GEORGIA CONSTRUCTION, BOND & LIEN LAW BLOG


Cobb to Speak at AGC Construction Professionals Conference

Posted in AGC Georgia,Good Business Practices,Honors & Awards,Practical Tips by Blue Blog on the April 14th, 2014

Georgia Lien Best Practices

It’s not too late!  Although over 325 construction professionals have already signed up to attend, the AGC Georgia (the Associated General Contractors of Georgia) still has space for you to participate in its inaugural Construction Professionals Conference & Marketplace.

With over forty learning sessions, the event is divided into four-tracks catering to the construction industry:

  • Executive Operations (including contracts, liens, payment bonds, leadership and best practices for industry executives, owners and leaders)
  • Human Resources (including employee management and legal compliance for your HR department)
  • Safety (including jobsite leaders and company-wide safety issues for every part of your business), and
  • Technology (including BIM, construction apps, deployment, managements and Bluebeam)

Mark’s lecture is part of the Executive Operations track which focuses on current lien and bond laws, best practices, and proven leadership strategies from an owner’s/executive’s point of view.

Specifically, Mark’ program, entitled Best Practices for Contractor Survival, will include a combination of current issues, practical tips, and lessons learned in several areas of construction law including contract negotiation and drafting, Georgia’s lien waiver laws, preparing and filing mechanics and materialmen’s liens in Georgia, construction project insurance tips, registration of foreign subcontractors, and project management.  Learn practical tips and on-the-ground knowledge to streamline and protect your interests.  But, to learn more, you’ll have to register for the symposium.

See below for registration information:

Construction Seminar:  AGC Georgia’s Construction Professionals Conference and Marketplace

Date:  Wednesday, April 23, 2014

Place:  Georgia International Convention Center, College Park

  • Over 40 learning sessions on Safety, Executive Operations, Technology and HR
  • Marketplace with 50 exhibitors
  • Over 300 attendees
  • Presentation of Ron Amerson Supervisor Safety Awards
  • Keynote presentation – Social Media Overload

Click here to learn more and to register!  We look forward to seeing you.

Construction Law Symposium in New Orleans!

Posted in Current Legal Issues by Blue Blog on the April 10th, 2014

ABA Forum on the Construction Industry

This is an exciting week at the Cobb Law Group; our materialmen’s lien and payment bond lawyer, Mark Cobb, will be attending the ABA (American Bar Association)’s Forum on the Construction industry’s Annual Meeting in New Orleans!  The topic of the 2014 Annual Meeting is “Beat the Blues: Counseling the Client During the Course of the Ongoing Construction Project” and will be held April 10 – 12.

The speakers are always of the highest caliber and the topics are vital to maintain the cutting-edge theories applied to construction law, lien and bond issues.  Topics this year include the following:

  • Getting the Troubled Project Back on Course
  • Owner’s Discovery of Defective Work in Progress
  • Triaging the Disruptive Labor Dispute
  • Impossibility or Impracticability as an Excuse to Performance
  • When to Call in Reinforcements
  • When to Call in the Surety
  • Advice on how to Handle Mid-Project Financing Problems
  • The Double-Edged Sword of Tracking Project Claims & Delays
  • The Delicate Balance Between Managing the Project vs. Managing the Claim
  • Practical Guidance on Handling Mid-Project Insurance issues
  • Avoiding Compliance Traps When Administering Federal Contracts with Minority and Other SBA Regulated Entities
  • Supplier Down! The Fallout of a Major Material Supplier Repudiation or Insolvency
  • Construction Litigation
  • When Reasonable People Differ: Keeping the Project on Track
  • When to Advise the Client to Terminate the Construction Contract
  • Project Counsel’s Ethical and Professional Obligations Versus the Eternal Quest for Project harmony and Cooperation

In addition to these fantastic legal educational opportunities, Mark also enjoys the networking opportunity to meet and discuss various legal issues with construction attorneys from across the country.

This particular annual meeting, too, has special excitement for the Cobb Law Group as the ABA is officially launching its new book “Construction Contracting” for which Mark Cobb was a co-author.  This book is a comprehensive practical and legal guide for the attorney representing specialty trade subcontractor and construction material suppliers.

