Change Order Disputes: Construction litigation would be much simpler if most cases involved only base contract sums. However, most construction contract disputes involve a change in contract's scope which either increases or decreases the contract price. Construction contracts generally provide detailed processes for change order approval, but in practice, those procedures are not always followed. In such cases, the party asserting the claim must rely on principles of equitable estoppel and course of dealing, while the party challenging the claim must convince the court to strictly enforce the contract's provisions.
Delay Claim Litigation: Delay claims are frequently asserted by both contractors and construction project owners. There is a construction schedule provided in almost every construction contract. If the contractor fails to adhere to the schedule, the owner often asserts a claim for liquidated or consequential damages. Contractors also assert delay claims for increased overhead, insurance, project management costs, and increased materials and labor costs when work is delayed. Many contracts contain no-damage-for-delay clauses, barring recovery by the contractor for sources of delay anticipated in the contract. The firm's lawyers have used such clauses to secure dismissal of seven figure delay claims, and have negotiated settlements of delay claims involving large public works construction projects.
Lien Law Art. 3-A Trust Claims: In New York, all funds received by an owner from a bank, by a contractor form an owner, or by a subcontractor from a contractor for the purposes of construction, are considered "trust funds" under Lien Law Article 3-A. Contractors must use such funds to pay valid trust claims defined in Lien Law 71, including payment of workers, subcontractors, suppliers and insurers. Failure to satisfy all trust claims before diverting funds to non-trust purposes can give rise to personal liability on the part of anyone involved. The assertion of claims under Lien Law Art. 3-A provides a means to recover against the individual owners of companies, but can also complicate claims, requiring lawsuits to be brought in the form of a class action on behalf of all trust beneficiaries.
Prevailing Wage Litigation: New York Labor Law 220 and the federal Davis Bacon Act provide that prevailing wages must be paid to workers on public works construction projects. Prevailing wages are established by unions and are often well above the market rate. As a result, unscrupulous contractors often fail to pay them. General contractors on public works projects are strictly liable for underpayments to workers, and often face liability for prevailing wage underpayments by their subcontractors. Our lawyers have defended prevailing wage class actions brought by workers, opposed class certification, and asserted claims against subcontractors that failed to pay prevailing wages on public works projects.
Access to Adjoining Property: In New York, it is common for contractors to need access to adjoining properties to make necessary improvements and repairs, such as underpinning of foundations and installation of temporary scaffolding. This is typically done by securing the neighbor's permission and negotiating a license to access their property. Where adjacent property owners are unwilling to grant a license, New York Real Property Actions and Proceedings Law § 881 provides a summary proceeding whereby the contractor can obtain a court-ordered license to access adjoining property.
Insurance and Surety Bond Litigation: Where workers or third parties are injured at construction projects, these claims are typically defended by insurance companies under workers compensation or general liability insurance policies. Where insurers disclaim coverage improperly, our lawyers can commence declaratory judgment actions requiring the insurers to provide defense and indemnification. The firm can also defend the underlying claim directly and seek indemnification from other parties that may be responsible. Our lawyers also prosecute claims against sureties and defend sureties in construction litigation involving payment bonds, performance bonds and mechanic's lien discharge bonds.
Warranties and Construction Defects:Real estate sales contracts and construction contracts in New York frequently include warranties. New York Real Property Law § 462 also imposes obligations on sellers of real estate to make certain disclosures. However, once the seller or contractor has been paid, it can be hard to enforce a warranty without litigation. Particularly with condominium developments, the sponsor often disappears after the last unit is sold and enforcement of contract rights may require litigation. When warranties are breached or construction defects are concealed, our litigation attorneys can compel the breaching party to honor the warranty and correct defects through litigation or the threat of litigation.
Arbitration and Mediation:In New York, arbitration and mediation clauses are commonly found in construction contracts, and influence the time and cost of resolving a dispute. Arbitrators are often more familiar with construction issues, particularly arbitrators operating under the American Arbitration Association's Construction Industry Arbitration Rules. However, arbitrators must be paid hundreds of dollars per hour, typically by the claimant, subject to possible shifting of those costs in the arbitration award. Our attorneys have experience representing contractors in arbitration, compelling arbitration, and enforcing arbitration awards.
Contract Drafting and Negotiation:Our attorneys negotiate construction contracts for multi-million dollar construction projects, as well as standard terms and conditions for inclusion in your construction proposals. When negotiating a construction contract, you need an attorney experienced in construction litigation, who is familiar with standard AIA contract terms, retainage provisions, notice of claim provisions, no-damage-for-delay clauses, liquidated damages clauses, arbitration clauses, pay-when-paid clauses, and other common contract terms. Our attorneys can also assist you in drafting shareholder agreements, operating agreements, real estate purchase contracts, commercial leases, employment contracts, license agreements, settlement agreements, financing agreements and other contracts.