Snapchat This! That Little Green Card is Pretty Important Says One Court

Matthew DeVries | Best Practices Construction Law

We live in a world of e-mails, IMs, texts, Snapchats, TikToks, Instagrams and the occasional fax.  Although information is transmitted instantaneously in today’s environment, proof of receipt of that information (often called “Notice”) remains subject to some very strict rules imposed by contract, case law or statute.

Notice of Claims.  In a transportation case involving a personal injury, Department of Transportation v. Jones, the Court of Appeals of Georgia explained the importance of strict compliance with certain notice provisions.  The plaintiff was injured in a single-car accident on State Route 42 and he sued the Georgia Department of Transportation (“GDOT”). The plaintiff claimed that GDOT’s improper maintenance of the roadway led to an accumulation of water, which caused his truck to hydroplane into a tree, severely injuring him.  GDOT filed a motion to dismiss, arguing that the plaintiff failed to strictly comply with the notice provisions of the Georgia Tort Claims Act (“GTCA”).  The trial court denied that motion and the Court of Appeals reversed.

The Green Card.  The GTCA requires that notice of the claim be sent to “the Risk Management Division of the Department of Administrative Services.”  At the hearing, the plaintiff presented the following evidence: (a) the notice letter; (b) the green return receipt card sent to the Commissioner of GDOT; (c) a response letter from the Risk Management Division acknowledging receipt of the notice letter; and (d) a U.S. Postal Service tracking document showing that “something was sent by certified mail to the Department of Administrative Services.

The Holding. Despite this evidence, the Court held that the plaintiff failed to strictly comply with the statute because there was no proof by the plaintiff that the letter was sent by certified mail to the Risk Management Division.  The green card submitted showed proof of delivery to the Commissioner of GDOT.  The attorney for GDOT admitted in court that the notice letter received by the Commissioner of GDOT was then sent internally by the Commissioner’s office to the Risk Management Division, which then sent the acknowledgement letter.  Nevertheless, the plaintiff did not comply with the statute requiring that he sent notice of the claim to the Risk Management Division.

So What? While this may seem like a hyper-technical application of the rule, that’s precisely what “strict construction” means according to one court in George.  Whether you are contractor, developer, specialty subcontractor, or professional service provider in the construction industry, the real lesson learned is to read the express terms of any applicable contract or statute when a dispute arises, and follow both “the letter and the spirit” of the law.

Project Delayed? Avoid Sending Generic Claim Letters In Times Like These

Ronald Williams | Fox Rothschild

Does it make sense, strategically, to send out a form letter now making a claim for more time and more money as a contractor?

As a result of government shutdowns across many states, some contractors have resorted to sending out aggressive letters asserting claims for more time and money. Frequently, these letters are not preceded by a courtesy telephone call from the contractor to the client. In my opinion, this approach is strategically flawed.

First, every contractor and every owner should know that the relationship between the parties is critical to the success of the project that is currently underway.  Picking up the phone to make a call before sending any letter is advised. In that call, both sides can lay the groundwork for further discussion and strategic planning. After all, once the shutdown is over, they will need a plan for restart. Few contracts specifically address what that plan is and how the plan should be adjusted during the early stages of the start up. Having the discussion early, in advance of sending a letter, is a good sign of commitment on the part of a contractor to the owner and implicitly and explicitly reaffirms the partnership between the parties.

If a contractor, contractually or otherwise, deems it appropriate to send a letter, it should strike the right tone. The tone should convey the unfortunate circumstances  everyone is facing at the moment, which simply could not have been predicted even a month ago. Further, the tone can demonstrate, among other things, that everybody is making every effort to mitigate internal and external costs. 

The letter should convey the importance of keeping communications open. Finally, the letter, if anything, should state the possibility that additional time and possibly additional funds may be needed, depending upon the circumstances. However, if the letter is framed as simply a classic “claim letter,” the response may well be less than constructive. 

One of the challenges with sending a letter at this point in time, is that most contractors will not have sufficient information to know the nature and extent of a claim.  Not knowing the nature and extent of the claim may undermine the contractor’s credibility going forward on the project and, if necessary, during any dispute resolution process. After all, if a contractor has more than ample float in the schedule, a request for more time may not be supported. 

If, on the other hand, the contractor strikes the right tone in the letter and still achieves the substantive goal of preserving any contractual rights and remedies, an open and honest dialogue can begin. The contractor and owner can make preparations for when the project restarts. Both safety measures and anticipated new measures can be discussed. Typical logistical issues can also be addressed. Depending upon the circumstances, logistical hurdles that existed before the shutdown may no longer exist. Additionally, the parties can plan for the likelihood of needing to address and adjust at some point after the start up with additional measures for the project.

As an owner, the best response to a claim letter that does not strike the right tone, in my opinion, is to pick up the phone and simply have that crucial conversation.  The owner can then follow up with a responsive letter striking the right tone while meeting the desired goal of reserving its rights and its remedies under the contract.

Builder Must Respond To Homeowner’s Notice Of Claim Within 14 Days Even If Construction Defect Claim Is Not Alleged With The “Reasonable Detail” Required By California’s Civil Code – Blanchette v. Superior Court (2017) 8 Cal.App.5th 521

Richard H. Glucksman and David A. Napper | Chapman Glucksman | May 25, 2017

On February 10, 2017, California’s Fourth District Court of Appeal held that if a builder fails to acknowledge receipt of a homeowner’s Notice of Claim within 14 days, as required by the Right to Repair Act (“SB800”), specifically California Civil Code §913, the homeowner is released from the requirements of SB800 and may proceed with the filing of a lawsuit.

In Blanchette v. Superior Court, Blanchette owned 1 of 28 homes constructed by GHA Enterprises, Inc. (“GHA”). On February 2, 2016, Blanchette served GHA with notice of a claim, setting forth the alleged defects in all 28 homes. On February 23, 2016, GHA responded that the construction defects were not alleged with sufficient “reasonable detail” as required by Civil Code §910. In response, Blanchette asserted that GHA’s response was untimely and thus excused him and the other homeowners from any obligations under SB800.  The trial court found for the builder, GHA, holding that Blanchette’s Notice of Claim lacked detail sufficient to trigger GHA’s obligations under SB800.  Blanchette appealed the ruling.

Although the Court of Appeal agreed that Blanchette’s Notice of Claim was insufficient because it did not provide reasonable detail to satisfy Civil Code§910, the Court of Appeal held that GHA’s failure to timely acknowledge Blanchette’s Notice of Claim released Blanchette from the requirements of SB800.  As the Court of Appeal recognized, Civil Code §930 expressly provides that the timing requirements of SB800 are to be strictly construed.

The Court of Appeal reasoned that its holding is consistent with the purpose of SB800, which is to promote resolution of a homeowner’s construction defect claim “in an expeditious and non-adversarial manner.” The Court further reasoned that “[a]n interpretation that permits a builder to ignore the time limits of section 913 and nonetheless preserve its objection to the lack of detail in a notice and require that the trial court then resolve the issue after litigation has commenced, will only delay construction defect claims.”

Blanchette is a stark reminder that Courts will strictly enforce the tight and often unreasonable time frames set forth in SB800.  Accordingly, builders and their counsel must ensure proper compliance with the procedures and deadlines of SB800 in order to maintain their rights thereunder, including but not limited to, the right to challenge the sufficiency of a Notice of Claim served by a homeowner.