GA Court of Appeals–If Contractor Does Not Give Notice, Then No Additional Claims Allowed

Posted in Contracts,Georgia Case Law,Government Contracting,Strict Compliance by Blue Blog on the April 4th, 2014

Georgia Road Construction Law

by Mark A. Cobb

Last week, the Georgia Court of Appeals decided Western Surety Company v. Department of Transportation holding that a construction contract’s claim notice provisions were enforceable which, in turn, invalidated the prime contractor’s request for additional funds due to increased material costs.  This holding underscores every contractor and subcontractor’s need to be aware of their contractual deadlines for providing notices on construction projects.

Background and Facts: This construction contract dispute involved the Georgia Department of Transportation (“DOT”), a government contractor, and two sureties.  The DOT contracted with the GC to make road improvements in Georgia, and as a part of the contract the Sureties issued a payment bond and a performance bond to the DOT, as obligee.  After the project was started, the GC experienced increased material costs (for the asphalt and other petroleum-related products) and suffered financial difficulties.  The GC advised the Surety that it could not continue to perform under the contract and planned to voluntarily abandon the project. Consequently, the surety stepped in to complete the project pursuant to the terms of the performance bond.

The Issue: The surety ended up suing the DOT for, among other things, the additional material costs.  The sureties, however, acknowledge that neither the original GC nor the Sureties themselves “strictly followed the claim notice requirements set forth under the contract.”

What Did the Contract Provision Require for Notice?  The construction contract in dispute required written notice of any potential claims; it further specified that failure to provide timely notice was a waiver of the claim. Thus, if notice was not properly given, then the claim would automatically be denied.  Specifically, the contract’s provision stated as follows:

NOTICE OF POTENTIAL CLAIM: In any case in which the Contractor believes that it will be entitled to additional compensation, the Contractor shall notify the Engineer in writing of its intent to claim such additional compensation. Such notice shall be given in order that the [DOT] can assess the situation, make an initial determination as to who is responsible, and institute appropriate changes or procedures to resolve the matter.

    a. Claims for Delay — The [DOT] shall have no liability for any delay which occurred more than one week prior to the filing of such written notice. Failure of the Contractor to give such written notice in a timely fashion will be grounds for denial of the claim.

    b. All Other Claims Except Acceleration and Delay — If the Contractor does not file such written notice before beginning the work out of which such claim arises, then the Contractor hereby agrees that it shall have waived any additional compensation for that work and the Contractor shall have no claim thereto.

The Sureties Argument: The Sureties claimed that the claim notice requirements were not applicable to the specific case because, among other things, the DOT waived strict compliance with the notice requirements, the GC and the Sureties substantially complied with the notice and claim procedures, and the DOT had actual notice of the claim.

The Holding: As the court pointed out, the parties had agreed (in their construction contract) that any additional material costs would require specific notice from the GC or Surety under the Contract and that compliance of this requirement would be “an essential condition precedent to any recovery of damages by the Contractor.”  The Georgia Court further reminded the parties that “As a rule, ‘”[a]ny notice requirement must be reasonably construed.’ And substantial compliance with a notice provision may present an issue for the jury if ‘[t]he evidence … appears to be ‘in the spirit’ of the contract provision.’ [citations omitted].  Then, as the Court applies the facts in the trial court record, it concluded that none of the communications by the GC or the Sureties reasonably or substantially complied with the requirement that timely notice of a claim be given to the DOT.  Thus, the Georgia Court of Appeals ruled that deadlines and notice provisions on construction contracts may be enforceable and, if proper notice isn’t given, it may preclude a party from seeking (much less recovering) additional money for its damages including increased material costs.

Practical Lesson: Regardless whether you are a prime contractor, specialty subcontractor or a sub-subcontractor working in Georgia, it is vital that you understand each term of your contract.  When we review construction contracts for our clients, we create a list of deadlines and notice requirements and suggest that the client post it conspicuously on the project file, the project manager’s desk or other pertinent place as a reminder to strictly comply with the notice obligations; failure to meet each and every deadline may result in the loss of your claim, the inability to file a materialmen’s lien, or to seek additional compensation.

 

 

Recognition for our Georgia Lien Law Tweets

Posted in Honors & Awards by Blue Blog on the March 19th, 2014

Georgia Construction Lien Info

The Cobb Law Group maintains an active blog on materialmen’s lien, payment bond and general construction law issues, and we have been very fortunate to have been recognized in national competitions regarding the quality of our content!  Lawyers can be wordy so Twitter is not always the best format for us, however, we have found Twitter a great way to circulate information on our current posts and pending legislation.  Recently, the Cobb Law Group’s Twitter account was included in a list of “Handy Twitter Accounts for Construction Managers”.  To check out the full list, please click here > >

If you have any ideas for future blog articles based on Georgia’s lien law,  supplier’s construction notice requirements, lien waivers or virtually any topic related to the construction industry, please let us know and we’ll try to cover them!

