Category Archives: News

Forfeiture Rule in Construction Disputes Under Review by the Massachusetts Supreme Judicial Court

By on March 6, 2018

Since the early 1900’s, Massachusetts courts have held that a contractor cannot recover on the contract itself without showing complete and strict performance of all terms or, in the event the contract cannot be completed fully, that the contractor substantially performed and attempted, in good faith, to perform fully. Under this rule, if the court finds that the contractor intentionally departed from the specifications of the contract, the contractor is prohibited from recovering under the contract, forfeiting its right to contract damages. 

The Massachusetts Supreme Judicial Court (SJC) will hear arguments this week requesting the forfeiture rule in construction cases to be overturned. The appellant in G4S Technology LLC v. Mass. Tech. Park Corp., SJC-12397, appeals a prior summary judgment ruling, wherein the trial court denied the contractor’s claims for approximately $10 million in delay-and-impact damages on the basis of the forfeiture rule. Despite ultimately completing the project, it was determined that the contractor paid some of its subcontractors late and submitted false certifications. Those actions were in breach the contract, and the trial court determined that those actions were sufficient to deny the contractor’s claims.

The SJC will consider whether Massachusetts should adopt an alternative standard that considers whether a breach was an uncured, material breach that alleviates the non-breaching party’s obligation to pay and weigh a breaching party’s lack of good faith or willfulness, among other factors to be considered by the court. This multi-factor analysis is applied currently by Massachusetts courts in other contract disputes, but not in connection with construction disputes.

Should the forfeiture rule be overturned, it would have wide-reaching consequences and create greater flexibility in arguing an entitlement to damages on breach of contract claims. Contractors would be wise to keep track of this case as it proceeds. If you have questions concerning your rights in connection with a construction dispute, consult an experienced Massachusetts construction attorney.

The White House Proposes $1.5 Trillion Infrastructure Development Program

By on February 12, 2018

The White House recently released its “Legislative Outline for Rebuilding Infrastructure in America.” 

In the preamble to the outline, The White House requested that Congress act to implement the infrastructure program in short order through new legislation.  In broad strokes, the outline calls for new spending to stimulate $1.5 trillion dollars in infrastructure investments, from federal and state governments, agencies and localities, to address American infrastructure projects.

Should the program be implemented by Congress in any meaningful way, it would mean a boon for public construction projects and contractors.  Contractors would be wise to keep a careful eye on this proposed legislation as it develops.     


Airbnb Hosts Beware: City of Boston Proposes Regulations on Short Term Rental Industry

By on February 5, 2018

Boston Mayor, Marty Walsh, recently proposed a citywide ordinance that will, if adopted by City Council, subject short-term rentals – such as those advertised through the popular home-sharing website, Airbnb – to regulations and reporting requirements.

The proposed ordinance requires that all short-term-rentals register with the city and pay an annual fee based on a tiered rental classification system. The classification system additionally dictates how many days per year various properties may be rented and the maximum number of guests per night. The ordinance also imposes a room occupancy excise tax on all short-term rentals. Short-term-rentals that are noncompliant with city codes will be ineligible for registration. Further, beyond requiring individual owner/host compliance, the ordinance also places reporting requirements on the booking companies themselves. 

Specifically, the ordinance classifies three types of short-term rental units:

  1. Limited Share Units
  2. Home Share Units; and
  3. Investor Units

Limited Share Units are rentals that are the host’s primary residence such that the host is present through the duration of the short-term rental. Limited Share Units may be offered for short-term rent 365 days of the year and will be subject to an annual $25.00 registration fee.

Home Share Units are also rentals that are the host’s primary residence that may be offered for short-term rent 365 days of the year. The host, however, need not be present through the duration of the short-term rentals, so long as the number of days booked for rental when the host is not present does not exceed 90 (consecutive or nonconsecutive) per year. Home Share Units will be subject to an annual $100.00 registration fee.

Investor Units are rentals that are not the host’s primary residence. Investor Units may be offered for short-term rental for up to 90 days (consecutive or nonconsecutive) per year and will be subject to an annual $500.00 registration fee.

Boston residents who participate in the short-term-rental economy are well advised to understand, and keep an eye on, proposed changes in housing law as regulations begin to promulgate in response to a growing industry.

Corporate Considerations: Piercing the Corporate Veil, a Primer

By on January 23, 2018

             The creation of a formal corporate entity and compliance with state prescribed formalities can offer business owners and members substantial protections from individual liability for business debts when acting by and through an entity. That protection, however, is not a given. In order to enjoy the benefits that limited liability entities afford, one must respect established corporate formalities and comport business practices accordingly.

            Generally, corporate entities enjoy the presumption that an entity is legally separate from its individual shareholders or members, such that individual shareholders/members are not liable for an entity’s liabilities.  Certain actions by shareholders/members, however, can lead the courts to pierce that liability protection, often called the “corporate veil,” and impose individual liability for facially corporate actions.  Thus, it is imperative to understand what behavior can cause such a result.

