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Thursday
Sep032015

DSU WINS IMPORTANT SJC CASE: THE OWNER’S IMPLIED WARRANTY OF SUFFICIENCY OF DESIGN APPLICABLE TO CONSTRUCTION MANAGER AT RISK PROJECTS

DSU attorneys, Jack DiNicola and Mike Brangwynne, won a landmark decision from the Massachusetts Supreme Judicial Court on behalf of our client, Gilbane Building Company (“Gilbane”).  In Coghlin Electrical Contractors, Inc. v. Gilbane Building Company, et al., the SJC ruled that the owner’s implied warranty of sufficiency of its design is applicable to construction manager at risk projects, procured through M.G.L. c. 149A, reversing a Superior Court decision.

In this case, Gilbane was the construction manager at risk (“CM at Risk”) for the Worcester Psychiatric Hospital Project in Worcester, Massachusetts.  Division of Capital Asset Management and Maintenance (“DCAMM”) was the owner.  Late in the Project, the electrical subcontractor submitted a claim to Gilbane, alleging increased costs of performance due to design changes, design errors, and design omissions.  Gilbane passed that claim to DCAMM.  After DCAMM rejected the claim, the electrical subcontractor filed suit against Gilbane and its surety.  Gilbane filed a third-party complaint against DCAMM, alleging that DCAMM was responsible for the subcontractor’s damages, if any, arising out of issues relating to the design of the project.

DCAMM filed a motion to dismiss the third-party complaint, arguing that there is no implied warranty of sufficiency of the design for the CM at Risk and that the indemnification provision of the contract required Gilbane to defend and indemnify DCAMM for the subcontractor’s claims even to the extent the claims relate to issues caused by DCAMM’s designer.  The Superior Court agreed and dismissed the third-party complaint.  Gilbane appealed.

In a decision released on September 2, 2015, the SJC reversed the Superior Court and reinstated Gilbane’s third-party complaint.  The SJC essentially accepted all of the arguments set forth by Gilbane, as well as the arguments presented by the Associated General Contractors of Massachusetts and Columbia Construction in submitted amicus briefs.

The SJC held:  (1) that the owner’s implied warranty of sufficient of design is applicable to CM at Risk project so long as the CM at Risk acted in good faith reliance upon the design documents and acted reasonably with respect to the CM at Risk’s own contractual obligations; (2) that the contract did not contain an express and explicit waiver of the implied warranty; (3) that the indemnification provision did not require Gilbane to defend and indemnify DCAMM for claims arising out of issues in the design; and (4) the use of third-party pleadings is appropriate to resolve these disputes.

This decision is a major victory for general contractors and construction managers because it reverses a Superior Court decision that improperly shifted enormous risk from the owner/designer to the construction manager.  Another important part of this decision involves the indemnification provision because the SJC properly limited the indemnification obligations to the extent of Gilbane’s “Work” as a defined term. 

A copy of the decision can be found here:  http://www.mass.gov/courts/docs/sjc/reporter-of-decisions/new-opinions/11778.pdf.

Please feel free to contact Jack DiNicola if you have any questions.

Wednesday
Jul222015

Zoning - What Is A Conditional Use Permit And How Do You Get One?

One of the principal purposes of a municipality’s zoning bylaw is to regulate the use of land in different districts of the city or town.  Zoning bylaws divide a municipality into zoning districts, which are often designated as either industrial, commercial or residential, and can be further subdivided.  The purpose of these divisions is to ensure that potentially disruptive or otherwise problematic property uses, such as a landfill or heavy manufacturing plant, are not located adjacent to residential or commercial areas.  This means that an individual that owns property in a single-family residential subdistrict cannot obtain a building permit to construct a fast food restaurant on his property, if the proposed “use” - a commercial restaurant - is prohibited in that subdistrict. 

Typical zoning bylaws have a use table that lists every possible lawful use of property within the city or town - uses such as a movie theater, warehouse, grocery store, auto repair shop, etc. For each use, the table lists whether it is “allowed”, “prohibited” or “conditional” in each district.  If the use is allowed, than a landowner can operate that use in that district; if it is prohibited he cannot (absent a zoning variance, which will be discussed in a separate article).  If the use is conditional, than the landowner must apply for a conditional use permit from the local Zoning Board of Appeal, and satisfy the Board’s requirements for the granting of a conditional use permit, sometimes referred to as a special permit.

Under Massachusetts law, a conditional use or special permit may only be issued for uses which are in harmony with the general purpose and intent of the city or town’s zoning bylaw.  In order to obtain the conditional use permit, the landowner will generally need to attend a public hearing before the local Zoning Board.  Each municipality’s zoning bylaw varies, but they generally require the local Board to consider issues such as the following:

-       Is the specific site an appropriate location for the proposed use?

-       Will the proposed use adversely affect the neighborhood?