 

 

Cobb to Speak on Subcontractor Payment Issues

Posted in Honors & Awards,Subcontractor Law by Blue Blog on the March 15th, 2014

Seminar on Georgia Lien Laws

Georgia materialmen lien attorney Mark Cobb regularly speaks at seminars and training sessions.  He frequently discusses legal issues related to Georgia subcontractors and general contractors including lien waivers, construction contract terms, best practices, and payment bond claims.

In addition to speaking to construction professionals, Mark also speaks to and helps train other lawyers.  On March 19, for example, Mark will be addressing construction lawyers from across the country on payment issues facing subcontractors.  Mark will be addressing the membership of Division 9 of the American Bar Association’s Forum on the Construction Industry; Division 9 is the subsection of the Forum which focuses on subcontractor law, construction liens and payment.

Mark was chosen to be a presenter to this group based upon his involvement with the forthcoming book on Subcontractor Law to be published by the ABA later this year.  This boo–written by lawyers primarily for lawyers–is the first national publication addressing subcontractor law, and Mark was a co-author of the section dealing with payment issues faced by subcontractors, suppliers and sub-subcontractors.

Although Mark is an experienced attorney in Georgia subcontractor law, he learned a great deal more in researching his portion of the book.  “Subcontractors across the country face similar issues, but the way each state deals with these issues is fascinating,” stated Mark.  “For example,” he continues, “Georgia allows the prime contractor and the specialty subcontractor to negotiate the amount of retainage held-back on a project whereas other states have specific statutes which limit the amount of the retainage that a general contractor can hold-back from its subs.  Similarly, different states manage the priority of construction liens and mortgages differently which can lead to different results depending upon the jurisdiction where the subcontractor, supplier or other lien claimant may be working.”

Mark’s research included looking in to subcontract issues related to payment as well as statutory and common law remedies related to payment. including a contractor’s right to set-off amount due to a subcontractor (or material supplier) on one project for amounts owed on another project.

Mark plans to present some of the significant differences he discovered among the states’ laws and the impact these differences can have as it relates to payments to subcontractors during the March 19th session.   In addition to speaking to his colleagues, Mark hopes to use some of his research to influence Georgia’s lawmakers to add or amend our existing statutes to make this more responsive to Georgia’s subcontractor’s needs.

“It is an honour for me to speak to my fellow construction lawyers from around the country,” stated Mark. “Particularly since the participants are generally highly sophisticated, experienced construction lawyers with a significant knowledge of subcontractor law and practice. “

FREE Calendar Wheel Giveaway

Posted in Filing Materialmen's Liens,Materilamen's Liens,Payment Bonds,Uncategorized by Blue Blog on the February 27th, 2014

calendar wheel 005

Construction projects are all about deadlines–30 days, 60 days, 90 days…..You’re always calculating when you will start or complete your work during a project.

And, have you ever finished a project and when payment is slow, you want to know the deadline before your ability to file a payment bond or materialmen’s lien expires?  Affidavits of Nonpayment, for example, must be filed within 60 days from the date of your Georgia lien waiver, but your construction lien must be filed within 90 days of the last day you were on the job.

Well, there’s no need to keep counting out on your fingers or searching for the calendar you keep misplacing–Cobb Law Group has created a calendar wheel for this very thing, and as a small thank you, we will drop one in the mail to you for FREE!!  It’s so easy, just

1. “Like” Cobb Law Group on Facebook;
2.  Leave a comment on the blog with a topic you would like for us to write about in a future blog article or tell us how you found us; and
3. E-mail us your mailing address dorothy@cobblawgroup.net

No more scrambling around or being lazy about those deadlines–we use ours all the time!

Giveaway ends when supplies run-out!

