by Dorothy Spencer
Georgia construction attorney Mark Cobb has been asked to be a presenter at the construction law seminar, “CONTRACTOR SURVIVAL 101″, sponsored by the Associated General Contractors (AGC) of Georgia held on Wednesday, December 18, 2013 in Tifton, Georgia.
According to the AGC Georgia’s information brochure, “Construction firms are faced with difficult legal, accounting and insurance issues exacerbated by the shrinking markets and lower profit margins. AGC Georgia has assembled a team of experts in these fields to share professional experiences and answer your questions.”
The seminar is intended to assist construction professionals with some of the important legal and accounting needs faced by the industry. In addition to a question-and-answer session, the following five topics will be the central focus of this seminar:
- Common Sense Surety and Financial Risk Management
- Internal Controls and Best Practices for Contractors
- Tax Law Updates
- Georgia Lien Law
- Sound Practices for Prime Contractors to Implement When Working with Specialty Contractors
Mark Cobb is honored to be a part of this important, educational program and to be leading the discussion on Georgia Lien Law and Sound Practices for Prime Contractors to Implement. In doing so, Mark will be highlighting several important topics such as:
- Understanding Legal Rights
- Georgia’s Statutory Notice Scheme including Notices of Commencement, Notices to Contractors, and Notices to Owners
- Effectiveness and Forms for Interim and Final Lien Waivers and Releases
- Affidavits of Nonpayment
- Private Project Payment Bonds
- Bonding of Specialty Contractors
- Detailed Schedule of Values
- Language in Subcontracts
- Reports from Subcontractors and Suppliers
- Obtaining Proper Paper Work from Specialty Subcontractors
- Confirming Worker’s Compensation Insurance
Contractor Survival 101 is open to everyone, and there is a discount for AGC Georgia members. This educational construction law seminar begins at 10:00 a.m. and will finish at 3:00 p.m. (lunch is included in the registration price). To learn more about the speakers or topics or to download registration information, please view Upcoming Events on the AGC Georgia website by clicking here – - >
In addition, you may contact the Cobb Law Group directly for additional information. We look forward to seeing you there.
by Mark A. Cobb
A Georgia Court of Appeals recently published its opinion in Board of Regents of the University system of Georgia v. Brooks, and the holding impacts businesses providing janitorial and general maintenance on Georgia’s public buildings.
The Background Facts: The Plaintiffs’ employer entered into a maintenance and service contract with Georgia Southern University (“GSU”) which included the cleaning of rooms and the refinishing of floors. In order to secure the contract, the employer submitted a payment bond to GSU, and the employees began working on the campus. The employer, however, did not pay its employees; thus, the employees made a claim against the payment bond for payment of their past due wages. Upon further investigation, it was determined that the employer had forged the payment bond. Consequently, the employees became the plaintiffs in a lawsuit against the Board of Regents alleging that GSU owed a duty to the Plaintiffs to “obtain, confirm and [e]nsure the existence of a valid payment bond under O.C.G.A. §§ 13-10-62 and 13-20-63″ (which is often called “The Little Miller Act”).
GSU’s Argument: The Board of Regents denied all liability. Among its arguments, the Defendant argued that the suit was barred by the doctrine of sovereign immunity. More specifically, the Defendant argued that the claim was a tort claim based upon negligence, and, as such, the case was governed by the Georgia Tort Claims Act (and not by the payment bond requirements of the construction of public works projects of Title 13). Consequently, the Defendant argued that GSU was entitled to sovereign immunity from all tort suits, including this one, and that the doctrine of sovereign immunity extends to employees of the State of Georgia while acting within the scope of their official duties or employment.
The Court’s Ruling: Although the Plaintiffs insisted that O.C.G.A. §§ 13-10-62 and 13-10-63 required a payment bond for the Plaintiffs’ protection, the Georgia Court of Appeals found that the Plaintiff’s failed to demonstrate that these code sections were applicable in this specific instance. Since the requirement for a payment bond was not proven, then, the court reasoned, the doctrine of sovereign immunity applied.
