Friday, December 11, 2015

To Lawyer Up or Not to Lawyer Up- That is the Question

To Lawyer Up or Not to Lawyer Up
That is the Question.
12/11/2015

Many years ago, I found myself suddenly becoming Marketing Manager of a business law firm. I was a lowly costume designer, turned file clerk, who’s old boss saw fit to turn into a marketing manager. It was a Cinderella story without the mice or awesome carriage (Seriously a pumpkin carriage….. it’s pie at the end of the night) After learning my trade the hard way, I saw many interesting things that happen from within a law firm; mainly the clients.

For the past 5 years I have seen potential client, turned client, walk into the office with a problem they could have stopped years before. Now, I am Marketing Manager for The Cromeens Law Firm and I see the same issue over and over again. Potential clients walking in with issues they could have stopped years before if they had gotten the right attorney or any attorney for that matter.

How, you may ask? Well, let’s first take on the issue on how many people view attorneys. They see them as a necessary evil, a weapon of last resort. Many business owners and people only go to an attorney when the problem has gone so far out of hand they don’t know what to do. As a marketer I have seen so many issues that could have been resolved well before they started. The simplest way to change this mindset is to not view attorneys as a weapon of last resort, but as your first line of defense. Whether it be reviewing your contracts, creating and forming your business properly, or giving you valuable legal advice before a decision is made.  

For example, I’ve seen time and time again where a business partnership has fallen apart and the two parties had no partnership agreement in place. This maybe due to the fact that they were friends when they started the business, or family. Let me tell you, nothing splits a friendship or familial ties apart more than money. Most small partnerships hold together with a handshake or believing the friendship will keep the bad away. I’ve seen this route only makes things messier when it comes to separating a business. There is nothing wrong with getting contracts signed and partnership agreements made up between friends and family, it actually helps protect both from each other and is both parties best interest.

Keeping an attorney on retainer for when you have questions or need something reviewed is the best route. It’ll be far more cost effective to nip something in the bud, than having to go to full out litigation. Litigation is expensive, reviewing a contract or forming a partnership agreement is not, comparatively.

Another big issue I see people making is that they think they know better than their attorney. I’ve seen client after client make calls that were against what their legal counsel suggests. This usually ends badly for the client. Remember, the attorney is there for your best interest as their client. They are there to support and defend you. All attorneys have spent years studying their trade and many more years learning their specialty. They know the nuances of law and have the research material to back their knowledge.

So my advice in a nutshell is to Lawyer up early, listen to your attorney and remember the attorney is there for your best interest.

Friday, May 1, 2015

Change Orders

Change Orders


I.        The Importance of the Scope of Work
Most small subcontractors understand that there is little room for negotiation when it comes to the terms of a construction contract. Arbitration clauses, indemnity provisions and even the contract price are often “predetermined” for the Project. This reality makes it imperative that a subcontractor understand the provisions of the contract, even if he cannot change them.

The scope of work defines your responsibility, and therefore, your liability in the event of a dispute. It will govern whether you are entitled to additional funds for a change made during 
construction. The more general the scope, the less likely you will be able to obtain a change order when the unexpected happens and the less likely you will be entitled to payment for any additional costs. The scope of work can even determine liability for a charge back. Again, the more general the scope, the easier it is to be held responsible for issues that technically fit under your scope’s description.

For example, suppose you contract to “install a flat roof on a building in accordance with Exhibit A – The Plans.” Then after commencement, the plans are changed to include a vaulted roof. Because this is a significant change, not contemplated in the scope of work, you would be entitled to submission of a change order for the additional cost of the vaulted roof. However, if your scope of work was simply “install a roof to the GC’s standards,” or “provide all labor and materials necessary to install the roof,” you may not be entitled to a change order under the contract. You may also be charged back for any other expenses connected to the roof, even if those expenses were not supposed to be a part of your responsibility on the Project.

