Virginia Real Estate, Land Use & Construction Law : Virginia Construction Lawyers & Attorneys : Bean Kinney & Korman Law Firm : VA Real Estate, Land Use & Zoning

Modular home construction presents significant potential improvements to home construction: significantly reduced construction time; less material waste; and reduced expense.  If not handled appropriately in terms of contracts and risk, modular homes can translate to a gigantic headache for both the designers, contractors, and the owner.

Last Thursday, Lisa Rein of the Washington Post wrote an article on mansions turning to modular construction to reduce time and costs.  The article caught my eye - while I have noticed this trend over the last 5 years or so, it was the first time I saw local mainstream press pick up on this.  My friend Jamie Baker Roskie at the always interesting Land Use Prof Blog picked up on the article and connected the thread towards local codes discouraging use of shipping containers as building materials. 

Adaptive reuse of discarded materials is one of the best ways to improve our economy's sustainability, and using shipping containers for modular construction is really an interesting approach.  Don't believe shipping containers make good construction materials?  Browse through a search of the articles at the highly informative Jetson Green blog that address containers and you will see some remarkable uses of containers, from emergency shelters for recovery in Haiti to very sweet, upscale small footprint breach structures.

Turning from containers to wood based modular construction, count me as a believer that we will see industry move towards more pre-fabricated assemblies to reduce cost and time of construction.  Despite my views on the future, I have particiated in some pretty ugly cases involving modular construction.  Based on the repetitive nature of these problems, I draw some conclusions about risks involving modular home construction that may help put the Washington Post's article into a legal context:

1. Prefabricated assemblies are sales of goods governed by Uniform Commercial Code not construction
2. Sales of goods involve different potential warranty theories and defenses than construction implied warranties
3. Sales of goods potentially have different statutes of limitations
4. While the install time may be shorter, manufacturing and delivery time may be a very different story
5. Most owner/contractor agreements involving modular construction are very weak on defining the remote manufacturer's role and responsibilities
6. Similarly, most owner/contractor agreements poorly define timing expectations until the modular unit is delivered and set on the building pad
7. Simple units seem to do pretty well; however, quality control seems to vary wildly amongst manufacturers and even within specific manufacturers depending on the specifics of a projects and the design complexity
8. As with other manufacturer's warranties, if there are problems, owners and contractors may struggly mightily to get manufacturers to respond appropriately to warranty complaints

This may be coming from the skewed perspective of seeing these projects in litigation, what do you think?  What have you seen?  Finally, how has the economic downturn improved or worsened working with modular manufacturers?

Images by Terretta

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In a recent Fairfax Circuit Court case, Travelers Indemnity Co. v. Simpson Unlimited, Inc., the court wrestled with the issue of what exactly constitutes an “improvement” under Virginia’s statute of repose found in Virginia Code Section 8.01-250.

Three Flint Hill Partnership, RLLP designated Simpson Unlimited Inc. to act as in independent contractor on a building construction project, requiring Simpson to repair and replace exterior building components, including removing and replacing terrace soffits on the eighth floor, as well as cleaning other building surfaces. Simpson submitted its application for final payment on December 4, 2002, and was paid for its work on December 16, 2002.

On December 20, 2004, there was a water leak on the eighth floor, causing damage to areas of the building occupied by tenants. Travelers Indemnity did not file suit until March 18, 2009, claiming that the water leak was related to work that Simpson performed under its contract with Three Flint.

Under these facts, Section 8.01-243 (B), the statute of limitations for property damage, gave Travelers Indemnity five years from December 20, 2004, the date the water leak damaged the building and the cause of action therefore accrued. Therefore, Travelers Indemnity’s claim would survive the statute of limitations.

Getting creative, Simpson instead filed a plea in bar based on the five-year statute of repose found in Section 8.01-250. Simpson argued that its work under the contract constituted an “improvement” allowing it to take advantage of the statute of repose, which began to run upon completion of the building project in 2002. Section 8.01-250 states:

No action to recover for any injury to property, real or person, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property, nor any action for contribution or indemnity for damages sustained as a result of such injury, shall be brought against any person performing or furnishing the design, planning, surveying, supervision of construction, or construction of such improvement to real property more than five years after the performance or furnishing of such services and construction….

Simpson claimed that the soffit replacement was an “improvement” because it enhanced the value of the building. Travelers Indemnity argued that the soffit replacement not an “improvement” because it was akin to a repair.

Judge Bellows analyzed dictionary definitions and opinions in other jurisdictions, ultimately agreeing with Travelers Indemnity and concluding that the soffit replacement was merely part of the normal upkeep and maintenance of the building rather than a modification or addition of the building, and therefore not an “improvement” that would allow Simpson to take advantage of the statute of repose.
 

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The Fourth Circuit has just issued their decision upholding the district court’s ruling in Universal Concrete Products Corporation v. Turner Construction Company, the topic of a December 2009 blog post on the Granby Tower litigation.

The parties agreed that the pay-when-paid clause in the Turner-Universal contract was unambiguous. However, just as it did at the trial court level, Universal argued that the subcontract incorporated the contract between Turner and the owner, creating an ambiguity about whether Turner would pay Universal before being paid by the owner. Universal relied on language that stated the costs the owner would reimburse Turner included “[p]ayments made by the Construction Manager to Subcontractors in accordance with the requirements of the subcontracts.” Just like Judge Martin, the Fourth Circuit concluded that clause related only to the reimbursement amount and not the timing of the payments.

Universal relied on cases from two other jurisdictions – Florida and Missouri – refusing to enforce very similar pay-if-paid clauses. The Fourth Circuit concluded that Virginia would simply not follow those jurisdictions, noting that an October 2009 City of Norfolk Circuit Court decision, W.O. Grubb Steel Erection, Inc. v. 515 Granby, LLC, mentioned the Florida and Missouri cases and opted not to follow their reasoning.

Once again, this case demonstrates that Virginia courts will invariably attempt to enforce the parties’ intent when faced with contractual disputes, even when that may lead to harsh results for one of the parties. Stay tuned on this case – the word is still out on whether the federal government will successfully condemn the site to expand the federal courthouse!
 

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My friend Vickie Pynchon recently posted at Chris Hill's blog, Construction Law Musings, on "How to Get Sued".  On the flip side, there are some simple pointers that all individuals and entities can follow that will dramatically reduce the chances of being sued.  These tips apply across a spectrum of businesses and are certainly not limited to just construction, real estate and land use.

