Construction and Facilities

Litigation and Arbitration | Project Counseling | Structuring Contracts

Overview

The Meyers Nave Construction and Facilities Group (CFG) opened in 2013 with a single focus on the construction industry and a commitment to excellence in the practice of construction law. CFG lawyers understand the construction industry – the laws, the issues, the technologies, and the language. CFG lawyers understand the challenges faced by owners, designers, contractors, subcontractors, construction managers, and specialty consultants. Whether planning projects, counseling on claims resolution or actively litigating a construction claim, we work toward each client’s business objectives. We share our clients’ sense of urgency to find the best solutions to construction problems and we provide legal solutions that make business sense.

Trials

CFG tries construction cases. Since opening, CFG has tried five complex construction disputes to final judgment or award – more than 80 “in court” days of witness examination, more than 130 depositions, and more than one million separate documents. Prior to opening CFG at Meyers Nave, the trials of CFG lawyers included power plants, wastewater treatment plants, water conveyances including tunnels and associated power facilities, libraries, and detention facilities, adding another 100 “in court” days in trials of complex construction cases.

With construction trial experience comes efficiency in case preparation and depth of judgment in making assessments of case value, cost and utility of discovery, managing experts, assessing strategies and settlement points. CFG works in close coordination with in-house counsel, providing high quality legal services with attention to cost controls, cost-effectiveness and results. CFG understands and maintains its focus on every case as a continuing value proposition, with attention to cost benefit per legal dollar, proactively managing and controlling the disputes process, from claims preparation, negotiations, document retrieval systems and discovery, disclosure and managing experts, and conducting trials.

• 2019 – Wastewater Treatment Plant Design Negligence (20 trial days)
  CFG represented the public owner of a wastewater treatment plant in a case involving the negligent design and engineering of a replacement tertiary filtration treatment system, which resulted in construction delays, poor plant performance, plant closures, and lost revenues. CFG obtained a $2.25 million jury verdict for the client. Total recovery by settlements in excess of $2.5 million
• 2016 – Reservoir Construction Delay and Lost Productivity Dispute (32 trial days)
  CFG represented a public owner of a reservoir in defense of $14 million in claims for delay, differing site conditions, extended overhead and lost productivity damages. The case involved more than 30 depositions and 32 days of hearing testimony from more than 20 witnesses. The initial award granted the contractor approximately 25% of the amounts claimed, however CFG tried certain defenses to the superior court by petition to vacate, resulting in a tentative ruling granting a full defense to the State. The matter was remanded for further findings on the project owner’s objections regarding pre-litigation claim requirements and the California Contractor’s License Law and then further review by the Superior Court after remand. CFG won a second and final ruling denying the contractor’s theories of substantial compliance for a full defense on contractor claims. Appellate proceedings and disgorgement litigation continues.
• 2015 – College Facilities Contract Dispute; and Hospital Design Contract Termination Dispute (total of 9 trial days)
  In bifurcated hearings, CFG’s client received a defense award after six days of testimony in Phase 1 of the hearings.  After several days of the Phase 2 hearings, the matter settled.
• 2014 – Hospital Design Build Default Termination (20 trial days)
  CFG represented a hospital owner in a complex arbitration following a default termination of a design build contractor on a $300 million hospital construction project approximately 30% complete. The case required more than 50 depositions and 20 full days of testimony from more than 30 witnesses, including 20 engineering, design, schedule and damage experts. The final award granted the contractor zero on $130 million in lost profit and quantum meruit.

Arbitration and Mediation

Since opening, CFG has settled construction claims throughout the litigation and arbitration process, often following dispositive motions, including a summary judgment on an eight-figure contractor claim on a state highway; and a dismissal in the face of a summary judgment on a seven-figure contractor claim on a college facility. CFG has defended eight-figure claims through discovery that then settled at the amount of the pre-litigation settlement offer; recovered seven-figure settlements in mediation; and counseled clients through default terminations, litigation and settlements of claims exceeding $100 million.

• 2019 – Bridge Dispute
  CFG represented a public owner in a bridge construction project by navigating the owner through the general contractor’s default and termination for cause at the midpoint of construction, recovering over $450,000 in a settlement with the performance bond surety for the completion of the project by a replacement contractor, and then defending against over $2.0 million in various claims asserted against the owner. After three years of litigation, the CFG team defended against all claims and affirmatively recovered an additional $935,000 for the owner in settlement for a total recovery of over $1.38 million, approximately 98% of the original $1.44 million construction bid amount. The matter included delay and differing site conditions claims.
  
• 2018 – Water District
  CFG served as lead litigation counsel for a water district in litigation arising from the design and construction of a water treatment plant. The litigation before the Disputes Review Board overseeing the plant project involved alleged owner-caused delay claims (zero days awarded on 1000 days claimed under four separate time impact analysis claims).
• 2018 – Community College
  CFG represented a community college in affirmative claims regarding serious construction defects that resulted in the closure of a new Child Development Center, rendering the facility a total loss. Obtained recovery of $4.8 million (98% of demand) after expert discovery through settlement reached at judicial settlement conference.
• 2017 – State Highway (partial summary judgment)
  After construction delays and more than $10 million in change orders, the contractor on a $60 million construction contract to rebuild a state highway filed suit seeking more than $14 million in disputed changes, delays and measured mile lost productivity claims. After three years of litigation and shortly before expert disclosures, CFG secured a summary judgment on the contractor’s affirmative claims for failure to comply with contractual administrative dispute procedures. The matter thereafter settled in mandatory judicial settlement conference under CCP §664 with the project owner retaining the contract retention and the contractor receiving zero on its affirmative claims.
• 2016 – College Building 
  CFG represented a construction management firm in the successful defense of claims by a contractor on a college facility, securing a dismissal with prejudice after filing a summary judgment based on the contractor’s deposition testimony. When the contractor then filed new, assigned claims against the construction management firm, the matter settled after trial continuance for less than 10% of the remaining co-defendant’s settlement amount, amounting to approximately 98% of the demand.
  
