What's Up With Division 1 (No. 18) -- Happy Holidays and Happy New Year!

Quite a bit has occurred since my last message from the Division 1 Chair, which was just before the Fall 2022 Meeting in Memphis, TN.  I will do my best to summarize the highlights but I wanted to start by saying HAPPY HOLIDAYS to all of Division 1's leaders and members.  I hope you are able to take some time off and enjoy the holidays with your family and friends.  I am very proud of what we have accomplished in 2022 and look forward to further collaboration with you all about construction litigation and dispute resolution into 2023 and beyond! 

Fall Meeting -- Memphis, TN (Sept. 28-30)

The Peabody Hotel was awesome!  The lobby was huge and very comfortable.  Full of southern charm.  The Forum Chair, Cary Wright, served as honorary duck warden (forget the real name).  A video of that is below:

We had a great dinner at Itta Benna, a hidden away restaurant located at the top floor of BB Kings.  Thanks to Mike Lane for scheduling this fabulous dinner and Breakwater Forensics LLC for sponsoring it.  Here are some photos:

We held the first of the 3-part trial advocacy practicums in Memphis.  They focused on jury selection.  Jason Rodgers-da Cruz led the planning effort for this program.  He was joined by Stu Sobel (last minute substitute due to Lu Prats having to deal with the Hurricane), Galina Davidoff, and Terry Brookie. 

Our lunch program, planned by Brett Henson and Jade Davis, on early dispute resolution was postponed because they are both based out of Florida and were dealing with Hurricane Ian.  We split up into different division lunches.  

We held Division 1’s annual planning retreat in Memphis.  We came up with a ton of excellent ideas for the concepts book and discussed some new ventures to try out.  Thanks to everyone who attended!  

Here are some other photos from the meeting.

Division 1 — Extreme Winds Program

Speaking of natural disasters involving wind, shortly after my last message, we held a fantastic virtual program on wind events.  This was a technical program.  It was very interesting and is full of videos.  I recommend you watch it if you have not already done so.  Thanks to Mike Lane for coordinating this program!

Division 1’s Toolbox Talk Series Programs - Sept, Oct, Dec

Just before the Fall Meeting, on September 22, 2022, we held a Toolbox Talk Series program on Ethical Conduct for Advocates and Neutrals (Rules and Remedies for Mediation Misconduct).  Thanks to Patricia Thompson and Deborah Ballati for leading this discussion.  Check out the video here:

We held Toolbox Talks in October and December as well.  October’s was on the Design-Build Standard of Care and led by Thanh Do and Joel Heard (partnership with Division 4).  I tagged along with Catherine Delorey and Mark Johnson for the December TTS on Strategies to Defeat or Mitigate Attorney’s Fee Prevailing Party Provisions.  

Both were great programs.  Kanita Williams, our most recent steering committee member, is going to lead the 2023 Toolbox Talk Series of programs.  Thanks to all the volunteers who made these programs a success.  

Division 1’s Arbitration Program with Division 8 - Nov. 10th

Division 1 and Division 8 agreed to collaborate on some programs.  The first of the programs was a virtual program on arbitration comparing domestic vs. international practices.  Pasha Ameli has been the D8 leader/liaison working hard to make these programs a success.  He moderated the panel of speakers (R. Zachary Torres-Fowler, Marcus Salvatore Quintanilla, Merra Kurubalan, and Patricia H. Thompson).  Thanks to Pasha, the speakers, and Division 8 for this program! 