S.B. 269 Pending Legislation Could Be Great for Georgia Lien Claimants

Posted in Current Legal Issues by Blue Blog on the January 25th, 2014

Georgia Lien Law Changes

by Mark A. Cobb

Virginia Construction Lawyer, Christopher G. Hill, maintains the highly-regarded blog “Construction Law Musings”.  He recently honored the Cobb Law Group by requesting that Mark Cobb write a guest post.  Mark chose to write about some pending Georgia legislation which is based on a Virginia statue.   Sen. Lindsey Tippins (R-Marietta) recently introduced S.B. 269 which, if passed, would give Georgia mechanics and materialmen’s liens priority over a deed to secure debt by requiring distributions from a foreclosure sale to first be used to satisfy the liens.  The impact of this legislation has a tremendous benefit to Georgia lien claimants, and we urge our readers to contact their legislators to vote in favor of this bill.  To learn more about this bill, please read Mark’s guest blog > >

 

 

New Years Resolutions for Contractors and Suppliers

Posted in Practical Tips by Blue Blog on the January 24th, 2014

Best Practices for Georgia Contractors and Suppliers

 

by Mark A. Cobb

Welcome to the new year!  It’s January and that means there are new-years resolutions being made in great abundance.  Self-improvement is always a good idea, but January can also be used to break bad business habits and replace them with better practices.  Thus, we hereby offers our New Year’s Resolutions for the construction industry:

  • RESOLVE to have your construction contracts reviewed and revised to improve their enforceability, to properly shift risks, and better define a project’s scope
  • Georgia General Contractors should RESOLVE to file proper Notices of Commencement on every construction project
  • Third-tier subcontractors and suppliers should RESOLVE to timely send Notices to Contractors and Notices to Owners (NTOs)
  • RESOLVE to use only Georgia’s statutory Interim Lien Waiver form and Final Lien Waiver form (they waive payment bond claims too!)
  • RESOLVE to remember that if you wait more than 60 days from the date of a Georgia lien waiver, the lien waiver becomes unconditional which means that you cannot recover the money you are owed
  • RESOLVE to work harder as today’s construction market place requires the best of each and every individual
  • RESOLVE to give your construction attorney time to prepare and file your Georgia mechanics and materialmen’s liens
  • Suppliers and materialmen should RESOLVE to update their credit applications and obtain more information which is useful to judgment collection
  • Non-resident contractors working in Georgia should RESOLVE to register with the Georgia Department of Revenue and obtain their sales tax bond
  • RESOLVE to purchase (and maintain!) all pertinent types of insurance including workers’ comp, general liability, an umbrella policy, automobile insurance, etc.
  • RESOLVE to address issues on construction projects as soon as you become aware of them rather than letting a small issue snowball into a larger problem
  • RESOLVE to pay your bills on time
  • RESOLVE to submit accurate, signed pay apps
  • RESOLVE to treat your employees and subordinates (well, everyone) the way that you want to be treated
  • RESOLVE to implement (and maintain!) better bookkeeping & record keeping methods
  • For plumbers (others?), RESOLVE to cover-up that plumber’s butt
  • RESOLVE to implement technology to lower your cost and improve your efficiency
  • RESOLVE to keep signed, daily construction logs
  • RESOLVE to know your rights as a prime contractor, a specialty subcontractor, or as a material supplier
  • Contractors and specialty sub-contractors should RESOLVE to promptly pay their subcontractors and suppliers after they receive payment
  • RESOLVE to adopt a policy of integrity for every aspect of your business
  • RESOLVE to become more active in any number of great contractor groups such as AGC (Associated General Contractors), ASA (American Subcontractors Association), or CSA (Construction Suppliers Association)
  • RESOLVE to honor your business contracts
  • RESOLVE to stop procrastinating
  • RESOLVE to constantly strive to be your best
  • RESOLVE to take a vacation and relax
  • RESOLVE to improve the professionalism of the construction industry

 

Breaking News–Supreme Court Victory for Subcontractors

Posted in Contracts,Current Legal Issues,Georgia Case Law by Blue Blog on the December 8th, 2013

Supreme Court Decides Construction Law Case in Favor of Subcontractors
by Mark A. Cobb
In its December 3, 2013 ruling, the U.S. Supreme Court took a very important stand in favor of subcontractors!  For those of us watching Atlantic Marine Construction Co., Inc. v. United States District Court for the Western District of Texas, et al. closely, we were delighted to see that the Supreme Court upheld the laws of twenty-four states (which impacts every state) to limit the uses of forum-selection clauses in construction contracts.

What is a Forum Selection Clause?  Forum selection clauses are very common in all types of contracts as they establish the jurisdiction where a dispute related to the contract will occur.  In other words, for example, a California general contractor and a subcontractor from Alabama working on a project in Georgia might agree in their subcontract agreement that any and all disputes related to their contract will be resolved in Georgia as that is the project’s location.  This makes sense as both parties were working in Georgia, the building in dispute is in Georgia, many of the witnesses were or are in Georgia, and it involves Georgia real estate.

