Bate and Switch
What you thought you
were getting….
What you got….
LegalTechnologies
Liability of Design
Survey
New
andand
Legal
Risks
Matthew DeVries
Stites & Harbison PLLC
Alexandria, VA | Atlanta, GA | Frankfort, KY | Franklin, TN | Jeffersonville, IN | Lexington, KY | Louisville, KY | Nashville, TN
The Big Picture
Overview
– Analyze the impact of
technology on construction
– Understand what documents
can help/hurt your case
– BIM versus CIM Lessons
– Identify best practices for
the paperless project
Who Am I?
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Father of seven
Husband of one
Construction attorney and LEED AP B+DC
Blogger: www.bestpracticesconstructionlaw.com
What Can This
Dude Teach
Me?
• Team
• Lawyer
• Judge
“People ask me to predict the
future, when all I want to do is
prevent it. Better yet, build it.”
- Ray Bradbury, Beyond 1984
Document
progress
Minimize exposure
and prevail in disputes!
Why should you have project
management procedures in place?
You know…
1. Standard management
procedures
2. Importance of project
communication
3. How to document
progress of work
You know…but did you know?
1. Standard management 1. People are responsible
procedures
for project management
2. Importance of project
communication
2. Litigation is about failed
expectations
3. How to document
progress of work
3. “What” is as important
as “How” you document
Why are proper
records essential for
claims and disputes?
• Reservation
of rights
• Causal
connection
• Prove cost
and delay
Critical Documentation
Non-Critical / Problem Documents
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Personal emails
IMs / Text
Blog trails
Internet usage logs
Jokes and photos
“Paperless success is
more than just taking
all the paper you have
and putting it into a
digital file cabinet.”
Web Based Capabilities
• Project team accesses same web
based database
• Access to design drawings, job
site photos, schedules, and +400
reports
• Document control is enhanced by
tracking revisions, storing master
files, streamlining review process
• Compliance with corporate
procedures
Mobile Devices
QR Codes in Construction
• Marketing / Business
Development
• Building Permit
Information
• Servicing Manuals and
Project Specifications
• Project Management
and Version Control
The Internet Plan Room
Takeoff Tools
Payment Controls
Project
Lifecycle
Design
Bid
Pre-Qual
Contract
Construction
Close-out
Dashboard
Accounting
Systems
Project – Contract – Subcontractor
Textura
Construction
Collaboration
Solutions
Pre-qualification
Management:
PQM
Bid
T
Management:
GradeBeam
Construction
Payment
Management:
CPM
Project
Participants
Financing,
Insurance,
Title
Reports
Owner/
Developer
Signatures
Payment
General
Contractor
Project
Mgt.
Planrooms
Other
Common Services
Security
Vendor
Eval
Workflow
Subcontractor
Compliance
Sub-Tiers,
Material
Suppliers
New Technologies
“If you are not
involved in BIM,
what are you
waiting for?”
“If you are not
involved in CIM,
what are you
waiting for?”
Joe Jarbo,
Clark Construction Group
AGC President
Matt DeVries
Stites & Harbison PLLC
CIM Legal Issues
Disclaimer:
It will take time to develop contracts tailored
to the CIM process. For attorneys, it is difficult
to create good contracts if there is no legal
precedent to follow. At present, there no
reported cases on CIM. Thus, it will take time
(and legal disputes) to fully understand the
legal risks associated with CIM.
Lessons from BIM
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Contract framework
Model management
Intellectual property rights
Reliance on data
Limitation of liabilities
Ownership of process
CIM: Early Legal Issues
• Who owns the CIM data, surveys, models?
Owner? Engineer? Everyone?
• Who can rely on information, data, surveys?
• If fully integrated project, who can change the
“stuff” created or contributed by each party?
• Who takes the risk related to changes in the
data or survey?
• Insurance issues will be difficult to determine.
Are You Ready to Jump?
What is the “put it in writing” rule?
What is hearsay? Non-hearsay? Exceptions?
Email versus Letter versus Change Order?
Can we shred documents at the end?
What about paperless project?
“Put it in Writing”
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Why?
Who?
What?