The Dispute Resolver Posts

I am assuming you know about the TDR posts if you are reading this message, but I would be remiss if I didn’t mention that the following has been posted on TDR since the Fall Meeting:

• D1 Neutral Feature - Robbie MacPherson
• View from the Field Part 5 - Field Labor Disruption
• Jurisdiction - Employee Training, Alone, May Subject You to a Foreign State’s Jurisdiction 
• Pennsylvania Superior Court Places Time Limit on Good Faith Withholding Under Prompt Pay Act
• Contractual Claims Protection: A Checklist for Owners
• D1 Neutral Feature - John Bulman
• Twists and Turbines - A New York Case Highlights an Owner’s Risk When Not Using Full-Wrap EPC Delivery

I want to thank all of the authors, editors and contributors of TDR.  After serving as the editor in chief of TDR for the past years, Catherine Delorey is going to hand-off the lead editor role to Marissa Downs.  Thanks very much Catherine for your work for TDR.  We launched some fun and different series since you have served as editor.  Congrats Marissa and I look forward to working with you on TDR as well as the new editors we are bringing on board.  

If anyone has an interest in being published in The Dispute Resolver, please reach out to Marissa Downs (mdowns@lauriebrennan.com) or Tom Dunn (rtdunn@pierceatwood.com).  

Forum’s Midwinter Meeting — Feb 1-3, 2023 (Caribe Hilton Puerto Rico)

Join us at the midwinter meeting (just about 1 month away!).  REGISTER HERE.

Joe Imperiale is leading the second practicum in the trial advocacy series on openings and direct examination.  Arrive early so you can attend the practicum on Wednesday.  

Marissa Downs is planning our social event which will be at the Casa Bacardi on Wednesday afternoon.  Be on the lookout for the registration info for that program, but it will include a mixology class, a tour, and reception sponsored by our friends at Construction Discovery Experts.  

Have a great end of 2022!   

Tom Dunn, Division 1 Chair

rtdunn@pierceatwood.com

401-490-3418

 

COURTHOUSE REPORTER SERIES: Twists And Turbines: A New York Case Highlights an Owner's Risk When Not Using Full-Wrap EPC Delivery

 New York State Thruway Auth. v. CHA Consulting, Inc., 165 N.Y.S.3d 832 (Albany Co., Sup. Ct. 2022).

This case involved a dispute over a wind turbine project. The root cause of the dispute was a bust between the “wind turbulence” at the site, and the wind turbulence that the turbines installed could withstand. Once the project was completed and commissioned, the overworked turbines prematurely failed.

The New York State Thruway Authority (the owner) sued CHA Consulting, Inc. (the designer), the Kadney Company (the general contractor), Vergnet (the turbine supplier), and two different site engineers: Prudent Engineering, and Ravi Engineering and Land Surveying (the engineers). The New York Supreme Court (New York’s trial court) dispatched all of the owner’s claims on summary judgment.

The designer, which had specified the wrong type of turbine, invoked New York’s three-year statute of limitations to defeat the owner’s professional negligence claim. The owner argued that the statute should run from the date of its acceptance of the work and issuance of a final certificate. But the statute makes clear that it runs from the professional’s “completion of performance under the contract.” With the designer out of the picture based on the timing of its work, the owner’s creative attempts to hold others responsible fell flat.

The general contractor defeated the owner’s claims because the designer specified the exact make and model of turbine, and the general contractor procured and installed those exact turbines. It was not the general contractor’s responsibility to verify that the turbines were suitable for the site, therefore the general contractor could not be held responsible. Even if the general contractor was somehow responsible for the verification, the owner accepted the general contractor’s work during inspection, and found it in general conformance with the contract plans and specifications.

The turbine supplier defeated the owner’s warranty claim because its warranty contained an exclusion when the site conditions were the cause of the issue. The owner argued that the turbine supplier should be estopped from taking advantage of the exclusion because it did not verify that the turbines were suitable for the site conditions. The Court disagreed, finding that the warranty did not create any duty for the turbine supplier to independently verify suitability. The various disclaimers in its contract were a further backstop against this argument.

The engineers defeated the owner’s claims because the Court found that their obligations were limited to confirming that the turbines supplied were the same as the turbines specified. The Court made this ruling primarily because the specification at issue was a “closed proprietary specification, with no substitutions allowed.” Had a less-detailed and more traditional performance specification been used, the engineers would have had greater responsibility to verify conformance.

