Wednesday, April 30, 2014

One minute practice pointer: Dispute Avoidance – It works in Court too!

     by Judge Nancy Holtz (Ret.), Mediator/Arbitrator Available Nationally, (617) 720-0501,    

It is the pretrial conference right before trial.  You have filed your Motion in Limine.  The issue is one of great importance to you. There is a very damaging piece of evidence which you know opposing counsel is going to seek to introduce.  You want it excluded and have so moved, in limine.

Your motion is well researched, well reasoned and well written.  You are now before the trial judge arguing the motion.   Despite a strong argument and making all your points, it is clear by the judge’s questions or comments that the judge is not persuaded and is about to rule against you. This is the moment when a lot of inexperienced lawyers will double down and argue even more vociferously to win the day.  But the seasoned lawyer knows there is another way to win:  avoid the dispute for the moment. Do not let the judge say “no”.  Instead, when you can see that you are probably not going to prevail, it is far better to offer an alternative to receiving a negative ruling:  Avoid this dispute for now.

“Your honor, may I ask that the Court reserve on this motion.   I would ask that you instruct opposing counsel not to mention it in his opening and approach sidebar before asking any questions about it.  I believe that once you have heard some evidence, my position will be more clear and it might be easier to rule then.  There will be no prejudice to the other side in holding off until you have a chance to see the issue in the context of the evidence.”

Needless to say, this same advice applies when you are opposing a motion in limine.  Suggest to the judge that you will not mention the particular piece of evidence in your opening but that you believe that when the judge hears more evidence, the relevance of that evidence will be more clear.

You live to fight another day and once the judge is a little more “educated” about your position, in the context of the evidence, you may well prevail.

Friday, April 25, 2014

The Top Ten Mistakes Made in Digital Presentations and Demonstrative Evidence

Thanks to Ed Josiah, the Forum's tech guru from Nautilus Consulting, we have the following helpful list of common errors that attorneys and experts make when using electronic presentation tools such as PowerPoint in court or in arbitrations.  Ed kindly provided this article to us to share with our members.  Here is the article:

The Top Ten Mistakes Made in Digital
Presentations & Demonstrative Evidence
By Edward M. Josiah1

Electronic presentation technology is a pervasive force in the world today. This is especially true in the field of law and more so in document intensive and multi-issue construction disputes. An exceptional oral advocate has always had a powerful advantage in the courtroom, but today, presentation technology brings an intensity and flexibility of its own to court. Carefully planned legal strategy and strong content remain the hallmark of a solid case. Carefully planned visual strategies and compelling graphics are the hallmark of a persuasive electronic trial presentation. It is the combination of the two that wins your arguments. This article will explore the top ten mistakes made in the formulation and design of electronic exhibits and presentations.
1.    Misuse of slides – Digital slides should not be viewed as electronic versions of document enlargements. The educative power of digital exhibits is in teaching the details. Jurors will read and remember a phrase that is enlarged on the screen. Displaying a full-page document is not conducive to learning. A “picture” should be worth a thousand words -- a thousand words should not be in the picture.

2.    Confusing slides - Each slide should address one fact or argument. A slide that attempts to focus on more than one issue will confuse viewers. Rather than decipher its meaning, jurors will simply discount it. Remember, the purpose of the presentation is to communicate facts efficiently for the viewers to remember.

3.    Wordy text slides – Electronic exhibits are like road signs. Imagine driving down a highway at 65 mph and seeing the following sign: “The best exit to take to get to 84th Street is coming up in approximately 4.2 miles on the right side of the road”. Even if you could read it, would you? The sign “84th St., Right lane, 4.2 miles” works so much better; it’s clean, short and simple. Electronic exhibits should get to the point.

4.    Digital Video – A common misconception is that an event or testimony video taped using digital video is in a format that’s ready to play back at trial. This is not true. The video will need to be translated into a format that computer software can accept. It can then be transferred onto a computer and converted to a file such as an “mpeg”. The digital video is a much higher quality of video, but costs more and takes longer to produce.

5.    Faster is not better – One of the most powerful features of electronic presentations is the ability to tell a story slowly and methodically. A good story unfolds one fact at a time. Each new fact should build on the credibility of the last and support the overall theme of the case. By revealing one point at a time, you control the flow of information and how you want the viewers to learn the case and your arguments.

6.    Information Overload – The most significant element involved in designing electronic presentation graphics is deciding “what” information should be included. Slides should be driven by the desire to influence the decision making process not exclusively by graphic design. The function of analytical graphics is to enhance the message or testimony. The design of the slide (colors, line weight, etc.) should not compete with the information being presented. Content should work hand-in-hand with the design.