How?
When?
Hearsay, Exceptions
and Non-Hearsay
“An out of court
statement
offered for the
truth of the
matter.”
Exceptions to “Hearsay” Rule
– Business record exception
– Author actually observed conditions
– The records were prepared in the normal
course of business
– The records were prepared at the time of the
event(s) or reasonably soon thereafter
– There is no suggestion that the records were
prepared for the specific purpose of use in
litigation –“A less-guarded time.”
The Legal World
• Higgins Dev. Partners v. Skanska USA
(Mont. 2009)
– Email sufficient to support a finding of
increased costs for change order
• Inland Construction Co. v. Cameron Park
(N.C. Ct. App. 2007)
– Email promising additional work not a
“contract”
– Lack of executed change order found to be
without merit
Case Law (cont’d)
• A-1 General Contracting v. River Market
Communications (N.Y. 1995)
– Handwritten notations on contract “should be
ignored”
– No agreement about payment schedule
• Klein Development v. Ellis K. Phelps & Co.
(Fl. Ct. App. 2000)
– Faxed release of lien binding?
– Letter requesting original signature was
contradictory evidence
Case Law (cont’d)
• Bethlehem Area Sch. Dist. v. White Bros.
Construction (Pa. Com. Pl. 2004)
– Letter constituted a limited admission of
damages (tiles and carpet, not mold)
• Raymond’s Building Supply v. Mattson
(Conn. Super. 2007)
– Photographs established that problems “were
or should have been” evident at the time of
termination
Yo, Joe! Can we shred?
e-Discovery
• General rule
“[A] responding party should produce
electronically stored information that is relevant,
not privileged, and reasonably accessible …”
• Exception
ESI which is “not reasonably accessible because of
undue burden or cost”
Order Re: Preservation
Order Re: Preservation (cont’d)
Order Re: Preservation (cont’d)
Order Re: Preservation (cont’d)
Just answer the question, Matt!
• While a litigant is under no duty to keep or
retain every document in its possession, it is
under a duty to preserve:
– What it knows or reasonably should know;
• Relevant to the action;
• Reasonably calculated to lead to discovery of
admissible evidence;
• Reasonably likely to be requested; and/or
• Subject of a pending discovery request.
Legal Questions: Paperless Project
• Who owns the license to the program?
• How much access do the parties have to
the documents created in the program?
• Who controls the server?
• Will the parties be granted access to
project documents during the project?
• Is less formal communication (email) good
or bad for the parties?
Legal Questions: Paperless Project
• Would you still use letters?
• Could emails to attorneys be retrieved by
other parties?
• Is a written instruction via email the same
as a change order?
• What type of information would you want
protected?
Baseball Gone Sour!
Tour de France Gone Sour!
“Teenage Son” Gone Sour!
“Adult Son” Gone Sour!
“Ferdinand the Bull” Gone Sour!
Construction Projects …
… Gone Sour!
E-mail: Not-So-Good
To: John
From: Paul
Re: Project Delays
John, I am going to have Drew send you some progress curve comparisons for
us to start the delay status analysis. I think we need to begin the discussion
with our management that we are late and tell them that we are analyzing
how late. We also need to consult the claims team as how we tell our
management that we are late. The schedule needs some serious work to be
used as a float tool and everyone is going to be looking to get answers.
E-Mail: Bad
From: Contracts Manager about Upper Management
People did not listen and act on previous recommendations in a timely manner
and I am annoyed that those delays significantly impact the cost and schedule to
this project. COMMITMENT from management means listening to the people
who have to make things happen …
Yes, I am annoyed, but more importantly I am concerned where we are going
with this project if people do not listen and act quickly. How can we be
successful with the schedule and cost if we do not have the resources to
execute the job proactively and/or project management does not respond
when we make recommendations? WE NEED HELP!!!!
E-Mail: Worse
From: Upper Management about Contracts Manager
Guys, let’s get real. I have three simple questions:
Is Bob the right person to be Contracts Manager on this project? If there is any
hesitation, then take the necessary action to get the right person in place.
Is there adequate support for the Contracts Manager at the site and/or back-up
available?
