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Practices - Construction Law - Claims Advice

Construction Law


Remedies and Claims Advice, Development and Preparation

A. Construction Remedies

McGuinness & Associates represents businesses at every tier level of a construction project. Our lawyers develop, pursue and defend claims on behalf of owners, contractors, suppliers, architects, and engineers.

1. Our Owner Clientele

Our lawyers assist project owners in implementing methods to avoid unexpected project encumbrances and/or payment obligations. Such methods include the use and tracking of preliminary notices, California Civil Code releases, joint check instruments, stop notice demands, notice of completion or cessation filings, recordation of private payment bond instruments, posting of non-responsibility notices at areas of tenant improvement and protective contract terminology. If encumbrances and/or alleged payment obligations arise, then we can tender such potential liability to the general contractor, a payment bond surety and/or seek a release bond to dispel them.

An owner can seek to ensure a proper completion of project work through a performance bond, establishing proper payment milestones, conducting inspections and maintaining a proper retention fund. Based on the project investment amount at risk and the skill set of the owner’s representatives, an owner may be advised to actively participate in creating design requirements and to confirm appropriate product selections during the submittal process. Requiring updated critical path method schedules can provide both a roadmap to achieve timely work and forensic evidence of both how a project became delayed (asserting claims) and/or how a contractor’s work schedules became extended (defending claims). Claims avoidance is also effectively pursued through the above practices, along with site meetings and appropriate project documentation.

Consistently proper, complete, and timely work within planned cost parameters emanates from an owner’s proactive participation in design requirements, project administration and work inspections. Our lawyers can advise owners about and organize methods for such proactive participation.

2. Our Designer, Builder and Supplier Clientele

Our lawyers assist project designers, builders and suppliers to preserve and pursue payment for work and/or material provided to a construction project. Our construction law expertise extends through all of the many California contractor/supplier remedies including, mechanics’ liens, stop notice rights, bond rights, prompt payment remedies, UCC interests, attachment remedies and the federal Miller Act bond rights.

The most common right any business claimant possesses is a simple breach of contract action against the entity with which the claimant has contracted to provide project work or materials. This contract action requires nothing more than an oral or written agreement for the exchange of work and/or materials for payment. Such rights do not ensure that payment will be made either when due or with certainty.

There are, however, a variety of important practices and/or remedies available to a contractor for both developing leverage to obtain timely payment and to best ensure that a full payment is ultimately received. These remedies include mechanics’ liens, stop notices, bond notices, security interests, prompt payment statute penalties, and other recovery rights. We assist our clientele to preserve their construction remedies which provide them with powerful leverage, including rights to:

  1. Seize an ownership interest in the construction project property by the proper recording and preservation of a mechanics’ lien;

  2. Freeze construction project funds by an effective stop notice filing, so that upper tier contractors cannot obtain these funds without payment to our client;

  3. Preserve surety payment guaranties through code compliant bond notifications (private/state/federal) and by complying with any enforceable bond restrictions;

  4. Repossess equipment, unless paid, through effective UCC interest filings; and

  5. Pursue a full array of penalty and other payment recovery rights such as prompt payment penalty remedies, interest (legal or contractual), legal fees, litigation expense and attachment rights.

These points of leverage can ensure a timely and complete payment to our clientele, when simply pursuing a breach of contract action might not. In addition, mechanics’ liens, stop notices, bond notices, and security interests can provide our clientele with valuable payment assurances, even when the parties pursued for payment are otherwise financially unviable.

B. Delay, Defects, Extra Work and Inefficiency - Claims

Our firm defends and pursues claims for delays (late completion/extended work schedule), defects, extra work and inefficiencies.

1. Owner Claims

An owner’s defects claim is for inadequacies in the project design, installation work and/or material which fails either to meet industry standards or comport with contract requirements. Owner defect claims comprise cost of replacement and/or repair and any associated project delay damages. 

An owner’s late completion claim is for the unexcused failure to timely complete project work in accordance with contract requirements. A project owner is entitled to the timely completion of project work which comports with design and other contract requirements. Otherwise, a variety of potential damages including lost rents, opportunity costs, ancillary lost profits, extended administration expense and other damages can be recovered by the owner.

Our firm has the experience and skill to specifically identify failures in a project design, construction and project administration, as well as, other causes of a troubled construction project. In addition, this firm works with distinguished and effective experts to both analyze claim liability and best prepare for construction claims litigation. Our lawyers can successfully protect project ownership interests and aggressively pursue an owner’s construction defect and/or delay claims.

2. Contractor Claims

A contractor has rights to a defined scope of work. Contractor extra work claims are to obtain compensation for any required additional work scope and/or a change in either the nature of work to be performed or expected project conditions. The extra work claim can be comprised of a contractor’s costs, profit and extended (unabsorbed) overhead.

A contractor also has rights to owner cooperation in the provision of site access, dependable design requirement information and reasonable work efficiencies. A general contractor is customarily responsible for project administration, including the creation and management of a project work schedule.

Reasonable work efficiencies include an agreed or reasonable project duration, proper trade sequencing, disruption avoidance and/or avoidance of both work compaction and acceleration. Contractor completion delay claims emanate from an extended project work schedule. Often related claims for inefficiencies can include elements of disruption, compaction and acceleration.

Contractor delay and inefficiency claims can be asserted by a project contractor against an owner or by a lower tier contractor against an upper tier contractor. A contractor’s delay and inefficiency claims can include extended (unabsorbed) overhead, increased labor costs, escalated material costs and lost profits.

Our firm has considerable expertise to protect your payment rights and to aggressively pursue your claims for extra work, delays and inefficiencies. In addition, this firm works with distinguished and effective experts to both analyze claim liability and best prepare for construction claims litigation. Our lawyers can skillfully assist you in all areas of construction remedies and construction claims.

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