__________________________________________________________________________________ Spring 2012 NEWSLETTER ISSUE NO.

60 CHAIRS COLUMN Dear Section Members: Its time to get to the beach. Please join us in Virginia Beach for the Virginia State Bar 74 Annual Meeting on June 13-17, 2012. In conjunction with the Local Government Law Section, the Construction and Public Contracts Law Section is presenting a CLE on Friday, June 15th from 11:00 a.m. to 12:30 p.m. entitled Navigating through Minority and Disadvantaged Business Enterprise Programs and Regulations. Immediately after the CLE, the Section will conduct its business meeting at which section members can vote on the slate of officers and new board members. Special thanks to Immediate Past Chair Todd Metz of Watt, Tieder, Hoffar & Fitzgerald who has organized this years CLE which offers 1.5 hours of CLE credit and has chaired the Nominating Committee.
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If you have not signed up for the Annual Meeting, the registration materials are available online at www.vsb.org/docs/AM2012-mailer.pdf along with information on the available hotels along the oceanfront. We hope to see you at the Sections CLE and business meeting. With the Annual Meeting comes a turnover on our Board. Please join me in thanking Richard McGrath and Fred Kozak of the Office of the Attorney General, Webb Moore, and Todd Metz for their years of service on the Board. Thanks also to our other Board members for 20112012: Brett Marston (Vice Chair), Sean Howley (Secretary), Mike Branca (Treasurer), Jennifer Mahar, Hobie Andrews, Hanna Blake, Chris Boynton, Shannon Briglia, Chris Hill, Scott Kowalski, Barrett Lucy, and Steve Test along with Judge Turk, Judge Ballou, and Judge Harris who serve as judicial ex-officio. In April the Section conducted a membership drive breakfast in Richmond which featured a free breakfast and one hour CLE on Mediation Ethics. The speaker for the CLE was the Honorable Arthur Vieregg (Retired) who was a Circuit Court Judge in Fairfax County before he joined the McCammon Group as a mediator. Judge Vieregg also is a past Chair of the Section. In addition to the ethics presentation, the breakfast included a networking component during which guests of Section members were given an opportunity to learn more about the benefits of Section membership. The goal of the breakfast was to boost membership in the

Section, and all non-section members who attended were offered a free membership in the Section through June 2013. Based on the success of the Richmond membership drive breakfast, the Section plans to host similar breakfasts in other parts of the state. Stay tuned for information on where and when the next breakfast will be held in 2012. A special thanks goes to Sean Howley of Kraftson Caudle who organized the membership event. Thanks also to Webb Moore of Hirschler Fleischer who hosted the event at his office in downtown Richmond. Also in April, the Section hosted a joint reception with the Construction Section of the Maryland State Bar Association at Union Jacks in Bethesda, Maryland. This is the first joint event which the Section has sponsored with our sister section of the Maryland State Bar Association, and we hope to host additional events together in the future. Thanks to Jennifer Mahar of Smith Pachter McWhorter who coordinated this event for our Section. The Section has begun work on this years update to the Handbook. The Handbook Committee is chaired by Scott Kowalski of Petty, Livingston, Dawson & Richards. Scotts Committee is working to update the thorough index of construction topics and add new case digests to the library maintained by the Section of Virginia state and federal court decisions in construction cases. Section members will receive an email when the updated Handbook is available. The current version of the Handbook is available online under the Member Resources section of our website. The Member Resources section is password protected so if you need the password, please contact Dolly Shaffner (our liaison at the Virginia State Bar) at barservices@vsb.org. Please mark your calendar for the Sections Fall CLE which will be held on November 23, 2012 at the Boars Head in Charlottesville. The Fall CLE Committee has lined up all of its speakers, and it looks like another great program for the fall. Thanks to Shannon Briglia of BrigliaMcLaughlin for chairing the Fall CLE again this year. This publication which you are reading would not be possible without the hard work of the Newsletter Committee which is chaired by Jennifer Mahar and Barrett Lucy. If you are aware of decisions which you think should be included in the next newsletter, please contact Jennifer (jmahar@smithpachter.com) or Barrett (blucy@freemandunn.com). If you are interested in getting more involved with the Section, please contact me at kbburch@kaufcan.com. The Section has several committees, and you do not have to be on the Board to serve on a committee. Kristan B. Burch Kaufman & Canoles, P.C. 150 West Main Street Norfolk, VA 23510 (757) 624-3343 kbburch@kaufcan.com