When Are Payment Bonds Required on Georgia Public Works Projects? According to O.C.G.A. § 13-10-60, Payment bonds are required for “public works construction contracts with an estimated contract amount greater than $100,000.00.” Although the phrase “public works construction contracts” is not defined in Chapter 10 of Title 13, the Court of Appeals noted that the same phrase is defined in the statutory scheme governing local government public works construction (which is substantially similar to the statutory scheme governing public works owned by the State of Georgia). According to O.C.G.A. § 36-91-2(12), the term “public works construction” means “the building, altering, repairing, improving, demolishing of any public structure or building . … Such term does not include the routine operation, repair, or maintenance of existing structures, buildings, or real property.”
What is the Lesson for Subcontractors Working on Public Projects? In this case, Plaintiffs did not submit the entire GSU contract into the record, and the complaint and portions of the GSU contract which were included in the record show only that the contract was for maintenance and other services, such as cleaning services. Consequently, the Plaintiffs failed to establish that their contract was for public works construction and, accordingly, a payment bond was not required by law. Therefore, prior to bringing a suit against a payment bond, it is vital to determine whether or not a payment bond was required for a specific contract.
Are there Other Important Lessons from this Case? Yes! Since the original payment bond submitted by the Plaintiffs’ employer was forged, the Plaintiffs also argued that GSU had a duty to confirm the validity of the payment bond. The court also held that Plaintiffs failed to demonstrate the state’s duty to verify the accuracy of the payment bond and reminded us that when the Board of Regents takes a proper-form bond, it is “not required to make any further inquiry or investigation into the propriety of the information presented on the face of the payment bond.” It is incumbant upon the subcontractor or supplier to confirm the validity of the payment bond on which they work or supply materials.
Two days before Thanksgiving, the Cobb Law Group‘s founding partner, Mark Cobb and his editor submitted their final revisions for the new book on Subcontractor Law to be published by the American Bar Association (ABA) next spring.
As long-time readers of this blog recall, in early 2012, the ABA Forum on Construction law began working on the first national book to be published on the unique specialty area of subcontractor law, and Georgia subcontractor attorney Mark Cobb was chosen as a contributor. Mark was honored to be selected to participate in this project particularly since he is the only construction lawyer from Georgia working on this project.
Mark’s contributions to the book focused on payment issues faced by subcontractors on their projects. Topics range from preliminary contract terms, paid-if-paid and paid-then-paid terms, owner and general contractor breach as well as the remedies available to subcontractors including materialmen’s liens, subcontractor liens and payment bond claims. For more information on this exciting project, please click here – - >
Since the final document has been sent to the publisher, the subcontractor law book remains on schedule with an anticipated publication date of April 2014. It’s launch will likely coincide with the Annual Meeting of the ABA’s Forum on th Construction Industry. We will post continued updates regarding this useful new book as they become available.
The Cobb Law Group is pleased to announce that it recently became a member of the Construction Suppliers Association.
The Construction Suppliers Association (CSA) is a trade association working for–and advocating on behalf of–independent material suppliers throughout Georgia and Alabama. According to its website, “The association serves as the voice of its members to state and federal government. CSA also provides a wide range of educational and cost-saving programs to businesses in the building materials industry.”
“Since the majority of our clients are construction suppliers, we thought that participating in a group such as the CSA would be a natural fit,” says Cobb Law Group’s founder Mark Cobb. “Almost daily, we prepare and file liens and payment bond claims throughout the state of Georgia; in addition we offer a full-range of legal services to our subcontractor and supplier clients including business law, contract review, construction collections, and construction litigation. We are hopeful that we will continue to build our practice and improve our skills by becoming a part of this great trade association.”
Since 1936, the Construction Suppliers Association has worked tirelessly to educate suppliers, to work for sound industry legislation and to improve the building supply economy. The construction lawyers at the Cobb Law Group look forward to working with the Association in each of these areas. According to Cobb, education is a great benefit to every material supplier. “For example,” he offers, “Georgia materialmen have advantageous lien rights in Georgia, but they must understand the complexities and be diligent in preserving and enforcing their rights.”
In fact, as readers of our blog already know, Mark Cobb is a contributor (the only Georgia construction lawyer!) to a new book to be published by the American Bar Association on Subcontractor Law. It will be the first book to be printed which focuses exclusively on this unique area of law. As one of the few subcontractor law and material supplier law attorneys in Georgia, Cobb understands the needs of the industry, and he welcomes opportunities such as those offered by the CSA to meet other industry professionals.
