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Andrews Myers
Business Insight from the Ground Up
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Construction
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Recap of the 2018 ABA Forum on Construction Law Annual Meeting
Shareholder Carson Fisk recently served as a program co-chair of the American Bar Association Forum on Construction Law’s 2018 Annual Meeting in New Orleans earlier this month. Entitled “Taking Care of Business: A Mini-MBA Program for the Construction Lawyer,” the program featured numerous sessions with a business-centric focus on matters such as economics, risk management, corporate structure, accounting, succession planning, and cyber-security, to name a few. Speakers included well-regarded construction attorneys from across the nation, in-house counsel, law professors, and even a special agent with the FBI. Highlights included a Second Line brass band parade and numerous division breakfasts, dinners, and events. The program was a great success, with approximately 700 registered attendees. In Carson’s role as program co-chair, he was responsible for planning and overseeing several of the ABA sessions.
Subcontractors Be Aware - How Trade Wars Could Impact Your Subcontracts and Bottom Line
by Chris Love   Before subcontracts are awarded on a project, subcontractors quote material prices for their bids, and if successful, enter into subcontracts with either the owner, general contractor or subcontractor. Material price increases cannot be foreseen with absolute certainty. Often times, the material price quoted by a subcontractor today will increase substantially in the future.  This reality has always been true.  However, what is new today is the speed and degree at which material price increases can happen.  
 
Earlier this month, China unveiled 50 billion dollars in tariffs on all U.S. imports, mirroring the Trump administration’s penalties and tariffs on all Chinese goods to be imported in the United States.  While certainly not the biggest, China is one of the larger exporters of steel and raw materials that the U.S. sources for its construction materials. Politics aside, as the U.S. and China continue to engage in trade wars causing increased tariffs on each sides imports, a hike in material prices for domestic construction projects in the United States can readily be expected.  Read more...
Real Estate
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Houston Stronger? Houston City Council Approves 500-year Floodplain Regulation
by Jack Turano   “To do nothing is not an option,” was the declaration offered by Mayor Sylvester Turner to Houston’s City Council prior to its vote on the proposed revisions to Chapter 19 of the City of Houston Code of Ordinances. The revisions to Chapter 19 were originally proposed by Mayor Turner in January as a means to reduce the risk of flood loss for future development and redevelopment. On April 4th, Houston’s City Council approved the proposed revisions to Chapter 19 by a 9-7 vote. The new regulations will undoubtedly change how Houston builds as 85,739 new parcels of land will be regulated by the revamped building restrictions in Chapter 19.

According to the Harris County Flood Control District, the 500-year floodplain is the area of land that has a .2 percent chance of flooding each year and the 100-year floodplain is an area that has a 1 percent chance of flooding each year. After three 500-year floods in the past three years, regulations imposed on property within the 100-year floodplain will be extended into the 500-year floodplain. The new protections will come at a cost though, as the revisions to Chapter 19 will undoubtedly increase the cost and level of complexity of construction within the incorporated city limits. The following are several notable items included in the recently revised Chapter 19:  Read more...
Big Welcome to New Associate: Manuel P. "Manny" Schoenhuber

Manuel "Manny" Schoenhuber joins the firm's litigation practice group as a first year attorney.  Prior to joining the firm, Manny served as a judicial clerk to Justice Laura Carter Higley of the Court of Appeals for the First District of Texas. 

He also served as a judicial intern for both the Honorable Melinda Harmon of the United States District Court for the Southern District of Texas, and the Honorable Charley E. Prine, Jr. in 246th Harris County District Court. In addition to his judicial internships, Manny was selected as a 2L law clerk for Andrews Myers in 2017.  Click here for more information on Manny Schoenhuber. 
Susan George Elected Section Officer of HBA Real Estate Law
Susan George, Senior Counsel in the Corporate and Commercial Real Estate practice groups, was recently elected as Secretary/Treasurer of the Houston Bar Association Real Estate Law Section for 2018-2019. 
Susan is a 18-year attorney in our Houston office.  In addition to her involvement with the Bar Association, she is also an active member of the Houston Chapter of CREW (Commercial Real Estate Women).
Employment
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OCIPs and CCIPs Necessary to Provide Workers' Compensation Bar for Owners and General Contractors
by Tony Stergio   As you are likely aware, an employer that subscribes to workers’ compensation cannot be sued for negligence by its employees for injuries they suffer while working.  This defense to employee negligence actions is commonly known as the “comp bar.”  Notwithstanding the comp bar, an employer can be sued for gross negligence if an employee dies as a result of a work-related accident, even if the employer is a comp carrier.  Further, an employee of a workers’ compensation carrier is free to sue other contractors, or the project owner, in connection with work-related injuries (even though employees cannot sue their employer for such injuries). 
 