            Shareholder/members, or even other controlling or related entities, may find themselves liable for corporate debts where it is evident that those shareholders/members, or other controlling or related entities, are using an entity for their personal objectives.  My Bread Baking Co. v. Cumberland Farms, Inc., 233 N.E.2d 748, 751–52 (Mass. 1968). Further, in Massachusetts, piercing the corporate veil may be appropriate in instances,

(a) when there is active and direct participation by the representatives of one, apparently exercising some form of pervasive control, in the activities of another and there is some fraudulent or injurious consequence of the intercorporate relationship, or

(b) when there is a confused intermingling of activity of two or more corporations engaged a common enterprise with substantial disregard of the separate nature of the corporate entities, or serious ambiguity about the manner and capacity in which the corporations and their respective representatives are acting. Id.

            More specifically, the courts consider and weigh twelve factors when considering whether piercing the corporate veil is appropriate in any given case. Court consider whether there exists:

(1) Common ownership;

(2) Pervasive control;

(3) Confused intermingling of business activity assets, or management;

(4) Thin capitalization;

(5) Nonobservance of corporate formalities;

(6) Absence of corporate records;

(7) No payment of dividends;

(8) Insolvency at the time of the litigated transaction;

(9) Siphoning away of corporate assets by the dominant shareholders;

(10) Nonfunctioning of officers and directors;

(11) Use of the corporation for transactions of the dominant shareholders; and,

(12) Use of the corporation in promoting fraud.

Pepsi-Cola Metropolitan Bottling Co., Inc. v. Checkers, Inc., 754 F.2d 10, 14-16 (1st Cir.1985).

           Not all factors need apply to justify the disregard of a corporate form, however, all are considered in the determination of whether or not the protections afforded by corporate formality are being abused to an extent that warrants piercing.  Thus, people conducting business by and through various formal corporate entities would be well advised to ensure that their business practices observe corporate formalities, to ensure that they retain the protective benefits such entities generally afford.  If you have questions with regard to business formation and/or operations you should consult with a knowledgeable attorney to determine your best options. 


Christopher Strang Selected as 2017 Super Lawyer

By on December 12, 2017

Strang Scott is honored to announce the selection of Christopher Strang as a 2017 Super Lawyer by the Massachusetts edition of Super Lawyers. Mr. Strang has been recognized for his outstanding work in construction litigation for the ninth consecutive year, first as a Rising Star and then as a Super Lawyer. The Super Lawyers selection team chooses only 5% of eligible attorneys as Super Lawyers, and only 2.5% of eligible attorneys as Rising Stars. Both lists are the result of a process that includes a statewide lawyer survey, independent research, and peer reviews.

OSHA Injury Tracking Application Enforcement Delayed to December 15, 2017

By on December 8, 2017

The Occupational Safety and Health Administration (OSHA) recently extended, for the second time, the enforcement deadline for compliance with electronic reporting of injury and illness data through its Injury Tracking Application (ITA) until December 15, 2017.

The new rule took effect January 1, 2017, and required certain employers to submit injury and illness information electronically through the new tracking application.  The information required to be submitted to OSHA remains largely unchanged from the information already required to be kept under current regulations.  In other words, the primary difference is that it must be submitted through the ITA rather than through traditional methods.

In late November, the deadline was pushed back again to December 15, 2017.  Despite the second delay in enforcement it appears that the rule will eventually begin enforcement, even amid speculation that the rule might be scuttled entirely.  For the time being, construction employers should be prepared to submit their 300A and related forms electronically for years 2016 and forward electronically by December 15, 2017 to insure compliance with the new rule and avoid exposure to citations.

Contractors Beware: OSHA Begins Enforcement of New Respirable Crystalline Silica Standard

By on October 30, 2017

On October 19, 2017, OSHA released interim enforcement guidance for its Respirable Crystalline Silica in Construction Standard. This standard began full enforcement on October 23, 2017.

The Interim Enforcement Guidance issued refers to the standard promulgated on September 23, 2017.  Initially, rather than issue citations for violations of the standard, OSHA’s compliance officers were instructed to assist employers making good faith efforts to comply with the new standard for the first 30 days of its enforcement.  With the new Guidance issued on October 19, full enforcement of the new standard was rolled out on October 23.  Accordingly, employers in the construction industry, and particularly those where substantial silica exposures may be encountered, should be cognizant that full enforcement of the standard will now be enforced by compliance officers.    

The Respirable Crystalline Silica in Construction Standard established a new exposure limit for respirable crystalline silica at 50 micrograms per cubic meter of air as a weighted average during a worker’s an eight hour shift.  This new permissible exposure limit is five times lower than the prior limit for respirable crystalline silica. 

Because prolonged and intense exposure to crystalline silica is known to cause cancer, and crystalline silica is byproduct of many construction activities and materials, such as concrete, rock, mortar and sand, OSHA’s Respirable Crystalline Silica in Construction Standard is intended to limit such exposures.  Many safety measures can be installed and protective equipment can and should be used to avoid intense or prolonged exposures to crystalline silica. Contractors frequently involved in operations where such exposure is likely should be careful to provide all necessary safety measures, safety equipment and personal protective equipment necessary to comply with the new standard.

