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Thursday
Mar172016

DSU Wins Important Appeals Court Case Regarding Notice On Massachusetts Public Construction Bond Claims

DSU attorneys, Jack DiNicola and Mike Brangwynne, prevailed in the Massachusetts Appeals Court on behalf of Hartford Fire Insurance Company (and its principal, SPS New England, Inc.).  The case, N-Tek Construction Services, Inc. v. Hartford Fire Insurance Company, can be reviewed here:  http://www.mass.gov/courts/docs/sjc/reporter-of-decisions/new-opinions/14p1483.pdf

This case involved a second tier subcontractor asserting a bond claim against a general contractor's payment bond surety on a public construction project.  DSU and Hartford prevailed at trial.  N-Tek appealed.

The primary issue on appeal, and the only one addressed by the Appeals Court, was whether N-Tek's e-mail to SPS was sufficient notice so as to comply with the requirements of Section 29 of M.G.L. c. 149 (the Massachusetts Public Construction Bond Statute).  While this case was fact sensitive, and many of the facts were not recited in the opinion, the Appeals Court held that N-Tek's notice, which was an e-mail to SPS, was not sufficient notice under the statute and the analogous Miller Act (applicable to federal construction projects).  The Appeal Court, in affirming the Superior Court, held that, "in light of all material surrounding circumstances ... [the e-mail] fails to state, explicitly or implicitly, that [N-Tek] was making a claim against SPS for services rendered on the project, and thus fails to satisfy [the statute.]"  The Appeals Court further held that the notice provision of the statute "was intended to relieve the general contractor of the need to engage in guesswork as to whether a claim was being made against it or the statutory bond." 

This case is important for several reasons.  First, it establishes parameters for proper notice under the statute.  Often, when public construction bond claim notice issues are analyzed, it is the timing of the notice, rather than the content, that becomes an issue in dispute.  This case will give general contractors and sureties some guidance on what is required of a lower tier subcontractor in terms of the quality and content of the notice.  Second, it establishes the importance to general contractors and sureties of the notice requirement in the statute.  The Appeals Court cited several policy issues from the viewpoint of the general contractor and surety to the notice requirements in the statute.  Third, the Appeals Court did not state that e-mail notice can never be compliant with the statute.  This issue remains open.   

If you have any questions or wish to discuss the issues raised in this decision, please contact Jack DiNicola.

Monday
Feb082016

DiNicola Named 2016 BTI Consulting 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 2016 by The BTI Consulting Group, Wellesley, Massachusetts.  This marks the second time that Mr. DiNicola has received this honor.  The 2016 BTI Client Service All-Stars consist of 312 attorneys nationwide from 163 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 2016 BTI Client Service All-Star by a National Professional Services Firm.

 

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

Monday
Oct262015

DSU Moves To New Office

DSU has moved to 6 Beacon Street, Suite 700, Boston, MA 02108.  Our telephone numbers and fax numbers remain the same.

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.