The Subcontractor Advocate
American Subcontractors Association of Ohio
Central Ohio Region, December 2009
Cincinnati Region, Volume 2
Contact Us Northern Ohio Region Issue 12
ASA of Ohio
P.O. Box 2026
Free Contract Podcast of the Month:
Dublin, OH 43017
(614) 717-9499 “Evaluating Transfers of Design Responsibility”
Fax: In this month’s free contract ruled that one promise implied into
podcast for ASA members, contracts is that the contractor can rely
E-mail “Evaluating Transfers of Design on owner-provided plans and specs when
Responsibility” (available with an the contract requires the contractor to use
Website accompanying white paper on the them. In the 1918 U.S. Supreme Court
www.asaofohio.com Member Resources page of the case United States v. Spearin, the U.S.
ASA web site, Supreme Court said that a contractor will
www.asaonline.com), listen to how not be “liable to the owner for loss or
the Spearin doctrine helps protect damage which results solely from
subcontractors against being made insufficiencies or defects in such
legally responsible for the costs of information, plans and specifications.”
defective owner-supplied plans and The Spearin doctrine has helped keep
President: specs. Then, in the same podcast, many contractors from having to pay for
Douglas McNames learn the disturbing truth about how damage caused by following faulty plans
Vice President: some owners and upper-tier and specs that were provided to them.
contractors have successfully used
Secretary-Treasurer: contractual disclaimers on all or Travers points out that the Spearin
James Gauer part of a design to “end-run” the doctrine, while beneficial, is also limited.
Board of Directors:
Spearin doctrine and make Contractors should not believe that the
Tony Casagrande subcontractors responsible for Spearin doctrine automatically exempts
Rick Cevasco errors nonetheless. them from any responsibility for the
Gary Hammel consequences of defects in plans and
Russell O’Rourke In the podcast, Eric Travers, an specifications. Most significantly, when a
Joe Urquhart attorney with the law firm of Kegler, contractor is not bound to build according
James Vecchio, Sr.
Brown, Hill and Ritter, points out to the plans and specs, it could still have
Executive Director: that the question of who’s liability.
Robert A. Vajda responsible for design errors boils
down to what promises each party Therefore, one way that an owner or an
on a project makes. And where upper-tier contractor may try to “end-run”
construction is concerned, the Spearin doctrine is with disclaimers.
promises mean contracts. A disclaimer denies the owner’s or upper-
Contracts can make promises in tier contractor’s responsibility for the
different ways – written, verbal, constructability of all the design, or even
and/or implied. U.S. courts have just key parts. Many times these
(Continued on Page 4)
Mechanics Lien Case Results In
Recovery of Attorneys Fees
The current economic downturn has The Fifth District Court of Appeals awarded
made the effective use of lien rights six-figure legal fees under both the
more important than ever. The problem mechanic’s lien statute and the frivolous
with lien rights (on private work) is that conduct statute (for “causing unnecessary
they only provide security to the extent delay or a needless increase in the cost of
there is “equity” in the property. – a real litigation”) to the victorious subcontractor
concern in a time of declining real estate lien claimant. Mid-Ohio Mechanical, Inc.
values. vs. Eisenmann Corporation, Case Nos. 07-
CA-35 and 08-CA-12 (November 2, 2009).
Ohio has a mechanic’s lien statute –
Ohio Revised Code * 1311.16 – that The Subcontractors Legal Defense Fund of
allows the recovery of legal fees by a ASA filed two amicus (friend of the court)
lien claimant from the fund created for briefs in the case. The first supported the
lien claimants. Fees are rarely right to lien manufacturing improvements.
Happy Holidays recovered under this provision in that The second supported the recovery of legal
to you from there rarely is a fund created for lien fees, as well as the presumption that
your Board of claimants when a distressed property is
sold in foreclosure. Yet a different
charges are reasonable when performing
work under a T & M contract.
Directors. situation can exist when the lien is
“bonded off”. Contractors, subcontractors and suppliers
can utilize these statutes and the Mid-Ohio
When a lien is bonded off, a bond (or case to leverage their recovery on
cash) must be posted in 150% of the lien mechanic’s liens, particularly when a lien
amount. The difference between the lien has been “bonded off”. Those that
amount and the bond amount is inappropriately threaten lien claimants with
available to pay interest and attorney’s needless litigation, or delay efforts of lien
fees. claimants to recover, do so at their peril.
An Ohio subcontractor (whom we Thank you to Don Gregory, Esq.,
represented) utilized this provision to Construction Law Chair at Kegler, Brown,
recover significant legal fees incurred Hill & Ritter for this article.
over a protracted multi-year legal battle.