If you have questions regarding OSHA’s new guidance, your compliance with other OSHA safety standards, or in connection with your rights after a citation has been issued, you are well-advised to consult with counsel familiar with OSHA matters.

Landlord’s Security Deposit Violation Does Not Warrant Triple Damages

By on October 26, 2017

The Massachusetts Supreme Judicial Court (“SJC”) recently addressed the scope and interpretation of the Massachusetts Security Deposit Act, MGL c. 186, § 15B, in Phillips v. Equity Residential Management, LLCStrang Scott previously discussed the implications of landlords’ failure to comply with MGL c. 186 (“the Act”).  

The dispute centered around four different provisions of the Act.

  • First, Section 15B(4)(iii) requires landlords seeking to retain all or a portion of a security deposit to submit a written itemized list of damages to the rental unit, including precise detail of the nature of the damage and the necessary repairs and copies of estimates, bills, invoices, receipts, or other evidence to validate the amount deducted, sworn to by the landlord under the pains and penalties of perjury.  Failure to comply with the requirements of Section 15B(4)(iii) forfeits the landlord’s right to deduct any amount from the security deposit for damage or repairs.
  • Second, Section 15B(6)(b) states that a landlord loses its right to retain any portion of the deposit for any reason, if the landlord fails to furnish the itemized list of damages in compliance with the requirements of the Act. 
  • Third, Section 15B(6)(e) states that a landlord cannot retain any portion of the deposit for any reason if the landlord fails to return the deposit, or any balance after deductions, within 30 days after termination of the tenancy. 
  • Finally, Section 15B(7) provides triple damages, interest, court costs, and attorneys’ fees to successful tenants where their landlord violated Section 15B(6)(a), (d), or (e).

The Federal District Court of Massachusetts awarded the tenant damages in the amount of his security deposit under Sections 15B(4)(iii) and 15B(6)(b), but denied an award of triple damages. On appeal, the First Circuit Court of Appeals submitted a certified question to the SJC, requesting clarification on the treble damages provision under Section 15B and whether a landlord’s violation of the itemized list requirement, which forfeits the landlord’s right to retain any portion of the deposit for any reason, also constitutes a violation of the Act.

The SJC answered “no” to the Circuit Court’s question. In its decision, the SJC ruled that the triple damages provision under Section 15B(7) does not apply to claims for violation of the itemized list requirement of Section 15B(4)(iii) or to forfeiture of the deposit under Section 15B(6)(b). The SJC did find, however, that improper deductions under the first sentence of Section 15B(4), or the failure to return a deposit or account for any portion within 30 days, would constitute violations entitling a tenant to an award of triple damages and attorneys’ fees.

If you have questions regarding whether your security deposit practices comply with Massachusetts law, contact experienced landlord counsel to evaluate your practices and to limit your exposure.

Chris Strang Reelected Treasurer of the Boston Bar Foundation

By on October 18, 2017

The Boston Bar Foundation (BBF) Board of Trustees elected Strang Scott partner Chris Strang to the office of Treasurer for a second term.   Chris’ service to the BBF as Treasurer continues his long-term committment to the organization, where Chris has served in many capacities, including as a member of the Executive Committee, the Board of Trustees, the Society of Fellows, the Young Lawyers Advisory Council and many ad hoc, fundraising or event planning committees.

The BBF is the charitable arm of the Boston Bar Association. It raises money to provide grants for many community organizations that further the mission of the BBF. These include providing legal services and access to justice to those in need, as well as a variety of public service activities.  To learn more, please visit the BBF:

Strang Scott Enjoys “A Taste of The Fenway”

By on September 30, 2017

The Strang Scott team was out in force last week to support our friends and neighbors at “A Taste of The Fenway.”

The fun festival featured our best community chefs, restaurants and other local businesses with delicious food and drink samples, as well as live music and games. The Fenway Community Development Corporation partnered with Samuels & Associates to organize the event.

We all enjoyed meeting our community leaders, area residents and local business owners, as well as catching up with several old friends and colleagues. The turnout was outstanding and everyone left a bit heavier than when they arrived.

Special thanks to Basho Japanese Brasserie, Beerworks Brewing Company, The Fenway Craft Beer Cellar, Blackjack Pasta Bar, Blaze Pizza, By Chloe, Cask ‘n Flagon, Cheeky Monkey Brewing Company, El Pelon Taqueria, Fiouna’s Persian Fusion Cuisine, Hojoko Japanese Tavern, HoneygrowLookout Farm, Loretta’s Last Call, Neighborhoods Café, Pavement Coffeehouse, Saloniki Greek, Sweet Cheeks, Tapestry, Target, The Lansdowne Pub, Tiger Mama, Wahlburgers, and Yard House  for the amazing food and drinks.

We encourage everyone to join us next year!