1.  Be likable.  It is a lot harder to sue a friend.  If you maintain a friendly, warm relationship and the other side genuinely likes you, it is very difficult to cross the threshold of considering suit, let along filing one.

2.  Failing that, at least be palatable and not obnoxious.  On some level, likability and personality are somewhat pre-wired and we may not all be blessed with the so-called "winning personality".  It is clearly within most of our ability to avoid being confrontational, impolite or nasty.  Those traits make it real easy to turn a dispute personal and into trench litigation warfare.

3.  Be honest and maintain credibility.  Understand that if you get caught even in somewhat meaningless falsehoods, they come at the price of your credibility throughout the deal.  Many lawsuits flow from the plaintiff losing trust in the honesty of their opponent.

4.  Play nice.  Taking extreme advantage during a deal may feel like a good move at the time, but it can create an atmosphere that calls for payback.  Building a relationship of shared mutual success and teamwork can help smooth over differences of viewpoint during performance of contracts.

5.  Be organized.  Expensive, protracted and risky litigation looks a lot less attractive if your opponent looks like they have their act together and can or may win.  Sending the message that you are well organized throughout a contract can help create that impression.

6.  Document, document, document.  This may be the most important substantive point, as opposed to personality driven point, of all.  My career is littered with cases fraught with peril due to the failure of clients or opponents to document decisions, conversations, agreements, or notices.  In the era of instantaneous e-mail transmission, there is no excuse for why you failed to drop a quick line confirming what turns out to be the pivotal facts once you get into litigation.  Sending that timely confirmation is a great investment in avoiding litigation.

Image:  Yale University Art Gallery

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Award winning design does not necessarily translate to an effective, successful or liveable built environment.  My interest and passion for interesting design is somewhat tempered by my having seen the consequences of projects not matching constructability and coordination with interesting design.  As I have previously revealed obliquely in my post on How to Pick a Lawyer, I am a junky for interesting technology, construction and design.  I still think that instead of art for arts sake, our building environment is our living environment and at its best, design and construction integrate these two potentially disparate arenas. 

I have spent a career of construction litigation crossing boundaries in the industry.  I cut my teeth defending design professionals, but I have since represented contractors and subcontractors.  I have worked with owners and product manufacturers.  Each camp has its own shorthand description of the failures of others.  I have heard the constant grumblings of the inability of contractors to follow the plans and specifications (or at worst even read them).  On the other side, I have heard contractors complain that architects draw pretty pictures but are clueless about how to put buildings together.  I have seen examples where each criticism was fair and others where they were totally unwarranted.

Placing all this in the context of the end user, I have lived the first hand experience of a train wreck between architecture as high design versus and living in the end product.  I attended Yale University and lived on campus in the Morse College dorm my sophmore year.  When most people think Yale, they envision the gothic style architecture which dominates the campus and is ably represented by the imposing shot of Harkness Tower to the above.  Morse College is a little different ... designed in a distinctly modern style by architect Eero Saarinen.

I was open on some level to Saarinen's style.  I grew up with his Dulles Airport design in Northern Virginia and loved that project with its suggestion of a sweeping plane's wing in the terminal.  Morse College was a little different.  Try living in spaces with literally no right angles in the living areas (which can be seen easily here where there are floor plans for Stiles and Morse Colleges).  As Wikipedia pithily states, "This resulted, notoriously, in two rooms which have eleven walls, none of which is long enough to put the bed against and still be able to open the door."

The lack of right angles was a physical impediment that ranged from a mere minor annoyance to a constant source of fury depending on how your room lottery worked out.  Luckily, our group drew well and my cozy single was pretty workable.  The more complex aspect of preparing to live in Morse College was based in social structure.  For every other dorm, planning for living arrangements basically called for grouping off in pairs.  Sets of best friends could group up into fours for lotteries.  There might be an odd person out here or there, but the numerical structure basically fit typical social conventions.

Not so with Morse.  The numerical structure of the rooms was as completely incongruous as the walls.  Instead of pairs forming groups of four, most room bidding centered around bizarre troups of sevens matching up with other sevens.  Every year, the politics around room assignments were a bloody nightmare of hurt feelings and betrayals.  Reaching up the elder food chain (and while I started in 1984, I had friends who dated back to the 1970's), I was informed that this bitter history was constant and consistently repeated each year.

Now that I litigate construction and design issues on a constant basis, I often find myself relearning the experience of living architecture first hand.    I am fascinated by the tension between celebrated design and practical performance.  I love the aesthetic of Frank Lloyd Wright's Falling Water, but I will admit to a chuckle regarding the near constant structural, mold and water problems at Falling Water.

The best projects are those which marry both art and application.  The most successful projects are those where the architects embody the master builder concept rather than the smug artiste, where the contractors are not only master craftsman but knowledgeable about design and helping with coordination.  It is perhaps utopian to expect everyone to pull the oars in the same direction, but when there are shared values, relationships and mutual respect, it can produce tremendous results in the built environment.

(Credit or blame for encouraging this post should go to my pal Laurie Meisel, social media presence for Architectural Record and Green Source Magazine, amongst other endeavors)

Images:

Harkness Tower by wallyg

Eero Saarinen Dulles Airpor by XYZ+T

Morse College Renovation by Phil Handler

Frank Lloyd Wright's Falling Water by Figuura

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There are a number of important construction law and economic developments that I want to pass along to our readers.  Given timing and the plethora of topics to address, I wanted to share these developments in a more rapid fire format so these updates remained timely.

You should be on the lookout for more information on these topics in the future.  We may expand on some of these threads in the future here as well:

• The Supreme Court of Virginia will hear the appeal in AMEC Civil LLC v. VDOT.  This case is a very important case involving what is required for notice of claims on construction projects; any person or entity involved in Virginia construction needs to keep an eye on this case as it could have a major impact on future Virginia construction litigation
• As reported by our friend Chris Cheatham, the District of Columbia has attempted to fix their green building ordinance by no longer requiring a "performance bond" guaranteeing verification of green construction ... they will instead just require a "bond" guaranteeing verification of green construction.  Count me as a skeptic that this editorial change is meaningful or will fix the problem of lack of available bonds in the markets to cover this risk.
• The economy is sending some mixed messages.  Overall unemployment dropped from 10.0% to 9.7% in January according to the latest Bureau of Labor Statistics report
• Unfortunately, that improvement did not translate to the construction industry.  ENR reports a significant continued rise in construction unemployment, jumping from 22.7% in December to 24.7% in January.  The Bureau of Labor Statistics indicates that the construction sector lost 75,000 jobs in January bringing the total to 1.9 million since December 2007
• Associated Builders and Contractors released their latest Construction Economic Update.  The skinny: private non-residential construction spending rose 0.2% in December, but was down almost 18% year over year.

