Solid Foundation: A Construction Law Blog

April 09, 2020

Virtual Mediations Are Zooming Forward . . . Jump on Board

ADR, COVID-19, Mediation

Authors:

R. Thomas Dunn

Practice area:

With most of the country on stay at home orders of some variety and court closings, parties to claims, litigation, and arbitrations are adapting quickly to virtual litigation activities that are customarily done in person. This includes virtual depositions, mediations, arbitrations, and trials.

In this post, I will talk about virtual mediations.

Contractual mediation is a requirement in many construction contracts to proceeding forward with litigation/arbitration. There is often a period of time in which the mediation should be concluded before a party may proceed to the next step of dispute resolution.

No matter the parties to the case, it is customary for parties, their counsel, experts, and insurance representatives to meet in-person at the mediator’s office, one of the law firms, or some neutral location like JAMS and/or AAA’s offices. The physical presence is an advantage in that it gets parties and their counsel together at the same place with one objective in mind — settle

April 08, 2020

U.S. SBA Corrects Rulemaking on Paycheck Protection Program Loans for Construction Businesses

CARES Act, COVID-19, Delay, PPP Loan

Authors:

Katharine E. Kohm

Practice area:

Construction

In a whirlwind of legislation, rulemaking, guidance, and answers to FAQs on the CARES Act, inevitably confusion arose related to business eligibility for the Paycheck Protection Program’s (PPP). Under the PPP, $349 Billion in loan funding is available for businesses impacted by COVID-19. Eligible businesses can borrow up to 2.5 times their average monthly payroll to cover costs such as payroll (mostly), as well as rent, mortgage interest, and utilities. And if certain requirements are met by the business, all or almost all of the PPP loan will be forgiven. Even putting aside the potential forgiveness benefit, the PPP loans offer favorable terms for businesses – low interest, no collateral, and no personal guarantees. Construction businesses clearly have a need for these PPP loans in an effort to blunt the immediate economic impacts of delayed, slowed, or stopped projects.

However, in a seeming contradiction to the CARES Act statutory language, which allowed businesses with 500 or fewer employees to apply for the PPP loans, the U.S.

March 31, 2020

Massachusetts Issues New Guidance on “Essential” “Construction-Related Activities” — Appears More Narrow

COVID-19, Delay

Authors:

R. Thomas Dunn

Practice area:

Construction

On March 31, 2020, Massachusetts Governor Baker replaced its prior list of “Essential Services” with a new list available online.

Missing from the new listing of “Essential Services” was the prior bullet point that stated construction workers who support the construction of projects was essential. That language from the March 23, 2020 Order is below:

While construction is mentioned a number of times as supporting other essential services, a new section titled “Construction-Related Activities” was added. This appears to be more narrow than the bullet-point above in that it refers to specific industries as opposed to a blanket “construction project.” The new section is below.

While guidance/explanation is not currently available as to the scope of this change from the Governor, the new policy of “Essential Services” appears to be more narrow than the Exhibit A list of “Essential Services” issued on March 23, 2020. Those industries that fall

March 27, 2020

“Essential” and “Safe” Construction Services During COVID-19 Outbreak

COVID-19

Authors:

R. Thomas Dunn

Practice area:

Construction

Effective today (March 27, 2020) at midnight, New Hampshire joins various other states in closing non-essential businesses and ordering citizens to stay at home. Governor Sununu issued Executive Order #17 on March 26, 2020.

All businesses that do not provide “Essential Services,” which are listed in Exhibit A to the order, must close their physical workplaces and facilities and stop all in-person operations. The order also requires businesses providing Essential Services to develop procedures for social distancing consistent with guidance from the CDC and Department of Public Health. Employees of essential businesses may continue to cross state borders for work-related travel, including travel to and from work, and to transport products to distribution facilities, etc. All businesses, essential or not, are permitted—and encouraged—to continue their operations through remote means.

Construction services are listed as an “essential service” under the Order. The Exhibit A closely tracks the listing of essential services issued by the Massachusetts Governor earlier this week. As the

March 25, 2020

Mass Governor’s Legal Office’s Letter to Municipalities: Withdraw Conflicting City/Town Policies Suspending Essential Construction Services

COVID-19, Delay, Risk Management

Authors:

R. Thomas Dunn

Practice area:

Construction

On March 25, 2020, the Massachusetts Governor’s Legal Office issued a letter to Municipal Chief Executive Officers in the Commonwealth that “provides guidance regarding the effect of the Governor’s March 23, 2020 Order ‘Assuring Continued Operation of Essential Services in the Commonwealth, Closing Certain Workplaces, and Prohibiting Gatherings of More than 10 People’ insofar as the Order intersects with municipal efforts to address the COVID-19 crisis.”

The Governor’s order deemed construction services as essential services, but some Cities/Towns have issued temporary suspensions of construction projects in their locale. The letter emphasizes the importance that “public officials avoid conflicting directives and duplication of efforts.” The Chief Legal Counsel stated:

Then, the letter confirms that the Governor’s March 23, 2020 Order included such a superseding provision “to ensure unitary management of this crisis.” The letter concludes, after reciting that constructions services were included as “essential services” in the list of essential services of the March 23 Order,

Accordingly,

March 25, 2020

Project Suspended or Payment Delays? Don’t Lose Your Mechanic’s Lien Rights!

COVID-19, Litigation, RI Mechanic's Lien, Risk Management

Authors:

R. Thomas Dunn

Practice area:

Construction

While many construction projects are advancing in a safe manner during the COVID-19 pandemic, some have been suspended by governmental order, like the Cities of Boston and Cambridge, or based upon the direction of the Owner and/or general contractor.

