Tag Archives: New Hampshire

Do More: Prevent Your Neighbor from Taking Your Land Through Adverse Possession

By Corey Giroux on September 26, 2017

Does your neighbor’s fence fall on your side of the property line? Did that garage get built on your land? If your neighbor encroaches on your land, you may be subject to losing that portion of your property by adverse possession.

Adverse possession is a common law doctrine through which ownership to property can be acquired by an unlawful possessor exercising possession for twenty years of adverse, continuous, exclusive and uninterrupted use of land such that the lawful landowner has notice that the possessor claims title to the property.

This little-known legal doctrine frequently affects densely populated residential areas where neighbors come and go and property surveys are the exception to the rule. Recently, the New Hampshire Supreme Court had occasion to review its adverse possession jurisprudence in the case of O’Malley v. Little.

In that action, an adverse possessor permanently acquired title to a strip of real estate in Hampton Beach, in a densely packed area of valuable homes near the beach. In 1993, the plaintiff installed a chain link fence between her lot and her neighbor’s lot. As it turned out, the fence was installed across the property line on to the neighbor-defendant’s land. After installing the fence, the adverse possessor-plaintiff frequently used the encroaching area for parking cars, gardening, and other ordinary uses incidental to ownership of land.

In 2010, new neighbors learned that the fence encroached on their land. In response, they called the plaintiff and informed her that her fence encroached and needed to be removed. The plaintiff refused to move the fence. The defendant asserted that he took other action to demonstrate to the plaintiff where the property boundary existed and that the plaintiff’s fence encroached on his land. Nothing else occurred until 2013, when the defendant emailed the plaintiff again and requested the fence be removed. In correspondence, the defendant offered the plaintiff a license to use the encroaching area. Again, the plaintiff refused. Accordingly, the defendant threatened to take action to relocate fence if the plaintiff did not do so herself. The defendant never took such action.

In December of 2013, the plaintiff filed suit to “quiet title,” or officially take legal possession of the encroaching area inside the fence line. In that suit, the defendant asserted that it “ousted” the plaintiff from possession of the disputed land, and thus terminated the adverse possession, through the repeated assertions of ownership from 2010 to 2013. The court disagreed.

Instead, the New Hampshire Supreme Court quieted title in the encroaching plaintiff, finding that “ousting” an encroaching adverse possessor effectively requires more than mere assertions of title. Rather than asserting title, the original owner must take affirmative steps to put the adverse possessor on notice that the lawful owner intends to reassert control or dominion over the disputed area. Having failed to take any such actions, the original owner lost legal title to the disputed area.

While little-known and infrequently asserted, losing title by adverse possession is risk property owners should be aware of, particularly in densely settled areas where unlawful encroachment by neighbors presents a significant risk to property. If you’re concerned that your neighbor encroached upon your land, do your homework. Review your plot plan and deed. Engage a surveyor if you’re unclear whether an encroachment occurred. Then take steps to reassert control over the land encroached upon by your neighbor. If you’ve found that your neighbor encroached on your land, do not let time pass you by. Instead, contact an attorney to help preserve your rights in your land.

New Hampshire Supreme Court Denies Consumer Protection Act Claim in Real Estate Transaction Gone Bad

By Corey Giroux on June 15, 2017

In the recent case of Fat Bullies Farm, LLC, v. Lori Devenport et al., the New Hampshire Supreme Court had occasion to consider whether a series of less than truthful representations made by a prospective purchaser in the course of negotiating a real estate transaction gave rise to liability under NH RSA 358-A, New Hampshire Consumer Protection Act (the “Act”).

After a trial in the matter, the Superior Court determined that the plaintiff and counterclaim defendants, Fat Bullies Farm and its principals, were liable for an award of enhanced damages – double attorney’s fees and double costs – pursuant to the Act. On appeal, Fat Bullies Farm and its principals argued that the trial court erred in determining that the conduct underlying the award was sufficient to support liability under the applicable legal standard – that is, that the conduct was sufficiently unfair and deceptive to meet the “rascality test” for determining liability under the Act.

