Working Smarter

We are in the age of almost everything being on camera. This is an important issue in litigation, as discussed in our attached newsletter - the duty to preserve and spoliation with adverse sanctions. Let's be careful out there, and smile, you are on camera!

BETTER, FASTER, CHEAPER. Arbitration often comes with this motto, and as discussed in our attached newsletter, the AAA Construction Rules were amended today to add “modernized” to that tagline.

Tuesday, February 13, 2024 is a historic day, or perhaps a futuristic day. The University of Pennsylvania became the first League School to say it will offer the major of AI-engineering.

Arbitration has emerged as a preferred method for dispute resolution, offering a range of advantages that make it quicker and more efficient compared to traditional litigation. The key factors contributing to the expediency and superiority of arbitration includes the expertise of arbitrators, their knowledge, the confidentiality of the process, and the overall cost-effectiveness. AAA Arbitrator Keith Langley discusses key aspects of arbitration in this January 2024 newsletter.

Accountants and their insurance carriers should be held liable to sureties who rely upon negligently performed audits. Construction auditing is a specialized field of auditing, and construction auditors have an expectation that sureties will rely upon their audits to make underwriting decisions. The new Third Restatement of Economic Harm goes a long way in helping the surety recover its losses. Different jurisdictions have different rules, and new decisions could change the landscape of negligent misrepresentation, particularly in light of the publication of the new Restatement. When a surety suffers a significant loss, it should do a thorough review of what it relied upon in underwriting the principal, and should perform a cost-benefit analysis of engaging outside counsel and outside experts to help recover against accountants and their insurers. As this is such a specialized field, it is extremely important to hire counsel and experts who have experience and expertise in evaluating potentially negligent audits and pursuing negligent auditors.

Unions will be present on many federal construction projects, and Executive Order 14063 requires the use of a Project Labor Agreement for any construction contract within the United States estimated to cost $35 million or more.

As we all know injunctions can be difficult. Here is a big win by the Surety with a great opinion by the United States District Court Judge.

As we approach close out of 2022, we thank you for all you have done to advance our (excellent) health and welfare. Attached is our report on Capacity. We eagerly look forward to 2023 and working with you to achieve important goals!

In Texas, while defective work can and often does cause an “occurrence” leading to property damage and accordingly there can be insurance coverage under the CGL policy, there has been a gap for the attorneys’ fees of the claimant. As attorneys’ fees are often large, such a gap can be devastating. In the latest session in 2021 the Texas legislature has closed this gap.

The pragmatic reality is that a surety should be able to attempt to mitigate damages, and should be able to select a performance option. When the court gets it right, these pragmatic realities are highlighted. Such is the case of Schuff Steel Company case opinion!

The Pearlman Conference just occurred. We are happy to say that in 2005 we prevailed in the Dallas district court, which expressly said Pearlman lived and survived the enactment of the Bankruptcy Code. The powerful concept of equitable subrogation stated in Pearlman lives on, and the surety is on first!

Oil and gas bankruptcies often now arise. Unfortunately, here the 5th Circuit agreed with the District Court and the Bankruptcy Court that the surety agreement was not an executory contract and did not “ride through” the bankruptcy proceeding.

A performance bond is all about getting the job done correctly. Here is our newsletter regarding several key concepts - materiality and clarity. We all wrestle with these issues (when evaluating takeover, tender, or claim denial) as have the courts. Above all else, everyone needs to communicate clearly and in writing.

In a break from tradition, this attached newsletter is about golf, granddaughters, and yours truly (who is doing great). Have a fun weekend!

$100 million seems like a lot to pay as a fine for cheating on an ethics exam. Some say that ethics are important, and telling the truth is a good thing. When there are big, dangerous, unknown items, reliance on a watchdog means hopefully the watchdog is trustworthy.

When a surety has to file a lawsuit to seek cash collateral, the judge may have issues with issuing an injunction ordering the principal and indemnitors to deposit cash with the surety.

For the first time, the Texas Supreme Court has now written that “written notice” requires more than substantial compliance and requires notice in writing.

This month’s newsletter details some of the recent changes to the Texas Property Code addressing perfection of liens. A payment bond issued on a Texas private project generally covers otherwise valid liens – this is the case even if the claimant did not specifically notify the Surety, but rather, simply elected to file a lien and follow those notice provisions to the principal and the owner. The latest changes impact (1) statute of limitations; (2) removal of the second month notice; and (3) procedural requirements for perfection.

A vital litigation weapon is a sanctions order. To seek one, educate the judge and first obtain a precise order regarding production of evidence and then show how the evidence has not been produced and how the court order has been violated. A sanctions order is a powerful weapon to work to rein in costs and pursue the truth.

Slack, instant messaging platforms, TikTok, yet today email is still the primary form of communication within the corporate world and remains one of the most important elements of ESI. Failing to plan is planning to fail!

Texas appeals court saw no reason to limit the rationale to only DTPA claims - nor Implied Warrantee Claims either.

Discovery is the most expensive part of most disputes, whether in trial, in arbitration, or in another stage. The reality is the high transaction costs of litigation, and in particular formal discovery, threaten to exceed the amount at issue in all but the largest cases.

Disputes can occur, and at times even seem commonplace. Disputes, whether in the early process, litigation, or arbitration, can be costly in many ways. Summary judgment can be an off-ramp or a “focus” tool. A motion for summary judgment sharpens the focus and can assist the party, the counsel, and the decision maker. Even if summary judgment is not granted, the motion and process are very important in focusing on key issues.

