April 2015

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Anatomy of a LeakMCN Podcast 130x130 Brown

In today’s episode we speak with Mr. Matthew Vocci, Principal, Ober|Kaler Construction and Litigation Group and Stan Sersen, President & CEO of Architectural Support Group, Inc. to discuss issues relating to design and construction defects and the consequences that spring from them. Stan has tremendous experience in design and forensic investigations of as-built conditions relating to water infiltration. Matt has been litigating construction defect matters at Ober|Kaler and has seen the back-end consequences of design and construction issues.

What is the building envelope and why should it be of concern?

  • Generally, the building envelope is the barrier system between the conditioned and non-conditioned (the components that keep water and air from entering building), etc.

What are the goals for designing the building envelope?

  • Watertight, air barrier
    • Code Provisions provide understanding of what is required
    • IBC – 1403 – Building Envelope weather resistant, etc.
  • Important for life safety issues
    • Water, mold, indoor air quality
    • Components deteriorate; structural issues can result
  • Practical concern for contractor/owner – 3% of cost is waterproofing and 85% of litigation relates to water penetration

What can be done to protect against water intrusion?

  • Early on work with design professional
  • Look at intersections – need for proper flashing at intersections of different components of the building

Claims and Litigation

  • Claims process can lead to litigation and discovery
  • Discovery is the process where parties exchange documents, correspondence and have to answer questions under oath – both in written form and at depositions
  • This process is one that most construction professionals generally want to avoid. The time and effort involved in bringing or defending a construction defect claim can be fairly daunting
  • First documents that opposing counsel will want to review are the contracts btw the owner-GC-subs and the drawings and specs
    • Did contractor comply with drawings and specs
    • Were the drawings/specs proper- did they meet the standard of care and contractual obligations
    • Contractors – More general drawings and notes can create problems
      1. Ex – No flashing detail drawings, just a note – Add Appropriate Flashings where appropriate
        1. If building leaks, you could be called to account for why flashings weren’t added
        2. Problem for designer – did that note meet standard?
    • Another example is where drawings/specs note that contractor is to follow manufacturer’s instructions for a given component
      1. If a specific window, for example, is to be used – the contractor should make sure to follow the installation instructions. If the window calls for a certain type of flashing – install it

What are some common issues that can lead to water problems

  • Coordination of subs
  • Strength of QC and on-site foreman
  • Is there an outside consultant that does testing
    • Are manufacturer’s reps on site to evaluate installation of components
  • Look at intersections – many contractors/specialties come together at intersections – mason, Tyvek, trim, carpentry, windows/doors, etc.

Legal issues regarding liability

  • You could have claims arise long after you are completed your work
    • Due diligence with your subcontractors
    • Have written, executed contracts for all work on the job – even small items that seem miscellaneous
      • Things to think about in the subcontract – disputes resolution clause – where and what venue
      • Do you want your sub to indemnify you for its mistakes – make that clear in your contract?
  • You want to be able to rely upon your subcontractor, that it will be around and have paid its insurance premiums, if there is a problem down the road

Why water infiltration is difficult

  • Is it the first time a window lets in a few drops of water; water can breach the water barrier for quite a while before it manifests on the interior – when was owner on notice?.
    • – In Poffenberger v. Risser, the Court of Appeals established “the discovery rule to be applicable generally in all actions and the cause of action accrues when the claimant in fact knew or reasonably should have known of the wrong.”  290 Md. 631, 636 (1981).  This means actual knowledge, not merely constructive notice is required.

As the Court of Appeals stated:

constructive notice, if deemed to be sufficient to activate the running of limitations, would recreate the very inequity the discovery rule was designed to eradicate, we now hold this type of exposure does not constitute the requisite knowledge within the meaning of the rule.  Affirmatively speaking, we determine the discovery rule contemplates actual knowledge — that is express cognition, or awareness implied from knowledge of circumstances which ought to have put a person of ordinary prudence on inquiry [thus, charging the individual] with notice of all facts which such an investigation would in all probability have disclosed had it been properly pursued.