Do Forum Selection Clauses in Construction Contracts Differ from Forum Selection Contracts in Other Business Agreements?  Yes, and that’s the impact of this case.  In the most general terms, forum selection clauses in commercial contracts tend to be enforceable.  Construction contracts, however, have very significant public policy consideration as well as issues related to state and federal laws.  Specifically, many states have enacted statutes which either void or make voidable forum selection clauses in construction contract.  States have singled out construction contracts due to public policy related to the situs of the project among other reasons.

Why do Some States Limit the Terms of Forum Selection Clauses? Imagine in the example above regarding the California general contractor, that the contract selected California as the proper jurisdiction for all disputes.  It might not be as fair for many reasons including California’s natural tendency to favor its citizens (in the case the general contractor); frequently, the general contractor has deeper pockets than the specialty subcontractor so to require the Alabama subcontractor to enforce its rights in California could be very expensive, the costs to fly witnesses located in the project’s location (Georgia) is time-consuming and expensive, and, frequently, subcontractors have limited opportunity to negotiate the terms of their contracts.  Furthermore, and perhaps most importantly, the dispute would involve a construction site or building located in Georgia.  Thus, many state legislatures have put limits onto the use of forum selection clauses in construction contracts.

What Happened in the Recent Case Decided by the Supreme Court?  In Atlantic Marine Construction Co., Inc. v. U.S. District Court for the Western District of Texas, a Virginia-based general contractor, Atlantic Marine, hired a subcontractor named J-Crew Management, Inc, a Texas corporation, to build a child care facility in Fort Hood, Texas.  And, the subcontract between Atlantic Marine and J-Crew contained a forum-selection clause requiring that all disputes “shall be litigated in the Circuit Court for the City of Norfolk, Virginia, or the United States District Court for the Eastern District of Virginia, Norfolk Division.”

J-Crew, in turn, subcontracted some of its work to sub-subcontractors who were located in or near Fort Hood, Texas (very close to the project).  All of J-Crew’s work  was performed in Texas, and all of the sub-subcontractors work was performed in Texas.  At the close of the project, however, J-Crew was owed almost $160,000 even though it had timely completed its work.  In order to recover the amount due, J-Crew brought suit against the general contractor in Texas (in the federal district where the project was located).  The general contractor, Atlantic Marine, citing the forum-selection clause contained in the construction subcontract, moved to dismiss or transfer J-Crew’s case to federal court in Virginia.

The Trial Court’s Decision:  Because the project occurred solely in Texas, the claim arose in Texas, all of the participants had been in Texas, and most of the evidence concerning the claim was located in Texas, the trial court agreed with J-Crew and refused to transfer venue to Virginia.  Furthermore, the Texas legislature had enacted a statute which states that construction contracts for improvements to real property located in Texas are “voidable by the party obligated by the contract to perform the construction” if the contract requires litigation in another state.

Federal Appeals Court Upholds State Law:  In response to the trial court’s ruling, Atlantic Marine appealed to the Federal Court of Appeals to seek enforcement of the forum-selection clause, but the appeals court agreed with the trial court. Finally, Atlantic Marine appealed to the U.S. Supreme Court, which granted review. The Supreme Court heard oral arguments in the case in October and handed down their ruling this week.

Ruling Impacts Georgia Subcontractors and Suppliers

Why The U.S. Supreme Court Upheld the Trial Court’s Decision:  The Supreme Court recognized states rights in not overruling the Court of Appeals Decision.  And, in fact, the Supreme Court’s holding states that when a federal court considers the forum for a case, “the court should not consider the parties’ private interests aside from those embodied in the forum-selection clause; it may consider only public interests.”  By authorizing public policy as a part of a court’s decision to transfer or dismiss a case, the Supreme Court recognized state sovereignty as well as the need for public interest to enforce states laws.

Important Lessons for Subcontractors and Suppliers: Although Atlantic Marine did not render all forum selection clauses in construction contracts unenforceable, it does permit a balance between parties’ rights to contract and public policy.  In addition, Atlantic Marine is a great reminder of the importance that even a seemingly insignificant subcontract term can hold in a construction contract.  Frequently, forum-selection provisions are buried deep within the “boiler plate” terms of the construction contract; parties entering into contract must pay attention to each of these terms including the forum selection clauses.

Cobb to Speak at AGC Georgia Seminar

Posted in Current Legal Issues,Honors & Awards by Blue Blog on the December 4th, 2013

Georgia Lien Law Seminar

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.

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