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OVERVIEW

Construction WHEN IT COUNTS

Our Construction Law Practice Group, which consists of more than 25 core professionals, provides legal support for clients as they embark on virtually any kind of construction project or facility renovation, or encounter disputes related to a project.

The timely resolution of a legal dispute can determine the success or failure of any construction project. So while we are more than prepared to go to court for you, we also understand your need to avoid a prolonged and costly lawsuit. We'll pursue any and all avenues to help you seek an early agreement on the best terms possible. Often, that means negotiating a favorable settlement on your behalf.

We often resolve construction claims through the use of alternative dispute resolution methods, and our attorneys serve as construction-related mediators and arbitrators. If litigation is the best course of action, we bring a strong track record and formidable resources into court with us.

As effective as we can be at resolving construction disputes, we prefer to help you stay out of them in the first place. As part of a comprehensive approach to meeting clients' needs, we help them assess risk and advise them on their rights, obligations and options.

There are important decisions to be made before a project breaks ground. We have extensive knowledge of construction financing options, and we can assist in obtaining tax-exempt financing through government programs for eligible projects. We often assist nonprofit organizations, such as colleges, universities, state and local governmental units, and hospitals and other healthcare providers in reducing their borrowing costs for capital projects through the issuance of tax-exempt bonds. Today, our construction practice is an acknowledged leader in handling environmental concerns directly affecting the construction industry, in areas such as storm water permitting and compliance, hazardous substance disposal and remediation, and wetlands permitting issues. We can advise you about many aspects of green building and can assist your design professionals in acquiring LEED certification.

In addition, our group provides advice on how best to pursue insurance coverage in the construction claim context and, when necessary, we litigate insurance claims on behalf of our construction industry clients against insurance companies. The Construction Law Group works closely with the firm's Insurance Recovery and Counseling Group to secure insurance coverage for owners, contractors and other parties to construction agreements and to represent them in disputes with their insurance companies.

We understand legal nuances of late notice provisions, the complexity of whether a claim involves covered property damage caused by an occurrence, and how to determine if potentially applicable policy exclusions or exceptions may apply. We often are able to obtain an insurance funded defense and/or settlement when construction defect claims are brought against our clients.

