Inside this Issue

A1 - Contractual Agreement can shorten statutory Time Limit for Bringing Suit
A2 - $50,000 Limitation of Liability Clause Enforced Although Eight Percent of Designer’s Fee
A3 - Suit Dismissed with Prejudice because Certificate of Merit not filed with Complaint
A4 - $2 million Slip and Fall Verdict for Scaffolding Accident Thrown Out because Laborer Proved Elements of Premises Liability but Judge’s Jury Instruction Mistakenly Only Addressed General Negligence. A costly Trial Error
A5 - 10 tips for making the home safer for elderly relatives

Article 1

Contractual Agreement can shorten statutory Time Limit for Bringing Suit

A contract provision in a homeowner contract with a furnace maintenance company shortened from the statutory three years to just one year, the time period for bringing a claim against the company. The homeowner filed suit against the company more than a year after maintenance work was performed and the company filed a motion to dismiss the suit as untimely even though it was filed within the statute of limitations period. The Maryland Court of Appeals held that parties have freedom of contract to shorten the time period for filing suits and that a contractually shortened limitation period will be valid if (1) there is no statute prohibiting shortening the time period; (2) the provision is not the result of fraud, duress, misrepresentation; and (3) the provision is reasonable in light of all the pertinent circumstances. Ceccone v. Carroll Home Services, LLC, 454 Md. 680 (Maryland 2017).

Comment: Where state law permits it, we believe it to be good risk management practice to specify in the contract the time period for filing suit. This reduces the risk of uncertainty that a suit might be brought many years after a project has been completed.

In this case, the contract prepared by the maintenance company established a one year period for the homeowner to bring suit, but it did not place any time limit on the company suing the homeowner. That aspect did not trouble the court.

In reviewing the proceedings of the trial court, it was clear that the judge felt the homeowner could have negotiated something different if he wanted to, and must be stuck with the bargain he entered into. The owner argued that the shortened time period was unreasonable. The judge responded, “Well, sir, I don’t think I can get around the language of the contract. The contract is very clear that the action must be filed within one year. And that’s clear. You contracted that way and that’s part of the contract.”

The homeowner, who represented himself pro se (i.e., without an attorney) in this small claim matter pro se argued with the judge, saying, “But the statute of limitations is three years.” The judge responded, “That’s the general rule. But you can contract it out. You can contract and make it six months, three—30 days.”

The homeowner then argued, “Yeah. But would a reasonable person determine that that’s a reasonable amount of [time] – one year?” The judge responded, “Well, I’ve seen it before.”

Arguing further, the homeowner asserted, “what’s basically happened is, is the contractor is setting an arbitrary amount of time…” The court responded, “Well, you could have, when you entered into the contract, said, look, I’m not going to agree to one year. It’s got to be three years. You could have said that and then put that in the agreement. But you know what a contract is -- being in the real estate business. Whatever is contracted for, you’re stuck with it.”

Maryland, as can be seen in this case, is a state that believes in freedom to contract what you will so long as it is not against the law or public policy. If you negotiate a bad deal, you will generally be stuck with it – subject to certain conditions that are explained in the decision.

Under Maryland law, there are a few code provisions that explicitly bar any effort to shorten a statute of limitations applicable to certain causes of action. But unless those provisions apply to a situation, Maryland courts honor the parties’ agreement to shorten the time period for filing suit if it is reasonable and if certain defenses to contract formation cannot be established.

Among the “factors to be considered in assessing reasonableness are the subject matter of the contract, the duration of the shortened limitations period compared to the period that would otherwise govern, the relative bargaining power of the parties to the contract, and whether the shortened limitations period is a one-sided provision that applies to one party but not the other.”

The court remanded the case back to the trial court to assess the reasonableness of the limitations shortening provision, and to consider evidence that the homeowner may produce concerning misrepresentation and fraud would undermine the validity of the shortened limitations period of in the agreement.

About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with Construction Risk Counsel, PLLC) representing design professionals, contractors and project owners. He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects. He is publisher of ConstructionRisk.com Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932. This article is published in ConstructionRisk.com Report, Vol. 20, No. 2 (Feb 2018).