The continuing sluggish economy continues to place significant bidding pressure on the construction industry.  I still stand by my post last October that this bidding pressure will translate to serious claims issues over the next couple years.  Put on your seat belts, it will be a rocky ride here for a while.

Image by Ian Britton courtesy of Freefoto.com

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In 2002, Brenda Kersey received a $71,397 mortgage loan to purchase a home in Richmond, Virginia. The loan was a Federal Housing Administration (“FHA”) loan governed by FHA regulations. PHH Mortgage Corporation was the holder of the note in connection with Ms. Kersey’s loan.

Like so many unfortunate homeowners, Brenda Kersey fell behind on her mortgage payments. PHH appointed the Professional Foreclosure Corporation of Virginia (“PFC”) as substitute trustee on the Deed of Trust securing the mortgage and instructed PFC to foreclose on Ms. Kersey’s home. PFC scheduled a foreclosure sale without having or attempting to arrange a face-to-face meeting between PHH and Ms. Kersey.

The deed of trust allowed foreclosure only if the holder of the note complies with FHA regulations. One of those regulations is 24 C.F.R. Section 203.604 (b), which states in part:

The mortgagee must have a face-to-face interview with the mortgagor, or make a reasonable effort to arrange such a meeting, before three full monthly installments due on the mortgage are unpaid. If default occurs in a repayment plan arranged other than during a personal interview, the mortgagee must have a face-to-face meeting with the mortgagor, or make a reasonable attempt to arrange such a meeting within 30 days after such default and at least 30 days before foreclosure is commenced….

Based on PFC’s failure to schedule a face-to-face interview before initiating foreclosure, Ms. Kersey filed a complaint in the Circuit Court for Richmond City seeking a declaratory judgment that PHH failed to comply with the deed of trust sufficiently to go forward with the foreclosure. PHH removed the matter to the United States District Court for the Eastern District of Virginia, Richmond Division, and moved to dismiss the action under Rule 12(b)(6) for failure to state a claim.

In a memorandum opinion in Kersey v. PHH Mortgage Corporation, Judge Williams refused to dismiss Ms. Kersey’s complaint, concluding that there was a “distinct and ripe controversy” as to whether PHH owed Ms. Kersey a face-to-face interview prior to foreclosing on her home.

PHH’s first argued that Section 203.604 and the National Housing Act (“NHA”) do not grant a plaintiff a private cause of action. Judge Williams dispensed with this argument by concluding that Ms. Kersey was not bringing a claim under the NHA and Section 203.604, but rather was seeking a declaratory judgment based on a state law breach of contract claim. Interestingly, Judge Williams hinted to PHH that perhaps it could assert that Ms. Kersey’s failure to make timely payments constituted the first material breach between the parties that would have relieved PHH from the obligatory face-to-face meeting.

PHH’s second argument was that it fell under an exception found in Section 203.604 (c), that a

face-to-face meeting is not required … if [t]he mortgaged property is not within 200 miles of the mortgagee, its servicer, or a branch office of either.

PHH has loan origination branches, but no servicing branches, within 200 miles of Ms. Kersey’s property, and pointed to an interpretation of this exception on HUD’s website that Section 203.604 relates only to mortgagors living within a 200-mile radius of a servicing office. Judge Williams refused to be swayed by the interpretation on HUD’s website, finding the exception in Section 203.604 (c) to be unambiguous. According to Judge Williams, a lender could escape the face-to-face meeting requirement only if the following are not located within 200 miles of the mortgaged property:

1. the mortgagee;
2. the mortgagee’s mortgage servicer;
3. a branch office of the mortgagee;
4. a branch office of the mortgagee’s mortgage servicer.

Judge Williams found that PHH could not therefore escape its face-to-face obligation when Ms. Kersey’s complaint alleged that PHH maintains “branch offices” within 200 miles of the mortgaged property.

It will be interesting to see if PHH ultimately prevails by alleging that Ms. Kersey committed the first material breach when she fell behind on her payments.  However, stepping back from the legal analysis for a moment, maybe there is a point to these face-to-face meetings, even if they are time consuming.  In the right situation, such a meeting could enable lenders and borrowers to come up with a mutual plan to avoid painful and costly foreclosure proceedings. 

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A post yesterday from our friend Chris Hill at Construction Law Musings really resonated with me on a critical skill that many lawyers seem to lack.  The post, "What Owners Look for in Green Building and Why Contractors Should Care" advocated that contractors should know and understand what project owners were looking for in green buildings.  As Chris states well, "Knowing the other side's playbook is one way that a football team can prepare, the same holds true in pre-construction negotiation of contracts."

This same concept can and should be applied in every legal context.  If I cannot understand the strengths and weaknesses of not only my case, but also my opponent's, I am wearing blinders and courting disaster.  Not being able to play both sides of the chessboard is asking for surprises.  In negotiations, that means losing ground unnecessarily.  In litigation, it can mean flat out losing the case.

For years, a pocket classics translation of Sun-Tzu's absolute must read, The Art of War has lived on my desk.  A classic passage from centuries ago echoes this issue:

So it is said that if you know others and know yourself, you will not be imperiled in a hundred battles; if you do not know others but know yourself, you win one and lose won; if you do not know others and do not know yourself, you will be imperiled in every single battle.

For clients on the receiving end, you should understand and cherish the need for your lawyer to play the "devil's advocate" role in testing assumptions, articulating weaknesses, and educating you regarding the strengths and weaknesses of your position.  Ultimately, that very approach may mean success or failure of your matter.

Image by vlasta2

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I am writing with a very quick update on the status of the non-suit in Virginia, the subject of our very first blog post here.  While Virginia is typically viewed as a conservative and somewhat pro-defendant forum, it does have one very nice procedure that is very beneficial to plaintiffs, the right to take one voluntary dismissal with prejudice at virtually any time and start the case over again (called a statutory non-suit).  The plaintiff then gets the original statute of limitations, or an extra six months from entry of the non-suit order to re-file their case.