Practice Leaders

Clifford Shapiro

Clifford J. Shapiro

Partner
Construction Practice Group Chair

Chicago

P 312-214-4836

F 312-759-5646

Scott Murphy

Scott R. Murphy

Partner
Construction Practice Group Vice Chair

Grand Rapids

P 616-742-3938

F 616-742-3999

EXPERIENCE
  • A Barnes & Thornburg attorney represented a major homebuilder and won reversal and a summary judgment on appeal in a dispute about the meaning of terms in a developer’s agreement to build a residential subdivision. Beazer Homes Indiana, LLP v. Carriage Courts Homeowners Ass'n, Inc., 905 N.E.2d 20 (Ind. Appl. 2009).
  • A Barnes & Thornburg attorney represented a road construction contractor for a road work project in the City of Chicago. Our client brought suit against a subcontractor that was retained to perform a portion of the work and terminated defendant's contract for substandard work. The defendant placed a mechanic's lien on the property. Our client suit sought declaratory judgment that the lien was unenforceable. The Circuit Court of Cook County found the Mechanic's Lien Statute void for vagueness, but the Illinois Supreme Court reversed. The court held that the Act was unambiguous, and therefore remanded the case for further proceedings in light of the opinion. Our client prevailed on remand.
  • A Barnes & Thornburg attorney represents condo association and owners in an injunction proceeding followed by two-week jury trial against developers of a residential condominium project. Issues of first impression under the Ohio Condominium Act included rights of the unit owners to assume control of the Board, the standing of the Board and unit owners, respectively, to pursue various types of claims against the developers and the proper parties entitled to recover for numerous construction defects against the developers. Mansions Condominium Unit Owners Ass’n v. Talbott, et al, Franklin County Common Pleas Ct. Case No. 88 CV 007525. (This matter occurred prior to the attorney joining Barnes & Thornburg LLP.)
  • A Barnes & Thornburg attorney successfully resolved allegations arising from the design, development and construction of an airport in the United States against an international transportation design company. (*This experience occurred prior to joining Barnes & Thornburg.)
  • An Indianapolis association of condominium owners achieved a favorable settlement in a case involving construction defect claims against the original constructor and the developer and others involved in the construction. The association spent millions of dollars to renovate and remediate the original construction of the building, which among other issues, was constructed without proper weatherproofing.
  • Assisted client in negotiating, documenting and securing approval of purchase of significant limestone reserves and other assets from Bankruptcy Estate. In re Smith Mining Materials, Inc., No. 06-30259 (Bankr. W.D. Ky. 2006).
  • Barnes & Thornburg attorneys have represented several multi-unit residential home builders in connection with residential water intrusion claims, subcontractor disputes, warranty issues and construction defect claims.
  • Barnes & Thornburg attorneys represented a large national homebuilder in litigation in Kentucky and successfully pursued claims against more than 20 subcontractors seeking to recover millions of dollars spent remediating defective construction work in residential homes. Beazer Homes Investments LLC v. Stephens, No. 06-CI-0345 (Fayette Cir. Ct. 2006).
  • Barnes & Thornburg attorneys represented a road construction contractor in a dispute against the Village of Lombard. The circuit court found for our client after a bench trial, holding that it was entitled to payment for its work at a higher rate than claimed by the Village. The lower court did not, however, award the client prejudgment interest. The appellate court affirmed the verdict in favor of client and reversed the lower court on the issue of prejudgment interest, holding that our client was entitled to the interest. Fortech, L.L.C. v. R.W. Dunteman Co., Inc., 306 Ill. App. 3d 804, 852 N.E.2d 451 (2006).
  • Barnes & Thornburg attorneys represented a subcontractor defendant in a construction accident case, including a third-party claim against the general contractor for contractual defense and indemnity. The client appealed the case to the United States Court of Appeals for the Seventh Circuit, where the client won complete indemnification and attorneys’ fees.
