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Archive for the ‘Construction & Design Professional’ Category

The Referee Has Decided David Beckham Is Back in The Game

Posted on: May 6th, 2019

By: Samantha Skolnick

Soccer has become Atlanta’s new craze. In 2017, Atlanta’s soccer team Atlanta United broke the Major League Soccer (“MLS”) attendance record in its final regular-season game exceeding the 800,000 mark in its first year in the league. They finished the season with 819,404 tickets sold, soaring above the league’s single-season record of 752,199.

Down south in our neighboring state of Florida, the world-renown David Beckham received a real kick in the shin. David Beckham, who is bringing an MLS team to Miami (Inter Miami CF), had some legal issues punted at him. Inter Miami CF is attempting to build an arena on the site of Lockhart Stadium. An interim agreement was signed, and a demolition scheduled to begin on May 6. This took a game stopping halt when the rival bidder FXE Futbol decided to sideline Beckham and hail him into Court.

FXE Futbol sued to block Beckham from beginning demolition work under a city deal that FXE had attempted to win as well. In April, the unanimous city commission picked Beckham’s proposal over the FXE plan for a minor league soccer team in a renovated Lockhart, surrounded by entertainment options. Beckham initiated the competition by submitting an “unsolicited” proposal for its MLS team and demolition of the stadium, and FXE responded with its rival plan.

After being hailed in to Court on Friday, the Court rejected the FXE request to freeze demolition plans. Broward Circuit Court Judge Raag Singhal said there was nothing suggesting the city overstepped its authority in picking the Beckham proposal. This “court does not have unfettered control over a power properly vested in another branch of government,” Singhal wrote. David Winker, the lawyer representing FXE, said his client plans to appeal.

This is just another example of how construction law impacts city infrastructure and in the long term our economy. It will be interesting to see how the appeal plays out. But even more interesting to see how the new MLS team stirs up Miami’s economy. In 2018, Atlanta United was the most valuable MLS team with a team value of $330 million, doing wonders for the Atlanta economy and bringing excitement to the residents of the city as well.

If you have any questions or would like more information, please contact Samantha Skolnick at [email protected].

The EPA Acts, Kind of, on Asbestos

Posted on: April 26th, 2019

By: Koty Newman

On April 17, 2019, the EPA finalized a significant new use rule (“SNUR”) governing asbestos use. The SNUR ensures that any discontinued uses of asbestos will not re-enter the marketplace without the EPA’s review. The EPA explains that this will close a loophole in its regulatory scheme for asbestos. Thus, if a manufacturer or processor would like to reintroduce asbestos into any product that is now free of asbestos, but contained it in the past, the reintroduction of asbestos would be subject to EPA review. Under the SNUR, the following uses for asbestos are examples of uses subject to EPA review: adhesives, sealants, roof and non-roof coatings, cement products, high-grade electrical paper, pipeline wrap, and any other building material. The EPA characterizes these uses as neither ongoing nor already prohibited under the Toxic Substances Control Act. The SNUR keeps prior asbestos prohibitions in place and does not amend them in any way. The SNUR will be effective sixty days after the date it is published in the Federal Register.

Critics of the SNUR say it does not go far enough. The Asbestos Disease Awareness Organization likens the SNUR to a smokescreen, as it only applies if companies wish to reintroduce to the marketplace a product that is already obsolete. The Asbestos Disease Awareness Organization called for a complete ban of asbestos.

The SNUR is not likely to have a great impact on business because industries are already utilizing economically viable products without any significant need for the reintroduction of asbestos. Even so, if a company wishes to reintroduce asbestos to a product, it must notify the EPA at least ninety days prior to initiating manufacturing or processing of the product that falls under the SNUR.

Regarding ongoing uses of asbestos in the United States, the EPA is evaluating those uses in the context of its separate asbestos risk evaluation. Some uses that the EPA is looking at in the context of its risk evaluation, but that are not affected by the SNUR, are sheet gaskets, oilfield brake blocks, and aftermarket automotive brakes/linings. If the EPA finds that a use constitutes an unreasonable risk of injury to health or the environment, the EPA could decide to prohibit the use.

If you have any questions or would like more information, please contact Koty Newman at [email protected].

Georgia Court of Appeals Provides Guideline for Drafting Enforceable Exculpatory Clauses in Georgia

Posted on: April 23rd, 2019

By: Bart Gary and Jake Carroll

Exculpatory clauses are terms in a contract that shift the risk of loss to the other party or a third-party, or attempt to limit one’s obligations under a contract. A typical exculpatory clause is a “limitation of liability” provision, which is commonly used in agreements for services—especially professional services, rendered by accountants, architect, engineers and consultants.

Attempts to limit one’s liability to agreed amounts are sometimes challenged in court on the ground that they violate “public policy,” but are nevertheless generally enforceable in Georgia, provided such clauses are “explicit, prominent, clear and unambiguous.”