• 2015 – Hospital Default Termination
  After the default termination of a design-build contractor on a multi-phase $360 million hospital construction project, the assertion of more than $100 million in contractor claims, and commencement of litigation by the project owner, the matter was settled by the parties, avoiding years of construction delay and litigation. The project is now completed.
• 2013 – Library Construction Dispute
  After prevailing at the trial level twice only to be reversed by the court of appeal twice, the matter resolved in 2016, prior to the third trial, with the contractor receiving zero on its affirmative claims (exceeding $10 million) and zero on its claims to recover its retention (over $2 million). The result was secured by enforcing the contract claim procedures. The matter resulted in two published opinions.

Project Counseling

CFG attorneys devote a substantial amount of time to project oversight and pre-litigation counseling on troubled projects, procurement and bidding disputes.  CFG’s focus is consistent: understand the client’s objectives; recommend pragmatic solutions; move the project forward.  Whether the objective is project completion, revenue generation, or cost management, the focus is the same – forward progress. Every construction project is different and every construction dispute involves unique facts, technology, processes and contracts. CFG will review the drawings, walk the project, meet the staff in the trailers, study the job photos. CFG evaluates claims of all types on projects as varied as process facilities, hospitals, heavy civil projects, or government office buildings; with claims pertaining to design or construction defects, changed or unforeseen conditions, delays, disruptions, loss of productivity, acceleration, payment disputes and insurance coverage.

CFG provides realistic assessments of entitlement, damages, litigation costs, litigation risks and uncertainties, and measures these costs against the value of prompt dispute resolution. Whether CFG is counseling on settlement, reserving rights or preserving defenses, the immediate focus remains on completing the project and (where it applies) maintaining the revenue stream. In project counseling, CFG considers the litigation option as the option of last resort. Just as cost and schedule drive construction projects, cost and timely resolution should drive construction disputes. Whether by face to face negotiations, facilitated negotiations, mediations, mini-trials, referees or arbitrations, CFG will evaluate each case and recommend solutions to cost effective dispute resolution.

Structuring Construction Projects and Contracts

CFG has worked with public entities to plan, structure, and draft baseline construction contract documents for design-bid-build, design-build and construction management at risk; equipment procurement; design and consulting contracts. CFG attorneys devote a substantial amount of time to contract negotiation and drafting, project oversight and pre-litigation counseling. CFG understands the use of construction contracts on construction projects and how construction contracts work in dispute resolution.  Simple language, express risk allocations and straightforward concepts work.

There is no “one size fits all” when it comes to contracts, and while CFG has forms of contracts it recommends, it has in-depth experience with the various standard industry and government forms-including the contracts of the American Institute of Architects (AIA), Consensus DOCS, the Engineers Joint Contracts Documents Committee (EJCDC) and the Construction Management Association of America (CMAA).

• County Capital Improvement Program
  Provided template documents for general contracts, design-build contracts, and construction-manager-at-risk contracts; reviewed and commented on specific design-build, construction-manager-at-risk, and OSHPD renovation contracts for the capital improvement project; and advised on many related issues, such as Labor Code Compliance and construction claims. The $631 million five-year program includes multiple improvements to hospital facilities, jail facilities, and a new five-story office building for 600 county employees with an adjoining 1,022-spot parking structure. (2016-2019)
• County Construction Contract Templates
  After serving as litigation counsel in defense of construction claims and litigation arising from a county-owned medical center (which was procured under design-build authority), revised and revamped the County’s standard form construction contracts, including new templates for design-bid-build, CM-at-risk, and design-build. (2017-2018)
• Hospital Healthcare District
  Contracting, contract administration, construction closeout and dispute resolution regarding a $300+ million acute care facility completed in 2018. Phase 1 projects included a Central Utility Plant, Center for Joint Replacement, utility infrastructure, and miscellaneous contracts preliminary to construction of main hospital. Phase 2 projects included the 224,800 square-foot acute care facility and parking structure. Services included project planning and documentation, advance contracting (base isolation), contract development, contractor procurement planning and competitive selection, contract documents (base isolation procurement, design contracts, construction contracts, CM-at-risk contracts), contractor replacements, and design professional procurement and replacements. (2015-2018)
• Hospital Construction Program
  Served as lead transactional counsel on 11 new hospital construction projects with a combined value in excess of $2 billion. The projects used design-bid-build, CM-at-risk, design-build, and target cost procurement methodologies. (2010-2014)
• Airport and Seaport Expansion
  Served as lead transactional counsel on a $1.5 billion expansion, which included a new concourse, new gates, new baggage claim areas, and renovations to airport roadways, curbsides and parking lots. The Port procured the new terminal project using a Master Builder approach which included design build procurements. Following that procurement, prepared reusable templates for design-build procurements. (2003-2007)
• Airport Expansion
  Served as lead transactional counsel on a $2.4 billion expansion, which included design and construction of the 2.5 million-square-foot international terminal, a system to transfer passengers among the terminals, two new parking garages and improvements to airport access from nearby highway and public transit station. (1998-2003)