  • Barnes & Thornburg attorneys represented a utility company in construction dispute with contractor involving claims of cost-overruns and details beyond the scope of the project. The Indiana Court of Appeals ruled in favor of client. Atlas Excavating v. Indiana-American Water Co., Inc., No. 41 A 01-0407-cv-3327.
  • Barnes & Thornburg attorneys represented an international oil and gas company, which obtained a favorable outcome in connection with claims related to one of its large refinery modernization projects. The claims arose out of mislabeled welding wire that was delivered to and installed at the refinery and caused the client to suffer millions of dollars of repair damages. The litigation included four parties and was pending for more than two years. Following an unsuccessful mediation, the client continued to engage in difficult negotiations with all of the other parties, but ultimately convinced plaintiffs to compromise and settle all claims. The client received a substantial recovery without full-blown discovery and litigation.
  • Barnes & Thornburg attorneys represented Rieth-Riley in Board of Commissioners' appeal of declaratory judgment that zoning ordinance was invalid and mandate that the board approve the developer's plan; court affirmed lower court's ruling. Hendricks County Bd. of Comm'rs v. Rieth-Riley Constr. Co., No. 32A05-0610-CV-585 (Ind. Ct. App. 2007).
  • Barnes & Thornburg attorneys routinely represent owners, contractors and subcontractors in connection with mechanic's lien and related claims including claims arising under the Indiana Owner /Personal Liability and the Michigan Builders Trust Fund statutes.
  • Barnes & Thornburg represented a Fortune 500 company in connection with claims against its warehouse service provider arising out of the collapse of a roof at a facility located in Carlisle, Pennsylvania. Our investigation revealed that a large amount of snow and ice had accumulated on the roof, and that this was a concurrent cause of the roof collapse. On behalf of our client, firm attorneys persuaded the arbitrator to reject the service provider’s argument that it was not liable because the roof collapse was also caused by a defect in the steel girder and truss connections supporting the roof. The arbitrator awarded our client approximately $2.4 million, which was the majority of the damages sought.
  • Barnes & Thornburg represented a general contractor in connection of a substantial delay claim against a private college worth more than $600,000. Claim was successfully mediated after extensive negotiations.
  • Barnes & Thornburg represented a homebuilding company in a multimillion dollar class action settlement by asserting claims against subcontractors. Colon v. Trinity Homes, LLC, No 29D02-0404-PL-374 (Hamilton Superior Court No. 2).
  • Barnes & Thornburg represented a modular building manufacturer in case involving a Miller Act claim on payment bond arising from modular units supplied to a military base.
  • Barnes & Thornburg represented a refining technology company in a wrongful death/professional negligence action involving the death by mesothelioma of an inspector and engineer at a foreign oil refinery for which our client allegedly specified the use of asbestos-containing products. After three weeks of trial before a jury, the L.A. Superior Court granted non-suit in favor of our client due to a lack of evidence presented by the plaintiff.
  • Barnes & Thornburg represented highway contractor in against claim brought by homeowners alleging flood damage resulting from road improvement project. On behalf of our client, Barnes & Thornburg mediated favorable settlement between six plaintiffs and three defendants.
  • Barnes & Thornburg represented principals of Trainor Glass Company who were sued by a bonding company after the company filed for bankruptcy and failed to complete over 20 construction projects throughout the United States. The bonding company alleged that it paid over $15 million to satisfy performance and payment bond claims and sought reimbursement from the principals under a general indemnity agreement. The circuit court dismissed the lawsuit for lack of subject matter jurisdiction because the project giving rise to the bonding company’s claims was located on sovereign land owned by Native Americans.
  • Jeff Longsworth, an attorney in Barnes & Thornburg LLP's Environmental Department (along with a former colleague), recently assisted the National Association of Home Builders (NAHB) in two recent victories against the Environmental Protection Agency (EPA).

