AIA B141 and B151 Architect Agreements to Retire in 2007

Womble Carlyle construction lawyer and architect, Ken Michael, attended the AIA National Convention in Los Angeles in June 2006 and reports on major changes developing with the American Institute of Architect's standard form Owner/Architect Agreement.

Managing Director and Counsel of AIA Contract Documents, Suzanne H. Harness AIA Esq., reported to convention attendees that the B141 Owner/Architect Agreement is going to be retired in 2007. The modular B141 that was changed so much in 1997 is used by only half the architects at best. An equal sized camp uses the 1997 edition of the B151 Owner/Architect Agreement, which is substantially similar to the old 1987 B141.

What to expect in 2007? A hybrid of the 1997 editions of the B141 and B151 which will be called "B101", a designation which was previously introduced in 1945. It will be a one part document similar in format to the B151 without all the blanks to fill in. It will bring back "Additional Services" (rather than "Changed Services"). The traditional Phases are brought back (Schematic Design, Design Development, Bidding or Negotiation and Construction). All of the Initial Information blanks in the 1997 B141 that some love and others hate will be moved to an optional Exhibit A. Parties will select between arbitration or litigation, with the default dispute resolution being litigation.

Since one size does not fit all projects, the AIA anticipates issuing a more expanded version of the architect agreement for extra large projects which will be designated "B102". Medium and small sized projects may use a "B103" and "B104" respectively.

Overall, it looks like AIA is being very pragmatic and is generally responding to the demands of the industry, which tend to move slowly. Stay tuned ...

Risk Allocation in Business Information Modeling (BIM)

The architect is responsible for design (with admittedly some exceptions for design work pushed down to specialty trades), the contractor is responsible for construction. Owners, designers and contractors have relied on this maxim for many years. But a couple of articles in a recent issue of Engineering News Record leaves no doubt that risks will have to be balanced in a much more complicated way as BIM begins to transform the construction industry.

Even at this early stage, it seems clear that BIM works best in a collaborative process where design and construction phases overlap, and the designer, the contractor and the major specialty trades each take the lead in developing the project model. Each player in the process (most importantly, the owner) should be prepared to accept a contractual risk allocation system that is more evenly balanced and nuanced than the old maxim.

The National Institute of Building Sciences (NIBM) has begun work on a BIM standard that will foster the free flow of graphic and non-graphic information among all parties to the process in an open and rational environment. The standard will include business processes and rules, reference standards and implementation guidelines, among other things. It may be that this standard also will be helpful in establishing contractual roles and responsibilities.

To read these two articles, see here and here.

Insured Risk: Now you see it. Now you don't.

Looks like the dissent got it right in American Modern Home Insurance Company v. Reeds at Bayview Mobile Home Park, LLC (4th Cir. (Md) April 14, 2006) (Unpublished). Judge Wilkins recognized the long established theory of liability under one's commercial liability policy (at least the duty to defend) against claims for damage to balance of work in the construction setting allegedly caused by defective work and/or negligence. The case is illustrative of how carefully one must plead and prove up insured risk in the construction setting--whether as plaintiff or as the insured defendant. For further discussion, see the Kevin Merriman Goldberg Segalla LLP article here.

An Owner by any Other Name...

The Georgia Court of Appeals has denied lien rights to a roofing material supplier because the supplier failed to issue Notices to Contractor when it began providing roofing materials to a project. Roofing Supply of Atlanta, Inc. v. Forrest Homes, Inc., A06A0166 (Ga.App. May 23, 2006).

In that case, an owner-developer hired a roofing contractor to build roofs on its properties. The roofing contractor, in turn, purchased materials from the roofing supplier. Although the owner timely filed statutory Notices of Commencement (in which it listed itself as both "owner" and "contractor"), the supplier failed to provide any Notices to Contractor. For that reason, the trial court declared the supplier's liens invalid, and granted the owner's motion for partial summary judgment. [Under Georgia law, once an owner timely files a Notice of Commencement (and posts a copy on-site), lien rights are cut off to lower-tier subcontractors and suppliers (those without a direct contract with the owner) except for those subs and suppliers who timely provide a written Notices to Contractor and send copies to the owner.]

On appeal, the supplier argued, in effect, that it was excused from providing Notices to Contractor because: (1) another part of Georgia's lien statute defines a "contractor" as someone in privity with an owner; (2) an owner cannot logically be in privity with itself; (3) by listing itself as both "owner" and "contractor", the owner invalidated its Notices of Commencement; and (4) an invalid Notice of Commencement cannot trigger a supplier's obligation to issue a corresponding Notice to Contractor.

The court of appeals disagreed. Noting that lien statutes are to be strictly construed, the court found no language in the statute to prohibit an owner from listing itself as both "owner" and "contractor" in Notices of Commencement; and, on that basis, it held that the owner's Notices of Commencement were valid, and the supplier's lien rights were lost when it failed to issue Notices to Contractor.

While most students are away, campus construction activity soars.

Many colleges and universities are anything but quiet during the summer months with the buzz of construction projects across their campuses. Elon University touts the "busiest summer construction season in Elon University history." Fifteen projects are underway at Elon University's main campus and at its new law school campus in Greensboro. And you can view a "construction video" feed of ongoing major projects at High Point University, which is also undergoing the "biggest transformation in our history."

Eureka! Water Flows Downhill

An Apex, North Carolina landowner sued an uphill neighbor in trespass for water and sediment material that flowed into a creek along their property line killing the landowner's cypress trees. At issue in Banks v. Dunn (North Carolina Lawyers Weekly No. 06-16-0506) was whether expert testimony was needed to establish that runoff from a hill of fill dirt caused the creek to overflow. The North Carolina Court of Appeals ruled that the causal relationship between the fill dirt dumped on the hillside above the creek and the subsequent flooding of the creek onto the landowner's yard "implicates no scientific principle more complex than the truism that water flows downhill, and will carry loose material in its flow."

It is nice to know a layperson's intelligence can be trusted to conclude that water flows downhill. See North Carolina Lawyers Weekly, May 1, 2006 edition.