Monthly Archives: July 2012

Impact of Fee Clauses Significant in Decision to Pursue Claim

Construction lawyers see lots of matters in which a supplier pursues a contractor for unpaid materials that were provided to the contractor on credit. And many times the contractor acknowledges that materials were received, but disputes owing for them because something was wrong with them. As an old contractor who got in trouble with the odd supplier on occasion, I read Atlas Supply, Inc. v. Realm, Inc., decision released on July 30, with some interest. Atlas is a well-known construction supply house, which provided oodles of stuff to the jobs I managed, and which I know to be particularly intolerant of not getting paid (read the lien notices in the DJC for confirmation of that fact).

The agreement Realm signed with Atlas provided that in the event Atlas pursued Realm for non-payment, Realm would “pay the costs of collection, including reasonable attorney fee in suit by Atlas Supply, Inc…for the merchandise sold to [Realm].”

Some of the materials Realm bought apparently failed, and it refused to pay Atlas for them. Atlas sued Realm to recover the purchase price. Realm counterclaimed against Atlas, asserting that the failures of the materials was Atlas’ fault, and that it had been damaged as a result. The kinds of counterclaim causes of action brought by Realm are mandatory under our court rules, which have been interpreted as requiring a party to bring an action it could have brought under the same facts, or face the possibility that it would be precluded from doing so in a future attempt. Both Atlas and Realm also sued the companies that made the materials.

After a mediation resolved all the principal claims, the only remaining dispute between Atlas and Ream was Atlas’ claim for attorney’s fees and costs, which went to court. The Superior Court construed Atlas’ entitlement narrowly under the parties’ credit application, and awarded Atlas only those costs and fees incurred in its effort to collect against Realm. The court categorically denied Atlas any costs and fees it incurred in defending against Realm’s counterclaim.

On Appeal, however, the Court of Appeals rejected the lower court’s interpretation, instead adopting Atlas’ contention that the clause allowed it to recover all the reasonable costs and attorney’s fees expended in the overall effort to collect. And, because disproving the compulsory counterclaims brought by Realm was part and parcel of Atlas’ attempt to prove its own claims against Realm, the Court of Appeals held that the Superior Court erred when it denied the costs and fees Atlas incurred to defend against Realm’s claims, because they were, in fact, incurred “in suit by Atlas..for the merchandise sold…”

In these tough times, we see more and more construction contracts re-inserting the “prevailing party” attorney’s fee provisions that the AIA and other standard documents had long eschewed in an attempt to promote settlement of construction disputes. As a result, those who contemplate adjudicating a dispute need to be mindful of more than just how expensive the pursuit of a claim can (and probably will) be for it. As Realm found out, the assessment of risk in prosecuting any claim needs also to include the close reading of any applicable attorney’s fee provision and whether the risk assessment should include the possibility of paying the other side’s costs and fees, too.

What’s up in the health-care sector?

The health care sector was one of the stronger industries during the Great Recession, helping many contractors get through difficult times. Many of those projects are now finished.

The DJC is profiling some of those projects – along with other issues facing those who design, build and develop health care facilities – in a special section called Health Care Design & Construction.

Read how Mortenson Construction used virtual tools to fast-track Providence Regional Medical Center in Everett, how Aldrich and Associates turned a former TV studio into a kidney dialysis clinic, and how lean design is different for every health care project.

Rigging Rules Postponed Until 2013

Our Safety Director, Mandi Kime, reports that the Department of Labor and Industries has postponed the compliance deadline for new rigger rules to February 1, 2013.

When the Crane Safety Standards were promulgated they included provisions related specifically to riggers.  See Subsection (3) of WAC 295-155-53306 for rigger requirements, including the requirement that riggers demonstrate that they meet the requirements of the subsection through a written test and through a practical test.

The department announced expedited rulemaking in order to clarify the scope, address concerns and more closely mirror the new federal requirements.  Upon announcing the expedited rulemaking effort, the Department also announced an extension to the compliance deadline for this part of the rule.  NOTE:  this delay only applies to the rigging requirements, not the remaining construction crane safety rules.

The filing took place in June, and during the comment period, enough letters of opposition to the “expedited” nature of the rulemaking were received, that the Department will now have to go back to a full rulemaking effort in August after the comment period closes.

What does this mean to you?  Since the rulemaking effort has been adjusted to a more thorough, slow process it means that there is room for stakeholders to speak up and the Department to modify parts of the rule language.  So, if you have not qualified your riggers to the new standards, it may be a good time to hold off a while longer until we see what the rule language will actually be after stakeholder input.