Article 2

$50,000 Limitation of Liability Clause Enforced Although Eight Percent of Designer’s Fee

A design professional was granted summary judgment enforcing a $50,000 limitation of liability (LoL) clause and waiver of consequential damages clause in its contract with its client, the design-builder. Although this amount was only eight (8) percent of the designer’s fee of $665,000, the court found this didn’t violate public policy as being too nominal an amount. In affirming the summary judgment, the state Supreme Court explained the state’s law did not allow parties to contract away all liability, but here the LoL clause capped damages without exempting or exculpating the designer from all liability – and it therefore did not violate the state law.

With regard to whether the amount was too nominal, the court noted that prior to additional services being assigned to the designer, the LoL constituted 40 percent of the originally agreed upon fees. “The failure of [the contractor] to address or renegotiate the limitation of liability clause during the execution of each addendum has made the term of the contract more burdensome than previously anticipated…. This court is unwilling to allow [contractor] to avoid a term of the contract simply because it has become more burdensome due to its own failure to renegotiate.”

Comment: The court well explains the principal of freedom of contract and the importance of honoring the mutually agreed upon terms of a contract even if those terms turn out to be burdensome or one sided. Zirkelbach Construction, Inc. v. DOWL, LLC, 389 Mont. 8 (Montana 2017).

The contract clause in question provided as follows:

“D. Consequential Damages/Limitation of Liability

To the fullest extent permitted by law, DOWL HKM and Client waive against each other, and the other’s employees, officers, directors, agents, insurers, partners, and consultants any and all claims for or entitlement to special, incidental, indirect, or consequential damages arising out of, resulting from, or in any way related to the Project and agree that DOWL HKM’s total liability to Client under this Agreement shall be limited to $50,000.”

The contractor filed suit against its design subcontractor claiming that due to the designer’s negligence and breach of contract, the contractor incurred $1,218,197.93 resolving problems caused by the designer’s design plans.

With regard to the issue of freedom of contract the court quoted from a number of earlier court opinions as follows:

“The fundamental tenet of modern contract law is freedom of contract; parties are free to mutually agree to terms governing their private conduct as long as those terms do not conflict with public laws.” (citation omitted). “This tenet presumes that parties are in the best position to make decisions in their own interest.” (citation omitted). “A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contract, so far as the same is ascertainable and lawful.” Section 28-3-301, MCA; Mary J. Baker Revocable Trust, ¶ 21. “To permit the avoidance of a written contract because the terms of the contract now appear burdensome or unreasonable would defeat the very purpose of placing a contract into writing.” (citation omitted).

Further comment: It is frustrating when plaintiffs’ attorneys attempt to convince the court that a valid limitation of liability clause is actually an exculpatory clause that violates public policy. They are essentially asking the court to change the bargain and throw out the contract terms their client freely entered into of their own accord. Trying to get out from under the LoL clause demonstrates a failure to take responsibility for one’s own decisions made during contract negotiation and formation. It is therefore always refreshing to see appellate courts, particularly state supreme courts, honor the principle of freedom of contract and restrain themselves from revising a contract to apply their own sense of what the parties should have negotiated.

Article 3

Suit Dismissed with Prejudice because Certificate of Merit not filed with Complaint

A crane operator that sustained injuries when his crane tipped over filed a professional negligence claim against an engineering firm. The complaint was filed two days before the running of the statute of limitations and failed to include a certificate of merit that was required by state law. An amended complaint was filed six months later and included a certificate of merit – but this was after the statute of limitations had run.

The question for the court was whether the case should be dismissed with prejudice because the certificate of merit was not filed with the original complaint and was subsequently filed after the statute of limitations had lapsed, or should the “relation back doctrine” be applied so that the late certificate of merit would be deemed to relate back to the original complaint that was filed within the period allowed by the statute of limitations. Held: The relation-back doctrine does not apply to a certificate which, by statute, is required to be filed “on or before the date of service of the original complaint.” The case was therefore dismissed with prejudice. Curtis Engineering Corporation v. Superior Court, 16 Cal.App.5^th 542 (California 2017).

