Austin Construction News • JAN 2020
Legislative Update: New Law Changes the Game on Public Claims
Callie D. Crispin, Attorney Allensworth & Porter Austin, TX
he Texas Legislature recently enacted a number of major changes affecting the construction industry, many of which represent victories for contractors and design professionals. Perhaps the most noteworthy is H.B. No. 1999. This law imposes major new requirements on governmental entities asserting construction defect claims over public projects. Importantly, the new law requires notice of a purported defect to be sent to contractors and design professionals and requires the right to cure before a lawsuit or arbitration is initiated. Under H.B. 1999 (now part of the Texas Government Code), governmental entities must, prior to being able to bring a claim, provide each contracting party a written report that clearly identifies the specific claimed defect, describes the project’s present physical condition, and describes the modification, maintenance, or repairs needed. In addition to this notice of an alleged defect, contractors and design professionals have the right to return to the project to inspect the condition and correct it prior to the governmental entity bringing a formal claim. If the entity fails to send a report or fails to allow a reasonable opportunity to inspect and cure before filing suit, the claim must be dismissed. The obligations under this law are not solely placed on governmental entities. Rather, it also imposes proactive steps that the contractor must take after receiving such a notice from an entity. After receiving a notice, the contractor has five days to provide a copy of the report to each subcontractor and supplier whose work or materials are involved. It would be wise for a contractor who receives a notice to be overinclusive and send the notice to every subcontractor and supplier whose work or materials could conceivably be implicated, as this is too short a period for a thorough evaluation. Contractors should strongly consider copying the governmental entity on all notices to subcontractors and suppliers to alert the entity to potential parties, as section 2272.004 requires the claimant to allow known subcontractors and suppliers to inspect the project, regardless of the entity’s lack of contractual privity. Additionally, within 30 days from the governmental entity sending the report, the contractor must inspect the alleged defect. Further, within 120 days after the inspection, the contractor must either correct the defect or enter into a separate agreement with the governmental entity to correct the defect. This law is a victory for contractors and design professionals because it provides an opportunity to cure defects before an arbitration proceeding or lawsuit, likely saving time and expense. Further, governmental entities will now be largely precluded from filing suit near the end of limitations or repose periods without first giving the appropriate parties notice and an opportunity to cure. While this law clearly benefits construction industry members who work on public projects, there are a few caveats worth mentioning: • First, the law does not apply to all public projects, as it excludes those relating to roads and civil works. • Second, the law has several exceptions that relieve governmental entities of the right to cure obligation. Specifically, a public entity is not required to give a
contractor the right to cure if the contractor is unable to provide a bond to cover the work. The owner is also not obliged to allow the right to cure if the party cannot provide liability insurance or workers’ compensation insurance or if the party has been convicted of a felony. Additionally, the statutory process does not apply if the governmental entity has previously terminated that party for cause or if the party previously made the issue worse in a prior repair attempt. Questions of whether a party was properly terminated for cause or whether a party previously made the issue worse will likely produce litigation, as these issues will often be complicated and deeply project-specific. Since termination for cause is usually governed by the parties’ contract, builders and designers should pay close attention to contractual termination for cause provisions, as they may exert serious influence over a party’s rights under this new law. For example, if a contract provides that a party may be terminated for cause for a non-material breach, the governmental entity may terminate the contract accordingly, thereby eliminating the application of this law altogether. • Third, while this law requires a governmental entity to provide a report and outlines several elements that must be included in it, the law does not explicitly require the report to be authored by a third-party nor by an individual with any design or construction expertise. In contrast, the bill, as introduced in the Legislature, did require the governmental owner to obtain an inspection and report from an independent third-party licensed professional engineer. As enacted, however, it appears that the public entity itself may simply provide a write-up on the required elements, regardless of the entity’s construction knowledge. H.B. 1999 is a positive step for contractors and design professionals. The notice and opportunity to cure construction defects in the public realm should help industry members avoid expensive lawsuits and arbitrations. At the same time, however, builders and designers must pay careful attention to their own requirements under this new law, as obligations flow both directions.
Joann Natarajan Compliance Assistance Specialist OSHA Austin, TX onstruction work is hard work, and construction workers feel the results. In one survey, seven out ten construction workers from 13 trades reported back pain, and nearly a third went to the doctor for it. Back pain, carpal tunnel syndrome, tendinitis, rotator cuff syndrome, sprains, and strains are types of musculoskeletal disorders. Work-related musculoskeletal disorders (WMSDs) are caused by construction tasks. WMSDs can become long-term, disabling health problems that keep you from working and enjoying life. Not only do these injuries hurt your body, but they can reduce your earnings. You have an increased risk of these injuries if you often:
Carry heavy loads Work on your knees Twist your hands or wrists Stretch to work overhead Use certain types of tools
On top of that, tight deadlines mean a fast pace. Pushing the pace increases your risk even more. Ergonomics tries to come up with solutions to make sure workers stay safe, comfortable, and productive. Excavation work exposes equipment operators to whole body vibration from earthmoving equipment and ergonomic problems from poor seat and cab design. Workers must often work in awkward postures, e.g. in trenches. Soil tampers produce high levels of hand arm vibration when compacting soil. Masonry work requires a lot of heavy lifting and carrying of masonry blocks and grout and constant stooping to pick up materials.
that are poorly balanced, digging of ditches and footers, driving stakes with sledge hammers, use of saw horses that are too tall or short, and carrying, setting and stripping of forms. Power tools may also present a risk of injury from vibration Structural steel work requires many awkward postures (e.g., welding), repetitive motions (e.g., welding), and use of pneumatic tools (for bolting). Crane operators are also exposed to whole body vibration. Concrete floor work requires a lot of bending to work at floor level which is harmful to the back. Workers must bend to tie steel rebar together. Back injuries may occur while pumping concrete with an elephant trunk hose, raking it into place and smoothing it with a straight edge (which requires work in a bent over posture). Trowelling the edges has to be done bent over. Vibrating the concrete into walls and edges exposes workers to hand arm vibration. Mechanical finishing of the floor may pose a vibration hazard and can require great force at times. A number of free resources exist that demonstrate tools and engineering controls for construction tasks that reduce stress on the body. These free resources are available at: https://www.cdc.gov/niosh/docs/2007122/pdfs/2007-122.pdf https://www.cpwr.com/a-z-index/E http://elcosh.org/video/1308/a000033/ ergonomics-in-construction.html
Concrete formwork presents a risk of back injury from the use of heavy saws
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Callie Crispin is a construction attorney at Allensworth & Porter where she helps clients across the commercial construction industry resolve disputes including contract and payment disputes and construction and design defect claims. To reach Callie, please contact firstname.lastname@example.org or visit aaplaw.com.
Origis Services broke ground on a 10,000sf solar and energy storage Remote Operations Center (ROC) in Austin. Slated for completion in early 2020, the ROC will house 70 personnel to support 500 field technicians. S. Watts Group Inc. serves as the general contractor. –mjm