The Act proscribes unfair and deceptive practices in commerce generally, and provides an inexhaustive list of specific types of conduct that give rise to liability under the Act. For conduct not specifically listed, courts in New Hampshire consider the conduct complained of under the Act’s general proscription against unfair and deceptive conduct. When considering whether any particular conduct not proscribed in the Act nevertheless supports liability, New Hampshire courts consider the conduct against the so-called “rascality test.” Under the “rascality test” the conduct complained of must “attain a level of rascality that would raise an eyebrow of someone inured to the rough and tumble of the world of commerce.” As a practical matter the court seeks guidance from the Federal Trade Commission Act (the “FTCA”) to determine whether such conduct runs contrary to the “rascality test” and offends the Act.

The FTCA test considers whether the complained of activity offends public policy as embodied in other statutes, the common law or otherwise offends established norms of fairness, whether the conduct is immoral, unscrupulous, oppressive or unethical or whether it causes substantial harm to consumers.

In the instant matter, the trial court found that Fat Bullies Farm’s conduct, which consisted of a course of unscrupulous behavior including misrepresenting their intentions for the future of the real property included in the proposed transaction, along with certain other selfish bargaining and business dealing tactics, was sufficient to establish liability under the Act.

The Supreme Court disagreed with the trial court’s decision, however, and held as a matter of law that misrepresentations concerning future uses of real property to be purchased could not give rise to liability under the Act if not contained in writing, because oral promises concerning real property are unenforceable under the Statute of Frauds. The Supreme Court noted that even though Fat Bullies Farm’s misrepresentations encouraged property owner to sell the property to them, a course of misrepresentations of intent were not enough to support liability under the general proscription of the Act and the “rascality test” absent more.

Each decision concerning liability under the general proscription of the Act and the related “rascality test” is inherently fact based, and therefore may not serve as strong precedent for future decisions of the Court. Nonetheless, the Fat Bullies Farm decision further underscores the larger body of New Hampshire Supreme Court jurisprudence that demonstrates a pattern of restraint in its application of the Act to business dealings. While other states with similar statutes apply the remedies offered by the Act liberally, the New Hampshire Supreme Court applies the remedy sparingly, and potential litigants should not be confident that, absent extraordinary circumstances, the Act provides redress for unscrupulous conduct in business dealings. To consider whether the circumstances of your dispute merit consideration of a claim under the Act, litigants are well-advised to contact a New Hampshire litigator.

Want Out? Prove It: Enforcing Termination Options in Massachusetts Commercial Leases

By Strang Scott on May 22, 2017

A recent Massachusetts Appeals Court decision made clear that the burden of proof relative to the operation of lease option clauses falls on the party seeking to exercise the option regardless of which party moves to enforce their rights pursuant to the lease. In Patriot Power, LLC v. New Rounder, LLC, et al. (2016), a commercial landlord initiated an action for declaratory judgment and breach of contract against a tenant alleging that the tenant did not properly exercise its contract option to terminate its tenancy.

At trial, the jury was instructed that the landlord bore the burden of proof relative to the claim that the tenant had not properly exercised the lease termination option. The landlord objected to the instruction and subsequently lost the case. On appeal, the court sided with the landlord and reversed the ruling on the grounds that the jury instruction regarding the burden of proof was erroneous and prejudicial.

The court held that the fact that the landlord initiated the action for declaratory relief did not shift the burden to the landlord on the underlying action. The court cited a line of cases supporting the proposition that, “one relying on a condition to avoid contractual obligation has the burden to prove the occurrence of the condition.” A proposition made stronger when the facts are such that, “the contractual obligation actually requires an affirmative act by the party seeking to end the obligation.”

As applied to the facts in Patriot Power it is clear that the tenant bore the burden of proof. The lease termination option required the tenant to mail timely notice of such termination in order to relieve the tenant of further contractual obligation. Thus, the tenant needed to prove it had, in fact, complied with the terms of the lease rather than the landlord needing to prove non-compliance. Lease termination option clauses are common in many Massachusetts commercial leases. Both commercial landlords and tenants should read their leases carefully in order to fully understand the obligations and provisions contained within.

Show Me the Money: When Payment is Due on Massachusetts Public Construction Projects

By Andrea Jacobs on April 5, 2017

Traditionally, general contractors on Massachusetts state-level public construction projects employed one of two types of risk allocation provisions in payment clauses in their subcontracts with subcontractors: a “pay-if-paid” or a “paid-when-paid” clause. This changed, however, due to a 2004 Massachusetts court decision that largely did away with condition precedent payment clauses commonly referred to as “pay-if-paid” clauses. While the differences between the two clauses may not jump off the page, the use of one rather than the other had a significant impact on a subcontractor’s right to collect payment from the general contractor.