To learn more about the Construction Suppliers Association and its membership opportunities, please click here – - >
The Cobb Law Group is pleased to announce that founding partner, Mark A. Cobb, has been appointed to an adjunct faculty position with Thomas University’s MBA program.
“This is a great opportunity to contribute to the next generation of leaders, business professionals, and attorneys,” said Cobb. In addition to having tremendous experience as a commercial and business lawyer, Cobb is also a successful businessman. Over the past ten years, Professor Cobb has built his law firm into one of the top construction law and business law firms in the State of Georgia. He has also served (and continues to serve) on multiple boards and frequently advises start-up businesses as well as established businesses struggling with growth opportunities in a downsized market.
For the Fall 2013 semester, Professor Cobb will be teaching in the Thomas University’s distinguished MBA program; in particular, Cobb will be teaching a class on “Leadership” to a group of Chinese students who participate in Thomas University’s MBA program associated with Jimei University, one of the key universities in Fujian Province, China. The students arrived in the program after completing their studies in engineering, law and business.
Cobb is excited to participate in this cross-cultural exchange. “Leadership is a fascinating subject, and we will explore this topic from many perspectives including recent scholarship, innovated leadership theories, and practical applications for improving the students’ own leadership abilities,” says Cobb. “Our course work will explore the complex phenomenon which exists between the leader and the followers in particular situations.”
Cobb credits his recent contribution to a new book (to be published by the American Bar Association in 2014 on Subcontractor Law) with his interest in teaching on the college and graduate school level. While researching and writing about national construction law issues, Cobb was reminded that the best lawyers balance practical client concerns with innovative, academic innovation. He is thrilled for the opportunity to combine his vast experience as a business and construction lawyer with a 21st century academic perspective.
Of course, Cobb’s first priority will be his students, however, he expects to grow and learn from the experience as well. “Our own growth must be continual–it benefits ourselves, our family’s and enriches our lives. More importantly, it helps us to grow and evolve with the ever-changing landscape of the modern business world, and this is very important for our clients,” says business professor Cobb.
Located in historic Thomasville, Georgia, Thomas University is a private, fully-accredited university offering a diverse curriculum. Currently, it offers 43 programs of study encompassing everything from healthcare professions, education, and business to arts, sciences, and human services. And, it is accredited by the Commission on Colleges of the Southern Association of Colleges and Schools (SACS) to award associate, bachelor and master degrees. For more information on Thomas University, please click here – - >
Huffington Post journalist, Radley Balko has written a very interesting article for the most recent issue of the American Bar Association’s ABA Journal regarding the evolution of America’s police from friendly public servants to pseudo-military; to read this article, please click here > >
If you would like to read more, the article’s author, Radley Balko, has written a book entitled Rise of the Warrior Cop: The Militarization of America’s Police Forces; if you are interested in reading this click on the following link.
Don’t forget to leave your comments regarding this interesting and important topic.
Although our law firm focuses on the needs and rights of subcontractors and material suppliers throughout Georgia, we understand that our readers are very diverse, and they appreciate learning about other issues which may impact them. We are pleased to provide a guest post provided by the Asbestos Cancer Victims’ Rights Campaign:
The summer months are the perfect time to kick off your long list of home improvements and DIY projects. With any do-it-yourself upgrades, safety is always paramount. Each year, June is named National Home Safety month. Also sponsored by the National Safety Council in June is National Safety Month; this year’s theme is “Safety Starts with Me.” The hope is to foster a sense of responsibility in people for their own safety, as well as the safety of others, to avoid preventable injuries and deaths.
For asbestos-exposure victims, the notion of preventable injuries and deaths rings all too clearly. With asbestos use rampant in construction and products used in homes prior to 1980, a renovation project can uncover much more than you bargained for during a project. In spirit of National Home Safety Month, here is some advice to consider when tackling your home projects to keep yourself and your loved ones as safe as possible from the hidden danger of asbestos.
Exterior of Your Home
Roofing and siding are commonly replaced on older homes to update the appearance and to protect the structure of the building. Asbestos is a known fire-retardant material, so having asbestos fibers in the siding, shingles, tar paper, and various glues and sealants was not out of the ordinary to help protect the building. This summer, if lifting the old shingles from a roof or re-siding your home is on your summer to-do list, consider researching or testing the products used on your home so you can finish your upgrade safely.
