Monthly Archives: October 2012

The International Green Construction Code: Raising the Bar from the Ground Up

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Francis A. Kirk – September 20, 2012

Recently the International Code Council published the International Green Construction Code (“IgCC”).  The IgCC is expected to be a real game changer for new construction in the United States.  Forward-thinking companies in the construction industry should be aware of this development and how it might affect their businesses if the IgCC is adopted in the jurisdictions that are home to their construction projects.

Does this new code apply to you and how will it affect construction?

The most significant impact of the IgCC will be to establish the floor, not the ceiling, for green building design and performance for new and existing buildings, affecting sustainable design and construction dramatically.

The IgCC is the product of years of study, discussions, and hearings by various industry groups involved in construction, such as the International Code Council; the American Institute of Architects; and the American Society of Heating, Refrigeration, and Air-Conditioning Engineers.  The goal was to establish minimum standards for green building design and performance.  When adopted by a jurisdiction the IgCC will apply to all new and existing commercial and residential buildings over three stories in height.  Accordingly, its impact could be far-reaching.

How does the IgCC differ from existing codes?

Unlike other construction industry regulations, the IgCC contains requirements not only for building construction but also for commissioning, operations, and maintenance.  No other building code contains requirements for operations after a building is constructed.

Also significant is that existing buildings are not automatically exempt.  Certain alterations, repairs, additions, sales, or changes of occupancy of existing buildings would trigger a requirement to comply with the code.

With limited exceptions Greenfield development is not allowed.

At least 50% of construction waste must be diverted from landfills.

At least 55% of building materials must be recycled, recyclable, or indigenous.

Increased energy efficiency must operate at 51% of the energy permitted to be consumed according to the 2000 International Energy Conservation Code.

Jurisdictions will have the ability to tailor the IgCC to local concerns, to account for varying needs across the country based on climate and geographical differences.

How widely will the IgCC be adopted and enforced?

Jurisdictions that adopt the IgCC will presumably enforce it in the same manner that they enforce current building codes.  Whether adoption of the IgCC will result in more vigorous oversight and enforcement than current building codes remains to be seen.  The IgCC itself does not call for greater or different enforcement.

Many groups involved in construction have concerns about adoption of the IgCC.  The National Multiple Housing Council is actively seeking an exemption from the IgCC, at the code level regardless of where adopted, because it considers compliance to be onerous and in some cases unrealistic for apartment complexes to achieve.  Other industry groups might seek an exemption as well.

Has the IgCC been adopted by any jurisdiction to date?

To date, the IgCC has been adopted in a limited number of jurisdictions.  Rhode Island has approved use of the IgCC but limited to only particular projects.  The states of Florida, Maryland, North Carolina, and Oregon have adopted the IgCC to varying degrees. Selected local governments in Arizona, New Hampshire, and Washington have also adopted the code. The author has been advised that the New Jersey Department of Community Affairs, the single largest code enforcement agency, views the IgCC favorably and will likely advocate for its adoption.

While no jurisdiction has yet to reject the IgCC, it is likely that Pennsylvania will decline to adopt the IgCC.  In January 2012 the Uniform Construction Code Review and Advisory Council advised the Pennsylvania legislature not to adopt the 2012 updates to the International Construction Code, which includes the IgCC.  One consulting engineer was quoted in Engineering News Record as remarking that the new codes, “are too complicated, too expensive to comply with and impossible to enforce.”

via The International Green Construction Code: raising the bar from the ground up – Lexology.

Owner’s Material Breach may Excuse Contractor from Obligation to Perform

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Alston & Bird, LLP – September 12, 2012

When things go wrong on a construction project, parties often engage in a “you-breached-no-you-breached” scenario. In a recent Texas case, an owner and contractor both alleged the other party breached the contract first, thus excusing their own further performance.

The owner, who was also the general contractor, hired a contractor to provide site preparation, utilities installation and concrete work for a warehouse construction project. The contractor sought damages for breach of contract because the owner had not paid outstanding invoices. The owner alleged the contractor abruptly stopped working on the project and left the job wholly unacceptable, claiming the contractor failed to complete a detention pond, which was required to obtain a county permit.