“Pay-if-paid” clauses create a condition precedent to payment. That is, a subcontractor has no right to be paid for completed work until or unless the general contractor received payment from the owner. “Pay-when-paid” clauses create no such condition precedent to subcontractor payment. Rather, a “pay-when-paid” clause is a timing provision; that is, the general contractor has a ‘reasonable time’ to obtain payment from the project owner, but in the event the owner does not pay the general contractor within a ‘reasonable time’ the subcontractor retains the right to collect payment from the general contractor for its work. Ambiguous contract language often complicated the subtle, yet substantial, difference between the two types of clauses, leading to high stakes contract interpretation disputes.

In 2004, Massachusetts did away with the distinction between “pay-if-paid” and “pay-when-paid” clauses on state-level public construction projects. In, Framingham Heavy Equip. Co., Inc. v. John T. Callahan & Sons, Inc., 807 N.E.2d 851, 855 (Mass. App. 2004), the court reasoned, that absent express contract language, if “payment to the subcontractor is to be directly contingent upon the receipt by the general contractor of payment from the owner,” then the default interpretation of subcontract payment provisions, “should be viewed ‘only as postponing payment by the general contractor for a reasonable time after requisition … so as to afford the general contractor an opportunity to obtain funds from the owner.’” This decision virtually eliminated “pay-if-paid” in favor of “paid-when-paid” clauses on Massachusetts state-level construction projects.

While the holding in Framingham is generally good news for payment-seeking subcontractors, the issue remains, however, as to what a “reasonable time,” is to afford general contractors before general contractors must make payment to subcontractors should the owner not pay. In Framingham, the court determined that where the payment issues originated in December 1998 and continued through March 1999, that by the end of April 1999, “the general contractor had exceeded any reasonable period of time,” and thus the subcontractor’s claim for payment for completed work could not be defeated even though the owner had yet to pay the general contractor for the subcontractor’s work.

There has been no subsequent case in Massachusetts that further defines the “reasonable time” standard to determine when general contractors must pay subcontractors when the general contractor objects to making payment as a result of a “pay-when-paid” clause. Thus, subcontractors should be keenly aware of any developments in the law regarding what constitutes “reasonable time” for payment in connection with these provisions. If you have questions regarding payment issues on state-level public construction projects you should contact a Massachusetts construction lawyer.

Strang, Scott honored in 2016 Edition of Super Lawyers

By Strang Scott on October 20, 2016

Strang Scott is honored to announce the selection of Christopher Strang as a 2016 Super Lawyer and Jordan Scott as a 2016 Rising Star by the Massachusetts edition of Super Lawyers. Mr. Strang has been recognized for his outstanding work in construction litigation for the eighth consecutive year, first as a Rising Star and then as a Super Lawyer, while Mr. Scott has earned his second consecutive recognition for his employment practice. 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.

Contractors Beware: OSHA Penalties Set to Increase on August 1, 2016

By Corey Giroux on July 27, 2016

On August 1, 2016, the Occupational Health and Safety Administration (“OSHA”), will raise the limits of its maximum penalties for the first time in nearly twenty-six years.

Current maximum penalties for “serious,” “other than serious” and “posting requirement” penalties will increase from $7,000.00 per violation to $12,471.00 per violation. Penalties for failure to abate hazards or violations will increase from $7,000.00 to $12,471.00 per day for each failure to abate the condition subsequent to the abatement date. Finally, the maximum penalties for “willful” or “repeat” violations will increase from $70,000.00 to $124,709.00 per violation.

All contractors, and especially those with a history of violations or alleged violations with OSHA, would be wise to insure that all personal protective equipment, tools and equipment are OSHA compliant in advance of the changes in maximum penalties. If your firm hasn’t recently revisited its safety procedures, practices and documentation, now is the time to review your firm’s safety program in order to avoid exposure to increased maximum penalties for OSHA violations set to take effect.