Our first post detailed the Spear v. MWAA case in Virginia where a plaintiff had filed a new case with a different requested damages amount.  Judge Chamblin from Loudoun County Circuit Court ruled that because the amount requested was different, it was not the same case and thus did not get the extra six-months to refile.  The case was therefore barred by statute of limitations.  This case has been the subject of not only significant commentary and criticism, but also has spawned a petition for appeal.

Virginia Lawyer's Weekly now reports that Judge Lane in Rockingham County Circuit Court has analyzed the same question and reached the opposite result.  Judge Lane found in O'Hearn v. Mawyer that refiling with a different request for damages is still the "same action" and entitled to the six month tolling period to refile.  At least one plaintiff's attorney is now breathing a little easier.

Image by Alma Mater

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In 2004, 515 Granby, LLC proposed a $180.5 million condo development. With 34 stories and 327 units, Granby Towers would be the tallest building in Norfolk and would revitalize the northern part of the city. The following year, the federal government threatened to condemn the property, causing just enough of a delay for the ebbing economic tide to overtake the Granby Tower project and thwart 515 Granby’s ability to secure financing.

Fortunately for 515 Granby, the prime contract with Turner Construction Company had the following language:

This Agreement and any liability and obligations of the Owner…shall be subject to and expressly conditioned upon the closing by the Owner, and the initial funding by its lender, of the construction loan… and Owner shall have no obligation or liability to Construction Manager for any costs for the Construction Phase under this Agreement unless such construction loan closing is completed.

Turner and its subcontractors, who were owed over $13 million for construction on the project, challenged this language in a two-day evidentiary hearing in the Circuit Court for the City of Norfolk. In a letter opinion issued by Judge Martin, Judge Martin rejected this challenge, finding that 515 Granby “made great efforts to secure financing for the project,” but was unable to do so due to the current conditions of the credit market. Judge Martin concluded that 515 Granby would have had to pay Turner only if and when it had received initial funding of the construction loan.  For an in-depth look at the court's reasoning, and what you can do if you face such a contractual provision, go to Yes, Virginia, Contract Terms Do Matter:  Financing Term Offers Owner an Escape Hatch, by my colleague, Tim Hughes, guest blogging on Construction Law Musings. 

Fortunately for Turner, its subcontracts contained the following language:

The obligation of Turner to make a payment under this Agreement, whether a progress or final payment, or for extras or change orders or delays to the Work, is subject to the express condition precedent of payment therefor by the Owner.

One of the subcontractors, Suburban Grading & Utilities, claimed this language was unenforceable. In a second letter opinion, Judge Martin upheld this provision as well, noting that the Supreme Court of Virginia finds “pay if paid” clauses enforceable “where the language of the contract in question is clear on its face.” This language was an unambiguous “pay if paid” clause that Judge Martin had no choice but to uphold, leaving Suburban to eat the costs of $575,928 for labor and materials and another $245,662 for dewatering.  For a great and very timely discussion of this opinion and advice about "pay if paid" clauses, I urge you to read Chris Hill's Construction Law Musings post, Pay if Paid, Pay Attention Subs.

Don’t go away thinking there will be no winners in this debacle! The federal government has since conveniently renewed its desire to condemn the property in order to expand the federal courthouse next door.  It offered a paltry $6.1 million to seize the Granby Tower property, an offer that no one is jumping at yet.  If you’re interested in reading more on this very likely end to the Granby Towers saga, take a look at Harry Minium and Tim McGlone’s recent article in The Virginian-Pilot.  
 

Image by:  Hyunsoo Leo Kim/The Virginian-Pilot 

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A recent Fairfax County Circuit Court case highlights how fragile confessions of judgments can be in Virginia.  The case, Superior Paving v. Bud & The Boyz Construction, resulted in a confessed judgment being set aside by the trial court.

Virginia law provides at Code of Virginia Section 8.01-433.1 that the note, bond or other evidence of a debt with a confession of judgment provision contain a notice provision stating:

IMPORTANT NOTICE

THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.

In Superior Paving, the plaintiff included the statutory notice language in the original credit agreement related to asphalt purchases.  The defendant later requested a proposal from plaintiff  for paving the entrance of an industrial building.  Defendant accepted the proposal.  According to the court's opinion, neither the proposal nor the later resulting invoices contained the statutory notice language.  The opinion is silent on whether the proposal, acceptance, and invoices expressly incorporated the terms of the credit application.

The court initially entered judgment in favor of plaintiff in March.  On October 5, the court set the judgment aside ruling that "any and all notes or evidence of debt upon which a confessed judgment is to be based must unclude the 8.01-433.1 language". 

There are a couple take-aways from this case:

• 1: Assume that confessions of judgment provisions are fragile and easily undone
• 2: Even after judgment is entered, See No. 1
• 3: Include the confession of judgment notice into the actual contracts

Image by Haole Punk

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No state has a longer shoreline than Florida – over 2,000 miles of shoreline, with 825 miles of beaches.  These beaches define Florida's top industry of tourism and are in a constant state of erosion.  Understandably, Florida has embraced the “public trust doctrine,” which dictates that tidal lands are held in trust for the people of Florida. The boundary between state-owned tidal lands and upland properties has traditionally been the “mean high water line” (“MHWL”). The MHWL may move inland due to erosion or seaward when land gradually forms (through accretion). However, the boundary will not shift due to a sudden change in the shoreline (through avulsion).

Recognizing the need to protect Florida’s beaches, Florida’s legislature enacted the Beach and Shore Preservation Act (“BSPA”) in 1965. Since then, Florida has restored approximately 200 miles of beaches through sixty actively managed projects.

The BSPA was amended in 1970 to define the property boundary for restoration projects along critically eroded beaches as the “erosion control line” (“ECL”). By adopting a fixed boundary for restoration projects, the BSPA meant to avoid boundaries that were constantly shifting due to coastal dynamics. Under the BSPA, the state would pump sand into the restoration area primarily on the state side of the ECL, creating a buffer of “sacrificial sand” that would protect the beaches and upland property. The 1970 amendments preserved, and arguably supplemented, the rights of landowners whose properties under the Act extended to the ECL rather than the MHWL.

With the devastating hurricane and storm damage we have seen over the last decade, Florida realized that it could no longer focus solely on its southern beaches. Florida decided to spend a total of $15 million – $4 million of state money and the rest paid by the local community and the town of Destin – to restore approximately seven miles of beach in Walton County, a jurisdiction located in Florida’s panhandle. In keeping with the BSPA, the state set the property line at the wet sandy beach.  The project was designed to create a narrow strip of dry beach by piling new sand where water – and therefore sovereign state land – once was.  What the project also created was a legal quagmire between government officials and private landowners that has now made its way to the United States Supreme Court.

