Boston Public School Master Plan Calls Construction Industry to Action

In March, Boston mayor Marty Walsh announced that the city is introducing a “new era of school investment,” a $1 billion, 10-year master plan called BuildBPS. Developed with planning firm Symmes Maini & McKee Associates, BuildBPS represents a major business opportunity for the local construction industry to play a part in shaping the future of Boston’s public schools.

Modernizing the Classrooms

A 2016 survey found that 60 percent of students, parents, and staff rated the condition of Boston’s public schools as “fair” or “poor.” More than 50 percent of Boston’s 127 public schools were built before World War II, and less than half of the buildings have been fully renovated. Through BuildBPS, the city plans to build modern classrooms with energy efficient environments, allowing for more fresh air and natural sunlight, and technology to promote 21st century learning and teaching methodologies.

Project Funding

Primary capital spending for BuildBPS will be funded by bonds issued by the City, with secondary funding through matching funds from the Massachusetts School Building Authority. Funding for the highest-priority projects is expected to be included in the proposal for Boston’s 2018 capital budget.

The Preti Flaherty Construction Law group is keeping abreast of this topic and will provide updates as it develops. Contact us with any questions or comments.

Contractor’s Lawsuit Against Architect for Tortious Interference Allowed to Proceed

A U.S. District Court Judge for the District of Massachusetts has allowed a lawsuit to proceed brought by a contractor against an architect, alleging the architect falsely certified grounds for termination to the project owner. In a November 18, 2015 written decision in the matter of Barr, Inc. v. Studio One, Inc., C.A. No. 3:15-40056, the Court denied the architect’s motion to dismiss the contractor’s claims against it sounding in tortious interference with contractual relations and tortious interference with advantageous relations. The Court determined that in both instances, the contractor must demonstrate that the architect acted with an “improper motive or means.” The lawsuit alleged that the architect certified to the project owner that the contractor breached its contract with the project owner by “repeatedly refusing or failing to supply enough properly skilled workers or other materials.” Per the terms of the contract with the contractor and owner, this was a specific ground for termination. In the lawsuit, the contractor alleged the architect knew this was not true, and project correspondence and meeting minutes established the project delays were not the fault of the contractor. The contractor also asserted that the architect caused the owner to terminate the contractor for the architect’s own financial gain and to secure benefits with respect to compensation for post-termination services that would otherwise not have been available.

In seeking to dismiss the lawsuit, the architect argued that the contractor did not allege it acted with “actual malice,” which is more stringent than the “improper motive” which was alleged. In rejecting this argument, the Court held that intentional interference torts – such as tortious interference with contractual relations and tortious interference with advantageous relations – do not require a showing of actual malice. The contractor’s allegations in the Complaint, including that that the architect knowingly certified false reasons to induce the owner to terminate its contract with the contractor, met the elements of the intentional interference torts alleged and were sufficient to survive a motion to dismiss.

Under the standard AIA contract used here, the owner could not terminate the contractor for cause without the architect’s certification of the grounds for termination. The Court’s ruling confirms that the contractor’s Complaint sufficiently alleged that the architect was not carrying out its contractual duties objectively and in good faith. Despite being hired by the owner, the architect still has a contractual duty to interpret and decide matters concerning performance under the contract in good faith, and without partiality to either the owner or the contractor, which the contractor alleged it failed to do.

New American Arbitration Association Construction Industry Arbitration Rules in Effect July 1

The American Arbitration Association has issued revised Construction Industry Rules and Mediation Procedures, which are intended to provide “a more streamlined, cost-effective and tightly managed process.”  Some of the most significant amendments include:

• A mediation step for all cases with claims of $100,000 or more (with both parties having the ability to opt out).
• Consolidation and joinder time frames and filing requirements to streamline these increasingly involved issues in construction arbitrations.
• New preliminary hearing rules to provide more structure and organization to get the arbitration process on the right track from the beginning.  
• Information exchange measures to give arbitrators a greater degree of control to limit the exchange of information, including electronic documents.
• Availability of emergency measures of protection in contracts that have been entered into on or after July 1, 2015.
• Enforcement power of the arbitrator to issue orders to parties that refuse to comply with the Rules or the arbitrator’s orders.
• Permissibility of dispositive motions to dispose of all or part of a claim or to narrow the issue in a claim.
  

 

To download a copy of the revised Rules, click here.  Preti attorney Ken Rubinstein is a member of the American Arbitration Association’s Panel of Construction Industry Arbitrators, and is available to provide additional information regarding the implications of the revised rules.  If you have any questions, please contact Ken at 603-410-1568 or 617-226-3868.