In conclusion — it is not uncommon for an owner to separately contract with the major players on a construction project, as opposed to entering a full-wrap EPC agreement, but such an arrangement presents certain risks. Two of the most notable risks are scope gaps, and as demonstrated in this case, liability gaps. The designer in this dispute was able to avoid liability because its work was complete long enough before the problem was discovered that the statute of limitations had run, which left the owner without a party to pursue. A full-wrap EPC agreement would likely have allowed the owner to avoid this situation.

*This blog article was previously posted on the Troutman Pepper website.

Author Todd Heffner is an Associate with Troutman Pepper in its Atlanta office.  His practice covers construction matters, including in federal court and arbitration.

Meet D1’s Neutrals Series: JOHN E. BULMAN

Company: Pierce Atwood LLP
Location: Providence, Rhodes Island
Email: jbulman@pierceatwood.com
Webpage:  https://www.pierceatwood.com

Law School: Georgetown University Law Center, J.D., cum laude;Editor, Law and Policy in International Business (1984)
Types of ADR services offered: Mediation, Arbitration, Dispute Review Boards, Online Dispute Resolution (ODR)
Areas served: Nationwide

Affiliated ADR Organizations:

        American Arbitration Association (AAA)

International Institute for Conflict Prevention & Resolution (CPR)

International Centre for Dispute Resolution (ICDR)

College of Commercial Arbitrators (CCA)

Chartered Institute of Arbitrators (CiArb)

Rhode Island Superior Court

Rhode Island Federal District Court

International Chamber of Commerce (ICC)

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Q: Describe the path you took to becoming an ADR neutral.

A: Early in my career, I was an advocate in several AAA construction-related arbitrations.  The AAA saw fit to add me to its Panel of arbitrators around 1990.  Since then, I have served as an arbitrator or mediator in approximately twenty states.

Q: What percentage of your current legal practice is spent on ADR work?

A: 90% or more of my time is spent as a neutral.

Q: Describe your background and experience mediating and arbitrating construction cases.

A: I have served as a mediator in over 100 construction cases since 1990. I have served as an arbitrator and rendered awards in at least fifty arbitrations, ranging from $500,000 to $220,000,000 in controversy.   Most of the larger cases have been three-arbitrator panels; I have served as chair in the majority of those cases.

Q: Mediators are oftentimes described as “facilitative,” “evaluative,” or “transformative.” Do you have a style?

A: Each case calls for a specific emphasis and/or technique but I certainly lean toward facilitative negotiation.

Q: Do you have any practices that you find make you particularly effective as a mediator?

A: Asking open-ended questions to prompt each party to fully articulate not only the merits of the case but also how counsel expects to meet the other side’s defenses or counterclaim.

Q: Do you recommend individual preparatory meetings with the parties and counsel prior to the joint session?

A: Yes. Gaining a better understanding of the dispute background and prior settlement discussions saves time and energy at the mediation session itself.  It also preempts “going down the wrong road” at the mediation.

Q: What should attorneys and their clients take into consideration when vetting and/or selecting an arbitrator?

A: The arbitrator’s subject matter expertise and ability to manage the process efficiently.

Q: What advice do you have for parties when considering whether to choose a single arbitrator or a panel?

A: Cases with a large amount in controversy or where the technical expertise of a particular arbitrator is important are cases where a three-member panel is effective and appropriate.  Cases with several parties are also situations where a three-member panel is appropriate.

Q: Do you think limits should be placed on discovery in the arbitration context?

A: There should be limits since arbitration is not supposed to be a mirror image of litigation.

Q: What role should traditional rules of evidence play in the arbitration hearing?

A: By the time hearings take place, there should be a limited number of exhibits that are in controversy.  This is the only time when the “rules of evidence” have a bearing, and they have a limited bearing.

Q: What are some of your interests or hobbies outside of your ADR Neutral practice?

A: Furniture making and fly-fishing.