I. CASES: (Note: Copies of the following decisions are available on the Sections website located at http://www.vsb.org/site/sections/construction ) CONTRACT/WAIVER Carnell Const. Corp. v. Danville Redevelopment & Housing Authority, 2011 WL 178341 (W.D. Va. Jan. 23, 2012) (Denying a Virginia public housing authoritys motion for summary judgment on grounds a reasonable jury could find that the authority agreed to modify and/or waive the contractual change order and dispute resolution procedures. Granting the contractors motion for summary judgment on the authoritys counterclaim for damages arising from defective work on the grounds such claim is barred by the authoritys failure to comply with contractual dispute provisions in light of there being no evidence that the parties waived or modified the contracts claims or dispute resolution procedures with respect to the authoritys claim. This opinion also addresses issues related to Title VI race discrimination and retaliation claims.) Carolina Conduit Systems, Inc. v. MasTec North America, Inc., 2011 WL 5042082 (E.D. Va. Oct. 24, 2011) (Plaintiff could not recover costs for extra work where Plaintiff failed to follow contract specified change order process and there was no evidence that the change order process was modified or waived by the parties to the contract. Plaintiff could not maintain claim for quantum meruit where the contract governed the parties relationship.) CONTRACT / VA PUBLIC PROCUREMENT ACT / SOVEREIGN IMMUNITY / QUANTUM MERUIT Jean Moreau & Associates, Inc. v. Health Center Comn, 283 Va. 128 (2012) (Holding developer's letter stating that developer wanted to give a heads up that developer intended to seek legal remedy was not a claim for payment within meaning of VA Public Procurement Act Code 2.2-4363, and municipal corporations performing governmental functions are immune from quantum meruit claims.) CONTRACT / WRITTEN NOTICE / UNJUST ENRICHMENT SNC-Lavalin America, Inc. v. Alliant Techsystems Inc., 2011 WL 4895217 (W.D. Va. Oct. 13, 2011) (Holding on motion for partial summary judgment that plaintiffs failure to provide written notice in accordance with the contracts terms was fatal to a portion of its claims and the existence of the written contract precluded claims for unjust enrichment.) CONTRACT / DAMAGES 2300 Pennsylvania Avenue, LLC v. Harkins Builders, Inc., 2012 WL 691579 (E.D. Va. March 2, 2012) (Awarding owner $3,922,189.00 for liquidated damages and damages relating to defective work.) CONSTRUCTIVE TRUST St. Joe Co. v. Norfolk Redevelopment and Housing Authority, 283 Va. 403 (2012) (Holding the imposition of a constructive trust on funds released by Norfolk Redevelopment and Housing Authority to pay for work performed by contractors on an office building was proper and necessary to prevent a failure of justice and unjust enrichment.)

THE DILLON RULE / ZONING ORDINANCE WAIVER PROVISION Sinclair v. New Cingular Wireless PCS, LLC, 2012 WL 1132215 (Va. Jan. 13, 2012) (Holding the Albemarle County Code 18-4.2.5(a) Waiver Provision, which sets forth the procedure for modifying or waiving the requirements of 18-4.2 (construction on land with slopes of 25% or more) by an application to the planning commission, is void because its delegation of the power to grant waiver applications to the planning commission violates the Dillon Rule.) INSURANCE / CHINESE DRYWALL Travco Ins. Co. v. Ward, 2012 WL 666230 (E.D. Va. March 1, 2012) (Certifying to the Supreme Court of Virginia a question of Virginia law: whether damage resulting from Chinese drywall is unambiguously excluded from coverage under an all risk homeowners insurance policy by the latent defect exclusion, the faulty material exclusion, the corrosion exclusion or the pollution exclusion.) II. LEGISLATION:

HB 928 Mechanics' Liens; Site Development Improvements Allows contractors to obtain a mechanics' lien in the amount of the value of the work contracted for by the claimant for site development improvements and clarifies that common areas are not to be included in the fraction used to calculate allocation of the contract amount to each individual lot or unit. The bill also specifies that any payment made to the contractor for an undesignated lot shall be applied to any lot previously sold by the developer. This amendment and reenactment to Section 43-3 of the Code of Virginia becomes effective on July 1, 2012. HB 33/SB 242 Public Procurement; Agreements with Labor Organizations Requires state agencies to ensure that neither the state agency nor any construction manager acting on behalf of the state agency shall, in its bid specifications, project agreements, or other controlling documents relating to the operation, erection, construction, alteration, improvement, maintenance, or repair of any public facility of public works, (i) require or prohibit bidders, offerors, contractors, or subcontractors to enter into or adhere to agreements with one or more labor organizations, on the same or related projects, or (ii) discriminate against bidders, offerors, contractors, subcontractors, or operators for becoming or refusing to become or remain signatories or otherwise to adhere to agreements with one or more labor organizations, on the same or other related public works projects. This amendment by adding Section 2.2-4321.2 of the Code of Virginia becomes effective on July 1, 2012. HB 410 Condominium and Property Owners' Association Acts; Recovery of Costs and Interest Provides that in cases in which the prevailing party is the association in an action against an owner for nonpayment of assessments in which the owner has failed to pay assessments levied by the association on more than one unit or lot, or when the unit or lot owner has had legal actions taken against him for nonpayment of any prior assessment, the award of reasonable attorney fees, costs, and interest on the judgment is mandatory with the court. The bill also provides in such instances that reasonable attorney fees, costs expended in the matter, and

interest can be recovered even if the proceeding is settled prior to judgment. Finally, the bill provides that the delinquent owner is personally responsible for all reasonable costs and attorney fees incurred by the association whether any judicial proceedings are filed. This amendment and reenactment to Sections 55-79.53, 55-79.73 and 55-515 of the Code of Virginia becomes effective on July 1, 2012. HB 127 Property and Casualty Insurance Policies; Forms and Endorsements Requires property and casualty insurance policies to contain a list of all policy forms and endorsements applicable to that policy, which shall display the respective form numbers and, if those form numbers are not unique identifiers of such forms, the applicable edition dates. This amendment and reenactment to Section 38.2-305 of the Code of Virginia becomes effective on October 1, 2012. HB 867 Certificates of Insurance; Property and Casualty Insurance Prohibits any person from (i) issuing or delivering a certificate of insurance that attempts to confer any rights upon a third party beyond what the referenced policy of insurance expressly provides; (ii) knowingly demanding or requiring the issuance of a certificate of insurance from an insurer, insurance producer, or policyholder that contains any false or misleading information concerning the policy; (iii) knowingly preparing or issuing a certificate of insurance that contains any false or misleading information or that purports to affirmatively or negatively alter, amend, or extend the coverage provided by the policy; and (iv) issuing or delivering a certificate of insurance that does not contain a statement regarding such matters. However, such a statement is not required if a certificate of insurance is required by a state or federal agency and accurately reflects the coverage provided by the underlying policies. A certificate of insurance may not represent an insurer's obligation to give notice of cancellation or nonrenewal to a third party unless the giving of the notice is required by the policy. The State Corporation Commission is authorized to determine if a person is engaged in such practice prohibited as an unfair trade practice. This amendment and reenactment to Section 38.2-515 of the Code of Virginia and by adding in Section 38.2-518 of the Code of Virginia becomes effective on July 1, 2012.