Regardless of how the stakeholder input process goes, the rules do not require you to meet the written and practical exam segment until February 1, 2013.  You really only need to have your riggers qualified to current standards of Qualified Person which reads:

Qualified Person

A person who has successfully demonstrated the ability to solve problems relating to the subject matter, work, or project, either by: Possession of a recognized degree, certificate, or professional standing; OR Extensive knowledge, training and experience.

For more info and to keep updated on the rule developments see the L&I page on Cranes (these developments are so recent that the Department does not have current info regarding the extended compliance date up yet).

Before We can Market within the Industry…

One of the greatest challenges for a construction product is being able to remain relevant when only a small portion of its funding and time is spent with the end buyer.  The masonry industry is one of the oldest construction products around.  Masonry products have proven their durability, flexibility and longevity decade after decade, but yet we, like other construction products, struggle to remain the product of choice and to remain relevant.  We spend thousands of dollars every year on research for our products proving that they are environmentally friendly or energy efficient or fire safe.   Each year, we work with code officials, advisory groups, legislators, in order defend our position in the construction market.

And every year, we run up against codes and agencies who want to prove how it’s just not enough.  Recently, I was sitting with a group of academics and consultants who are looking to mandate building product manufacturers provide data on lifecycle assessments to the State.  As we sat in the comfortable room, along Lake Union, with the perfect temperature and lighting, enjoying the view and conversation, I posed the question – “When did the building products industry become the bad guy?” In this particular room, we weren’t being very well received.

The industry spends an absorbent amount of money to maintain its market in a tough construction economy, then an additional amount of money is spent to educate code officials, building officials, elected officials, etc. on why were not a bad choice; and once were done defending our position to those who have no say in whether our product is selected, we must spend time and money educating the designers and general contractors about the actual product.  We don’t mind doing this, as we know why masonry products are the best choice; and why we provide the greatest flexibility for making a lasting statement.

So, the next time, you have the opportunity to have a free lunch through our Lunch and Learn Series, either in your office or ours, or call our technical experts and ask for free advice.  Or if you choose to join us at our September 7th MIW Golf Tournament where design and construction industry representatives play for free, please take a second to listen to the quick marketing message that is being delivered.  We don’t need to do the hard sale – our product really does stand on its reputation, but we did have to spend a lot of time convincing people of that before, we could market it to you.

Helmets to Hardhats Links Vets with Construction

Today’s DJC includes a fine article by Sam Bennett regarding the construction industry’s concerns regarding a recent Department of Labor proposal that contractors who do federal work follow a new system for hiring disabled workers and veterans.  That article is here.

As a follow up, I want to make sure everyone is aware of Helmets to Hardhats, a national, web-based program that connects National Guard, Reserve and transitioning active-duty military members with quality career training and employment opportunities within the construction trades. The program, created a decade ago, is administered by the Center for Military Recruitment, Assessment and Veterans Employment, a non-profit 501(c)(3) joint labor-management committee.

Employers are required to participate in “proven apprenticeship training programs that are registered and approved by applicable federal and state authorities.” However, it is not limited to union training programs and employers.

The Construction Industry Training Council (CITC) of Washington, which is an approved H2H training program that AGC of Washington, ABC and others sponsor, runs an open-shop registered apprenticeship program with more than 400 apprentices in several craft programs.

According to its website, “H2H encourages all responsible employers who have construction-related career opportunities to apply for acceptance into our program.” Employers must meet certain criteria including: “access to a quality and federally-recognized registered apprentice program, a permanent system to ensure employment and training opportunities, formal curriculum and instructor training programs, related training and an on-the-job training program, an affirmative action program, and a positive record of caring for the welfare of workers as evidenced by health insurance, pension benefits and workers’ compensation coverage.”

Helmets to Hardhats was created because the industry knows that the nation’s veterans can serve as a good pool of potential construction craftworkers, but also understands that making the connections with the nation’s veterans as they leave service can be difficult.


It’s finally hot — now we have to worry about the heat.

Now that we’ve had two sunny days in a row, and it might hit 80 (or beyond) this weekend, it’s time to think about heat stress. Doesn’t seem fair though, we should be able to enjoy the heat for a while and not have to worry about it. But, to help contractors and their craft workers stay safe, the U.S. Dept. of Labor has a new app for that! The OSHA Heat Safety Tool gives you information right on your phone. You can calculate the heat index and determine the risk on each jobsite and learn the protective measures to be taken. Currently available for Androids and iPhones and “coming soon” for Blackberries. Go to