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Smart Agreements
  & Litigation Risks


James d’Entremont    Scott Wolfe
Phelps Dunbar, LLP   Wolfe Law Group
Baton Rouge, LA      Louisiana | Washington
phelps.com           wolfelaw.com
                     constructionlawmonitor.com
                     LEED AP
Part I:

Litigation Risks
Construction Litigation
          v.
  Green Litigation
Unmet Expectations
Unmet Expectations
• Cost:   The project cost more than expected
Unmet Expectations
• Cost:   The project cost more than expected

• Scope: The project’s scope was more
 expansive than anticipated
Unmet Expectations
• Cost:   The project cost more than expected

• Scope: The project’s scope was more
 expansive than anticipated

• Schedule:   Completion took longer than
 planned
Unmet Expectations
• Cost:   The project cost more than expected

• Scope: The project’s scope was more
 expansive than anticipated

• Schedule:   Completion took longer than
 planned

• Quality: The workmanship quality was
 inferior to expectations.
Still...
    Unmet Expectations
Still...
    Unmet Expectations
   • Energy Performance:   Is the building’s energy
      systems performing as expected (or
      promised)?
Still...
    Unmet Expectations
   • Energy Performance:   Is the building’s energy
      systems performing as expected (or
      promised)?

   • Rating: Did the building achieve the planned
      LEED rating or other certification?
Still...
    Unmet Expectations
   • Energy Performance:   Is the building’s energy
      systems performing as expected (or
      promised)?

   • Rating: Did the building achieve the planned
      LEED rating or other certification?

   • Long-Term Sustainability:  What is the
      project’s impact on the environment, and is
      this as expected?
Plus...
 Unique Risks & Features
Plus...
 Unique Risks & Features
Plus...
 Unique Risks & Features
Plus...
 Unique Risks & Features
Plus...
 Unique Risks & Features
Plus...
 Unique Risks & Features
Damages, Codes &
Structures
Green Building Codes
 • California Green Building Code

 • DC Green Building Act
 (http://bit.ly/ajMac7)

 • IGCC (http://bit.ly/cC1GvV)
Energy Inspectors
• Cities like Austin and New Orleans
are tightening energy codes and
emphasizing role of energy inspectors.

• New York Times Article
(http://nyti.ms/a841ad)

• Construction Law Monitor Article
(http://bit.ly/bP180O)
Reporting Energy
 • Cities like Seattle, WA are passing
 municipal regulations requiring
 certain properties to report their
 energy consumption, with plans on
 regulating consumption in the future.

 • CLM Article on Requirements
 (http://bit.ly/cXk8a0)
Tax Credits
Tax Credits are available in certain
locally, federally and state-wide for
solar installations, energy performance,
rating certifications and more....
LEED Challenges
LEED Challenges:
http://bit.ly/aLvGkL

LEED De-Certifications:
http://bit.ly/bQuxgc
Part II:

Who’s To Blame?
Spearin Doctrine
“[I]f a contractor is bound to build
according to plans and specifications
prepared by the owner, the contractor
will not be responsible for the
consequences of defects in the plans
and specifications.”
             US v. Spearin, 248 US 132
Architects As LEEDer
• Should architects do the design & LEED
 coordination?

• Are architects increasing the price of
 agreement with owner to accommodate the
 additional risk?

• Is it possible to shift some responsibility
 to the contractor, suppliers or other project
 participants?
Contractor Perspective
• Bid-build Projects & Contracts that Shift
 Design Responsibility

• Design-Build, & the Increased Risk

• Don’t Guarantee Certification, or Spearin in
 Jeapordy
Insurance
Insurance
• Not Much Out
 There
Insurance
• Not Much Out
 There

• Policies Available
 Are Riders - so,
 are green risks not
 covered in
 standard policies?
Part III:

Smart Agreements
Things To Keep In Mind To...
   Contract Smart.
Green, Sustainability,
High-Performance
Building, Green
Certification, etc.

No Universal
Meaning. Define
Them, & Choose a
Rating System &
Version.
Things To Keep In Mind To...
   Contract Smart.
Consider a Rating
Coordinator

Identify Responsible
Parties

Delegate Work and
Responsibilities to
Appropriate Parties
Things To Keep In Mind To...
   Contract Smart.

