This presentation - given to the New Orleans Green Legal Matters Conference - analyzes the risks inherent in green building projects, and those contractual tricks that can be used to limit or minimize those risks. I gave this presentation on October 14th, joined by James d'Entremont of Phelps Dunbar.

1. Smart Agreements
& Litigation Risks
James d’Entremont Scott Wolfe
Phelps Dunbar, LLP Wolfe Law Group
Baton Rouge, LA Louisiana | Washington
phelps.com wolfelaw.com
constructionlawmonitor.com
LEED AP

2. Part I:
Litigation Risks

3. Construction Litigation
v.
Green Litigation

4. Unmet Expectations

5. Unmet Expectations
• Cost: The project cost more than expected

6. Unmet Expectations
• Cost: The project cost more than expected
• Scope: The project’s scope was more
expansive than anticipated

7. Unmet Expectations
• Cost: The project cost more than expected
• Scope: The project’s scope was more
expansive than anticipated
• Schedule: Completion took longer than
planned

8. Unmet Expectations
• Cost: The project cost more than expected
• Scope: The project’s scope was more
expansive than anticipated
• Schedule: Completion took longer than
planned
• Quality: The workmanship quality was
inferior to expectations.

9. Still...
Unmet Expectations

10. Still...
Unmet Expectations
• Energy Performance: Is the building’s energy
systems performing as expected (or
promised)?

11. Still...
Unmet Expectations
• Energy Performance: Is the building’s energy
systems performing as expected (or
promised)?
• Rating: Did the building achieve the planned
LEED rating or other certification?

12. Still...
Unmet Expectations
• Energy Performance: Is the building’s energy
systems performing as expected (or
promised)?
• Rating: Did the building achieve the planned
LEED rating or other certification?
• Long-Term Sustainability: What is the
project’s impact on the environment, and is
this as expected?

13. Plus...
Unique Risks & Features

14. Plus...
Unique Risks & Features

15. Plus...
Unique Risks & Features

16. Plus...
Unique Risks & Features

17. Plus...
Unique Risks & Features

18. Plus...
Unique Risks & Features

19. Damages, Codes &
Structures

20. Green Building Codes
• California Green Building Code
• DC Green Building Act
(http://bit.ly/ajMac7)
• IGCC (http://bit.ly/cC1GvV)

21. Energy Inspectors
• Cities like Austin and New Orleans
are tightening energy codes and
emphasizing role of energy inspectors.
• New York Times Article
(http://nyti.ms/a841ad)
• Construction Law Monitor Article
(http://bit.ly/bP180O)

22. Reporting Energy
• Cities like Seattle, WA are passing
municipal regulations requiring
certain properties to report their
energy consumption, with plans on
regulating consumption in the future.
• CLM Article on Requirements
(http://bit.ly/cXk8a0)

23. Tax Credits
Tax Credits are available in certain
locally, federally and state-wide for
solar installations, energy performance,
rating certifications and more....

24. LEED Challenges
LEED Challenges:
http://bit.ly/aLvGkL
LEED De-Certifications:
http://bit.ly/bQuxgc

25. Part II:
Who’s To Blame?

26. Spearin Doctrine
“[I]f a contractor is bound to build
according to plans and specifications
prepared by the owner, the contractor
will not be responsible for the
consequences of defects in the plans
and specifications.”
US v. Spearin, 248 US 132

27. Architects As LEEDer
• Should architects do the design & LEED
coordination?
• Are architects increasing the price of
agreement with owner to accommodate the
additional risk?
• Is it possible to shift some responsibility
to the contractor, suppliers or other project
participants?

28. Contractor Perspective
• Bid-build Projects & Contracts that Shift
Design Responsibility
• Design-Build, & the Increased Risk
• Don’t Guarantee Certification, or Spearin in
Jeapordy

29. Insurance

30. Insurance
• Not Much Out
There

31. Insurance
• Not Much Out
There
• Policies Available
Are Riders - so,
are green risks not
covered in
standard policies?

32. Part III:
Smart Agreements

33. Things To Keep In Mind To...
Contract Smart.
Green, Sustainability,
High-Performance
Building, Green
Certification, etc.
No Universal
Meaning. Define
Them, & Choose a
Rating System &
Version.

34. Things To Keep In Mind To...
Contract Smart.
Consider a Rating
Coordinator
Identify Responsible
Parties
Delegate Work and
Responsibilities to
Appropriate Parties

35. Things To Keep In Mind To...
Contract Smart.
Certification is paper-
intensive. Identify who
will manage the
documentation and the
certification’s manual
requirements.

36. Things To Keep In Mind To...
Contract Smart.
Contractors:
Don’t tie certification
with substantial or final
completion. It can take
months, and you don’t
want to be waiting on
money that long.

37. Things To Keep In Mind To...
Contract Smart.
Get to know the
vendors and products
to be used. Don’t
subscribe to a
technology without
investigating, and hold
vendors accountable
for their promises.

38. Things To Keep In Mind To...
Contract Smart.
Damages for failure to certify or for failure to meet
certain benchmarks may be murky. Consider waiving
consequential damages, and call out these specific
expectations and considering waiving those damages
or presenting LDs for them.

39. Things To Keep In Mind To...
Contract Smart.
Flow Down Clauses:
Make sure your
obligations go up and
down the chain.

40. Form Contracts
For Architects: B214–2007 establishes duties and
responsibilities when the owner seeks certification from the
U.S. Green Building Council’s Leadership in Energy and
Environmental Design (LEED®).
Among other things, the architect’s services include conducting
a pre-design workshop where the LEED rating system will be
reviewed and LEED points will be targeted, preparing a LEED
Certification Plan, monitoring the LEED Certification process,
providing LEED specifications for inclusion in the Contract
Documents and preparing a LEED Certification Report
detailing the LEED rating the project achieved.
http://bit.ly/acKt78

41. Form Contracts
For Contractors: On Nov. 10, ConsensusDOCS released the
construction industry's first and only comprehensive standard
contract document addressing the unique risks and
responsibilities associated with building green projects -- the
ConsensusDOCS 310 Green Building Addendum. The
Addendum incorporates contractual best practices to identify the
project participants' roles and responsibilities, as well as the
implementation and coordination efforts critical to achieving a
successful project using green building elements, particularly
those seeking third-party green building rating certification. It
was drafted to work well not only with the other
ConsensusDOCS contract documents, but also with other form
contracts.
http://bit.ly/9WVdvo

43. Smart Agreements
& Litigation Risks
James d’Entremont Scott Wolfe
Phelps Dunbar, LLP Wolfe Law Group
Baton Rouge, LA Louisiana | Washington
phelps.com wolfelaw.com
constructionlawmonitor.com
LEED AP