The California Code of Civil Procedure in question requires the attorney for plaintiffs and cross-complainants in certain professional negligence actions to serve and file a certificate on the defendant or cross-defendant on or before the date of service of the complaint or cross complaint declaring that he or she has consulted with and received an opinion from an expert in the field, or an adequate excuse for not doing so. In this case the court held that the later filed certificate did not relate back to the filing of the original pleading.

The court stated:

“Under the relation-back doctrine, a court will ordinarily deem a later-filed pleading to have been filed at the time of an earlier complaint if the amended complaint is based on the same general set of facts. (citation omitted). Where the statute of limitations has expired before the filing of an amended complaint, unless an amended complaint relates back to a timely filed original complaint, the amended complaint will be time-barred. (citation omitted). Under the relation-back doctrine, to avoid the statute of limitations bar, the amended complaint must allege the same general set of facts, refer to the same accident, same injuries, and refer to the same instrumentality as alleged in the original complaint. (citation omitted).

Sutherland has not cited, and we have not found, any cases supporting the proposition that the relation-back doctrine applies to a certificate which, by statute, is required to be filed “on or before the date of service” of the original complaint. (§ 411.35(a).) Applying the relation-back doctrine in this situation would render meaningless the statutory requirement that the certificate be filed “on or before the date of service.” (§ 411.35(a).)”

Article 4

$2 million Slip and Fall Verdict for Scaffolding Accident Thrown Out because Laborer Proved Elements of Premises Liability but Judge’s Jury Instruction Mistakenly Only Addressed General Negligence. A costly Trial Error

A pipefitter employed by a refinery owner (Valero Energy Corporation) was injured when he slipped and fell on loose plywood on scaffolding constructed by a scaffolding contractor. He filed suit against the scaffolding firm, alleging the basic elements of premises liability. A jury was given a jury instruction and question for finding “general negligence,” but was not instructed on “premises liability,”. It awarded judgment of $2 million. This was reversed on appeal with the court holding that the elements of premises liability (not general negligence liability) were presented at trial. This was a fatal error to give the jury a general negligence instruction instead of premises liability instruction because the general negligence submission to the jury could not support the plaintiff’s recovery under a premises liability case.

In the balance of the article below we review the court’s discussion of the legal distinction between the causes of action. What is quite important about the decision is how plainly it demonstrates the importance of preparing for trial with jury instructions and questions in mind right from the beginning, and then being sure that the instructions and questions ultimately given to the jury match the proof of facts and legal elements set forth during the trial. The unfortunate result in this decision is a trial lawyer’s nightmare. United Scaffolding, Inc. v James Levine, 2017 WL 2839842, 60 Tex. Sup. Ct. J. 1515 (Texas 2017).

An irony in this case is that the case went to trial twice. The first trial resulted in a $178,000 verdict in favor of the plaintiff with a finding of 51% responsibility falling on the defendant. The judge in that trial submitted a general-negligence question to the jury, which had been offered by the defendant. After the jury verdict was rendered, the defendant filed a motion for a new trial, asserting that the verdict was against the great weight and preponderance of the evidence. The trial court agreed and granted a new trial.

At the conclusion of the new trial, the jury found the defendant 100% responsible and awarded the plaintiff $2 million. In this trial, a general-negligence question was again submitted to the jury. But this time, it appears that this question was requested by the plaintiff rather than by the defendant.

On appeal, the defendant argued that the claim was improperly submitted on the general-negligence theory of recovery, and that this was reversible error entitling it to a “take nothing judgment” because the plaintiff’s actual legal theory that was presented at trial was “premises liability” and that could not then be submitted to the jury under a general-negligence theory of recovery.