CCIPs and OCIPs are ways to expand the comp bar on construction projects—to cover contractors in addition to the employee’s employer and (in the case of an OCIP) the project owner. In a CCIP, general contractors provide workers’ compensation coverage for all of its subcontractors (including the subs of the subs) on the project.  As a result, the comp bar applies to all contractors on site; employees of a contractor on a CCIP project cannot sue another contractor for negligence as a result of a work-related injury. Etie v. Walsh & Albert Co., 135 S.W.3d 764, 768 (Tex. App.—Houston [1st Dist.] 2004). An OCIP is even broader; where the project owner provides the workers’ compensation insurance for all contractors and subcontractors, the project owner and all the contractors and subcontractors are covered by the comp bar. Read more...
Quick Tips for Navigating the FMLA
by Mike Schiff   Most people are familiar with the Family and Medical Leave Act, and have some understanding of what it does and why; employers must protect employees who find their ability to work impacted  by either their own medical circumstances, or those of a close family member, from termination.  It’s a simple concept, however any employer who has actually tried to navigate the FMLA can readily attest that its requirements are hardly so simple.
 
Nearly 60% of U.S. employers fall under the FMLA. Most employers recognize that an employee is entitled to up to 12 weeks of leave in a 12 month period for qualifying circumstances. Many are aware their employees must have worked a minimum of 1,250 hours in the preceding 12 months to qualify.  Some realize the risk of potential liability for failing to grant FMLA leave for a qualifying employee. Nearly everyone has either used, or knows someone, who has had to use FMLA leave within the last year.  Read more...
Bankruptcy
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Courts Continue to Protect Texas Homesteads and Their Proceeds
by Josh Judd   Texas has a long history of protecting homesteads from claims of creditors.   In March 2018, the United States Fifth Circuit Court of Appeals issued an important decision allowing a homeowner who filed bankruptcy to retain $364,592 of proceeds from the sale of his home.  The owner of a failed business filed Chapter 7 bankruptcy and claimed his home as exempt property.  During the pendency of his bankruptcy, the homeowner sold his home and transferred some of the proceeds to his wife, and the remaining to his lawyers that were defending him in a pending criminal investigation.  
 
The bankruptcy trustee filed a lawsuit against the debtor, his wife, and the lawyers who received the funds, asserting that the creditors were entitled to the money because the money was not reinvested into another homestead within six months.  Under Texas law, two provisions of the Homestead Act were particularly relevant.  First, the basic rule is that a home is exempt from seizure for the claims of creditors (with some very narrow exceptions).  Second, the “proceeds rule” provides that the proceeds from the sale of a homestead are exempt for a period of six months after sale, which allows the homeowner a reasonable time to reinvest the proceeds into a new home and maintain protection from creditors. Read more...
The Women's Initiative Launches
The Women’s Initiative at Andrews Myers is focused on maximizing skills unique to women, and building and maintaining the expertise women need for elevating their careers, successfully developing sources of new business, and navigating growth of their practice.  Read more...
Come join us in April and May for the following association presentations and special events:

April 26 - Jason Walker conducts a "Lien & Bond Claims" Seminar for ASA members
April 26 - Kenton Andrews travels to Temple, Texas, to present "Anatomy of a Construction Claim" to the CFMA Heart of Texas Chapter members
May 2 - Carson Fisk speaks on "Project 101 - Contracts and Bonds" at the annual ACEA Symposium
May 2 - Jason Walker joins a panel discussion on "Avoiding or Fixing Problems with Construction Projects" at the CREW Luncheon
May 10 - The Women's Initiative hosts a Women Wine Maker's Tasting
May 16 - Carson Fisk presents on "Understanding the AIA Contract Form Updates," to the West Texas Chapter of AGC
May 17 - Tony Stergio conducts a seminar on "Employment Law" for Brady Chapman Holland clients
Energy
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Dispute Resolution by Independent Experts
by Bart Turner   Oftentimes parties to an EPC contract will agree to intermediate dispute resolution by independent technical or legal experts. The experts can be nominated in advance or on an ad hoc basis, and are called upon to suggest resolutions or resolve, on an interim basis, disagreements that may arise regarding a technical subject matter.  While this practice is helpful, as is often the case, many disputes encompass more than technical issues and often involve questions that also require some interpretation of the contract. For instance, is certain work a compensable change, is a certain event or activity a compensable delay, are certain costs recoverable?  Therefore, the drafter of an expert resolution provision should impose appropriate limitations on the scope of what the expert can review.
 
The decisions of an independent expert are typically binding on an interim basis, and either party should be able to formally challenge the decision through formal arbitration or the courts.  At this stage, the decision will be subjected to the review by a court or arbitral panel as described in the dispute resolution procedures provided for in the EPC contract.  While the decisions of the expert are given some degree of respect, either party may argue the merits of their case as the decision of the expert is not intended to be absolute and final unless it is not submitted to arbitration or litigation. Some clauses are drafted such that if the claims are submitted to formal arbitration or litigation, it is on a “de novo” or new basis, and the expert’s decision is not admissible as evidence.  Read more...
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