7.    Technology Overkill – One of the biggest pitfalls that attorneys fall into is overdoing their presentations with too much technology. Fancy animations and effects have their place but should not be used just because the technology has the capability. The initial design of the slides should reflect simplicity. The need for animations and effects will become clear as the presentation and testimony come together.

8.    I don’t need to Rehearse! -- A technological-based presentation must be sensitive to the style of the attorney employing it. It is necessary to synchronize technique with technology and this requires practice. Rehearsals afford the attorney an opportunity to refine problem areas and to become comfortable with the flow of the presentation as a whole. Keep in mind that electronic presentations affect where the attorney stands and how he/she interacts with witnesses, the judge and the jurors.

9.    Rooms have Limitations -- Technology considerations must be addressed to ensure that the presentation has the maximum impact on the jury. The best presentation will not be effective if the jury can’t see it clearly. Reviewing and planning for the physical courtroom is critical for success during trial. The size of the room, location of monitors and/or screen, electrical wiring, acoustics, lighting and equipment are all part of the trial environment and must be considered early on.
10. Murphy’s Law will rule -- Anything that can go wrong will go wrong. While the reliability of technology has dramatically improved over the past few years, an attorney should always prepare for the worst. Back-ups for all hardware such as laptops and projectors as well as duplicate informational CD’s are a must. Physical handouts of the presentation should be considered for backup purposes.

Ed Josiah is Director of the Nautilus Consulting Demonstrative Evidence Practice Group. He is one of the nation’s leading demonstrative evidence specialists, past president of the Demonstrative Evidence Specialists Association and graphics consultant to the American Bar Association’s Forum on the Construction Industry.

He can be reached directly at or (631) 891-3043.   

Tuesday, April 15, 2014

2014 Cornerstone Award: Holt Gwyn

Every year at the Annual Meeting, the attendees convene for the Forum's Annual Business Meeting during our lunch on the Thursday of the meeting. This year was no different, of course, as we convened in a ballroom to install our new Governing Committee members and Division Chairs (including our new chair for Division 1) and hand out awards and thank yous for those people who edited books published in the past bar year or who chaired national or regional Forum events.

Here's a photo of outgoing Chair Terry Brookie leading the meeting this year.

From time to time, the Forum Governing Committee determines that an individual should be honored for his or her lifetime of achievements and contributions to the Forum.  This award is known as the Cornerstone Award.  It is not awarded every year, and it is only awarded to those who have truly given back to the construction law profession through their service, activity, and scholarship in the field.  Past winners of the Cornerstone Award are a veritable "Who's Who" of construction law; a list of the awardees through 2013 is available on the ABA Website here.

This year, Doug Oles of Oles Morrison Rinker Baker LLP in Seattle had the privilege to introduce the latest winner of the Cornerstone Award, A. Holt Gwyn of Conner Gwyn Schenck PLLC in Greensboro, North Carolina.

The video below is Doug's introduction and gentle roasting prior to Holt's acceptance of the award.  Doug could have continued on for much longer if he had chosen to mention all of the awards that Holt has earned through his distinguished career, but he did abbreviate somewhat.

Here is Holt's humble acceptance of the award.

And my apologies for the shakiness of the videos at times.

Thursday, April 10, 2014

Workshop A: Labor Today, None Tomorrow

Danny Jarrett of Jackson Lewis LLP in Albuquerque and Christopher Whitney of Pierce Atwood LLP in both Boston and Providence are the speakers for Workshop A. All of us have seen picketing, bannering, and other labor union tactics. But, as construction lawyers, how do we handle issues raised by those behaviors -- or even strikes?

Danny and Chris are giving us the lowdown on these issues. 

Good Morning from New Orleans

Day 1, plenary 2: we are learning about the use of random sampling to deal with construction defect claims. Our speakers are Clifford Shapiro of Barnes & Thornburg LLP in Chicago, Clairmargaret Groover of Becker & Poliakoff in Orlando, and William Mazur of Rimkus Consulting Group in Houston. 

If you are missing out on the presentation, be sure to check the searchable knowledgebase on the Forum's website for the written materials. 

Tuesday, April 8, 2014

New Mississippi Lien Law To Protect Subcontractors, Suppliers and Materialmen

During the 2014 legislative session, the Mississippi Legislature passed a construction lien law in response to a 2013 judicial determination that Mississippi's "Stop Notice" statute was unconstitutional. The bill has passed out of conference but it must be enrolled and signed by the governor. The new law is applicable to residential and commercial construction projects and allows unpaid subcontractors, sub-subcontractors, suppliers and materialmen ("Claimants") to place a lien against real property. Lumber suppliers, electric suppliers, equipment providers, plumbing, and roofing companies supported the construction lien bill, Senate Bill 2622, which will be codified as Section 85-7-401, et seq. of the Mississippi Code of 1972.