    In the first victory, the NAHB settled a longstanding lawsuit against the EPA after the agency agreed to withdraw the numeric limit that it developed to control stormwater runoff from construction sites and to pursue additional improvements to the 2009 rule. The lawsuit had noted that the EPA's numeric limit would have cost stakeholders up to $10 billion a year in attempts to comply - and that coming up with a number that would work across all geographic areas and soil types would not be possible. In addition to withdrawing the numeric limits, the EPA has agreed to clarify the non-numeric portion of the rule so that land developers, permit writers and inspectors better understand what measures are required to help protect the nation's waterways. The EPA also has agreed to pay $93,000 in legal and court costs to NAHB as part of the settlement. NAHB was represented by Jeff Longsworth in this matter.

    In the second victory, the firm assisted NAHB in drafting a brief that played an integral role in the Federal District Court for the Eastern District of Virginia's rejection of the EPA's attempt to use stormwater flow rate as a surrogate pollutant in a TMDL case. In that brief, the firm helped distinguish EPA's generalized legal arguments regarding its authority to use surrogates in its NPDES permitting program by pointing out that what EPA really wanted to do was regulate "stormwater flow" to keep sediment already in the creek from being "stirred up." This is the first such court decision regarding EPA's authority (or lack thereof) to regulate stormwater flow and creates significant challenges for the Agency's plans to develop a national stormwater flow regulation, slated for proposal this June. NAHB was represented in this matter by Jeff Longsworth with assistance from Rob Weinstock.
  • On behalf of construction trade association, a Barnes & Thornburg attorney successfully filed an equal protection constitutional challenge to 20-year-old construction racial set-aside statute. A permanent injunction issued by the District Court was affirmed by the United States Court of Appeals for the Sixth Circuit. Associated General Contractors of Ohio, Inc. v. Drabik, 214 F.3d 730 (6th Cir. 2000). (This matter occurred prior to the attorney joining Barnes & Thornburg LLP.)
  • Our construction group attorneys have represented owners, contractors and subcontractors in connection with various mechanic's lien and related claims.
  • Represent a prime contractor in a dispute with the owner and architect over the scope, price and payment terms of a construction change directive.
  • Represent charter school operator, Imagine Schools, throughout the state of Indiana, including negotiation of agreements to purchase buildings to be redeveloped into schools, and contracts with architects and general contractors. Also handled zoning amendments, zoning variances and variances from historic preservation standards.
  • Represent subcontractor involved in a payment dispute with general contractor on a $1 million-plus subcontract.
  • Represent subcontractors in connection with various mechanic's liens claims for unpaid work.
  • Represented a Fort Wayne, IN publishing company in connection with a $35 million project to house the company’s new printing press, including negotiation of the contracts with the architect and general contractor.
  • Represented a major grocery chain which was the Lessee of a large part of a strip center located in Lafayette, Ind. after a major build-out project went bad. The matter included significant delay, overrun and construction deficiency claims by our client against the general contractor, and in turn by the general contractor against its subcontractors. The matter also involved the resolution of mechanic's lien claims filed by the general and the subs.
  • Represented Associated General Contractors of America that intervened to defend an EPA rulemaking to permit construction storm water discharges. The rulemaking was challenged by several environmental groups.
  • Represented owner of medical office building located in Jacksonville, Florida in connection with real estate development and the negotiation of construction contracts.
  • Represented real estate developer to negotiate a $250 MM construction contract and related design contracts for a large mixed use project to be located on the south side of Chicago.
  • Represented real estate development entities in connection with several projects, including:



    an apartment complex in Raleigh, North Carolina;

    a mid-rise urban multi-use project consisting of retail and apartments located in downtown Indianapolis, Indiana; and

    a mixed use retail/apartment project located in Ramsey, Minnesota

    Legal services rendered involved construction contract negotiations, negotiation and documentation of incentives, casualty insurance claim negotiations, construction and mezzanine financing, and negotiating sale of development projects.
  • Represented Southwest Allen County School Corporation in virtually all matters relevant to the construction of several new schools during the last 10 years.
  • Represented the owner/client in (i.) the negotiation of a $33 million design-build contract for a 100,000 square foot addition to its main medical clinic facilities. (ii.) the construction contracts for a new satellite clinic facility and an addition to another satellite clinic facility, both over $5 million and 10,000 SF each and (iii.) in obtaining construction, equipment, acquisition and related working capital financing for the these projects totaling in excess of $70 million.
  • Represented the property owners in the high profile condemnation of 110 acres owned by the City of Fort Wayne, Ind. Recently retained by Utility Center, Inc. (d/b/a Aqua Source) in connection with condemnation proceedings commenced by the City of Fort Wayne with respect to the Utility Center’s north side utility system which is valued at more than $17 million.
  • The Barnes & Thornburg Construction Law Practice Group attorneys have represented several prominent real estate developers in connection with litigation arising out of alleged defective construction at residential condominium and townhome developments. Our representation included defense of construction defect claims asserted in litigation, the pursuit of claims against subcontractors, and the pursuit of insurance coverage for the claims. We have successfully obtained insurance company provided defenses, and negotiated favorable settlement agreements for our clients, often funded by insurance.
  • The Barnes & Thornburg Construction Law Practice Group defended a Vermont general contractor against significant construction defect claims arising out of a large commercial office building located in Bourbonnais, Illinois that was leased by a nationally prominent tenant. Our attorneys also handled all of insurance aspects of these claims. After a period of full blown litigation, we successfully resolved the claims by compromise and settlement on very favorable terms for our client. Among other things, most of our clients’ defense costs were paid by insurance carriers, and the settlement amount was paid in full by insurance carriers as well.
  • The Barnes & Thornburg Construction Law Practice Group represent a 300 unit, high-rise building condominium association in connection with various construction claims against the developer, including claims related to the entire exterior window-wall system. The matter involves several parties including the condominium association, the developer, the general contractor, the subcontractor that installed the exterior cladding and the company that manufactured the window system. The parties are currently involved in a creative settlement process that includes the use of a “neutral” expert’s evaluation of building conditions.
  • The Barnes & Thornburg Construction Law Practice Group represented a Chicago area real estate developer to handle all insurance coverage issues arising out of construction defect lawsuits filed by multi-building, mid-rise condominium associations. Services included seeking defense and indemnity from numerous insurance companies, and the defense of several declaratory judgment actions filed by insurance companies. We successfully obtained insurance payments for the defense of the construction defect lawsuits, and also obtained payments from several insurance companies to help settle the construction defect claims.
  • The Barnes & Thornburg Construction Law Practice Group represented a Florida contractor that designs and installs window-wall products on high-rise buildings. The complex case involved breach of contract, acceleration and disruption claims arising out of the construction of a 28-story apartment building in downtown Chicago. The matter also involved insurance coverage disputes related to these claims, including litigation filed by on of the insurance carriers in Florida.