For contractors in states that operate their own, state run, “mini-OSHAs,” OSHA has required that those agencies adopt maximum penalties that meet or exceed those imposed by OSHA. Accordingly, contractors operating in states with “mini-OSHA” agencies should be mindful to consider whether they’re subject to penalties for any violation that may exceed the penalty that OSHA might impose for any similar violation.

Of course, the best way to avoid an increased OSHA penalty for a violation is to refrain from committing any violation. As a practical matter, violations frequently occur despite your firm’s best efforts and dedication to providing a safe and compliant work environment. If OSHA requests to inspect your work site or office, you’d be well-advised to immediately contact an attorney experienced in OSHA practice to help guide your firm through the process and to achieve best results.

Contractors: Do You Know Your Rights Under the New Hampshire Residential Construction Defect Dispute Resolution Statute?

By Corey Giroux on April 12, 2016

New Hampshire has enacted a dispute resolution statute for residential construction defect claims made by homeowners that, among other things, provides contractors notice and opportunity to resolve alleged construction defects prior to a disgruntled owner instituting litigation against them. Despite its obvious benefits to residential contractors, many contractors fail to preserve the right to rely on the statute in contracts with homeowners.

The residential construction dispute resolution law’s stated purpose is “to encourage the out-of-court resolution of disputes between homeowners and contractors relative to residential construction defects.” NH RSA 359-G encourages the resolution of residential construction defect claims by mandating a procedure that homeowners must follow prior to instituting litigation against a contractor, provided that the contractor preserves its right to rely on the statute in its written contract with the owner.

Assuming the right to rely on RSA 359-G has been preserved, the homeowner must provide notice of any claim of an alleged defect to the contractor no later than sixty days prior to filing an action against the contractor in court. The homeowner’s notice to the contractor must contain a description of the alleged defect(s) “in detail sufficient to explain the nature of the alleged construction defect and the result of the defect … [and] provide to the contractor any evidence in possession of the homeowner that depicts the nature and cause of the construction defect.” In other words, the homeowner’s notice must contain more than a simple notification to the contractor that there is a problem. In so doing, the statute requires homeowners to provide contractors with adequate notice of the actual issue(s) for which the homeowner claims a defect and not simply a notice that there are alleged defects in the work.

Provided that the contractor receives adequate notice from the homeowner, the contractor must, within 30 days, respond in writing to the homeowner disclosing any information the contractor has regarding the specific alleged defects and:

Offer to settle the claim made by making repairs, paying money to the homeowner or both, without performing any inspection of the claim;
Offer to inspect the claim; or
Reject the claim.

Generally speaking, if a contractor offers to inspect the claim, the contractor will have 15 days to do so and then another 15 days to provide written notice to the homeowner of the contractor’s findings from the inspection. In the written notice the contractor must:

Make a written offer to fully or partially remedy the construction defect at no cost to the homeowner, and provide the anticipated schedule to complete repairs;
Make a written offer to settle the claim by payment;
Make a written offer to resolve the issue by payment and repair; or
Issue a written statement that the contractor will not remedy the defect.

After the homeowner elects to accept or reject the offer made by the contractor, the matter may proceed with payment, repairs or to the courts if the contractor rejects the claim and the homeowner disagrees.

Importantly, if the homeowner accepts the contractor’s offer to remedy the alleged defects and the contractor does so, the homeowner is barred from later bringing suit against the contractor for issues related to the defect. Similarly, provided that the contractor has preserved its right to assert 359-G, this dispute resolution mechanism provides the exclusive remedy for homeowners to utilize in the first instance. Actions filed in court prior to exhausting the remedies in 359-G shall be stayed until such time as the homeowner has complied with the statute.

RSA 359-G provides contractors and homeowners with a great tool to resolve disputes before they ripen into time-consuming and costly litigation. The statute provides a common sense framework for the parties to a residential construction contract to address perceived deficiencies in the work in a prompt and orderly fashion without initial resort to a legal process that is ill-equipped to deal with residential construction defect issues efficiently. Savvy contractors and homeowners do well by insisting that RSA 359-G be incorporated into their contracts.

It is important to note that RSA 359-G contains many other meaningful timing, notice and additional requirements that are beyond the basic operation of the statute addressed here. In order to gain a full understanding of the statute, how to preserve your rights under the statute, and how the statute operates in any particular situation, homeowners and contractors would be wise to consult with a New Hampshire construction attorney regarding the particulars of the situation.