State and local officials argue that the restoration project provides the private landowners with storm damage and erosion protection without taking land or property rights from the landowners. The officials note that, consistent with the BSPA, the project preserves all upland owners’ rights of view, access and use of the waters. You can read more on these arguments in the state’s brief and the brief for Walton County and the City of Destin.

Private landowners instead see a “land grab” that robs them of their right to gain land by accretion and their right to have their property in continuous and direct contact with the water. They complain that the officials dumped sand in their backyard to create what is now considered a public beach. To read more on the landowner’s arguments, read Stop the Beach Renourishment, Inc.’s brief and reply brief.

The Florida Supreme Court’s lengthy opinion concluded that the beach restoration program reflected “the state’s constitutional duty to protect Florida’s beaches in a way that reasonably balances public and private interests.” The court found that landowners maintained their rights to access and view the water, but that Florida law provides no basis for the landowners to own the new narrow strip of dry sand as private property, and therefore no basis for the property owners to demand compensation.

The United States Supreme Court has previously addressed whether a legislative or executive decision can amount to a constitutional taking. But now this case – Stop The Beach Renourishment, Inc. v. Florida, Case No. 08-1151 – raises the question of whether a state court decision can amount to an unconstitutional taking of property.  Based on comments from the Justices during oral argument last week, the opinion will likely not be unanimous, as noted in NPR’s December 2, 2009 article, High Court Appears Divided on Beach-Property Case.  Complicating things is the fact that Justice Stevens, who owns a Florida beachfront apartment, was absent from the oral argument, making it possible that the Justices will not have the votes one way or the other to reach a majority opinion.

My guess is that the United States Supreme Court will find a way to avoid deciding the novel issue of whether the Florida Supreme Court's decision can be considered a taking, and will not disrupt the Florida Supreme Court's determination that the beach preservation project did not take any legally cognizable state property right from the land owners.  Any other thoughts or predictions out there?

Image by:  Melissa Nelson/AP
 

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Here is a sampling of cases to watch for in 2010. The Virginia Supreme Court has granted appeals for these cases earlier this year, and will hear argument in 2010.

In May, the Court granted the appeal in W &W Partnership v. Prince William County BZA, et al., Record No. 090328, challenging the ruling of Judge Whisenant from the Prince William County Circuit Court. At issue in this case is whether a deed legally subdivided a parent tract of land, creating a separate lot and entitling the lot to its own GPIN and address. The Court will likely set the argument for this case in early 2010.

July was a busy month for the Court, accepting petitions and granting appeals in numerous real estate related cases. First up is Anton E.B. Schefer v. City Council of the City of Falls Church, Record No. 090803, contesting a ruling by Judge Newman of the Arlington County Circuit Court. This case will analyze whether a City of Falls Church zoning ordinance imposed height regulations on the appellant’s property that were more restrictive than regulations for other identically zoned properties, and whether the ordinance should be struck down on an equal protection theory.

The Virginia Supreme Court granted a second appeal from a ruling by Judge Newman in the Arlington County Circuit Court, TIR Conaill Properties, L.C. v. 2401 Wilson, LLC, Record No. 090855. This commercial lease dispute case will examine whether the plaintiff could sue using its trade name, and whether the trial court properly considered discovery deposition testimony.

Next, we have Bailey v. Town of Saltville, Record No. 090989, challenging the decision by Judge Lowe of the Circuit Court of Washington County. The Court will consider whether a 1909 agreement and a 1909 deed conveying a “right of way” for a “single track railway” granted a fee simple interest or only an easement to the railway company.

In September, the Court accepted the petition in Advanced Towing Co. LLC, et al. v. Fairfax County Board of Supervisors, Record No. 091180. This appeal disputes the ruling by Judge White of the Fairfax County Circuit Court, who refused to find that a Fairfax County Code provision contravened the Dillon Rule and was enacted ultra vires.

Stay posted as we keep an eye out for these cases and others!
 

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The first trial in the infamous Chinese drywall litigation will apparently involve seven Virginia homeowners.  The first case is currently set for a bench trial on January 25, 2010. 

We have written several times regarding the Chinese drywall litigation, including several months ago in Mid Atlantic Construction.  While Virginia plaintiffs will apparently occupy the first position on the trial docket, our area in Northern Virginia has thus far been very quiet to silent on this front.  The Tidewater area has been a little different as a supplier there sold a fairly significant quantity of the drywall that was used locally.

The Chinese drywall is just the most recent wave of products liability litigation to erupt across the construction industry.  The past several waves, such as the fire retardant plywood, plumbing material, and EIFS systems litigation, each pointed out that getting around the economic loss rule in Virginia is extremely difficult.  The economic loss rule in Virginia provides that a party suing for "economic losses" is seeking a contractual remedy and must demonstrate privity of contract to recover.

The economic loss rule and its various permutations is one of the most important legal issues in construction litigation in Virginia.  As such, we are going to take the change to explore the economic loss rule and discuss it over several posts moving forward.

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Earlier this year, the Virginia Supreme Court decided Martin Brothers Contractors, Inc. v. Virginia Military Institute, taking the opportunity to revisit its decision in Blake Construction.

The Virginia Military Institute (“VMI”) contracted with Martin Brothers to renovate VMI’s main dining facility. During the project, VMI requested changes resulting in a 270-day delay. VMI agreed that it alone was responsible for the delay. Martin Brothers sought $430,242.56 in delay damages plus the costs of recovery.

VMI paid only a portion of Martin Brothers’ delay claim, relying on terms found in the contract’s General Conditions. General Condition 43(b) stated that Martin Brothers could recover damages for owner-caused delay, provided the delay was “unreasonable” [sound familiar?!]. In such a case, Martin Brothers would be permitted to submit a change order adding additional days for completion of work. The General Condition governing change orders allowed some, but not all, site direct overhead expenses for delay, and disallowed all home office expenses. The same General Condition contained a subsection allowing a fifteen percent markup for overhead and profit. Martin Brothers’ claim included $225,937.40 in site delay damages and $204,305.16 in home office delay damages. Based on the language in the relevant General Conditions, VMI agreed to pay only $99.646.20 in site damages and refused to pay any home office damages.

