning of "remedies at law" that an aggrieved party may seek following the exhaustion of its administrative appeal. Mello contended "the remedies at law" referred to in the second paragraph of M.G. L. c. 149, § 44D(4), was the right to bring a civil action for money damages against DCAM with a full jury trial on the merits. However, the court disagreed, noting that the Commonwealth of Massachusetts did not waive its sovereign immunity with respect to any claims arising from the denial of, or refusal to, issue a license or certificate. The court further noted that even if immunity was waived, the legislative intent necessary to infer an implied right of private action from the statute was absent in this case. The court also noted the statute provided an applicant with the remedy of an administrative appeal to the Attorney General and expressly empowered the Attorney General to institute enforcement proceedings, if warranted, against DCAM.
The court was also not persuaded by Mello's argument that a cause of action for money damages against DCAM existed at common law. The court noted that licenses are required to engage in many occupations and businesses; and the loss of a license may cause devastating financial and emotional consequences to an applicant. Nonetheless, there is no right to money damages flowing from an improper licensing action.
To learn more about this case, contact attorney Daniel Sonneborn at 617-226-3800 or by email dsonneborn@preti.com. To learn more about construction law or professional liability matters, contact any member of Preti Flaherty's Professional Liability Practice Group.
US Supreme Court Upholds the Enforceability of Forum Selection Clauses in Construction Contracts
Thursday, December 5, 2013
The United States Supreme Court in Atlantic Marine Construction Co., Inc. v. United States District Court for the Western District of Texas, No. 12-929 (Dec. 3, 2013) reiterated the priority and enforceability of forum selection clauses in construction contracts. The Supreme Court reversed the decision of the Fifth Circuit upholding the trial court’s decision not to enforce the forum selection clause contained in a construction agreement between Atlantic Marine, a Virginia corporation, and J-Crew Management, Inc., a Texas corporation. The parties’ subcontract included a forum-selection clause, which stated that all disputes between the parties would be litigated in Virginia. When a dispute arose, J-Crew filed an action in the United States District Court for the Western District of Texas. Atlantic Marine responded by filing a motion to dismiss the case or in the alternative to transfer the case to Eastern District of Virginia. The trial court denied both motions and the Fifth Circuit upheld the denials on the basis that Atlantic Marine bore the burden of proving that transfer was appropriate and had failed to meet its burden.
In reversing the Fifth Circuit’s decision, the Supreme Court concluded that “[w]hen the parties have agreed to a valid forum-selection clause, a district court should ordinarily transfer the case to the forum specified in that clause” unless there are “extraordinary circumstances unrelated to the convenience of the parties,” which the Court found lacking in the instant case. The Court noted that the “enforcement of valid forum-selection clauses, bargained for by the parties, protects their legitimate expectations and furthers vital interests of the justice system.” Thus, when considering the appropriate forum for a dispute, “a valid forum-selection clause [should be] given controlling weight in all but the most exceptional cases.” The Supreme Court found that the Fifth Circuit erroneously placed the burden on the party seeking to enforce the forum selection clause rather than the “party acting in violation of the forum-selection clause,” who should have borne the burden of showing that public-interest factors overwhelmingly disfavor a transfer.
This is a very important decision from the Supreme Court that once again reiterates the priority of forum selection clauses in determining where disputes should be litigated. This is a good reminder when entering into a contract to pay attention to the forum selection clause included and where a potential dispute down the road may be litigated because courts are going to hold you to the forum identified in those clauses.
For more information on professional liability matters, contact attorney Nathan Fennessy at 603-410-1500 or any member of Preti Flaherty's professional liability practice group.
In reversing the Fifth Circuit’s decision, the Supreme Court concluded that “[w]hen the parties have agreed to a valid forum-selection clause, a district court should ordinarily transfer the case to the forum specified in that clause” unless there are “extraordinary circumstances unrelated to the convenience of the parties,” which the Court found lacking in the instant case. The Court noted that the “enforcement of valid forum-selection clauses, bargained for by the parties, protects their legitimate expectations and furthers vital interests of the justice system.” Thus, when considering the appropriate forum for a dispute, “a valid forum-selection clause [should be] given controlling weight in all but the most exceptional cases.” The Supreme Court found that the Fifth Circuit erroneously placed the burden on the party seeking to enforce the forum selection clause rather than the “party acting in violation of the forum-selection clause,” who should have borne the burden of showing that public-interest factors overwhelmingly disfavor a transfer.
This is a very important decision from the Supreme Court that once again reiterates the priority of forum selection clauses in determining where disputes should be litigated. This is a good reminder when entering into a contract to pay attention to the forum selection clause included and where a potential dispute down the road may be litigated because courts are going to hold you to the forum identified in those clauses.
For more information on professional liability matters, contact attorney Nathan Fennessy at 603-410-1500 or any member of Preti Flaherty's professional liability practice group.
Beware of Copyright Infringement in Construction Projects
Thursday, November 21, 2013
On November 8, 2013, the Fifth Circuit Court of Appeals affirmed a $3.2 million jury award in favor of Kipp Flores Architects, L.L.C. ("KFA") against Hallmark Design Homes, L.P. (“Hallmark”), in a copyright infringement action. The jury in the U.S. District Court in Houston found that Hallmark infringed KFA's copyrights by constructing hundreds of houses from KFA’s architectural plans without purchasing the plans for each house as required. KFA alleged that Hallmark obtained copies of certain of its copyrighted architectural designs pursuant to a license from KFA allowing Hallmark to build one home based upon each design. According to KFA, the agreement expressly provided that additional licenses for additional units could be purchased, but Hallmark failed to pay the additional license fees in connection with its reuse of the licensed plans. The jury returned a verdict compensating KFA for the amount of profits that Hallmark earned from the sales of the homes in question that were built based upon KFA’s architectural plans. The appellate court rejected Hallmark's arguments that the evidence was insufficient to support a jury finding of “substantial similarity” and concluded that the matter had been well tried at the district court.
This is a reminder for all architects and design professionals to take care in ensuring that they do not copy or otherwise infringe another professional's copyrighted designs. It also creates an incentive for design professionals to take steps to register their designs with the U.S. Copyright Office to ensure that their hard work is not being copied and used without appropriate compensation.
For more information on professional liability matters contact attorney Nathan Fennessy at 603.410.1500 or a member of Preti Flaherty's Professional Liability Group.
This is a reminder for all architects and design professionals to take care in ensuring that they do not copy or otherwise infringe another professional's copyrighted designs. It also creates an incentive for design professionals to take steps to register their designs with the U.S. Copyright Office to ensure that their hard work is not being copied and used without appropriate compensation.
For more information on professional liability matters contact attorney Nathan Fennessy at 603.410.1500 or a member of Preti Flaherty's Professional Liability Group.
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