The court explained as follows:

“A general contractor in control of the premises may be liable for two types of negligence in failing to keep the premises safe: that arising from an activity on the premises, and that arising from a premises defect [citation omitted]. Levine argues on appeal that neither of those types of negligence applies in this case because USI relinquished control of the scaffold before Levine was injured, leaving Levine with a general-negligence claim. The court of appeals considered USI’s control over the premises to be the central inquiry in determining the character of Levine’s claim. [citation omitted]. Concluding that Valero controlled the scaffold on the day of Levine’s accident, the court of appeals held that Levine’s claim was properly submitted under a general-negligence theory of recovery. In reviewing the alleged charge error, we must consider the nature and circumstances of Levine’s injury, Levine’s allegations against USI, and the evidence presented at trial.

[A] person injured on another’s property may have either a negligence claim or a premises-liability claim against the property owner. When the injury is the result of a contemporaneous, negligent activity on the property, ordinary negligence principles apply. When the injury is the result of the property’s condition rather than an activity, premises-liability principles apply. Negligence and premises liability claims thus are separate and distinct theories of recovery, requiring plaintiffs to prove different, albeit similar, elements to secure judgment in their favor.[citation omitted]. Because negligence and premises liability claims are based on independent theories of recovery, we have held that they are not interchangeable….

Negligent-activity and premises liability claims “involve closely related but distinct duty analyses.” [citation omitted]. In a negligent-activity case, a property owner or occupier must “do what a person of ordinary prudence in the same or similar circumstances would have ... done,” whereas a property owner or occupier in a premises liability case must “use ordinary care to reduce or eliminate an unreasonable risk of harm created by a premises condition which the owner or occupier [of land] knows about or in the exercise of ordinary care should know about.”

The court further explained that for a premises liability defendant to be liable for a plaintiff’s injury, the plaintiff must prove:

“(1) that [the defendant] had actual or constructive knowledge of some condition on the premises; (2) that the condition posed an unreasonable risk of harm to [the plaintiff]; (3) that [the defendant] did not exercise reasonable care to reduce or to eliminate the risk; and (4) that [the defendant’s] failure to use such care proximately caused [the plaintiff’s] personal injuries.”

Having explained the general principles that distinguish negligent-activity from premises liability claims, the court next turned to whether the plaintiff's alleged injury resulted from a contemporaneous negligent activity or a condition on the property. In this particular case, the court concluded that the plaintiff failed to allege that a contemporaneous ongoing activity caused his injury. The court stated:

“Levine has never alleged that any sort of contemporaneous, ongoing activity caused his injury. Rather, in his trial court petition, Levine alleged that USI created a dangerous condition by “improperly assembling, erecting, and/or securing the scaffolding.” Levine further alleged, among other things, that USI failed to “adequately determine dangerous conditions created,” “correct the dangerous condition which existed with the scaffolding,” “secure the scaffolding in a proper and safe work condition,” and warn “that a dangerous condition existed which required extra care to be taken” by Levine while working on the scaffold. In essence, Levine claims that his injury resulted from a physical condition USI created and then left on the premises. We have repeatedly characterized such slip-and-fall claims as premises defect cases because the injuries were alleged to have resulted from physical conditions on property.”

Just because USI did not own the actual property (i.e, the Valero facility), this did not mean it could not be liable for premises liability and had to be sued instead for a general-negligence theory of liability. In this regard the court stated,

“We begin with the question of whether any duty of care USI owed Levine as to the scaffold condition is derived from our premises defect body of law, as USI contends. Levine argues on appeal that no premises liability claim exists because USI, a contractor, did not own, physically possess, or control the premises and therefore owed Levine no duty under a premises liability theory; rather, USI was hired to assemble the scaffold and did so negligently, making this purely a negligence case. Whether a duty exists is a question of law for the court, and the presence of an unreasonably dangerous condition weighs in favor of recognizing a duty.”

***

“An owner or occupier generally does not have a duty to ensure that a general contractor performs work in a safe manner.[citation omitted. Essentially, a general contractor that assumes control of or retains the right to control the premises “is charged with the same duty as an owner or occupier.”[citation omitted]. Thus, the duty to make the premises safe or warn of dangerous conditions “generally runs with the ownership or control of the property,” and a defendant’s liability under a premises liability theory rests on the defendant’s assumption of control of the premises and responsibility for dangerous conditions on it.”