At the trial court level, VMI successfully convinced the Circuit Court that the contract's terms, including its markup provisions, amounted to “liquidated damages,” one of the specifically enumerated exceptions in Virginia Code Section 2.2-4335 (B). The Virginia Supreme Court didn’t buy this argument, going right back to its decision in Blake Construction. The Court reiterated that Section 2.2-4335 “means what it says”:

Any provision…to waive, release, or extinguish the rights of a contractor to recover costs or damages for unreasonable delay in performing [a public construction contract]…shall be void.

The only exceptions to this broad language are those specifically enacted by statute, including Section 2.2-4335 (B):

1. provisions allowing a public body to recoup costs for delay caused by the contractor, subcontractors, and their agents and employees;
2. notice requirements;
3. liquidated damages; and
4. arbitration or other forms of alternative dispute resolution.

In analyzing whether the terms of the contract were in fact a liquidated damages clause, the Virginia Supreme Court asked whether Martin Brothers and VMI had actually entered into an agreement for the calculation of delay damages. VMI argued that the claimed home office expenses and all site expenses beyond $99,646.20 were included in the markup provisions, amounting to an agreed method of calculating the delay damages, and therefore a valid and enforceable liquidated damages clause.

The Court saw past this argument, pointing out that the markup provisions compensate Martin Brothers for added work required by VMI’s change order, but provide no compensation at all for extra expenses resulting purely from the delay. For instance, if VMI issued a change order requiring extra work, and Martin Brothers was able to complete the extra work on time, Martin Brothers would be entitled to its fifteen percent markup. However, if the extra work delayed the project by a year, Martin Brothers would still be entitled only to its fifteen percent markup, and nothing at all for the delay.

The Court concluded that the General Conditions with its markup provisions were not actually an agreed formula to calculate delay damages, and therefore not covered by Section 2.2-4335 (B)'s liquidated damages exception. Because the terms of the contract that VMI relied up acted as an absolute bar to most of the delay expenses incurred by Martin Brothers, the Court declared those terms void and unenforceable as against public policy.

In the wake of Martin Brothers, public bodies will likely become more and more creative in drafting supposed “liquidated damages” provisions. Take comfort in the Virginia Supreme Court’s and the General Assembly’s strong protection of a contractor’s right to delay damages in public contracts, and carefully scrutinize these provisions before you sign a contract.
 

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In the recent case of Martin Brothers Construction, Inc. v. Virginia Military Institute [pdf], the Virginia Supreme Court was confronted with whether Martin Brothers was able to claim delay costs, re-examining its 2003 opinion, Blake Construction Company, Inc./Poole & Kent v. Upper Occoquan Sewage Authority [pdf]. This post will review the Blake Construction opinion, and set the stage for the next blog post on Martin Brothers.

Blake Construction presented the Court with its first opportunity to examine a contract limiting delay damages in light of Virginia Code Section 2.2-4335 (A) [pdf], which states in part:

Any provision contained in any public construction contract that purports to waive, release, or extinguish the rights of a contractor to recover costs or damages for unreasonable delay in performing such contract, either on his behalf of on behalf of his subcontractor if and to the extent the delay is caused by acts or omissions of the public body, its agents or employees and due to causes within their control shall be void and unenforceable as against public policy.

The Court analyzed two contractual provisions, easily finding that the first was directly contrary to Section 2.2-4335 and therefore void as against public policy. That provision stated that an extension of time would provide the sole remedy for delay, and that the contractor agreed to make no claim for delay damages for “any sort of delay…for any reason, including but not limited to delay occasioned by any act or failure to act of the Owner.”

The rub in the case was the second provision, which tried to temper the blanket prohibition on delay damages. The second provision allowed the contractor to recover “additional compensation for the actual and direct costs” from unreasonable delay caused by the owner or engineer, provided that the contractor complied with notice and submission requirements. The provision also included a definition of “unreasonable delay” as amounting to bad faith, malice, gross negligence or abandonment.

As it should have, the Court began with the plain language of Section 2.2-4335, and the sweeping language by the General Assembly declaring any provision limiting delay damages as void. Viewed through that lens, the Court was not concerned about the language limiting delay damages to those within the owner’s control and requiring the contractor to give notice, because these were specific exceptions included in Section 2.2-4335 (A) and (B)(2). The Court was less forgiving about the bar for unreasonable delay damages except upon the owner’s bad faith, malice, gross negligence or abandonment, concluding that such a bar was void and unenforceable as against public policy under Section 2.2-4335.

The lesson to take from Blake Construction is to carefully compare any delay provisions in a public contract to Section 2.2-4335. A court is likely to find unenforceable and void delay provisions that go beyond Section 2.2-4335 (B), which specifically allows: (1) provisions allowing a public body to recoup costs for delay caused by the contractor, subcontractors, and their agents and employees; (2) notice requirements; (3) liquidated damages; and (4) arbitration or other forms of alternative dispute resolution.

Two more things to know about Section 2.2-4335: Under Subsection (C), a contractor making a delay claim is liable for a percentage of the public body’s costs to investigate, analyze, negotiate, litigate or arbitrate the claim. Under Subsection (D), a public body denying a delay claim is liable to the contractor for a percentage of the same kinds of costs, but only if determined in litigation or arbitration to have been in bad faith.

Stay tuned for the outcome of Martin Brothers in Part II of this post! I’ll give you a hint – we’ll look at Section 2.2-4335 (B)’s liquidated damages exception.
 

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Construction cases by their nature tend to involve a lot of facts, witnesses, and documents.  They also tend to involve multiple parties, legal issues and arguments, and strategic procedural and motions practice.  By their nature, these realities mean that construction cases can involve quite a lot of legal work and can be expensive to try.

There are several things that clients in construction cases, and indeed all legal matters, can and should do to help themselves.  Following these tips can not only streamline the effort undertaken by the lawyer and thus reduce expenses, but also can help to present your matter in the most effective manner and produce better results:

1. Be organized.  Handing your lawyer a tabbed binder of documents instead of a disheveled pile of documents means less time reviewing and understanding your care.
2. Be responsive.  When your matter is analyzed or litigated in fits and starts because you do not respond, that effort tends to always require retreading old ground ramping up again.
3. Do your homework.  A corollary to No. 2, if you are to obtain documents, information, or provide assistance, understand that your efforts are important to timely and efficient handling of your matter.
4. Make decisions.  Once there is sufficient information and analysis to make informed choices, it is time to decide.  Failing to pick often not only removes the need or chance to choose, but it translates to expensive lost effort without advancing your matter.
5. Understand time is money.  Even with all the discussion about alternative fee billing, this will always be true.  I know and understand that client communication is critical.  Clients should know and understand that the more we communicate, particular on rehashing prior discussions or decisions (see No. 4 above), the more expensive the case gets.