Why Revocable Trusts Aren’t Just for the Wealthy

By Corey Giroux on November 2, 2015

Trusts have long been considered the domain of the wealthy. After all, most everyone has heard the term “trust fund baby” used to describe a child from an affluent background. While trust planning remains popular with the affluent, more and more ordinary people are recognizing the benefits of the use of revocable trust planning to achieve their estate planning goals.

So, why is this happening? Simply put, revocable trusts have advantages that cannot be replicated through the use of wills alone. Because property and assets held in trust are non-probate assets, assets that would otherwise be subject to the probate process are not subject to probate when held in trust. Because assets held in trust are not subject to the probate process, trust assets remain private and are not ordinarily subject to public disclosure.

Trusts offer other advantages. Trusts can be used very effectively to control asset distributions. Trusts can help ordinary people set up distribution plans for their children or other intended beneficiaries that distribute assets over extended periods of time, for specific purposes and with specific assets. While children are ordinarily entitled to receive assets passing by will at age 18, that period can be prolonged through the use of a revocable trust. Parents can manage the distribution of their assets to their children through the use of a trustee to control distributions over time, in amount and for the particular purposes set out in the trust. This planning is frequently employed to avoid giving unfettered access to assets to children at age 18, when many, if not most, are ill-prepared to manage and maintain significant assets.

In addition to the benefits for your family, trusts are very effective tools to manage your assets in the event of your disability or incapacity. In the event that you become incapacitated or disabled, a trustee or trustees named in your trust will manage the assets in your trust for your benefit. This can be achieved without court-ordered conservators or guardians that might otherwise be necessary and whose appointment requires filings and hearings before the probate court.

Revocable trusts are flexible. Trusts can be amended, or even revoked, relatively easily. Trusts can and should be amended to reflect the changing circumstances of one’s family over time and to capture other advantages occasioned by changing laws. Once in place, amending a revocable trust is ordinarily straightforward and inexpensive.

While trust planning tends to be somewhat more expensive in terms of upfront costs, it can be significantly more efficient, in time and money, than probating an estate. This is especially true in states like New Hampshire, where the probate process is complicated and burdensome. For estates containing significant assets, probate administration is likely to be time-consuming, expensive, and extended in duration. As a result, you’re well-advised to consider trust planning as part of your overall estate plan.

While everyone should maintain a comprehensive estate plan, including wills, powers of attorney, advanced health care directives and the like, more people are considering revocable trusts to achieve their estate planning goals. Like each element of a comprehensive estate plan, whether or not a trust is right for you and your family should be considered in light of your circumstances and planning goals. Consult with your estate planning attorney to consider your circumstances and estate planning objectives.

Five for Fighting: Subcontract Provisions Every Subcontractor Must Know to Get Paid

By Corey Giroux on September 2, 2015

While there are any number of subcontract provisions that subcontractors must be aware of in order to negotiate subcontracts favorably, the following five provisions are critical to insuring that your business gets paid for the work it performs.

Lien Provisions

Did you know that it’s perfectly legal to relinquish your statutory right to a mechanic’s lien in New Hampshire? If you did, give yourself a small pat on the back. All too often, however, subcontractors – especially those new to working in New Hampshire – fail to appreciate that they can waive their right to assert or maintain a mechanic’s lien through their subcontract. Worse still, it is often the case that subcontractors learn this valuable piece of information at the very worst time: when they need to secure a mechanic’s lien for delinquent payment on a project.

In order to avoid this painful result, have your subcontracts reviewed carefully in-house or by your attorney, with a specific focus on any provision or language that relates to waiving or relinquishing the right to assert, maintain or perfect a lien or an attachment against the owner or its property. If you see it, don’t accept it. The mechanic’s lien is a very useful tool to make sure you get paid in New Hampshire, and you shouldn’t give it away before you start your project.

Retainage Provisions

Most every project contains a retainage provision, so how different could they be? If you treat retainage provisions interchangeably, you may go a long time before you get paid that all important final five to fifteen percent of your contract balance.

Retainage provisions are like Skittles: many flavors and some are better than others. For example, if you’re a subcontractor that performs work early on in a project, it will be beneficial to negotiate retainage reductions based on acceptance of your scope of work by the project owner. If you accept a common retainage provision that simply calls for the owner to withhold ten percent until the completion of the project, and you’re responsible for clearing the site and preparing for building or paving, it may be years before your final retainage payment becomes due, let alone gets paid. Surely, that final ten percent looks better in your pocket than the owner’s. As a result, it’s imperative that you closely monitor the retainage provision in each subcontract you execute.