It’s important to keep in mind that side agreements or communications outside of the written contract may not be enforceable and you should try to make sure your scope of work is as clear as possible, without alienating your GC. A few things you should always clarify:

  • Whether the contract includes Labor only OR Labor and Material. Contracts often include inconsistent language regarding this issue. For example, the “scope” section may say labor only but the form language of the contract states that the “subcontractor is to provide all labor and materials.”
  • Who will provide which Equipment? If you need a specific lift to perform a portion of the Project, the contract should include what’s needed and who will provide it.

  • Manpower requirements. Contracts often state that the sub must have a particular number of workers on the Project “at all times.” What does this mean to the GC? Can you meet that expectation?

II.      Failure to Obtain Written Change Orders when Warranted
So you are entitled to a change order for a change in scope. What happens if you don’t get it in writing? A general contractor will often make changes as the Project progresses. If the changes fall within the original scope of your contract and don’t cause increased costs, this may not be a problem. However, failure to obtain a written change order on items outside the original scope, or for changes that increase your cost, can make it very difficult to get paid.

If the work you did was an “Extra” then you might be able to recover…. If the work was “additional,” then probably not. Under Texas Law, “additional work” is that required in the performance of your contract and without which, your contract scope could not be completed. This work is governed by the terms in your contract, including the likely requirement that changes be in writing. Failure to obtain a written change order for “additional work” will make recovery of any extra costs unlikely.

“Extra work” is work outside of the scope of your contract and not required in performance of your contract. Generally, work that is considered “Extra” can be recovered because it is work that is not necessarily governed by your written contract with the GC, not governed by any provision that requires written change orders, and may create a separate oral contract.

For example, say a contractor agrees to “provide labor and material necessary to complete all framing work.” Upon visiting the site and starting the Project, he finds that the cost for materials and labor has increased and he underbid the job.  These would be considered “additional costs” and would not be recoverable unless written change orders had been executed. However, had the GC asked that the contractor provide the drywall labor as well, or dig a trench for the plumbing contractor, those expenses would be recoverable as “extras,” even if no written change order had been executed.

As a subcontractor you should always remember that Contracts protect the ones who draft them. However, if you understand the expectations from the beginning, you can generally avoid conflict or at least, prepare and create records to support any potential claim.   As morbid as it seems, the best way to prevent litigation is to prepare for it from the outset.

This article is intended as a general educational overview of the subject matter and is not intended to be a comprehensive survey of recent jurisprudence, nor a substitute for legal advice for a specific legal matter. If you have a legal issue, please consult an attorney.


FOR MORE INFORMATION GIVE US A CALL AT 713.715.7334
OR VISIT US AT

Tuesday, April 28, 2015

FRAUDULENT LIENS IN TEXAS by Rhonda Allen

October 29, 2014 by Rhonda L. Allen, The Cromeens Law Firm, PLLC

In response to the routine practice by inmates and a separatist group known as the Republic of Texas in filing bogus liens against police officers and government officials purely for retaliatory reasons, the Texas Legislature enacted Civil Practices and Remedies Code Section 12.002 (“Chapter 12”).
Chapter 12 provides a specific cause of action for money damages from a person who files a fraudulent lien.  Damages must be paid to EACH injured person for the greater of $10,000 or actual damages incurred, plus court costs, reasonable attorney’s fees, and exemplary damages as determined by the court.
A person asserting a claim under Chapter 12 must establish three elements:
  1. Knowledge that the document was fraudulent;
  1. Intent that the document be given the same legal effect as a valid document; and
  1. Intent to cause physical injury, financial injury, mental anguish or emotional distress.