Are there any other projects in this deadlocked condition?
E-Mail: The Worst
From: Upper Management to Contracts Manager
Bob,
I understand your frustration about lack of support from back in the East. We are
attempting to get the additional resources and assistance that you have
requested. In the meantime, you need to continue with the team in place. If we
are going to make the contractor look like they cannot do their job, we MUST
look and act like we are doing ours!!!
Rob
E-Mail: Dirty Words
Internal Correspondence
Great! What the hell are we supposed to do now?!?! This invoice will now have to
be made known to ABC Co., but not before our sailaway date of May 15th
*******
I am sure that Mr. Smith and Mr. Jones will be involved here, but I would much
rather have ABC Co. see this after our equipment has left the port and is on the
High Seas on their vessels.
Lesson Learned: Watch out for the four-letter words.
Daily Report
4) MISLABLED PARTS STILL
ONGOING. LOST TIME IS
MOUNTING UP. LAYDOWN AREA
HAVING A HARD TIME DUE TO
MISLABELING.
Deviation Report
Description: Labor Availability
Root Cause: Missed in the
original estimate.
Change Order Log
No.
Item
Date
Amount
Pending
Notes
1
Rebar masonry
3/14
$114,450
0
Missed quantity
2
Rebar
3/14
$92,896
0
Missed quantity
3
Curb
3/14
$58,905
0
Missed quantity
4
Additional pumps
5/7
$105,990
0
Engineer
5
Additional filters
5/7
$12,450
0
Engineer
6
Electrical
5/7
$311,412
$311,412
Engineer
The Real World
• “One look is worth a thousand words.”
– Fred Barnard (Dec. 8, 1921 advertisement)
• "Un bon croquis vaut mieux qu'un long
discours" (…a good sketch is better than a long speech…)
– Napoloean Bonaparte
• “As the Chinese say, 1001 words is worth
more than a picture.”
– John McCarthy, computer scientist
Photos: Assist in Project
Administration
Location:
Nashville, TN
User:
Owner (out-of-town)
Feature:
Progression photos
used by project
members during
construction
Photos: Proof of Installed
Quantities
Location:
Memphis, TN
User:
General Contractor
Feature:
Aerial photos used to
establish entitlement to
installed quantities
Photos: Impeachment of Witness
Location:
Memphis, TN
User:
General Contractor
Feature:
Aerial photos used to
contradict witness
testimony on scope of
completion
Photos: Proof of Responsibility
Location:
Nashville, TN
User:
General Contractor
Feature:
Date of photos used to
establish insurance
coverage dispute
Photos: Defective Work
Location:
Atlanta, GA
User:
Owner & General
Contractor
Feature:
Walk-through photos
used to show defect
and standard
Photos: Incomplete Work
Location:
Atlanta, GA
User:
General Contractor
Feature:
Interior MEP photos
used to defend claim
by sub for additional
$$
Photos: Recover Regulatory Fines
Location:
Raleigh, NC
User:
Owner
Feature:
Pre-construction sitesurvey photos used to
identify responsible
party for local fines
Not actual project photo
Photos: Proof of Delays
Location:
Pittsburg, PA
User:
Steel Contractor
Feature:
Aerial photos show
staging area used by
other trades and
impacted schedule
5/30/00
Photos: The Smoking Gun
(Bad photo if you are the blasting contractor!)
LESSON LEARNED #1
The contract is the most
important aspect of risk
management!
LESSON LEARNED #2
People perform the work…
People need to be trained…
People defend/pursue claims…
LESSON LEARNED #3
Technology is a tool,
like any other tool,
that can be misused,
mishandled, or
miscommunicated.
LESSON LEARNED #4
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Review all contracts to determine rights
Notify the proper persons
Document the impact
Reserve rights and proceed under protest
Prove the monetary loss due to impact
Negotiate resolution
Have a strategy and written protocol
for when projects go sour.
LESSON LEARNED #5
Questions?
Civil Integrated Management
“It doesn’t matter whether you are a lion or a gazelle—
when the sun comes up, you’d better be running.”
Roger Bannister, first man to run a mile in less than four minutes