Retainage isn’t intended to be an annuity that you receive years after you perform your work, but instead should provide the owner some security that you’ll finish your scope of work after you’ve been paid the majority of your contract balance. If you focus on negotiating a retainage provision that fairly accounts for your scope of work and its timing in connection with the overall project, you shouldn’t need to wait extended periods of time to receive the final payment you’re owed.

Change Order Provisions

There are virtually as many change order provisions as there are subcontracts. It seems that every general contractor or construction manager that doesn’t utilize an AIA subcontract document creates its own change order provision. With so many iterations of a provision meant to capture the same thing, more or less, what should your company be looking for?

In short, to maximize your chances of getting paid for extra or change work, subcontractors should strive to negotiate change order provisions that come as close as possible to mirroring the reality of performing work on a project. More often than not, that reality is a fast-paced project with a limited schedule where changed or extra work cannot wait weeks for signed change orders from executive level corporate representatives. As a result, subcontractors are best served by negotiating change order provisions whose terms are not unduly burdensome, restrictive or otherwise difficult to satisfy.

For instance, the author recently reviewed several subcontracts which directed that only the company president or another board level executive were authorized to approve a change in scope. This is hardly practical for a subcontractor. Ordinarily, a general contractor’s executives are not in the field regularly, and do not have the kind of “hands on” knowledge of a project that a project manager or superintendent possesses. Worse still, executives are not readily available to subcontractors, as a general matter. As a result, it’s not difficult to anticipate the difficulties that a subcontractor is likely to face when trying to balance the need to perform change order work, to maintain the project schedule and to secure the appropriate written authorization to perform the work. These competing interests often lead to subcontractors performing work before they are authorized to do so according to the terms of their subcontracts, based on spoken assurances from onsite representatives of the general contractor. This, in turn, exposes the subcontractor to the risk that the general contractor or the owner will reject the change order and that a fight will be necessary to get paid.

Because the competing interests in performing the work, meeting the schedule and securing appropriate authorization for changes in scope exist on so many projects, subcontractors are best served by negotiating change order provisions that mirror, as closely as possible, the anticipated conditions in field. Doing so will go a long way toward insuring that you’ll be paid for your extras. To the extent that you have any doubt regarding what steps are necessary to make sure you’re complying with the change order provision in your subcontract, you’re well advised to speak with your construction attorney.

Pay if Paid Provisions

Construction lawyers frequently discuss the concept of “risk allocation” with their clients. So what is risk allocation? At is core, risk allocation is concept used to describe how the parties to a contract divide or allot the various risks attendant to a particular contract.

A “pay if paid” provision is a tool used by general contractors and constructions managers to reallocate the risk of nonpayment, that for many years, was borne by the general contractor or construction manager. A “pay if paid” provision operates exactly as it sounds. That is, it’s a provision that conditions payment to a subcontractor for work it performs on the upstream contractor first receiving payment from the owner, or from the party upstream from it. In other words, if the general contractor doesn’t get paid from the owner, the general contractor has no obligation to make payment to its subcontractor, regardless of whether the subcontractor fully and dutifully performed its work.

Does it make sense for a subcontractor to accept a “pay if paid” provision in its subcontract? The answer is unequivocally no. The vast majority of subcontractors have no ability to determine the financial solvency of the owner or the dependability of its construction financing. Furthermore, a subcontractor has no direct contract with the owner, as the general contractor does, which thereby limits the subcontractor’s potential legal remedies if the owner elects not to pay for any number of reasons that have nothing to do with the subcontractor. Because of these issues and others, subcontractors should be reticent to execute any contract that contains “pay if paid” language. Because “pay if paid” language can be difficult to discern from other kinds of risk allocation devices, such as “pay when paid” and similar provisions, if you have any doubt about what your contract specifies seek the advice of your construction attorney.

