Commercial and Industrial Disputes

A substantial portion of the firm's construction practice involves the resolution of disputes on a wide variety of commercial and industrial projects. Examples of the kinds of projects we have litigated include wastewater treatment facilities, office buildings, shopping centers, power plants, DIA projects, highway projects, schools, etc. The firm represents owners, developers, contractors and suppliers in range of construction disputes, ranging from complex defect and disruption claims (discussed below) to disputes over changes and over the scope of work.

Delay Claims

Time is critical in construction and often drives profitability. When delays occur, the question invariably turns to responsibility for the resulting damages, whether that be an owner's delay in making the site available, delays in delivery of owner-supplied materials, revisions to the plans, etc. Al Cohen has handled countless delay claims since they began practicing law in the late 1970s.

Sorting out the cause and effect of delays is the goal in every delay claim. For large projects, this will involve a critical path scheduling analysis and the retaining of a qualified scheduling expert, which can be costly. We aim to manage costs by ensuring that the analysis is a cooperative venture between expert and client. We are also experienced in exposing the "tricks of the trade" used by scheduling experts, including the use of programming techniques which are not readily visible in the Primavera schedules produced in a final report.

Disruption and Productivity Claims

Often, the contractor is able to stay on schedule in the face of delaying events only through an acceleration of its work. Acceleration, however, results in a loss of productivity due to, e.g., crowding of crafts, overtime, etc. Productivity can also be lost due to a variety of causes other than acceleration, such as a delayed start pushing work into Winter, altering the schedule due to the owner's need to keep the facility operating during construction, interference between the subcontractors, etc. Capturing these costs, however, is extremely difficult. Our attorneys are experienced with the ways in which these claims can be quantified, such as a measured mile analysis and the use of industry estimating guides for disruptive conditions, such as crowding and winter weather.

Residential Defect Claims

The firm also handles a variety of residential construction defect claims. Most of our work in this area involves the representation of the developer and homebuilder, although we have also represented many subcontractors and suppliers in these disputes. At one time, we represented a large national homebuilder in their Colorado defect cases. More commonly, the firm represents custom homebuilders and represents subcontracts in the construction of both custom and tract homes.

This is a rapidly evolving area of practice. For example, over a dozen Colorado municipalities have enacted their own construction defect ordinances. Another example is the evolving "economic loss rule," which addresses when a construction claimant can bring a claim against parties with whom it did not contract. Of necessity, we stay up on developments in this quickly changing field.

The firm does not act as insurance defense counsel. We do, however, work with the client to submit claims to its insurance carriers (typically the CGL carrier but occasionally a professional liability carrier for design-build contractors). As a result, we are often utilized as insurance coverage counsel, helping to ensure that defense costs and any eventual settlement or award are paid by the insurers.

Mechanic's Liens/Surety Bonds/Payment Remedies

The mechanic's lien is a fundamental tool for securing payment on private construction projects. We have handled numerous mechanic's liens, from filing the notice of intent to lien, to recording the lien, and, finally, to litigating the lien foreclosure lawsuit. In rare cases, we have pursued mechanic's lien cases through judgment and the foreclosure sale. Mechanic's liens are a highly technical area of the law and require strict compliance with the law's requirements on notice, proper identification of the owner and real property being liened, and timely filing of the lien and foreclosure action. A fundamental part of our work is ensuring that our clients comply with these technical requirements.

On public works projects, mechanic's liens are not allowed. Instead, Colorado provides two other remedies, both of which can be utilized at the same time: (1) First, the prime contractor must post a payment bond, ensuring that lower tier subcontractors and suppliers are paid. (2) Second, is the "withholding remedy," under which a subcontractor or supplier can send a notice to the owner, requiring it to withhold payment to the prime contractor until the payment claim is decided.

In addition, Colorado law provides additional, often underutilized remedies, to obtain payment. These include:

  1. A notice to disburser requiring that the construction lender set aside funds for the claimant until the dispute is resolved; and
  2. The trust fund statute, under which an owner or prime contractor who is paid for a subcontractor's work, but does use those funds to pay lower tier contractors, is liable for civil theft and breach of fiduciary duty. Colorado law also allows a personal claim against corporate officers who are responsible for the trust fund statute violation, and allows for treble damages and attorney's fees.
Public Contracting Disputes

Public works projects constitute a very large segment of the construction marketplace and we have substantial experience in representing contractors on local, state and federal projects. Al Cohen worked for a federal agency for many years, where he developed considerable expertise in government contracts. Since then, he has been involved in numerous state and local projects involving, e.g., CDOT, Denver Water, special improvement districts, the City and County of Denver and smaller municipalities and school districts.

While the merits of public construction disputes have much in common with disputes on private contracts, there are some significant differences.

  1. First, the dispute resolution mechanism may be very different. For example, the City and County of Denver and Denver Water require that all disputes be resolved through private arbitration conducted by a representative of the Manager of Public Works, who is selected and paid by the government. There is no independent decision-maker. On CDOT projects, a Dispute Resolution Board is used before arbitration or litigation, which has been effective at keeping disputes out of litigation.
  2. Some technical requirements may be more strictly applied with respect to the government, and particularly the Federal government. As the Federal courts have held, the government is not bound by the unauthorized acts of its agents. As a result, direction can be taken only from the Contracting Officer, not onsite inspectors or others who may purport to exercise authority.
Advisory Services

A significant portion of the firm's representation of its construction clients is devoted to the review and negotiation of construction contracts. All that "boilerplate" has very real consequences, which may not be apparent to the layman. Our lawyers have extensive experience drafting construction contracts to ensure that they adequately protect the client in a way which is consistent with their market niche. We are also experienced in modifying standard form contracts, such as the AIA contracts and the AGC Consensus Docs, to fit the particular needs of our clients and their projects. We recognize, however, that many contracts are presented on a take-it-or-leave-it basis. Even in those situations the firm advises its clients of the risks it will assume if it signs the contract. For example, if the contract includes a waiver of the mechanic's lien remedy, virtually every contractor would want to know about that before signing the agreement.

An important element of each contract is the dispute resolution provision. Prime contractors, in particular, want to ensure that they can get both the owner and the relevant subcontractors into the same forum. This can only be accomplished by careful drafting so that the dispute resolution provisions in the prime contract and the subcontract work together, and permit the resolution of disputes in the same forum, whether the client prefers arbitration or court.