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Construction in Brief Building Success 2019 | VOLUME 3 CONSTRUCTION IN BRIEF BUILDING SUCCESS What’s New? New Jersey’s “No Damages for Delay” and Negligence Page 1 of Third Parties Page 2 Buckle Up: Best Practices PA Supreme Court for Contractors Riding Decision Raises New the Roller Coaster of Attorney-Client Privilege Construction Material Considerations for Tariffs Construction Clients Page 3 Working with Outside Consultants Page 5 Buyer Beware: Transferring Your Workers’ Compensation Experience Rating in a Business Transaction Page 6 Q&A with Steven M. Williams Page 7 New Faces What’s New? Marc B. Cytryn joined our Labor & Employment Group as an associate in the Philadelphia office. He represents clients in a broad range of employment litigation matters including discrimina- tion, harassment, whistleblower, wage and hour, and restrictive covenant disputes in both federal and state courts. Marc helps employers prevent claims by counseling them on day-to-day workplace issues and compliance with federal, state, and local laws. He reviews and drafts employee handbooks, employment agreements, and severance contracts, and conducts training for Ashling A. Ehrhardt Christopher W. Sexton Sydney Pierce Co-Editor-in-Chief Co-Editor-in-Chief Associate Editor businesses on equal employment opportunity and sexual harassment in the workplace. Prior to joining Cohen Seglias, Marc was a labor and employment attorney at a national law firm, where his practice focused on counseling and defending businesses in In this issue, you will learn practical tips on employment litigation matters. how to avoid the risks of unpredictable pricing as well as the availability of steel Tiffany R. Marini joined the firm’s Philadelphia office as a construction associate. She represents contractors, subcon- and aluminum for construction projects. We tractors, design professionals, and owners in litigation involving also cover issues that contractors should be delay and defect claims, contract and change order disputes, and mechanics’ liens and bond claims on both private and public aware of and recent case law affecting New projects. Tiffany is a strong advocate for her clients in all stages Jersey’s “no damages for delay” provisions of the litigation process, providing guidance and insight to help on public projects. On page 7 you can read them achieve optimal results. Before joining the firm, Tiffany was an associate at a large our Q&A with the Chair of the firm’s Com- regional law firm where she represented design professionals and property mercial Litigation Group, Steve Williams. owners in professional and general liability claims. We hope you are enjoying this fall weather! Timothy R. Ryan joined Cohen Seglias’ Newark, New Jersey Please reach out to us with any questions. office as a construction associate. He counsels general contrac- tors, subcontractors, construction managers, and design professionals on all aspects of construction law. Tim is an experienced litigator, representing clients in construction litigation matters throughout the state and federal courts of New Jersey. He also has significant experience litigating construction lawsuits arising out of design claims. CONTRIBUTORS: You can read Tim and Mike McKenna’s article on New Jersey’s “no damages for delay” provisions on page 2. Lori Wisniewski Azzara Brian A. Lawton Paul E. Simon joined our Washington, DC office as an associate. Michael F. McKenna As part of the firm’s Scientific Misconduct Group, he represents Sydney Pierce scientists who have been accused of plagiarism, fabrication, or falsification of data in the context of scientific research supported Kelsey E. Riehle by federal funds. Paul also has experience in a wide array of civil Timothy R. Ryan and criminal litigation, as well as internal and external white-collar Lisa M. Wampler investigations. Steven M. Williams Before joining Cohen Seglias, Paul gained experience working for a large, international law firm and for a small litigation boutique. Co-Editor-in-Chief: Ashling A. Ehrhardt Stasha M. Sosnowicz returns to Cohen Seglias as an associate in our Construction Group. She focuses her practice on construc- Co-Editor-in-Chief: tion litigation, representing contractors, subcontractors, design Christopher W. Sexton professionals, owners, and other parties on a wide variety of Associate Editor: construction projects. Stasha was previously a summer associate with the firm. She worked closely with attorneys in the firm’s Sydney Pierce Construction and Insurance Coverage & Risk Management Groups, conducting legal research and drafting memoranda and a variety of other legal documents. 