In a recent survey by the AGC (March 17-19), 28% of the respondents reported a project delay ordered by owners and/or governmental bodies. Of the delays and disruptions, respondents reported various causes including:

- 16% material/equipment shortage
- 11% labor shortages (including subcontractor laborers)
- 18% labor shortages from authorities having jurisdiction (AHJ) for inspections, permits, certificates of occupancy

(The AGC is proving to be an invaluable resource with a 8 part webinar series on COVID-19 related issues plus excellent e-blasts and an online resource page. Locally, the AGC of Massachusetts and CIM are also on the forefront of COVID-19 related construction industry issues. I encourage you

March 23, 2020

Emergency Rule – Rhode Island Contractors’ Registration and Licensing Board (CRLB)

COVID-19, RI Statute Update

Authors:

Katharine E. Kohm

An emergency rule of Rhode Island CRLB went into effect this morning “in response to the State of Emergency issued by the Governor.” The rule seeks “limit in-person contact while continuing to efficiently administer the CRLB statutes, rules, and regulations. This Emergency Rule shall remain in effect until such time as the State of Emergency is lifted.” For more, please see the CRLB website.

In substance, this emergency rule confirms that the CRLB remains open for business. It is accepting applications for new licenses and registrations as well as renewals of the same by mail or deposited in its new, on-site drop boxes at its office. To the extent a new or renewing applicant requires an examination or educational training, which cannot be completed during the RI State of Emergency, the applicant may apply for a temporary waiver for examination or educational training. Note that any registration or license issued with a waiver will expire 90

March 23, 2020

Rhode Island Issues Work from Home Order “If You Can”

COVID-19, Delay, Risk Management

Authors:

R. Thomas Dunn

Practice area:

Construction

On March 22, 2020, Governor Raimondo issued the Seventh Supplemental Emergency Declaration that ordered “[a]ll business service personnel that can work from home are required to do so.” The order was effective immediately and operates through March 30, 2020.

At the time of preparing this post, Rhode Island has not suspended business activities for “essential businesses.” Based upon this policy, field construction services cannot be performed remotely so they can continue provided the following practices are in place:

Gatherings of ten (10) or more people in public or private spaces in Rhode Island are prohibited. In addition, businesses that remain open must post notices of these policies as noted in paragraph 5 below.

For Rhode Island news and updates about COVID-19, visit https://health.ri.gov/diseases/ncov2019/.

March 23, 2020

Massachusetts Closes In-Person Non-Essential Businesses Effective March 24 — Construction Designated Essential

COVID-19, Delay, Risk Management

Authors:

R. Thomas Dunn

Practice area:

Construction

Effective March 24th at 12:00 noon, Massachusetts is closing all non-essential businesses “physical workplaces and facilities (“brick-and-mortar premises”) through April 7, 2020. See COVID-19 Order No. 13.

As an update to my post from Friday on Non-Essential Businesses, Massachusetts did not adopt the CISA Guidelines, but appears to have followed the structure of them.

The essential services list for Massachusetts can be found HERE. Construction services is included as “essential” servcies as follows:

All indication is that MassDOT, MBTA, and MassPort projects are continuing (as noted by the above-referenced public works inclusion as an essential service. During a board meeting of MassDOT, the Commissioner stated that the work is continuing but each project will be reviewed on a case-by-case basis. Below is a letter Construction Industries of Massachusetts received from MassDOT on March 23, 2020 stating

March 20, 2020

Current Guidance on Whether Construction Services Are “Essential” or “Life-Sustaining” Businesses Under Governmental Business Suspensions

COVID-19, Risk Management

Authors:

R. Thomas Dunn

Practice area:

Construction

State governments are issuing orders suspending the full or partial operations of “non-essential” or “non-life-sustaining” businesses. At the time of writing this post, these states include Nevada, Pennsylvania (Order of PA Secretary of Health), New York (50% no later than 8pm today – March 20th). Some cities, such as Los Angeles are issuing similar orders. Other states and local municipalities are considering such measures and it appears inevitable that more will come today and through next few days.

To what extent will construction companies qualify to continue operations as “essential” or “life-sustaining” businesses? What is the current guidance?

New York’s guidance provides for construction “skilled trades such as electricians, plumbers” and “other related construction firms and professionals for essential infrastructure or for emergency repair and safety purposes.” “Essential infrastructure” includes:

- utilities including power

Our blog focuses on providing practical information and guidance relating to construction risk management and dispute resolution. We intend to highlight and summarize relevant state and federal cases, construction industry developments, newly published construction law publications to provide a meaningful resource to assist our in-house counsel, risk manager, or outside counsel readers to avoid, mitigate, or efficiently resolve disputes relating to the construction industry.

While many of our topics will have a national focus, specialized attention will be devoted to state-specific topics and developments in the jurisdictions in which our construction attorneys practice: Massachusetts, Rhode Island, Maine, and New Hampshire.

Virtual Mediations Are Zooming Forward . . . Jump on Board

U.S. SBA Corrects Rulemaking on Paycheck Protection Program Loans for Construction Businesses

Massachusetts Issues New Guidance on “Essential” “Construction-Related Activities” — Appears More Narrow

“Essential” and “Safe” Construction Services During COVID-19 Outbreak

Mass Governor’s Legal Office’s Letter to Municipalities: Withdraw Conflicting City/Town Policies Suspending Essential Construction Services

Project Suspended or Payment Delays? Don’t Lose Your Mechanic’s Lien Rights!

Emergency Rule – Rhode Island Contractors’ Registration and Licensing Board (CRLB)

Rhode Island Issues Work from Home Order “If You Can”

Massachusetts Closes In-Person Non-Essential Businesses Effective March 24 — Construction Designated Essential

Current Guidance on Whether Construction Services Are “Essential” or “Life-Sustaining” Businesses Under Governmental Business Suspensions

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