The Editors welcome the submission of articles, opinions and other items of interest. Such materials may be sent to either of the newsletter co-editors: Jennifer A. Mahar, Esq. Smith Pachter McWhorter PLC Suite 900 8000 Towers Crescent Drive Vienna, VA 22182-2700 703-847-6300 FAX: 703- 847-6312 jmahar@smithpachter.com J. Barrett Lucy, Esq. Freeman, Dunn, Alexander, Tiller, Gay & Lucy, P.C. 1045 Cottontown Road Lynchburg, VA 24503 434-528-3400 FAX: 434-385-0365 blucy@freemandunn.com

Construction Law and Public Contracts Section 2011-2012 Board of Governors

Kristan B. Burch, Chair Kaufman & Canoles 150 West Main Street, Ste 2100 P.O. Box 3037 Norfolk, VA 23514 757-624-3000 kbburch@kaufcan.com K. Brett Martson, Vice Chair Gentry, Locke, Rakes & Moore 10 Franklin Road, SE P.O. Box 40013 Roanoke, VA 24022-0013 540-983-9391 brett_marston@gentrylocke.com Sean M. Howley, Secretary Kraftson Caudle LLC 1600 Tysons Blvd., Ste 250 McLean, VA 22102 703-873-5506 showley@kraftsoncaudle.com Michael A. Branca, Treasurer Peckar & Abramson 1133 21st Street NW, Ste 500 Washington, DC 20036 202-293-8815 mbranca@pecklaw.com Todd R. Metz Immediate Past Chair Watt, Tieder, Hoffar & Fitzgerald, LLP 8405 Greensboro Dr., Ste 100 McLean, VA 22102 703-749-1000 tmetz@wthf.com Jennifer Mahar, Newsletter Editor Smith Pachter McWhorter PLC 8000 Towers Crescent Dr., Ste 900 Vienna, VA 22182 703-847-6300 jmahar@smithpachter.com J. Barrett Lucy, Newsletter Editor Freeman, Dunn, Alexander, Tiller, Gay & Lucy, P.C. 1045 Cottontown Road Lynchburg, VA 24503 434-528-3400 blucy@freemandunn.com Stephan F. Andrews Vandeventer Black LLP 707 East Main Street, Ste 1700 P.O. Box 1558 Richmond, VA 23218-1558 804-237-8800 sandrews@vanblk.com Hanna L. Blake Watt, Tieder, Hoffar & Fitzgerald, LLP 8405 Greensboro Dr., Ste 100 McLean, VA 22102 703-749-1000 hblake@wthf.com Christopher S. Boynton City Attorney's Office Municipal Ctr, Bldg 1, Rm 260 2401 Courthouse Drive Virginia Beach, VA 23456-9004 757-385-4531 cboynton@vbgov.com Shannon J. Briglia Briglia McLaughlin, PLLC 1950 Old Gallows Rd., Ste 750 Vienna, VA 22182 703-506-1990 sbriglia@briglialaw.com Christopher G. Hill The Law Office of Christopher G. Hill, PC 4870 Sadler Road, Ste 300 Glen Allen, VA 23060 804-205-5155 chrisghill@constructionlawva.co m Scott W. Kowalski Petty Livingston Dawson Richards 725 Church Street, Ste 1200 Lynchburg, VA 24505 434-846-2768 skowalski@pldrlaw.com Fred R. Kozak Office of the Attorney General 900 East Main Street Richmond, VA 23219 804-786-0038 fkozak@oag.state.va.us Richard T. McGrath Office of the Attorney General 900 East Main Street Richmond, VA 23219 804-786-1100 rmcgrath@oag.state.va.us R. Webb Moore Hirschler Fleischer P.O. Box 500 Richmond, VA 23218-0500 804-771-9561 wmoore@hf-law.com Stephen G. Test Williams Mullen 222 Central Park Ave., Ste 1700 Virginia Beach, VA 23462-3035 757-499-8800 stest@williamsmullen.com Hon. Robert S. Ballou US District Court, WD Va. P.O. Box 1141 Roanoke, VA 24006 540-857-5158 robertb@vawd.uscourts.gov Hon. J. Overton Harris Spotsylvania Circuit Court P.O. Box 505 Hanover, VA 23069 804-365-6161 joharris@courts.state.va.us

Hon. Robert M. D. Turk Montgomery Circuit Court P.O. Box 6156 Christiansburg, VA 24068-6156 540-394-2016 rturk@courts.state.va.us Ms. Dolly Shaffner Virginia State Bar, Liaison 707 East Main Street, Ste 1500 Richmond, VA 23219-2800 804-775-051 shaffner@vsb.org