    With respect to the construction claims, two separate lawsuits were filed and after resolving complex procedural hurdles before the courts, the matter proceeded to arbitration involving the project owner, general contractor and our client before the American Arbitration Association. During those proceedings, we were able to negotiate a favorable settlement for our client, including a significant payment. We then also resolved the insurance litigation pending in Florida on favorable terms for our client.
  • The Barnes & Thornburg Construction Law Practice Group represented a large municipality in connection with claims arising out of an $8 billion runway expansion project at an international airport. On behalf of client, firm attorneys handled large claims against more than 15 program management and design professionals that provided services for the project. Through a creative mediated alternative dispute resolution process that included the exchange of substantive information, mediation presentations and negotiations during the course of approximately one year, our team was able to successfully resolve all claims on favorable terms for our municipal client by pursuing insurance and utilizing mediation process without litigation.
  • The Barnes & Thornburg Construction Law Practice Group represented a large steel company to address construction claims arising out of the purchase and installation of a sand cooling system at a foundry. We investigated the matter and developed several counterclaims on behalf of our client worth more than $2 million. After these counterclaims were asserted, the parties were able to negotiate a very favorable settlement for our client.
  • The Barnes & Thornburg Construction Law Practice Group represented a luxury brand automobile dealership in connection with litigation involving mechanic's lien claims, construction defect claims and claims arising out of the insolvency of the general contractor during a project to construct a new automobile dealership and sales facility in Naperville, Illinois. We successfully resolved the claims at issue through negotiation.
  • The Barnes & Thornburg Construction Law Practice Group represented a national general contractor in construction defect litigation involving a university dormitory building located in Chicago and more than $8 million of claimed damages. This significant matter involved more than 15 parties. Our attorneys handled the construction defect litigation as well as all insurance coverage aspects of the case (including ancillary insurance coverage litigation). We successfully obtained defense payments from several insurance carriers while we pursued claims against our client’s subcontractors and their insurance carriers. After four years of effort, we obtained a very favorable settlement for our client through mediation. Under the terms of this settlement, our client’s defense costs were paid almost entirely by insurance carriers, our client did not pay any of the settlement amount paid to the university, and our client obtained reimbursement for certain amounts it had paid to address and correct the construction problems.
  • The Barnes & Thornburg Construction Law Practice Group represented a national real estate developer and related entities in connection with multi-million dollar delay, change order and construction defect claims against a large general contractor. The claims arose out of a significant project located in Chicago’s River North district that successfully converted a large historic building and related structures into residential and retail space. We devised and negotiated a creative alternative dispute mediation process under which the parties that successfully addressed and resolved the complex and contentious claims without having to engage in litigation proceedings.
  • The Barnes & Thornburg Construction Law Practice Group represents a large municipality in connection with claims and possible litigation arising out of a $200 million contract to engineer, build and operate the central heating and cooling plant/facility for a large airport facility.
  • The Barnes & Thornburg Construction Law Practice Group routinely represent owners, contractors and subcontractors in connection with various mechanic's lien and related claims.
  • The Barnes & Thornburg Construction Law Practice Group served as lead counsel for a Michigan general contractor in connection with construction claims and related insurance coverage issues arising out of the design, fabrication and installation of a five-story racking system in three large freezer warehouses located in Hobart, Indiana. Thousands of pallets of frozen food items were stored in the warehouses; the racking system designed, supplied and installed by our client’s subcontractor was failing, and our client became involved in litigation and alternative dispute resolution proceedings involving six parties with claims worth millions of dollars.