Have You Looked at the ASA National Website
Have you looked at the ASA website multitude of documents. You will find
lately? Better yet, have you used any of “Contract terms”, “ConsensusDOCS”,
the items or features found there? There “Project Management” and “Business
is so much there: articles, contract Management”. In the “Contract Terms”,
information, business management there are podcasts and white papers on:
information, podcasts and corporate • Evaluating Transfers of Design
discounts. I want to bring to your Responsibility
attention some of the features found in • What’s NOT in the Contract
the website and encourage you to take • What the Subcontract Really
time to investigate it for yourself. Says
In addition to the podcasts and white
Once you have entered the website, papers, there are several ASA contract
www.asaonline.com, you will find the conditioning/negotiation tools including
Here’s wishing ASA Mission Statement, Vision but limited to:
you a Happy New Statement and Values. Please read • ASA Subcontractor Bid Proposal
Year!!! Let’s all them. You will be reminded what ASA 2008
hope for an stands for and how the association • ASA Addendum to Subcontract
improved works for you. When you click on the 2008
economy and “Subcontractor Advocacy” tab, you can • ASA Contract Offers Terms for
better times for read about the latest action by ASA on Projects Using Wrap-Up
all of us in the national and state legislative advocacy Insurance.
construction issues, or you can read about the ASA
industry. Subcontractors Legal Defense Fund Under the ConsensusDOCS portion,
(SLDF). See what SLDF does, how it you can read the frequently asked
helps all subcontractors and suppliers questions regarding ConsensusDOCS.
and how you can support SLDF. In the Then you can click on “Tell Owners the
“Gateway to Construction” tab, you can 10 Reasons Your Project Needs
find information on how to contact other ConsensusDOCS”. This new power
ASA Chapters and in Government point presentation emphasizes the need
Resources, you can find how to contact for ConsensusDOCS and also shows all
Departments within the Federal of the associations who helped draft
Government as well as your Senators and/or support the ConsensusDOCS.
and Representatives. ConsensusDOCS order forms, with a
The ASA website, member discount, are just a click away
Now it is time to enter your Username with the provided link or you can choose
www.asaonline.com and Password to access the “Members
has many interesting the “How to order ConsensusDOCS”
Only” portion of the website. Your link.
features. Look at Username and Password were given to
the SLDF section. you when you joined ASA. If you do not Next month, I will conclude this article
remember your Username and on the National website,
Password, contact Rob Vajda at www.asaonline.com. I will address
firstname.lastname@example.org. I will contact more valuable information in ASA
ASA Headquarters with your request and Member Resources, as well as the
they will contact you. ASAdvantage program and more.
In the ASA Member Resources tab, you
can access a lot of information and a
2009 - 2010 Free Contract Podcast of the Month (from Page 1)
“Evaluating Transfers of Design Responsibility”
ASA of Ohio has 85
member companies. Disclaimers are hidden in the signed. For samples of language that
ASA of Ohio welcomes general conditions, specifications subcontractors can use to counter
or other contract documents. risky disclaimers, see the ASA
Our newest member is According to Travers, if someone Addendum to Subcontractors (2008).
CareWorks Consultants, wants to disclaim responsibility for The language in this model addendum
Inc. CCI is the new Third his design, he doesn’t have to is designed to help subcontractors
party Administrator clearly identify where the disclaimer avoid the cost of others’ design
(TPA) for our Workers’ is located in the contract. deficiencies.
Compensation discount Subcontractors should also be
program. aware that disclaimers in the prime- In next month’s podcast, “Defining
contract document can be flowed- Design Responsibility”, learn how
down to their subcontracts. design responsibilities explicitly
Executive Director Rob defined in contracts can also carry
Vajda has a new e-mail When working on a project, risks for subcontractors, and resources
address: subcontractors should view a to protect against the risks.
email@example.com disclaimer of owner-furnished plans
The address and phone and specs as a warning sign that Download the podcast with an
number have not the owner may “know something” it accompanying white paper on the
changed. doesn’t want them to know about Member Resources page of the ASA
the project until after the contract is Web site.
The website is
undergoing some major Upcoming Member Meetings and Events in Your City
changes. We are
attempting to create a *** NOTE *** All programs in all cities are subject to change and are
brighter website with a dependent on the availability of the speakers!
change of color and new
photos. Please review Cincinnati Columbus Cleveland
your directory data and
contact Rob Vajda if December 17th – January 12th – The Your Northern Ohio
there are additions, Holiday Lunch at the speaker will be Rich Council is working on a
Hilton Cincinnati Murray, the new Director ofmeeting/program for
corrections or deletions.
Netherland Plaza. the Ohio School Facilities January. As soon as
You can list more than Commission. arrangements are made,
one contact for your January 7th – The information will be made
company. Cincinnati Council is February 9th - The Central available.
working on a Workers’ Ohio Council wants to
Comp. program present a “Forecast Night”
presented by our new
TPA, CareWorks A future meeting topic
Consultants, Inc. could be a presentation on
“Notice of Furnishings”
February 11th or 18th –
Council is planning a