At trial, the contractor argued the parties had agreed the owner would provide the necessary dirt needed to fill in the detention pond and when the owner failed to provide the dirt, the contractor could not complete the pond. The owner contended that the contractor breached by leaving the project and sought damages flowing from the contractor’s breach and the owner’s efforts to salvage the project. The jury found in favor of the contractor.

On appeal, the owner argued the contractor was precluded from recovery because the contractor breached first by failing to complete the detention pond, which was essential to the project. The court of appeals stated that to recover on a breach of contract claim, a contractor must have in good faith intended to comply with the contract and any defects in the work could not have been pervasive or a deviation from the general plan. But, the appellate court found that the owner committed the first breach by failing to provide the dirt for the detention pond, and any failure by the contractor to perform was a result of the owner’s prior breach. Affirming the trial court, the court of appeals held that the contractor’s lack of substantial performance does not preclude recovery for a breach of contract claim when the other party commits the first material breach.

It is important to note, the court stated 1) the contractor must have in good faith intended to comply with the contract and 2) that a first material breach by the owner was necessary for the contractor to recover (the court considered numerous factors to determine if a breach is material). As a result, if an owner appears to breach the contract, it is imperative that a contractor continue to attempt to perform its contractual obligations, and if it ultimately chooses to abandon a project, be confident that it can demonstrate the owner’s breach was material. The best example of a material breach is, like here, where the owner’s breach directly prevented the contractor from performing.

via West (TX): owner’s material breach may excuse contractor from obligation to perform – Lexology.

OSHA to Initiate ADR Pilot Project under Whistleblower Program

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David Erickson and Mark Anstoetter – October 19, 2012

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) has announced the launch of an alternative dispute resolution (ADR) pilot project for complaints filed with the agency’s Whistleblower Protection Program. OSHA will implement the pilot project in its Chicago and San Francisco regional offices, which together cover whistleblower investigations in Arizona, California, Hawaii, Illinois, Indiana, Michigan, Minnesota, Nevada, Ohio, and Wisconsin, as well as various Pacific Islands including the Northern Mariana Islands, Guam and American Samoa.

The pilot program will offer two voluntary methods of ADR: early resolution and mediation. When a whistleblower complaint is filed in one of the pilot regions, OSHA will inform the parties of their ADR options and provide a regional coordinator to work through these methods if requested. Under the early resolution process, parties would attempt to resolve a dispute before OSHA launches an investigation to determine the validity of the charges, pretext or potential violations. The mediation process would involve a neutral third party to help the parties resolve a dispute by mutual agreement. See OSHA News Release, October 2, 2012.

OSHA to initiate ADR pilot project under whistleblower program – Lexology.

Designation of Non-Parties at Fault in Construction Defect Cases is not as Straightforward as it First Seems

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Jonathan M. Allen – September 14, 2012

In Colorado construction defect cases, defendants often designate non-parties at fault under a Colorado statute that allows for the fact-finder to apportion fault between parties and non-parties. See C.R.S. § 13-21-111.5(3). Issues frequently arise involving whether builders owe non-delegable duties of care, thus rendering designation of non-parties at fault improper, or whether apportionment of fault is appropriate when the theory of recovery is based on contract, rather than tort. No published appellate decision has addressed the issue head-on, so practitioners often look to trial court decisions for guidance.

Unfortunately, as is so often the case, Colorado trial courts are split on the issue. A recent decision from the Arapahoe County District Court determined that a homebuilder does not owe a non-delegable duty to the homeowner. See Marx v. Alpert Custom Homes, 10-cv-405, Order Regarding Plaintiffs’ Motion for Determination of a Question of Law (Arapahoe Co. Dist. Ct., Dec. 27, 2011). The trial court denied the plaintiffs’/homeowners’ request to strike the defendant’s/homebuilder’s designation of non-parties at fault on the theory that the homebuilder’s duty to plaintiffs was non-delegable. The court looked to A.C. Excavating v. Yacht Club II Homeowners Association, 114 P.3d 862 (Colo. 2005), which held that a subcontractor owed an independent duty of care to a homeowner. The Marx court reasoned that there would be no reason for the holding in Yacht Club II if the homebuilder’s duty to the homeowner was non-delegable. Consequently, the Marx court concluded that the homebuilder’s designation of its subcontractors as non-parties at fault was proper.