Interior of Your Home
The list of places and products where asbestos could be hidden in your home may seem endless. Some frequent projects, like replacing tiles, replacing insulation, or removing popcorn ceilings, are all projects to consider calling in a professional asbestos abatement team if you suspect asbestos could be present. These type of projects require materials––like floor and ceiling tiles––to be broken up in order for removal. When asbestos-containing materials are broken up or cut, that is when the potential for friable asbestos is the greatest, putting anyone in your home in danger of inhalation and subsequent exposure.
What to do if Asbestos is Found in Your Home
If you believe there is a great chance that asbestos is in your home, hire a professional asbestos removal contractor to test the materials to confirm if asbestos is present. If asbestos is found in your home, there is no need to panic. Asbestos becomes dangerous when it becomes friable, or disturbed, and its microscopic fibers are released into the air. An asbestos removal contractor can work with you to have the asbestos properly abated from your home so you can get your renovation projects safely underway.
A main component of the Asbestos Cancer Victims’ Rights Campaign’s mission is to educate the public on the dangers of asbestos. Asbestos-related diseases are sometimes unavoidable, but by understanding the risks and locations of this deadly fiber, we can learn how to best prevent exposure. The ACVRC is also fighting to protect those individuals and family members who have already been exposed. In honor of National Home Safety Month, Please sign our petition to protect the rights of asbestos cancer victims.
While it’s important to maintain and update your home for your comfort or for improved curb appeal, it’s more important to consider the theme of “Safety Starts with Me” and take the time to consider properly removing asbestos containing materials from your home safely. Not only will you be taking a great step to keep yourself safe, you’ll also be keeping your loved ones safe from potential exposure as well.
by Mark A. Cobb
On July 1, most of the 2013 Georgia legislative changes take effect including a very crucial amendment to Georgia’s lien laws.
Earlier, this year, our state legislature approved and our Governor signed in to law, an amendment to the Georgia Mechanics and Materialmen’s Lien Statutes which allows lien claimants the right to include all of their contract costs in their lien amount. Thus, as of today, it is clearer that the law allows lien claimants to include such amounts as pre-judgment interest, general condition costs, mobilization, de-mobilization, and profits in the amount they claim in the form of a lien. Specifically, Part 3 of Article 8 of Chapter 14 of Title 44 of the Official Code of Georgia Annotated, relating to liens of mechanics and materialmen, was amended by revising Code Section 44-14-361, relating to creation of liens and property to which lien attaches. The following is the revised O.C.G.A. Section 44-14-361 (the changes to the current statute are indicated underlined) which takes effect today:
(a) The following persons shall each have a special lien on the real estate, factories, railroads, or other property for which they furnish labor, services, or materials:
(1) All mechanics of every sort who have taken no personal security for work done and material furnished in building, repairing, or improving any real estate of their employers;
(2) All contractors, all subcontractors and all materialmen furnishing material to subcontractors, and all laborers furnishing labor to subcontractors, materialmen, and persons furnishing material for the improvement of real estate;
(3) All registered architects furnishing plans, drawings, designs, or other architectural services on or with respect to any real estate;
(4) All registered foresters performing or furnishing services on or with respect to any real estate;
(5) All registered land surveyors and registered professional engineers performing or furnishing services on or with respect to any real estate;
(6) All contractors, all subcontractors and materialmen furnishing material to subcontractors, and all laborers furnishing labor for subcontractors for building factories, furnishing material for factories, or furnishing machinery for factories;
(7) All machinists and manufacturers of machinery, including corporations engaged in such business, who may furnish or put up any mill or other machinery in any county or who may repair the same;
(8) All contractors to build railroads; and
(9) All suppliers furnishing rental tools, appliances, machinery, or equipment for the improvement of real estate.
(b) Each special lien specified in subsection (a) of this Code section may attach to the real estate of the owner for which the labor, services, or materials are furnished if they are
furnished at the instance of the owner, contractor, or some other person acting for the owner or contractor and shall include the value of work done and materials furnished in any easement or public right of way adjoining said real estate if the work done or materials furnished in the easement or public right of way is for the benefit of said real estate and is within the scope of the owner’s contract for improvements to said real estate.