 Certification is paper-
 intensive. Identify who
 will manage the
 documentation and the
 certification’s manual
 requirements.
Things To Keep In Mind To...
   Contract Smart.
 Contractors:

 Don’t tie certification
 with substantial or final
 completion. It can take
 months, and you don’t
 want to be waiting on
 money that long.
Things To Keep In Mind To...
   Contract Smart.
Get to know the
vendors and products
to be used. Don’t
subscribe to a
technology without
investigating, and hold
vendors accountable
for their promises.
Things To Keep In Mind To...
   Contract Smart.
Damages for failure to certify or for failure to meet
certain benchmarks may be murky. Consider waiving
consequential damages, and call out these specific
expectations and considering waiving those damages
or presenting LDs for them.
Things To Keep In Mind To...
   Contract Smart.

Flow Down Clauses:
Make sure your
obligations go up and
down the chain.
Form Contracts
For Architects: B214–2007 establishes duties and
responsibilities when the owner seeks certification from the
U.S. Green Building Council’s Leadership in Energy and
Environmental Design (LEED®).

Among other things, the architect’s services include conducting
a pre-design workshop where the LEED rating system will be
reviewed and LEED points will be targeted, preparing a LEED
Certification Plan, monitoring the LEED Certification process,
providing LEED specifications for inclusion in the Contract
Documents and preparing a LEED Certification Report
detailing the LEED rating the project achieved.
                                         http://bit.ly/acKt78
Form Contracts
For Contractors: On Nov. 10, ConsensusDOCS released the
construction industry's first and only comprehensive standard
contract document addressing the unique risks and
responsibilities associated with building green projects -- the
ConsensusDOCS 310 Green Building Addendum. The
Addendum incorporates contractual best practices to identify the
project participants' roles and responsibilities, as well as the
implementation and coordination efforts critical to achieving a
successful project using green building elements, particularly
those seeking third-party green building rating certification. It
was drafted to work well not only with the other
ConsensusDOCS contract documents, but also with other form
contracts.
                                     http://bit.ly/9WVdvo
Smart Agreements and Green Litigation Risks
Smart Agreements
  & Litigation Risks


James d’Entremont    Scott Wolfe
Phelps Dunbar, LLP   Wolfe Law Group
Baton Rouge, LA      Louisiana | Washington
phelps.com           wolfelaw.com
                     constructionlawmonitor.com
                     LEED AP

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Smart Agreements and Green Litigation Risks