Attorney’s Fees Provisions

Last, but certainly not least, subcontractors must understand what the attorney’s fees provisions mean in their subcontracts. Like all of the foregoing types of provisions, there isn’t a one size fits all remedy. What stands out about the importance of an attorney’s fee provision is that in some very important instances, the only way to enforce or determine your rights with respect to each of the kinds of provisions discussed above, is to employ the services of an attorney. And that costs money. So, if you don’t have an adequate provision of this kind, you’ll be forced to decide whether or not to pursue claims for payment (or other claims) based not upon whether you’re entitled to be paid, but rather by how much you’ll have to spend to get paid.

This isn’t lost on some less scrupulous general contractors. In some instances, if a general contractor knows you’ll have to spend enough money to chase payments you’re owed that it becomes throwing good money after bad, they’ll simply pocket the money you should be paid and force you to bring suit against them. This is no way to keep your projects profitable.

In order to make sure that you don’t fall victim to this scenario, insure that your contract has an attorney’s fees provision that calls for your fees to be paid in the event that you need the services of an attorney to enforce your rights under your subcontract.

So what do you do when the general contractor won’t agree to an attorney’s fee provision that runs in your favor? In that instance, you negotiate what is known as a “prevailing party” provision. A “prevailing party” provision calls for either party to a contract to receive their attorney’s fees and other costs from the other side in the event that a particular party prevails in an arbitration or lawsuit. As is the case with each of the foregoing kinds of provisions, the devil is in the details of the provision. Nevertheless, if you’re diligent about reviewing (or having someone else review) the language of any proposed attorney’s fee provision, you’ll be much less likely to learn that your subcontract only gives the general contractor the right to recover its attorney’s fees.

If you master the foregoing five kinds of provisions, or engage your construction attorney to help you do so, you will negotiate better subcontracts before you get started and you’ll almost certainly forestall a variety of construction disputes before they have the opportunity to ripen. Should you have questions regarding any of the information presented here, you’d be well advised to contact your New Hampshire or Massachusetts construction attorney.

New Hampshire Supreme Court Upholds Statute of Repose Against Constitutional Challenge, Barring Claims Against Subcontractor and Design Professional

By Corey Giroux on March 16, 2015

On February 20, 2015, the New Hampshire Supreme Court issued an opinion in the case of Jillian Lennartz v. Oak Point Associates, P.A., & a. In Lennartz, the plaintiff sought to recover for a personal injury suffered in 2009 which was alleged to have resulted from the faulty design or installation of a vent pipe in a laboratory facility on which construction had been substantially completed in 2003. In order to attempt to recover damages for the alleged injuries, the plaintiff brought suit against the subcontractor and design professional in 2012.

At the trial court, the defendants sought and were granted summary judgment on the basis of NH RSA 508:4-b, I, New Hampshire’s statute of repose. Among other things, the statute of repose bars actions to recover damages for injuries to person, property or economic loss arising out of a deficiency in the creation of an improvement to real property through the design, construction or inspection of the improvement, if the claims for damages are not brought within eight years from the date of substantial completion. At its core, the statute of repose is intended to prevent businesses in the construction industry from exposure to claims for injuries suffered many years after completing work on any particular project.

In this instance, the plaintiff’s injuries were alleged to have been suffered before the repose period expired, but the plaintiff brought suit against the defendants only after the eight year period from the date of substantial completion had expired. Among other arguments, the plaintiff principally argued that the statute of repose was unconstitutional as applied to her on an equal protection under the law basis, because her injuries were suffered before the repose period expired, but were barred only because her suit was filed after repose period expired. That plaintiff argued that this ran afoul of equal protection in so far as it prevented her from redressing injuries alleged to have occurred before the statute’s expiration, while others similarly injured that filed sooner would not have been barred by the court from proceeding with suit against the defendants.

The New Hampshire Supreme Court disagreed, holding the statute of repose constitutional as applied to the plaintiff’s claims because the statute is substantially related to an important governmental interest in protecting and relieving those in the construction industry from limitless liability under the discovery rule, which otherwise might infinitely suspend the limitations clock from running on the applicable limitations period until an injured party discovers its injury or should discover its injury in the exercise of reasonable diligence.

The Lennartz decision is an important one for those involved in the construction industry because it reaffirms an important limit to liability for builders and design professionals against claims brought long after the completion of a project. The decision should instill contractors, subcontractors and design professionals working in New Hampshire with further confidence that they will not be subject to liability for alleged defects decades after completion.