 Image by Brookenovak

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In the recent case of Burdette v. Brush Mountain Estates, LLC, the Virginia Supreme Court tackled head on what it takes to convey an easement. Burdette acquired two parcels of land by deed, which stated that the conveyance was “made subject to all easements, reservations, restrictions and conditions of record affecting the hereinabove described property,” and referred to a boundary line adjustment plat that was recorded in the land records. The plat depicted a fifty-foot easement traversing both parcels and this notation” ‘50’ PRIVATE EASEMENT FOR INGRESS, EGRESS AND PUBLIC UTILITY FOR THE BENEFIT OF [Brush Mountain’s property], IS HEREBY CONVEYED.”

Brush Mountain owned an adjacent parcel to the east of Burdette’s property. Brush Mountain submitted a request to rezone its parcel. To develop its property, Brush Mountain would need to rely on the easement for access. When Burdette discovered Brush Mountain’s plans, Burdette filed a complaint for declaratory judgment against Brush Mountain, contesting the existence of the easement.

In analyzing whether an easement must be conveyed by a deed or will, the Court began with Virginia Code Section 55-2, which states “No estate of inheritance or freehold or for a term of more than five years in lands shall be conveyed unless by deed or will.” In holding that an easement is not an estate in land, the Court concluded that Section 55-2 was not applicable.

The Court then turned to the language in the deeds and the plat, siding with Burdette that those documents did not contain the necessary words to convey an easement. First, the “subject to” language in the deed was merely boiler plate and did not specify a particular plat. Second, the plat did not show the full extent of the burden imposed by the easement because the easement spilled over into property not included in the survey and was identified only in a note. Third, Brush Mountain was in essence a stranger to the deeds.

The moral of the story is that, if you want to convey an easement, be as clear as possible about your intent. Details matter! Specify the plat directly on the face of the deed. Incorporate the plat, and show the full extent of the easement on the plat. And include all related parties in the deed.
 

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The story of the collapse of the Dallas Cowboys practice facility collapse continues to point towards serious design flaws as the culprit. The National Institute of Standards and Technology press release regarding its report states that the practice facility collapsed, “under wind loads significantly less than those required under applicable design standards”. A full copy of the draft NIST report and accompanying slideshow are quite interesting. The design and construction firm involved in the project has consistently claimed that severe weather conditions were to blame; however, the NIST report expressly concluded that wind speeds at the time of collapse were well below design loads and further that the demands at code required wind loads exceeded the structure capacity of the facility.

The practice facility was a steel frame structure with a tensioned fabric covering. The practice facility collapsed on May 2, 2009 during a windstorm. Twelve people were injured in the collapse, which left a scouting assistant permanently paralyzed and broke the neck of a special teams coach. The video report embedded with this post includes some harrowing footage prior to and during the collapse.

The factual backdrop of this disaster is fairly remarkable in the rapid and extensive dirt exposed relative to the project. As seen from the timeline prepared by The Dallas Morning News (this and the other links are free, sign-up is required), Cover-All Building Systems and its subsidiary, Summit Structures, designed and built the Cowboys practice facility. Cover-all suffered a warehouse collapse in Philadelphia that the Cowboys were aware of prior to hiring Cover-all for the practice facility project in 2003.

Reports following the filing of suit on the Cowboy practice facility matter have pointed to far deeper problems. It appears that the person who handled initial structural calculations on both the Philadelphia and the Cowboys’ facility was a trainee and unlicensed. Cover-all fired the engineering director of the Philadelphia and Cowboys facility projects. The person identified as the lead engineer of the project stated he had little to do with the project, worked for Summit only briefly, and had been hired to build small farm buildings. After the completion of the Cowboys’ project, the engineering director’s successor warned Cover-all management in 2004, "We can't continue to operate this way or we're going to kill somebody."

The Philadelphia collapse eventually resulted in a very large verdict against Cover-all. The Cowboys expressed some concerns regarding their facility and Cover-all eventual reinforced the facility roof, but that obviously was not sufficient to stave off the collapse.

There are a couple takeaways from this horrible event:

• Follow your instincts – if you are worried about your designer or contractor, there are probably good reasons
• Follow up on licenses, codes and inspections – reports indicate that permits were not pulled for the 2008 retrofit work as required
• Get second opinions when reasonable and required
• Know the qualifications and background of key personnel
• Don't assume
• To quote both my wife and Ronald Reagan, Trust but Verify!!

 Image: Copyright Silver Smith, 2009

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Be aware that the procedural requirements of Virginia Code Section 15.2-1246 [pdf] apply to appeals denying claims arising under contracts covered by the Virginia Public Procurement Act, according to the recent case, Viking Enterprise, Inc. v. County of Chesterfield, Record No. 080215 (Jan. 16, 2009) [pdf].

In Viking Enterprise, Viking entered into a written contract with Chesterfield County to construct a fire station. The County insisted that Viking had to remove and replace part of a concrete floor. Although Viking believed the floor could be repaired without removing and re-pouring the concrete, it complied with the County’s request and submitted a claim for $86,531 for additional work. The County’s board of supervisors denied the claim on July 25, 2005, and the clerk of the County’s board of supervisors gave Viking written notice of that denial in a letter dated August 2, 2005.

Relying on Virginia Code Section 2.2-4363(E) [pdf] and 2.2-4364(E) [pdf], Viking believed that it merely needed to file suit in Circuit Court within six months of the board of supervisor’s final decision to perfect its appeal. It filed a complaint in Chesterfield County Circuit Court on January 27, 2006. It later non-suited its action and re-filed its complaint on February 13, 2007.

The County argued that Viking failed to comply with Section 15.2-1246, which would require Viking to appeal within thirty days from the date of the board of supervisors’ decision (if Viking had been present at the July 25, 2005 meeting) or within thirty days of service of the clerk’s letter (had Viking not been present at the meeting), and that Viking failed to serve written notice on the clerk and to execute a bond.

