A clasp of hands and an exchange of smiles – that may have described how construction contracts were sealed years ago, but no more.
“The handshake days in Clark County are over,” said Christopher Veley, associate attorney with Jordon Schrader Ramis PC and one of three attorneys at JSR’s new 5,000-square-foot Vancouver office, located in the Columbia Tech Center.
A sophisticated building environment
It’s not that people are less trustworthy than before, but that the construction climate has changed significantly.
“It’s a more sophisticated environment than 15 years ago,” stated Steve Madsen, government affairs director for the Building Industry Association of Southwest Washington.
Many factors contribute to the growing complexity of construction and development, including changes to lien laws, employee benefit rules, land use and zoning, and environmental regulations.
Although such complexity can be challenging for construction businesses, it’s bread and butter to firms such as JSR, which provides counsel to developers, regional commercial contractors and homebuilders, suppliers and subcontractors and design professionals.
JSR’s client base represents a mix of commercial, residential and light industrial companies, as well as municipalities. Of these clients, many are located in Southwest Washington. Veley said 80 percent of his clients are in Clark County.
Christopher Reive, attorney and shareholder at JSR since 1999, also will be in the new JSR office. He specializes in environmental legal issues, and has lived in Clark County for 25 years. He said that at least 20 percent of his clients were from Southwest Washington.
David Commeree, director of Product Development for New Tradition Homes, said construction-related environmental concerns are growing in Clark County due to two converging pressures: land use regulations and difficult development sites, which offer challenges such as heavy woods, traffic issues, wetland concerns and off-site utilities.
By integrating an attorney into the project team, said Commeree, a construction company can be proactive and can utilize the attorney’s “inside knowledge” about prior case law that could affect a project.
One type of project that almost always requires an attorney are brownfields, an increasingly significant issue for Southwest Washington, according to Reive. He cited several examples, including the Gramor’s proposed redevelopment of the riverfront Boise Cascade site and the Kyocera site, redevelopment of which is stymied currently due to water contamination issues.
Brownfields, said Reive, are rife with potential conflicts, but the many different stakeholders want the same outcome – a clean, profitably redeveloped site. An environmental lawyer can help developers negotiate with the seller and environmental agencies, trading positive environmental responses for absolute or limited immunity, thereby creating “real financial incentive for acquiring contaminated land.”
Other areas of construction and development that benefit from an attorney’s services, said Commeree, include easement negotiations, cost-sharing and joint-use agreements, contract review, incorporation of business entities and the establishment of homeowners’ associations.
Crossing the border
The proximity of Vancouver to Portland creates a specialized “border” situation for construction firms, who often perform work on both sides of the river. But, said Thomas “Brad” Eriksen, long-time Clark County resident, immediate past president of the Greater Vancouver Rotary Club, and shareholder in JSR since 2001, Washington and Oregon have very different sets of tax and business structures, lien laws and employee and land-use regulations.
Eriksen, who will be the third JSR attorney in Vancouver, and whose clientele is split about 50/50 between Clark County and Oregon, said an attorney can help navigate these regulatory mazes.
According to Reive, insurance is another area where “dirt law” lawyers can help construction companies. First, an attorney can negotiate particular language with underwriters for a specific coverage area. And, when an insurance company denies a claim, an attorney can help claimants sue the insurance company.
Insurance isn’t the only type of litigation that construction companies have to worry about. Steve Turner, president of Trus-Way Inc., with offices in Vancouver and Pasco, said his company had been named in a couple construction defect claims – and although Turner said his company was eventually found not guilty, or not even associated with the defect, “you need an attorney to get through it.”
Although commercial construction continues apace in Clark County, the recent slump in the residential housing market could lead to an increase in lien litigation, said Turner. Veley agreed, stating that a downturn in the economy often led to more disputes. He also said that disputes tend to rise during the rainy season – because during the good weather, companies are too busy getting the work done to argue about it.
New laws, old problems
Recent trends in legislation may lead to increased litigation as well. Veley indicated that currently, homeowner claims are limited to economic loss. But if “negligence claims” are approved, damages could include attorney fees and “pain and suffering” and homeowners may be more likely to sue.
In addition, new changes to the lien laws have expanded who must be registered and licensed. Veley said that construction companies who weren’t familiar with the changes could find themselves on the outside looking in when trying to enforce a lien.
Of course, construction companies try to avoid litigation where possible, and that is one major reason New Tradition Homes employs JSR.
“Their main job is to keep us out of litigation,” said Commeree.
Reive, Veley, and Eriksen offer legal services that can easily be absorbed by the Clark County construction market.
“The construction market in Clark County has evolved to the point where it no longer makes good business sense for construction companies to shop for specialized legal services in Portland and Seattle,” said Reive, who is excited about working in Clark County.
“The Vancouver economy is booming,” said Reive. “I’ve always wanted to work where I live, and now it’s easy to justify moving the office to Vancouver.”
ALTERNATIVES TO LITIGATION
In cases of dispute, one naturally thinks of litigation – that is, a trial. However, it is increasingly common for construction and development companies to pursue alternative avenues to litigation, such as arbitration and mediation.
Litigation is expensive, and can move at a snail’s pace. Arbitration and mediation offer some advantages over litigation, in that they can be less expensive and quicker to settle. The major difference between mediation and arbitration, which both rely on an objective third party to settle the dispute, is that arbitration is a more trial-like, formal procedure with the result being binding on both parties, while mediation is a more flexible procedure which is not binding and can result in more creative solutions.
Jordan Schrader Ramis attorneys routinely recommend their clients include both arbitration and mediation clauses in their construction contracts. Here are a few tips Jordan Schrader Ramis offers for reaching a successful resolution:
•Choose a competent arbitrator or mediator. One good source is the American Arbitration Association.
•Ensure that each representative of the disputing parties has complete authority to resolve the matter.
•Schedule the mediation at the proper time – after the issues at stake are fully understood, but before parties are resigned to courtroom proceedings.
•Don’t undermine the mediation process by deciding what your “bottom line” is before mediation begins
•Make sure the resolution reached through mediation is “memorialized” by recording it in writing before leaving the mediation.