(c) Each special lien specified in subsection (a) of this Code section shall include the amount due and owing the lien claimant under the terms of its express or implied contract, subcontract, or purchase order subject to subsection (e) of Code Section 44-14-361.1.
(d) Each special lien specified in subsection (a) of this Code section shall include interest on the principal amount due in accordance with Code Section 7-4-2 or 7-4-16.
In addition to this important update to Georgia’s lien laws, most of Georgia’s new statutes also take effect today including the amendment to Georgia’s constitution to allow the state to authorize new charter schools over the objection of local school boards, and a $2,000 increase in the amount of tax-free income married couples filing jointly may claim as an exemption.
by Mark A. Cobb
In today’s economy, a dollar means more than it has in a long time; thus, every dollar that your credit department is able to collect helps build your company’s bottom line. Since our firm focuses on construction collections throughout Georgia, we have observed that small steps taken by sales and credit departments can result in big gains if collection ends up on a lawyer’s desk. Thus, we have listed some important tips which are easy to implement and can increase your recovery rate substantially. Although these tips are focused towards material suppliers and subcontractors working on Georgia projects, most of these tips, however, will help credit and collection managers in every industry and in every location.
1. Credit Applications: Have one for every credit customer and know where the original is located.
2. Credit Applications: Update them every 3 or 4 years.
3. Credit Applications: Make sure they are legible! We cannot overstate the importance of this, if the salesman or the credit analyst receiving the copy cannot read every word, then a third-party collector or collection lawyer will not be able to read it either–particularly after it has been scanned, copied, and faxed.
4. Credit Applications: Make sure they contain useful information in case the customer absconds or you need to locate assets. Require information such as
- middle or maiden names;
- spouse’s names;
- EINs for business applicants;
- social security numbers for all of the principals of the business;
- home address for the principals; and
- bank account information for the principals.
5. Credit Application: Make sure it is complete. If there is any missing information, have the salesman or credit analyst tell the potential customer something like, “We will be glad to process your application for credit; however, before we do so, we need all of the information completed..”
6. Credit Application: Use a forum selection clause. If you must bring a lawsuit against the customer in the future for non-payment, a forum selection clause built into the credit app establishes the location and the court where the action may be brought. Your lawyer can suggest a location convenient to him or her and save your company travel time and likely offer more predictable results from a familiar court.
7. Guarantee: Have an attorney in each state in which you supply materials draft a guarantee which meets that state’s specific requirements.
8. Guarantee: Use a forum selection clause in your guarantee which establishes the court and the jurisdiction where you can bring a lawsuit if payment is not received. This will save travel time and legal fees.
9. Guarantee: At the time the credit application is made, obtain a personal guarantee from one or more principals of the business.
10. Guarantee: Require both a husband and wife to submit personal guarantees (it will help prevent a guarantor from transferring all of his or her assets into a spouse’s name).
11. Guarantee: Get information on the guarantor. Either in the body of the guarantee or on the signature line, have the guarantor provide useful information such as a (physical) home address, a social security number, drivers license number and work information.
12. Guarantee: Update them! As businesses evolve and grow, there may be new principals from whom you should seek additional personal guarantees.
13. Guarantee: Have them witnessed/notarized. We are constantly amazed how many guarantors claim that their PG was forged–even if there was a purported witness. Don’t let an applicant return a “signed” guarantee and then have a branch employee “witness” it; implement a policy that a witness must be physically present and witness the guarantor’s signature on the document.
14. Extend Credit Slowly: Whenever the customer requests additional credit, use the request to get additional and updated information on the company and guarantors; perhaps, you could use a more comprehensive application for credit requests over a certain amount.
15. Send NTOs: In Georgia, third-tier material suppliers and sub-subcontractors may file a mechanics or materialmen’s lien or make a payment bond claim only if they have sent a Notice to Owner (“NTO”) and a Notice to Contractor (sometimes called a Notice of Furnishing) within the first 30 days of beginning to supply on the project; failure to meet this obligation will reduce your recovery options.
16. When Supplying: Get current information about the job site including the following:
- a copy of the Notice of Commencement;
- payment bond information;
- the name of the general contractor; and
- the name of the owner of the project.