Statute of Repose – another issue that we have litigated — In its current iteration, the Statute prohibits a plaintiff’s cause of action from accruing for damages to person or property resulting from the defective and unsafe conditions of improvements to real property that were completed more than 20 years before the injury. In addition, the Statute provides heightened protection to certain professions within the construction industry. Claims for damages against architects, professional engineers, and contractors no longer accrue 10 years after the improvement was completed. So, a plaintiff’s damages must have occurred within 10 years after the completion of the improvement for their lawsuit to proceed against architects, professional engineers, and contractors.

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2015 Construction & Real Estate Bootcamp

The 1st Annual Construction & Real Estate MCN Podcast 130x130 BrownBootcamp is a thought leadership event being provided by KatzAbosch and co-hosted by the Maryland Construction Network. Kelly Ernest, the Marketing Manager for KatzAbosch joins us on this podcast to discuss the program and highlight some of the information and benefits you can derive by attending this FREE EVENT! The program seeks to unite leaders from the Real Estate world with those from the Construction industry to bring a holistic business approach with speakers hailing from the finance, legal, management, general contracting and government sectors.

The Bootcamp is scheduled for Tuesday, May 12, 2015 at the Sheraton Baltimore North Hotel in Towson. The activities begin at 9:30 a.m. with education sessions, food, and networking continuing until approximately 6:00 p.m. Click Here to go to the KatzAbosch Events page for more information on this event and to reserve your seat!

Attendees should include a solid mix of C-level executives from Mid-Atlantic based general contractors, subcontractors, building owners, developers, architects, engineers, suppliers, financial and legal professionals, and consultants. The morning begins with a light breakfast and networking followed with a Keynote Address by Secretary Mike Gill, of the Maryland Department of Business and Economic Development. Secretary Gill’s address will provide a State of the Industry report under the new Hogan Administration.

The next program is a General Contractor Panel to include leaders from Merritt Properties and Bozzuto Construction. They will be available to address your questions.

Next, Mike Gentry, a CPA with KatzAbosch , gives a presentation titled: “Finding Cash Flow and Controlling It’s Direction”. At the conclusion of this last morning session, a hot lunch will be provided along with an opportunity for some networking.

The afternoon sessions kick off with a discussion on Succession Planning and Ownership Transfer Techniques hosted by Tony Ivener. Tony is the founder and managing partner of Ivener Management Group.

The final session of the day is presented by Buddy Potler, from the law firm Offit Kurman. Buddy will share his knowledge of Communication Skills, Collaborative Negotiation, and Mediation.

Then, the fun starts. We conclude this great day of information exchange with a happy hour over Bourbon, Beer and hors d’ouervres.

Register Now as space is limited!

For more information on the event, visit www.katzabosch.com/events or you can call Kelly at 410-307-6388 or email her.

For more information about the many services KatzAbosch provides, please visit their website – www.katzabosch.com. Do you perform government work, or are you considering it? KatzAbosch has just launched a webpage dedicated to the Government Contracting Services they provide. Please visit http://www.katzaboschgovcon.com/ for more information!

We look forward to seeing YOU at the Real Estate and Construction Bootcamp on May 12th! Don’t forget – Register Now!

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The following links will open pdf’s of the three PowerPoint presentations delivered at MCN’s March Direct Connect meeting in February.

Frederick County Public Schools

Frederick County Department of Economic Development

Howard County Economic Forecast

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#60 – The Maryland Construction Network

In today’s episode of the MCN podcast, we speak with Delegate Dan Morhaim, M.D.  Dr. Morhaim represents Maryland’s 11th District in the Maryland House of Delegates. Dr. Dan has sponsored HB 119, also known as the State Procurement Change Order Fairness Act. This section illustrates main points of the bill as now currently under consideration: […]

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