The court concluded that the plaintiff, an employee of Valero, was “an invitee” and therefore the duty the defendant owed to the plaintiff as an invitee would be “to make safe or warn against any concealed, unreasonably dangerous conditions of which the landowner is, or reasonably should be, aware but the invitee is not.”

In the final analysis the court concluded that the question of whether the defendant owed the plaintiff a premises duty must be determined by examining whether USI maintained a right to control the scaffold that allegedly caused the plaintiff’s injury. Based on the evidence presented at trial the court found USI had the right to control the scaffolding it constructed, and that no Valero employee was authorized to construct, use, or dismantle a scaffold without first securing USI’s permission.

For all these reasons, the court found that the plaintiff’s case sounded in premises liability and because the jury was given only a general-negligence theory question and was not given the correct instruction and question as to premises liability, the jury verdict had to be reversed.

Article 5

10 tips for making the home safer for elderly relatives

By: Jane Sandwood

Bringing your elderly parents into your home is a blessing for some; it provides quality time together that you may not otherwise have. But moving your parents in your home also often requires retro-fitting some new features to ensure they remain safe.

If your home is going to be a temporary stage for transitioning between independent living and moving into a residence designed for seniors, it can be difficult to determine how to balance safety over the short term without damaging your home’s value over the long term.

We’re going to break down the modifications you may need to make to your home and how to make them without impact your home’s value (too much):

Responsible Construction: Building Senior Friendly Homes

Every construction company and builder will want to earn a well deserved reputation for the quality of their builds. This is especially pertinent for senior housing projects, where there are several considerations that need to be taken - and there is plenty of demand in Tysons, VA, where 11.6% of the population are aged 65 or over. Poor planning can cause reputational and cost damage, with adverse construction processes bringing problems as far afield as Elgin, IL, where a housing project for seniors has hit safety hitches.

For companies in the senior housing business, there are a few considerations to ensure that your risk is managed effectively when going through the motions of constructing a project. By implementing these guidelines into your build, you can help build a solid reputation for versatile homebuilding.

Construction Materials

One of the prime ways to ensure that a senior housing project remains effective for the target market is through the use of sensible and effective building materials. For instance, when constructing bathrooms, the inclusion of granite and other polished rock types in flooring can be problematic, threatening slips and falls and also releasing harmful gas over years. Instead, make the home safe for seniors by providing elements on which to support weight in case of falls, and using floors that have grip, or non-slip linoleum.

Provide Flexibility In Ramp Design

Fortunately for construction companies, the requirements and related liabilities for ensuring properties are compatible with wheelchairs and other mobility aids falls on the owner of the property or business. However, if you are involved with a project offering independence and flexibility to seniors, it pays to have architectural design that allows either for immediate wheelchair access, or for future adaptations. This is especially in focus as technology is allowing wheelchair users independence and bringing the flaws of poorly designed properties into light.

Accessibility

In a wider sense, look to improve accessibility around the home. This includes removing thresholds between rooms, such as raised areas or metal boundaries between areas of the house. The benefit of this is removing the danger of trips and falls. This extends to the access to the specific design of the house grounds. Especially for seniors who require specific care and attention, either from family or care agencies, it is vital to have good access to the house. Again, the ability of third parties to reach your development can be key in maintaining a high value and being a quality development.

Making your house design inclusive of and designed towards senior isn’t the most taxing task around - but there are specific, easily overlooked alterations you can make, as discussed above, that can make the difference in terms of money, time and reputation.

10 HOME SAFETY TIPS FOR SENIORS

Read more here.

About the author:

Jane Sandwood is a freelance writer and editor. She has written for both digital and print across a wide variety of fields. Her main interest is exploring how people can improve their health and well being in their everyday life. And when she isn't writing, Jane can often be found with her nose in a good book, at the gym or just spending quality time with her family.

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ConstructionRisk.com Report (Feb 2018)