17. Watch the Date: Do not let a debt continue past 90 days from the last day in which you supplied materials on a job in Georgia; all construction liens and all payment bonds must be made within 90 days of the last day in which you worked on the job site. Calendar payment for 65 days past due.
18. Joint Check Agreement: If you notice slow payments at the start of the project, watch-out for the final payments; request that your customer agree to a joint check arrangement with the general contractor.
19. Lien Waivers: Georgia Lien Waivers become unconditional after 60 days; thus, if a lien waiver is signed but you do not receive payment within 60 days, it is presumed that you received payment. After this deadline passes, you cannot claim that you are owed money; prior to the deadline, however, you have several options including (but not limited to) filing an Affidavit of Nonpayment, filing a materialmen’s lien or making a claim against the payment bond.
20. Materialmen’s Liens: Filing a proper materialmen’s lien can dramatically increase your collection rate; make certain that you utilize this very useful tool on every private project in Georgia.
21. Payment Bond Claims: Similar to materialmen’s liens, making claims against a payment bond on a public works project will substantially increase your collection rate. Do not let the 90-day deadline pass you by!
22. Payment Bonds on Private Projects: It is easy to forget that some private construction projects in Georgia are covered by payment bonds; although these differ from payment bonds on public projects, they are a very useful tool to substantially increase your collection and you want to meet the requirements for making a claim.
23. Continuing: Get information on customer’s current/additional job sites. It is very likely that your salesmen know the debtor’s current job sites. Although this may not be the site on which your company supplied materials, information on current work can help with post-judgment collections (this information can be used for filing a garnishment against the income the subcontractor may be getting from its new job or it can be used to serve legal process upon a debtor who is difficult to find).
24. Litigation: For each state in which you supply materials, choose one lien and bond lawyer who can assist you with your needs throughout the state. It will save you time, money as well as build relationships.
25. Continuing: Train, train, train your employees (both salesmen and credit analysts); bring in a specialist to educate your staff on lien laws, payment bond claims, deadlines, and other pertinent topics.
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Every so often, we take a break from talking about construction law on this blog, and today is one of those days! Some very good friends of ours, Debbie Frame and Jan Kiss, have a great deal of experience with leadership, management training, and training to improve employees’ (and everybody’s!) health and wellness; Frame and Kiss have consulted with numerous businesses and industries, and through their research, have written a new book which some of our clients might find practical for their businesses, their employees, or for themselves.
Jan Kiss, RN MSN, has over 30 years of progressive clinical and management experience in healthcare, she is a Board Certified Drugless Practitioner, a Certified Integrative Nutrition Coach and a Certified Leader Coach. Her co-author, Debbie Frame, has vast corporate experience training and coaching executives, managers and supervisors as well as entrepreneurs and professionals; in addition, she is the founder and president of The Leadership Essentials™ Group.
I have known Jan and Debbie for years and am privileged to call them friends, and I have personally received the benefit of their health and business knowledge on many occasions. That’s why it is so exciting that they have co-authored an e-book, The Health and Wellness Coaching Tips and Tools. Together, they have created a compendium of information, tips and tools that will support those who are trying to stay healthy–and those who are trying to get there. The book offers readers ways to make better choices and hold themselves accountable for changing bad habits.
The authors take the approach that information is power, and they lay the ground work with some startling facts about nutrition, weight, disease and exercise. Building on this foundation, the authors provide readers with real-world tools (and tips!) to build a diet and eating plan. It’s easy to say that we know what goes into our stomachs, but the reality for most of us is that we don’t. Armed with the right tips and tools on virtually every topic including leftovers, how much water experts say each person should drink, and how to handle nighttime munchies, readers will be able to build a toolkit for health and wellness that will work for now and in the future. Always encouraging their readers to check with their physician before making any dietary or exercise changes, the two coaches encourage people to be sensible and take control of their health.
While each author is in their own private practice, the two work together to coach clients on health and nutrition and then help hold them accountable for making the life changes they need to hardwire changes, through life coaching. Both authors live on St. Simons Island, GA.
This book has been issued in multiple formats including as an APP for DROID, an ebook for iPhone/IPad/ iPod, Kindle and Nook. To learn more about this great book (and to buy a copy!), please click below.