The issue also presents itself in the context where tort claims are barred by the economic loss rule, leaving a plaintiff with only a contract remedy. The question then is whether designation of non-parties at fault under a contract theory of recovery is proper. In Dwight v. R.A. Nelson & Associates, 09-cv-94, Order re: Plaintiff’s Motion for Determination of Questions of Law (San Miguel Co. Dist. Ct., March 12, 2010), the court concluded that designation of non-parties at fault was appropriate for a breach of contract claim. The court rejected the defendant’s argument that apportionment of fault to non-parties was inappropriate in a breach of contract action because a non-party must owe a duty to the plaintiff before designation of fault is appropriate. Thus, defendant argued, because only the parties to the contract owe duties to the other, no non-party to that contract could appropriately be designated. The court rejected this argument, concluding, “A party who breaches a contract should only be responsible for damages caused by the breach. When there are multiple causes of the damage, the jury must be given a way to apportion the damages among the various causes. The apportionment statute is a sensible and practical way for a jury to do just that.”

Other courts have reached different conclusions. For example, in Ashby Family Partnership v. Design Service & Construction, LLC, 10-cv-89, Order (Grand Co. Dist. Ct., March 11, 2011), the court concluded, without much analysis, that “[r]egardless of whether there are contract or negligence claims, a general contractor may not designate its independent contractor as a non-party at fault.”

Whether and under what circumstances designation of non-parties at fault is appropriate in a construction defect case has important consequences and impacts a defendant’s potential exposure, expert witness opinions and the presentation of one’s case to a jury. However, until a Colorado appellate court weighs in on the issue, practitioners and trial courts will continue to struggle with non-party designation of fault issues in construction defect cases.

via Designation of non-parties at fault in construction defect cases is not as straightforward as it first seems – Lexology.

Continued Uncertainty in Federal Regulation of Storm Water from Construction Sites

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Wendy Manley – September 5, 2012

In the latest turn of the ongoing saga of storm water regulation, the U.S. EPA has withdrawn its proposed rule that would have revised the enforceable numeric effluent limits for runoff from construction sites.  The numeric limits were established for turbidity in effluent limitation guidelines (“ELG”) adopted by EPA in December, 2009.  Once established for specific industrial sectors, ELGs must be incorporated in NPDES permits issued to point-source dischargers.

This regulatory matter has been an arduous journey for EPA, one that may not reach a conclusion any time soon.  Following a lawsuit filed in 1989 by the Natural Resources Defense Counsel alleging that EPA had failed to meet its statutory obligation relative to discharges from construction and development, EPA identified that sector as an industrial point source category for further rulemaking under Clean Water Act section 304(m).  EPA then solicited comments in 2002 on a range of options to address construction storm runoff.  In 2004, EPA decided not to promulgate ELGs, drawing further litigation from NRDC, which did not end favorably for EPA.  A California District Court held in 2006 that once EPA lists an industrial point source category under section 304(m), it has a mandatory duty to promulgate ELGs and New Source Performance Standards (NSPS).  Meeting the court’s deadlines, EPA proposed ELGs and NSPS in November, 2008, and adopted them in December, 2009.  Construction storm water permits adopted after February 1, 2009 were required to incorporate the numeric effluent limits contained in the ELG.

In November, 2010, EPA stayed the numeric turbidity limit in order to review its calculations used to set the limit. As a result, it had to extend the expiration date of the 2008 permit from June 20, 2011 to February 15, 2012 in order to allow time to incorporate the new numeric limitations in the new construction permit.  Most recently, on August 12, 2011, EPA withdrew its proposal in order to gather more data, a move that will extend the period of uncertainty for those subject to the federal construction storm water permit.

EPA’s 2009 ELG set a turbidity limit of 280 nephelometric turbidity units (NTU) for construction runoff.  As it turns out, California’s new Construction General Permit (“CGP”), adopted shortly before EPA adopted its ELG, set a numeric turbidity limit of 250 NTU.  The CGP timing conveniently relieved the State Water Resources Control Board of using EPA’s numeric limit until the following permit cycle.  While it may have been EPA’s proposed 13 NTU limit that propelled the state to adopt the CGP before EPA adopted the ELG, the good news is that California’s CGP is not subject to EPA’s continually shifting rulemaking.

via Continued uncertainty in federal regulation of storm water from construction sites – Lexology.