While these requirements have been addressed in prior appellate decisions, in Warren Averett, LLC v. Landcastle Acquisition Corp.[1] the Georgia Court of Appeals discussed in detail the “prominence” requirement for limitation of liability clauses in a contract for accounting services. The Court observed that a number of factors are considered when evaluating the enforceability of an exculpatory clause or limitation of liability clause:

  • Font. The clause should not be in the same font size used throughout the contract. It should be “capitalized, italicized, or set in bold type for emphasis.”
  • Setoff. The clause should be set off in a separate section that specifically addressed liability or recoverable damages, with a bold, underlined, capitalized or italicized specific heading, such as “Limitation of Liability” or “DAMAGES.”
  • Location. The clause should be in a prominent place within the contract to emphasize the importance of the clause’s limitation on recoverable damages, such as being adjacent to another similarly significant provision or being next to the parties’ signature lines.[2]

These factors should be used as a guide for parties when drafting and negotiating contracts with exculpatory clauses. For example, in construction contracts, the parties should pay close attention to the font and location of indemnity and no-damage-for-delay clauses. In commercial and professional services contracts, common exculpatory clauses that merit close scrutiny address indemnity, limitation of lability, waivers of certain types of damages, and insurance terms.

Finally, while the opinion is helpful as concerns what is not prominent, it does not offer a clear statement of what is prominent. For example, does the font need to be bold, capitalized, and italicized, or will one choice work? In light of the Warrant Averett decision, it would seem that the more factors met, the less risk the clause is found unenforceable.

If you have questions regarding this decision, or any other contract drafting questions, please contact Bart Gary at [email protected] and Jake Carroll at [email protected]. Mr. Gary and Mr. Carroll practice construction and commercial law as members of Freeman Mathis & Gary’s Construction LawCommercial Litigation, and Tort and Catastrophic Loss practice groups as well as representing business and commercial entities in a wide range of disputes and corporate matters involving breach of contract, business torts, and products liability claims.

[1] Warren Averett, LLC v. Landcastle Acquisition Corp., 2019 Ga. App. LEXIS 178, Case no. A18A2117, March 13, 2019. (physical precedent only). Because one judge of the three-judge panel concurred in the judgment, the opinion is limited, physical precedent.
[2] 2019 Ga. App. LEXIS 178 at 9-10 (emphasis by the Court) (internal citations omitted).

Who Did What for Whom? Construction Lien Rights in Georgia Depend on the Contractor, Not the Cost

Posted on: March 18th, 2019

By: Jason Kamp

In 2013, the Georgia General Assembly expanded the scope of items covered under its construction lien statute, O.C.G.A. § 44-14-361, by amending subsections (c) and (d). The statute now allows contractors to claim liens for contract expenditures for general conditions or other costs that are not strictly for labor, services, or materials that become part of the property as traditionally required. For example, a general contractor can now claim a lien for insurance, security, or cleaning costs or interest owed on the principal amount due under its construction contract.

Importantly, the expansion of the type of costs entitled to lien rights does not translate into an expansion of the type of contractors entitled to lien rights. The expanded lien rights still depend on whether the contractor at issue fits into one of the nine categories laid out under subsection (a) of the statute. To illustrate, a general contractor can now claim a lien on costs for providing security services on site under its contract, because it furnishes other materials and services for the improvement of real estate under (a). However, a security services contractor is not entitled to a lien on the costs for providing security services on a construction site, because it does not fit within any of the (a) categories.

It is easy to see how Georgia’s expansion of lien rights to non-traditional costs may blur the distinction between actor and act in practice. Additional attention to “who did what for whom” may be warranted when undertaking lien waivers, organizing contractor relationships, or other activities touching on lien rights as a result.

If you have any questions or would like more information, please contact Jason Kamp at [email protected].

The Supreme Court Sets Groundwater Pollution in its Sights

Posted on: February 20th, 2019

By: Ze’eva Kushner

Yesterday, the United States Supreme Court decided to hear an appeal from the Ninth Circuit’s decision in Hawai’i Wildlife Fund et al. v. County of Maui, 886 F.3d 737 (9th Cir. 2018). The Supreme Court will be hearing this case in the Fall to resolve a circuit split regarding whether discharging pollution that travels underground before emerging into an ocean, river or other major waterway requires a permit under the Clean Water Act.

Congress passed the Clean Water Act in 1972. The goal of the Clean Water Act is “to restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” 33 U.S.C. § 1251(a). One of the primary provisions of the statute makes it unlawful for anyone to discharge a pollutant, meaning adding pollution, to the waters of the United States, including the territorial seas. 33 U.S.C. §§ 1362(12), (7).

The provisions of the Clean Water Act have been interpreted by a number of courts over the years, with the coverage of groundwater pollution being a thorny issue for some time. In February 2018, the Ninth Circuit held that Maui County had to comply with the permitting requirement of the Clean Water Act in order to continue to dispose treated water through underground wells after it was shown that the treated water made its way into the Pacific Ocean through fissures in the ocean floor.

The Fourth Circuit made a similar finding a few months later in a case involving a gasoline pipeline spill in South Carolina when it determined that the Clean Water Act covered claims that the spill contaminated nearby creeks and wetlands after traveling through groundwater.

However, in September 2018, the Sixth Circuit changed direction when it ruled on two cases involving the pollutants released by coal ash ponds, holding that the Clean Water Act cannot be used to regulate pollution that travels through groundwater before reaching navigable waters such as a river or ocean.

Thus, it is up to the Supreme Court to resolve the debate regarding how direct of a connection there must be between a source of pollution and the waters that get polluted. Whether a pollutant that goes underground before making its way into a major waterway is subject to the Clean Water Act will have a major impact on industries across the country.

If you have any questions or would like more information, please contact Ze’eva Kushner at [email protected].