    On behalf of our client, we successfully settled the claim with the primary plaintiff at mediation, and proceeded with litigation against five other parties. After the completion of two rounds of mediation with parties from four states, we successfully concluded a final settlement with all parties and our client’s insurance carriers under which our client was able to recover most of its client’s defense costs and the settlement amount paid.
  • The Barnes & Thornburg Construction Law Practice Group successfully negotiated a $250 million construction contract on behalf of a prominent Chicago real estate developer with a national general contractor in connection with a large mixed-use project located on the south side of Chicago. Our attorneys also negotiated the contracts with the project’s design professionals.
  • The Barnes & Thornburg Construction Practice Group successfully resolved all claims against a Chicago developer at mediation after three years of litigation in a high-profile case that arose out of the conversion of a historic building into offices and condominiums. The litigation involved two related cases, multiple parties and millions of dollars of alleged significant construction defects, as well as complex and disputed insurance coverage issues involving a "wrap" liability insurance policy issued for the project. The Barnes & Thornburg team took the lead role in the litigation and at the mediation, and the final settlement agreement resolved all claims for all defendants on very favorable terms. Among other things, our client’s share of the settlement amount will be paid entirely by its insurance carrier.
  • The Construction Law Practice Group represents an international oil and gas company in connection with one of the largest, if not the largest, refinery modernization construction projects in the United States. Our work on this project has included the following significant claims:

    Litigation Regarding Refinery Emissions Control System

    We are lead counsel handling litigation pending in California arising out of a contract to design and supply a large emissions reduction system for a power plant at the refinery. In conjunction with attorneys in our Los Angeles office, we are both defending against the contractor’s claims and prosecuting counterclaims worth several million dollars.

    $20 Million Dispute With Refinery Contractor – Forensic Audit

    We are lead counsel in a $20 million dispute with a contractor that performed a major turnaround maintenance project at the refinery. The investigation of these claims includes cost accounting and forensic audit issues and various claims related to the work itself. Our team is responsible for dispute resolution efforts and any litigation that may be required.

    $15 Million Dispute - Supplier of Defective Component Parts

    We are lead counsel in a dispute with a supplier of refinery component parts that involves over 100 claims and at least $15 million. Our team is responsible for the investigation and analysis of the claims, dispute resolution efforts and any litigation that may be required.

    $10 Million Dispute – Coke Facility Construction Work

    In 2012, we successfully resolved a $10 million dispute related to the construction of the large coke handling facility at the refinery. We evaluated the complex commercial contract that included construction of the facility, and assisted the client in negotiations that resolved the dispute on favorable terms including eliminating certain potential future claims.

    Structural Steel Fireproofing

    We are co-counsel in connection with the investigation and litigation of issues related to structural steel fireproofing at the refinery. The claims involve steel suppliers, fireproofing fabricators and fireproofing suppliers located in various states and litigation that is now pending in two states.
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