  • 1. Smart Agreements & Litigation Risks James d’Entremont Scott Wolfe Phelps Dunbar, LLP Wolfe Law Group Baton Rouge, LA Louisiana | Washington phelps.com wolfelaw.com constructionlawmonitor.com LEED AP
  • 3. Construction Litigation v. Green Litigation
  • 5. Unmet Expectations • Cost: The project cost more than expected
  • 6. Unmet Expectations • Cost: The project cost more than expected • Scope: The project’s scope was more expansive than anticipated
  • 7. Unmet Expectations • Cost: The project cost more than expected • Scope: The project’s scope was more expansive than anticipated • Schedule: Completion took longer than planned
  • 8. Unmet Expectations • Cost: The project cost more than expected • Scope: The project’s scope was more expansive than anticipated • Schedule: Completion took longer than planned • Quality: The workmanship quality was inferior to expectations.
  • 9. Still... Unmet Expectations
  • 10. Still... Unmet Expectations • Energy Performance: Is the building’s energy systems performing as expected (or promised)?
  • 11. Still... Unmet Expectations • Energy Performance: Is the building’s energy systems performing as expected (or promised)? • Rating: Did the building achieve the planned LEED rating or other certification?
  • 12. Still... Unmet Expectations • Energy Performance: Is the building’s energy systems performing as expected (or promised)? • Rating: Did the building achieve the planned LEED rating or other certification? • Long-Term Sustainability: What is the project’s impact on the environment, and is this as expected?
  • 13. Plus... Unique Risks & Features
  • 14. Plus... Unique Risks & Features
  • 15. Plus... Unique Risks & Features
  • 16. Plus... Unique Risks & Features
  • 17. Plus... Unique Risks & Features
  • 18. Plus... Unique Risks & Features
  • 20. Green Building Codes • California Green Building Code • DC Green Building Act (http://bit.ly/ajMac7) • IGCC (http://bit.ly/cC1GvV)
  • 21. Energy Inspectors • Cities like Austin and New Orleans are tightening energy codes and emphasizing role of energy inspectors. • New York Times Article (http://nyti.ms/a841ad) • Construction Law Monitor Article (http://bit.ly/bP180O)
  • 22. Reporting Energy • Cities like Seattle, WA are passing municipal regulations requiring certain properties to report their energy consumption, with plans on regulating consumption in the future. • CLM Article on Requirements (http://bit.ly/cXk8a0)
  • 23. Tax Credits Tax Credits are available in certain locally, federally and state-wide for solar installations, energy performance, rating certifications and more....
  • 24. LEED Challenges LEED Challenges: http://bit.ly/aLvGkL LEED De-Certifications: http://bit.ly/bQuxgc
  • 26. Spearin Doctrine “[I]f a contractor is bound to build according to plans and specifications prepared by the owner, the contractor will not be responsible for the consequences of defects in the plans and specifications.” US v. Spearin, 248 US 132
  • 27. Architects As LEEDer • Should architects do the design & LEED coordination? • Are architects increasing the price of agreement with owner to accommodate the additional risk? • Is it possible to shift some responsibility to the contractor, suppliers or other project participants?
  • 28. Contractor Perspective • Bid-build Projects & Contracts that Shift Design Responsibility • Design-Build, & the Increased Risk • Don’t Guarantee Certification, or Spearin in Jeapordy
  • 31. Insurance • Not Much Out There • Policies Available Are Riders - so, are green risks not covered in standard policies?
  • 33. Things To Keep In Mind To... Contract Smart. Green, Sustainability, High-Performance Building, Green Certification, etc. No Universal Meaning. Define Them, & Choose a Rating System & Version.
  • 34. Things To Keep In Mind To... Contract Smart. Consider a Rating Coordinator Identify Responsible Parties Delegate Work and Responsibilities to Appropriate Parties
  • 35. Things To Keep In Mind To... Contract Smart. Certification is paper- intensive. Identify who will manage the documentation and the certification’s manual requirements.
  • 36. Things To Keep In Mind To... Contract Smart. Contractors: Don’t tie certification with substantial or final completion. It can take months, and you don’t want to be waiting on money that long.
  • 37. Things To Keep In Mind To... Contract Smart. Get to know the vendors and products to be used. Don’t subscribe to a technology without investigating, and hold vendors accountable for their promises.
  • 38. Things To Keep In Mind To... Contract Smart. Damages for failure to certify or for failure to meet certain benchmarks may be murky. Consider waiving consequential damages, and call out these specific expectations and considering waiving those damages or presenting LDs for them.
  • 39. Things To Keep In Mind To... Contract Smart. Flow Down Clauses: Make sure your obligations go up and down the chain.
  • 40. Form Contracts For Architects: B214–2007 establishes duties and responsibilities when the owner seeks certification from the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED®). Among other things, the architect’s services include conducting a pre-design workshop where the LEED rating system will be reviewed and LEED points will be targeted, preparing a LEED Certification Plan, monitoring the LEED Certification process, providing LEED specifications for inclusion in the Contract Documents and preparing a LEED Certification Report detailing the LEED rating the project achieved. http://bit.ly/acKt78
  • 41. Form Contracts For Contractors: On Nov. 10, ConsensusDOCS released the construction industry's first and only comprehensive standard contract document addressing the unique risks and responsibilities associated with building green projects -- the ConsensusDOCS 310 Green Building Addendum. The Addendum incorporates contractual best practices to identify the project participants' roles and responsibilities, as well as the implementation and coordination efforts critical to achieving a successful project using green building elements, particularly those seeking third-party green building rating certification. It was drafted to work well not only with the other ConsensusDOCS contract documents, but also with other form contracts. http://bit.ly/9WVdvo
  • 43. Smart Agreements & Litigation Risks James d’Entremont Scott Wolfe Phelps Dunbar, LLP Wolfe Law Group Baton Rouge, LA Louisiana | Washington phelps.com wolfelaw.com constructionlawmonitor.com LEED AP

Notas del editor

  1. Introduction
  2. Before talking about the specific (green building litigation), it’s important to get a grasp on general construction litigation...and what causes this type of litigation.
  3. Generally, litigation arises because of unfulfilled expectations.
  4. Generally, litigation arises because of unfulfilled expectations.
  5. Generally, litigation arises because of unfulfilled expectations.
  6. Generally, litigation arises because of unfulfilled expectations.
  7. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  8. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  9. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  10. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  11. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  12. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  13. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  14. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  15. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  16. These green building cases present unique damages issues.
  17. These green building cases present unique damages issues.
  18. These green building cases present unique damages issues.
  19. These green building cases present unique damages issues.
  20. These green building cases present unique damages issues.
  21. These green building cases present unique damages issues.
  22. These green building cases present unique damages issues.
  23. These green building cases present unique damages issues.
  24. These green building cases present unique damages issues.
  25. How Do You Prepare for these green building vulnerabilities?
  26. How Do You Prepare for these green building vulnerabilities?
  27. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  28. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  29. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  30. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  31. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  32. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  33. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  34. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  35. Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
  36. A basic definition for “green washing”
  37. Introduction