When a bankruptcy is filed rights can be affected. The take away is - look carefully at what is received, even when formal “required” notice requirements have not been met. Of course, the devil is in the details.

Damages amounts may swing wildly and what is asserted may be much higher than what is legally recoverable. ALL we need to do is understand the concepts of “foreseeability” and “reasonable certainty” There is a lot of detail packed into those issues! Our Litigation Newsletter describing a 2022 Texas Supreme Court opinion dealing with some fascinating damage issues!

As a law firm, we have made a significant investment of time and resources to work better and smarter. Microsoft SharePoint is a big part of that. We are able to work more collaboratively with you, to produce privilege logs as required by courts, to have more data, and to have more certainty and security.

This newsletter will address a recent change in Texas law that has (finally) clarified who can be liable for attorney’s fees in a breach of contract case,

Attorneys, and people who use attorneys, need to know that everything the attorney sees is not automatically protected from disclosure.

Disputes and litigation can be long and costly. Bankruptcy tools are often used to try to achieve more efficient resolutions and parties need to know what the Bankruptcy Code provides, what Congress allows and provides for, and how to evaluate and present positions.

Many times there are links in communications. Production of this data so we understand the context conveyed is vital. Our newsletter addresses this issue regarding a recent court opinion from a learned and experienced judge and learned counsel. The word to the wise is first understand the technology.

Texas has now joined the majority and is a quasi-Spearin state after more than 110 years on the other side of the design deficiency ledger.

Persuasion, themes, zooming in, and practice are all key concepts. View is our newsletter on trial practice with a few lessons learned.

Native, not TIFF eDiscovery tools available now provide efficient ways to incorporate file naming convention, easily allowing identification of documents.

Trials are very difficult for all involved, and Langley works to make the process effective and efficient. With our experience and proper communication we work to make the process understandable to all involved including witnesses.

Summary judgment is now very possible in Florida courts.

Creditors have leverage to request adequate protection provisions in exchange for turning over the property.

The corporate rep dep is a powerful tool to learn the truth. It should be used early in the case with a careful, thoughtful meet and confer between the attorneys.

The Florida Supreme Court has approved a modification to the summary judgment standard that makes it easier to prevail.

An audit is the touchstone for the decision to extend surety credit, and when auditors fail, it usually leads to the losses for the Surety.

Litigation strategies for pursuing affirmative claims with a group of professionals that can provide input on construction, accounting, and legal considerations.

In 2020 the Court unanimously said that an order denying a creditor relief from the automatic stay on debt collection efforts was final and immediately appealable

A CGL policy can provide a source of recovery in cases of construction defects and resulting damage.

Keith Langley discusses Arbitration and Surety

When evaluating bankruptcy, a surety profession should keep 3 things in mind: Get your professional involved early; Understand the process; Evaluate proof of claim.

In Texas, the party seeking to enforce liquidated damages has the burden of showing that (1) “the harm caused by the breach is incapable or difficult of estimation” and (2) “the amount of liquidated damages called for is a reasonable forecast of just compensation”.

Bankruptcy courts are facing unique challenges given the intersection of COVID-19 and the accompanying economic downturn. Creditors therefore need to also be sensitive to protecting their rights if it is expected that bankruptcy filings will tick upwards over the next 60 days.

Coronavirus is officially a pandemic — which, in the realm of infectious diseases, is the worst case scenario.

The automatic stay is perhaps the most fundamental protection for a debtor in bankruptcy.

Legal Fees and Arbitration in Texas

Can the Texas Performance Bond Surety Be Liable After Substantial Completion?

Texas Supreme Court Creates New Path for Defendants to Recover Attorneys’ Fees in Texas – Has Fee-Shifting Swallowed the American Rule?

eDiscovery: 5 Keys to Success

Post-Appraisal Summary Judgment Affirmed – and Gutted

There are many bankruptcies where a debtor is looking to reorganize and needs continued surety support during the pendency of the bankruptcy. This leads to an opportunity early on to receive accommodations and make deals.

With summer upon us, many will venture out on the great American road trip to experience the unique features our country has to offer (most, I assume, will travel to see Cowboys Stadium, home of America's team). Like the variety offered by our country's travel destinations, we too see this in application of legal concepts from state to state.

Contractual Language Defeats $100,000,000 Fraud Verdict as a Matter of Law

Construction and surety law is a broad field that covers a vast number of topics and issues. Given this size, there is a constant stream of judicial decisions that could affect your next legal dispute.

The Court is set to hear oral argument in two post appraisal summary judgment cases. e on the lookout for additional updates from us after the Court hears oral argument, and after a decision is rendered.

eDiscovery Update: Phones, Emails, Hash Values and Saving Costs by Self-Authenticating ESI

Have you considered and Appraisal Expert for Building the Difference-in-Value Defense? Defendants would be wise to build a “difference-in-value” defense, bolstered by an appraisal expert

Uncovering the pipeline. Revisiting Mustang Pipeline.

Hurricane Harvey or Irma Insurance Dispute? How About Appraisal – The Top 10 Items to Consider When Invoking Appraisal

The Best Laid Plans of Mice and Men Often Go Awry

The Miccosukee Million - where allegations are suspect, evidence for the other side is tenuous, and opposing counsel is unreasonable and likely is giving bad advice.