-       Will the use create a hazard to vehicles or pedestrians?

-       Will the use create a nuisance?

-       Are there adequate and appropriate facilities provided for the proper operation of the use?

If the Zoning Board determines after taking testimony at the hearing that the proposed use is appropriate for the neighborhood, it will vote to grant the landowner a conditional use or special permit.  The Board can also attach conditions to its decision, known as provisos, which limit the proposed use in particular ways.  For example, if neighborhood residents at the hearing were concerned about late night noise from a proposed local theater, the Board could attach a condition that all entertainment at the theater must end at 10:00 p.m.

Because each zoning bylaw is different, with its own subtleties, it is often helpful to hire a zoning attorney to navigate the conditional use application process.  An experienced zoning attorney can also facilitate communications with local neighborhood groups and town administration.  If you are in need of a conditional use or special permit and have further questions or concerns, please contact Michael Brangwynne at mike.brangwynne@dsu-law.com or by telephone at (857) 250-0446.

Wednesday
Jul222015

What Should You Do When A Condominium Owner Fails To Pay Fees

As anyone that has lived in a small condominium building knows, your relationship with fellow unit owners can have a significant impact on your daily life.  Accordingly, condo associations or trusts are placed in a difficult situation when one unit owner stops paying his or her regularly assessed association fees.  Particularly for buildings with a limited number of units, unpaid condo fees can quickly affect the condominium association’s finances, and its ability to properly maintain the common areas of the property.  Fortunately, Massachusetts law offers protection to condo associations when a unit owner fails to make regular payments.

Under Massachusetts General Laws, c. 183A §6, condo associations are granted a lien against the unit when a unit owner fails to pay his duly assessed condominium fees.  This lien is a legal right in the property, similar to the lien that accompanies a mortgage transaction when a mortgagor is lending money for the purchase of real estate. Importantly, the lien created under § 6 is a “priority lien,” meaning that the condo association’s interest in the delinquent-paying unit takes priority over some other liens, such as previously recorded mortgages on the unit.  Massachusetts law further provides that the condo association’s lien against the delinquent unit includes any costs incurred in collecting the fees, such as attorneys' fees.

In a practical sense, this means that, if a unit owner has a mortgage on the unit, which is often the case, and the lender is notified that the unit owner is delinquent in paying his or her condo fees, the lender will usually step in and pay the delinquent condo fees, along with any legal fees or other costs incurred by the condo association in pursuing collection of the delinquent fees in order to remove the condo lien and regain it's priority.  Unfortunately, the condo association’s lien is only given priority with respect to the first 6 months of delinquent fees, so it is beneficial for the condo association to take swift action when a neighbor falls behind on payments. 

Even if the unit owner does not have a mortgage on his unit, the condo association is not without remedies.  The owner of a unit without a mortgage presumably has a substantial amount of equity in the property.  The condo association’s lien on the property can be used to seize and auction the property to pay off the delinquent fees and costs of collection, if the unit owner fails to pay the delinquency.  More often than not, a unit owner will pay what is owed rather than see his unit seized and sold at a sheriff’s auction.   

In summary, there are several steps that a condo association can take when faced with a non-paying unit owner.  Because of the protections afforded by Massachusetts law, the condo association can often compel payment of the delinquent fees, along with any costs incurred by the association in pursuing the delinquency.  For more information, or to speak with an attorney regarding assistance in pursuing a delinquent unit owner, please contact Attorney Michael Brangwynne at mike.brangwynne@dsu-law.com or on the phone at (857) 250-0446.

Friday
Feb272015

Andrew Upton Appears ON WGBH TV To Discuss Campaign Finance Lawsuit

DSU Administrative Lawyer Andrew Upton appeared on the WGBH TV News Show “Greater Boston” to discuss a recent lawsuit against the Massachusetts Office of Campaign and Political Finance.  Mr. Upton practices in all areas of administrative law including campaign finance law and local permitting and licensing.  Click on the link below to watch Mr. Upton's appearance.

 

http://wgbhnews.org/post/campaign-finance-lawsuit-aims-change-mass-rules

Wednesday
Feb122014

DiNicola Named 2014 BTI Client Service All-Star

DiNicola, Seligson & Upton, LLP is proud to announce that Jack DiNicola has been named a BTI Client Service All-Star for 2014 by The BTI Consulting Group, Wellesley, Massachusetts.  The 2014 BTI Client Service All-Stars consist of 330 attorneys nationwide from 187 law firms that were selected for outstanding client service through unprompted feedback from general counsel at the world's largest companies.  Mr. DiNicola, whose practice is focused on construction law, was nominated as a 2014 BTI Client Service All-Star by a national construction and real estate company. 

For more information about BTI Consulting and the Client Service All-Stars, please go to www.bticonsulting.com and http://www.bticlientserviceallstars.com/attorneys-the-bti-all-stars/