Under the new law, all Claimants furnishing services, labor and/or materials for the improvement of real estate shall have the right to file a lien on the real estate under certain enumerated circumstances. The lien claim also includes interest and the Claimant has the right, in unusual circumstances, to petition the court for an award of attorneys' fees.

The lien may be only filed by licensed Claimants. Further, with a nod to equity and perhaps the "clean hands" doctrine, only Claimants who have substantially complied with or completed their contractual obligations may file a lien.

First, as is typical with most lien statutes across the United States, a pre-lien notice must be issued to the owner and/or contractor if the materialman or supplier does not have contractual privity with these parties. This pre-lien notice must be issued within 30 days following the first delivery of labor, services, materials or work on the property. Without this pre-lien notice, a Claimant cannot subsequently lien the job.

The lien must be filed within 90 days from the Claimant's last work, labor, services or materials performed or delivered for the construction project. Once filed, the Claimant has two business days to serve or mail a copy of the lien upon the owner and/or the contractor. The lien may be amended to increase or decrease the amount of the claim with such amendment relating back to when the lien was originally filed.

The new law provides further that the suit to enforce the lien must be filed within 180 days of when the lien was filed and a Notice of Lis Pendens must be filed with the commencement of the lien action.

Finally, the new law reiterates the general provision that the lien is only a claim against the property, and as such, the Claimant may obtain a judgment in rem against the property. The judgment is not an in personam obligation of the property owner.

The process for filing a lien against residential property is somewhat different. Rather than the 30-day notice referenced above, the Claimant must provide the owner of the residence a pre-lien written notice at least 10 days before filing a lien. Like the lien above, the claim is only an in rem claim allowing the Claimant to obtain an in rem judgment against the property and does not impose in personam liability upon the property owner.

The statute also allows the owner to shorten the litigation period of 180 days referenced above by serving upon a Claimant a "Notice of Contest." Upon such issuance, unless suit is initiated within the 180-day-period, the lien is automatically extinguished upon the earlier of 90 days after the filing of the "Notice of Contest" or 180 days from the date the lien was filed.

When the contractor obtains a payment bond for the benefit of subcontractors and material suppliers, that bond cancels the ability of the subcontractors and materialmen to obtain a construction lien.

The effective date of the statute will be the date of signing by the governor or 14 days from legislative approval, whichever is earlier.

Tuesday, April 1, 2014

Texas Court Rejects General Contractor's Fraud Claims Against Owner's Lender

A Texas court of appeals recently rejected a general contractor's claims for fraud against the project owner's lender.

In that case, the general contractor did not receive several progress payments for its work on the project, and was not paid its retainage by the owner. The owner defaulted on its construction loan, which led to the lender foreclosing on its lien on the property.

The general contractor filed suit against the lender, claiming (among other things) that lender fraudulently misrepresented that it was withholding retainage from the loan amounts disbursed to the owner for the general contractor's periodic pay applications. The trial court granted summary judgment in favor of the lender on the fraud and constructive-trust claims.

The court of appeals affirmed. It pointed out that the general contractor had failed to present evidence showing the lender had made any "misrepresentations" concerning retainage. The lender's witness stated that the lender did not actually withhold any retainage, but instead forwarded the full amounts to the owner. The general contractor, in turn, did not present any evidence that its requests for payment were presented directly to the lender, or that the lender withheld any of the retained funds for the owner. Absent such evidence, the court held that the general contractor failed to raise an issue of material fact on whether the lender made any misrepresentations.

The opinion is David Wight Constr. Co., Ltd. v. FDIC, No. 14-12-01003-CV (Tex. App--Houston [14th Dist.] Feb. 25, 2014, no pet. h.).

Though the court did not discuss the issue, by analogy, some statutes in Texas expressly exempt lenders from certain obligations concerning construction loans. For example, the Texas Trust Fund Act expressly exempts lenders from any obligations to hold construction payments in trust for the contractors who work on projects. Tex. Prop. Code Sec. 162.004(a). However, this exemption would not excuse the lender from liability for any fraudulent misrepresentations to the general contractor.

Has anyone seen a successful claim for fraud or negligent misrepresentation by a contractor against a lender? Would allowing such claims expand the lenders' liability in a manner that would interfere with the normal administration of pay applications in commercial construction projects?