1 Cohen Seglias Attorneys Named to 2020 Best Lawyers® List New Jersey’s “No We are pleased to announce that seven Cohen Seglias attor- neys are included in the 2020 Edition of The Best Lawyers Damages for Delay” in America®. Lawyers are selected for inclusion based on an exhaustive peer-review process. and Negligence of Roy S. Cohen Marc Furman Litigation – Construction Employment Law – Management, Third Parties Edward Seglias Labor Law – Management Construction Law, Jason A. Copley Litigation – Construction Litigation – Construction George E. Pallas Shawn R. Farrell Construction Law, Litigation – Construction Litigation – Construction John A. Greenhall Construction Law Cohen Seglias’ Washington, DC Office Building Success with Habitat for Humanity of Washington DC By Michael F. McKenna and Timothy R. Ryan “No damages for delay” provisions are a universal component of construction contracts on public projects. Generally imposed by public entities in an attempt to limit their exposure, “no damages for delay” provisions operate to preclude a contractor from receiving compensation or an equitable adjustment to the contract value solely because of delays on the project. Oftentimes, within these provisions, the sole remedy afforded to the contractor is additional time, but not additional compensation. These provisions should be carefully considered as they can leave the contractor on the hook for all additional costs incurred as a result of delays, regardless of 2019 Philadelphia Heart Walk & Gearing Up for the the public entity’s responsibility for them. 2020 Hard Hats with Heart Practice Pointer Cohen Seglias is proud to continue our partnership with the It is generally suggested by counsel to avoid using the word “delay” American Heart Association for the fourth year in a row! On in situations where the project time has been extended due to November 2, The Cohen Seglias team was joined by family, owner-related issues, and instead, use “extended time for perfor- friends, and pets at the 2019 Philadelphia Heart Walk in mance.” This language assists in limiting the application of the “no support of the AHA’s mission to build healthier lives free of damages for delay” clause when the project was extended and not heart diseases and stroke. Leading up to the walk, the firm delayed. A “delay” is a period of time when, due to an issue, no hosted various fundraising events throughout September work can be performed. On the other hand, during an “extended and October. time for performance,” work can be performed, but it may be only non-critical activities. In addition, there is no demobilization. The damage here is that the contractor’s time for performance is extended, not delayed. New Jersey Law The law in New Jersey previously included a contractor’s right to avoid “no damages for delay” clauses if the delay was caused by an owner’s bad faith or active interference. To bring more equity to this type of contractual provision, the New Jersey legislature enacted a law declaring “no damages for delay” provisions in public In spring 2020, the firm is sponsoring AHA’s Hard Hats with contracts void as a matter of public policy. The statute provides: Heart a home run derby event at Citizens Bank Park to bring A covenant, promise, agreement or understanding in…a awareness to the need for better heart health within the contract…to which a public entity is a party, relative to the Philadelphia construction industry. Cohen Seglias attorney construction, alteration, repair, maintenance, servicing or Robert O’Brien is a member of the Executive Leadership security of a building, structure, highway, roadway, railroad, Team for the event. appurtenance and appliance…purporting to limit a contractor’s remedy for delayed performance caused by the public entity’s For more information about Cohen Seglias news and events, negligence, bad faith, active interference, or other tortious contact the firm’s Marketing Director, Kerstin Isaacs, at conduct to an extension of time for performance under the 267.238.4730 or [email protected]. contract, is against public policy and is void and unenforce- able. N.J.S.A. § 2A:58B-3(b). Continued on page 4 2 Buckle Up: Best Practices for Contractors Riding the Roller Coaster of Construction Material Tariffs material as delivered. Another metric might be based on a particular material price index. This clause can change the amount to which a contractor is entitled when prices increase post-bid, but can also be drafted to be effective in the opposite instance, when a contractor is entitled to less when a price decreases post-bid. Risk can be allocated by this clause in any number of ways, including placing all the risk of changing prices on one party, sharing the risk between owner and contractor based on a certain percentage of the material price, or including caps on the risk incurred by one By Lisa M. Wampler and Sydney Pierce party. Creative risk-sharing solutions can help avoid a situation where the contractor is forced to bear the risk for any material On March 8, 2018, President Trump signed a pair of executive price increase. orders putting a 25% tariff on imported steel and a 10% tariff on imported aluminum. In the eighteen months since the tariffs went Force Majeure Clause into effect, the impacts of these and subsequent international Contractors seeking to recoup losses occasioned by an increase in trade decisions on the American construction industry have the cost of materials can also rely upon force majeure provisions.
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