However, there is one additional element which is required to prove a fraudulent mechanic’s, contractor’s or materialman’s lien filed under Chapter 53 of the Texas Property Code (“Chapter 53”).  If a lien is filed under Chapter 53, a person must also be found to have acted with an intent to defraud.  This last element was seemingly introduced to protect those claimants who through an error (typographical, clerical or some other explainable mistake) unintentionally submit an inaccurate lien affidavit for filing without a specific intent to defraud.  However, actual case law on this specific element has yet to be reported.
Because of the potentially large monetary damages for a lien determined to be fraudulent under Chapter 12, lien claimants must be vigilant in complying with all Chapter 53 deadlines and notice requirements as well as ensuring the factual accuracy and components required for each lien affidavit.
Chapter 53 poses compliance challenges not only for the general public, but for experienced legal counsel who do not routinely practice in the field of construction law.
The Cromeens Law Firm PLLC assists clients throughout the State of Texas in filing lien claims which comply with Chapter 53, removing fraudulent liens, as well as other issues related to the construction industry such as collection and breach of contract disputes.
 To Learn More about Rhonda Allen and the Cromeens Law Firm check out our Website link below:
This article is intended as a general educational overview of the subject matter and is not intended to be a comprehensive survey of recent jurisprudence, nor a substitute for legal advice for a specific legal matter

Jury Trials

Generally, civil attorneys work long hours and even weekends, but come December, the entire civil justice system essentially shuts down. That is, all except for our office where we have been asked to show up through Christmas Eve. I bring up the subject only to point out that I am at the office with rare “free” time. Instead of reading dry CLE handouts, I’ve downloaded a copy of “The Common Law” by Oliver Wendell Holmes, Jr. As with any book worth reading, I found it difficult to get through even the first chapter without stopping to ponder the passages I find particularly relevant. In the first lecture of the book, Holmes begins by discussing the origins of law, couched in vengeance and a need to remedy injury inflicted by intentional acts. He points out that while we tend to think of ancient civilizations and their laws as barbaric, it was also unlikely that an individual would be punished for acts that were not intentional or for acts that led to unintended consequences. Vengeance, though now considered base, is generally justifiable:
“Vengeance imports a feeling of blame, and an opinion, however distorted by passion, that a wrong has been done. It can hardly go very far beyond the case of a harm intentionally inflicted: Even a dog distinguishes between being stumbled over and being kicked.” – Oliver Wendell Holmes, Jr., The Common Law
This discussion brought to mind the controversy of the civil jury and our “evolution” toward its demise. Often, a lawyer’s opinion of whether he likes or dislikes juries turns on the signatory of his paycheck. However, I sincerely believe that if you lose a jury trial, it is because either 1) your client deserves to lose, or 2) because you failed as the attorney to tell his story. It’s easy to label the jury trial as a “crapshoot,” but the jury always makes the right decision in light of the evidence put before it. “Even a dog distinguishes between being stumbled over and being kicked.”
The jury decides questions of fact. Facts can only be determined by human perception and what better way to determine facts than by simply asking a group of uninterested individuals how they perceive a situation to be. When the law applied to the facts of a case does not produce the just result, it is the LAW that is flawed, not the jury. The law should produce a just outcome that parallels common sense. If it doesn’t, IT IS BAD LAW.
Justice is the inherent perception of what is right and what is wrong. It’s an emotion of either sickness or satisfaction in response to an event or an action. It’s what allows us to go our entire lives without committing a crime, yet never pick up the penal code to determine which actions are in fact criminal.This internal perception can be overshadowed by self interest, but it is always there. If six or twelve individuals have the same perception of a situation, that perception no doubt reflects justice. The fewer number of individuals deciding the facts of the case, the less likely the finding will be just. This is why villains fear juries, support judges, and prefer arbitration. Ignorant, lazy lawyers do the same.
As for the history of law, it seems that most civilizations start off with good intentions, setting forth idealistic laws of the land in their constitutions, declarations and creeds. Then the reality of history and humanity sets in. We get tired of fighting our own nature and we allow it to erode the idealism behind the law in an exponential manner until rationalism, common sense and justice are so far removed from the law that only an entire reset of the system can remedy the situation. Then the cycle begins all over again. This constant struggle to find justice is the only thing that elevates mankind as a species.So though it may seem a lost cause, the uphill effort to change the world for the better is essential to our evolution. It’s slow. It’s tedious. And it depends on an individual’s willingness to uphold principles without likelihood of ever realizing reward or recognition for it. Those of us who at least attempt to fight “the good fight” should expect to offend others, be criticized, and sometimes, be taken advantage of. Rather than allow such things to deter or depress my enthusiasm, I intend to enjoy every minute of it.