The Circuit Court and the Virginia Supreme Court agreed with the County. Because Viking conceded it had not appealed within thirty days of the decision or service of the clerk’s letter, had not served notice of the appeal on the clerk and had not executed a bond, Viking’s appeal was dismissed because it did not comply with Section 15.2-1246.

The Viking Enterprise opinion concludes with the following recap of requirements to perfect an appeal from a county’s disallowance of a claim arising out of a contract covered by the Virginia Public Procurement Act:

[T]he claimant must serve written notice of its appeal on the clerk of the county’s governing body and execute a bond to the county, both within 30 days from the date of either the decision or service of the written notice of the denial, in accordance with Code § 15.2-1246. The claimant must then institute legal action in the appropriate circuit court within six months of the date of the decision denying the claim, in accordance with Code Code §§ 2.2-4363(E) and -4364(E).

Notably, the Court recognized that Section 2.2-4363(E) also allows for an administrative appeal if available, and declined to rule on whether that subsection conflicts with section 15.2-1246. The Court also assumed without deciding that the Virginia Public Procurement Act applied, although Chesterfield County argued that it had enacted an ordinance opting out of the Act.
 

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Think twice before you accept a check tendering only partial payment!  In a recent case, Helton v. Phillip A. Glick Plumbing, Inc., [pdf], the Virginia Supreme Court ruled for a homeowner who had repeatedly disputed his plumbing company’s charges and argued that his bill was excessive. The homeowner wrote his last check for  $1300 -- $1686.51 less than the final invoice -- and included the words “paid in full” in the memo line of the check.  He sent the check with a letter raising yet again the issue of overbilling and wasted time and materials, and said that he would make no more payments.  The plumbing company cashed the check, crossing out “paid in full” and writing “No” and “balance due $1686.51.”

Looking at Virginia Code Section 8.3A-311 [pdf], an amendment to the Uniform Commercial Code adopted in 1992, the Court reviewed the following elements that a debtor must prove to establish accord and satisfaction by use of an instrument: (1) the debtor tendered an instrument in good faith as full satisfaction of the claim; (2) the amount of the claim was unliquidated or subject to a bona fide dispute; and (3) the claimant obtained payment of the instrument.  Under that code section, the claim is discharged if the debtor shows the instrument, or an accompanying written communication, contained a conspicuous statement showing that the instrument was tendered as full satisfaction of the claim.

The Court had no problem concluding that the homeowner tendered the check intending the bill to be satisfied in full, that the final invoice was subject to a bona fide dispute, and that the plumbing company cashed the check. The Court ruled that the claim was discharged because the homeowner clearly marked “paid in full” on the check and sent a letter with the check outlining the repeated complaints of overbilling.  The language added by plumbing company before cashing the check only verified the company’s knowledge of the dispute and that the homeowner gave a “conspicuous statement” that he tendered the check as full satisfaction of the claim.
 

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It is common to have arbitration clauses in contracts, and courts will honor these clauses in all but very rare instances. In fact, Virginia courts have repeatedly stated a clear public policy in favor of arbitration and upholding arbitration agreements.  Additionally, Virginia Code Section 8.01-581.02 (A) [pdf] mandates a court to compel arbitration when a party to an arbitration agreement petitions the court and the opposing party refuses to arbitrate.

Nonetheless, a party can waive its right to invoke an arbitration clause when it initiates litigation and later uses the arbitration clause to thwart the litigation process. This is exactly what happened recently in the Circuit Court for the City of Hopewell in the consolidated cases of Shoosmith Bros., Inc. v. Hopewell Nursing Home, LLC, et al., Case No. CL06-299 and Kenbridge Constr. Co., Inc. v. Hopewell Health Investors, LLC, Case No. CL09-108 [pdf].

In Shoosmith Brothers, Judge Campbell noted that Virginia has not squarely addressed the issue of waiver of arbitration, but relied on the concept of “default” in the Federal Arbitration Act and cases from the United States Court of Appeals for the Fourth Circuit to articulate a test for waiver.  The question became whether Kenbridge Construction Company “so substantially utilize[d] the litigation machinery that to subsequently permit arbitration would prejudice” Shoosmith Brothers, Inc.  Judge Campbell had no problem finding waiver where Kenbridge had been participating for two and a half years in litigation involving two different cases with many different parties, and arbitration with only Kenbridge would have left the other parties in “judicial limbo.”

The lesson to take from this is “Finish what you started.” Arbitration can save parties a great deal of time, money and frustration.  You should be sure at the outset that arbitration is the dispute resolution forum you want before you include arbitration clauses in your agreements, and understand you may be stuck with your choices.
 

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 Virginia can be a difficult forum for plaintiffs. One tremendous advantage to plaintiffs, however, has been the “nonsuit”. So long as there are no cross-claims or counterclaims filed, a plaintiff has an absolute right to request a dismissal without prejudice and has a right to re-file their case. This statute in essence gives a plaintiff the chance to take a mulligan during the case so long as the case has not been sent to a jury or a dispositive motion is under the advisement of the court.

Statute of limitations concerns are integral to exercise of the nonsuit. The Code of Virginia at § 8.01-229(E)(3) states:

[I]f a plaintiff suffers a voluntary nonsuit … the statute of limitations with respect to such action shall be tolled by the commencement of the nonsuited action, and the  plaintiff may recommence his action within six months from the date of the order entered by the court, or within the original period of limitation … whichever period is longer. 

A new case from Loudoun County Circuit Court may make exercise of the non-suit and re-filing of the new case a far scarier proposition for plaintiffs. A plaintiff filed and non-suited a personal injury case that requested $325,000 in damages in the complaint. When the plaintiff re-filed the new case, the complaint asked for $500,000 in damages. The court found that because the damages requested had changed, the plaintiff did not “recommence” her “action” as required to gain the benefit of the tolling of the statute of limitations. As a result, the court found the personal injury claims were barred by statute of limitations and dismissed the entirety of the case with prejudice.

This is a trial court decision and is thus not controlling on other courts. It will be very interesting to see if other courts follow this ruling or if the ruling stands up in the face of further motions in the case or appeals. The ruling has already triggered negative commentary and reaction from the plaintiffs’ bar seen at Virginia Lawyer's Weekly. One thing is certain – whether in a construction litigation context or elsewhere, the case is a clear cautionary tale of how risky and unpredictable litigation can be.  Parties in litigation need to keep the upside and downside risks in mind throughout the entire process.

Image: Peter Hellebrand (phelle)

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