"Yes, Virginia the EPA is serious about enforcement of stormwater runoff at construction sites."

As reported by our roving reporter Kate Whitby of Spencer Fane..

Home Depot Settles Storm Water Violations Home Depot has agreed to pay a $1.3 million penalty and implement a nationwide compliance program to resolve alleged violations of the Clean Water Act, the Justice Department and Environmental Protection Agency announced today. The settlement resolves alleged violations that were discovered at more than 30 construction sites in 28 states where new Home Depot stores were being built. The settlement, joined by the State of Colorado, requires that Home Depot implement a comprehensive, corporate-wide program to prevent storm water pollution at each new store it builds nationwide. Home Depot must develop improved pollution prevention plans for each site, increase site inspections and promptly correct any problems at its sites. The company must properly train its construction managers, as well as contractors and their personnel on the federal storm water requirements. Home Depot must also implement a management and internal reporting system to improve oversight of on-the-ground operations and appoint a high-level company official to oversee compliance at all company construction sites. By requiring construction sites to take simple, basic steps to prevent storm water pollution, we are better protecting the environment for all of us said Robert Varney, regional administrator for EPA's New England office. like all businesses, Home Depot shares a responsibility to comply with environmental laws and help these communities protect their waters. Storm water that runs off of large construction sites can carry sediment, debris, and other pollutants into surrounding waterways, said Ronald J. Tenpas, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. This settlement is an important step in protecting the environment around Home Depot's future construction locations.The government complaint alleged a pattern of violations that EPA discovered through state and federal inspections of construction sites and by reviewing documentation submitted by the company. The alleged violations include not obtaining permits until after construction had begun or failing to obtain the required permits at all. At the sites that had permits, EPA found violations of permit requirements that prevent pollution, such as silt and debris, from getting into storm water runoff. Violations included the failure to maintain adequate plans to prevent storm water pollution, failure to properly place and install fences around project areas to prevent silt from getting into storm water runoff, and failure to install controls at storm drains to prevent soil and sediments from reaching nearby waterways. The Clean Water Act requires that construction sites have controls in place to prevent pollution from being discharged with storm water into nearby waterways. Each site must have a storm water pollution prevention plan that sets guidelines and best management practices that the company will follow to prevent runoff from being contaminated by pollutants. EPA also requires that all construction projects larger than one acre obtain a federal permit. Improving compliance at construction sites is one of EPA's national enforcement priorities. Construction projects have a high potential for environmental harm because they cover large areas of land and have had a history of noncompliance with environmental regulations. Without onsite controls, runoff from construction sites can flow directly to the nearest waterway and can cause beach closings, swimming and fishing restrictions, and habitat degradation. As storm water flows over construction sites, it can pick up pollutants, including sediment, used oil, pesticides, solvents and other debris. Polluted runoff can harm or kill fish and wildlife and can affect drinking water quality. Today's settlement is the latest in a series of enforcement actions to address storm water violations from construction sites around the country. A similar consent decree was reached with Wal-Mart in 2005 under which Wal-Mart established a comprehensive storm water compliance plan and paid a fine of over $3 million. The consent decree, lodged in the U.S. District Court for the District of Delaware, is subject to a 30-day public comment period and approval by the federal court. Home Depot is required to pay the penalty within 30 days of the court's approval of the settlement. More Information"http://www.epa.gov/compliance/resources/cases/civil/cwa/homedepot1207.html">Home Depot settlement

Construction Economy

If you check out the recent article on construction economy in the KC area in Ingram's magazine you will note a slight increase in commercial construction in the area is predicted by the author. Good news for KC!

Indemnity law in the US regarding construction: Kansas update!

Kansas SB 379 passed the Senate and is now in the House Judiciary Committee. The local contractor groups generally are behind the legislation to prohibit indemnification clauses in construction contracts. The existing Kansas law was enacted in 2006, and it provides that indemnification provision in a construction contract or other agreements entered into in connection with a construction contract, requires the indemnitor to indemnify the indemnitee for the indemnitee's negligence is against public policy and is void and unenforceable. The purpose of the existing law is to prohibit shifting of tort liability in construction contracts.

When is an independent contractor not an independent contractor?

FedEx Loses Appeal of Drivers' $5.3 Million Verdict (Update2)

By Laurence Viele Davidson and David Mildenberg

Aug. 13 (Bloomberg) -- FedEx Corp., the second-largest U.S. package shipping company, lost its appeal of a $5.3 million verdict that might make hundreds of independent contractor drivers full-time employees.

A California appeals court rejected the company's claim that a trial court judge erred in deciding the FedEx Ground workers should be accorded full-time status. More than 200 drivers sued FedEx in Los Angeles state court, claiming it treats independent contractors like full-time employees while denying them full pay and benefits.

``FedEx's control over every exquisite detail of the drivers' performance, including the color of their socks and the style of their hair, supports the trial court's conclusion that the drivers are employees, not independent contractors,'' according to the court's opinion.

The ruling covering so-called single-route drivers might affect a similar case before a federal judge in South Bend, Indiana, who is considering the same claims by drivers in California and other states. In that consolidated case, more than 150 drivers are seeking hundreds of millions of dollars in back pay and benefits, as well as recovery of maintenance and other costs they say they were denied in their work as independent contractors.

Legal Options

FedEx spokesman Perry Colosimo said in an e-mailed statement that the company is ``evaluating its legal options'' as to whether they will appeal the worker classification issue to the California Supreme Court.

Colosimo said today's order applies only to single route owners from 1996 to 2001, some of whom were employed by the ground unit's predecessor company that FedEx bought in 1998. Only 40 Of the 200 plaintiffs are still drivers for FedEx, he said.

``In FedEx Ground's view, the appeals court decision did not invalidate our independent contractor business model,'' Colosimo said in the statement. ``Rather, the appeals court focused on some expense reimbursements related to about 200 mostly former, unincorporated, single-work-area owners who originally contracted with Roadway Package System -- a predecessor company of FedEx Ground.''

In the California case, Memphis, Tennessee-based FedEx promised contractors they could work for themselves, set their own schedules and be independent business owners, the drivers said in their complaint. In reality, the company controls their scheduling, appearance and work habits as if they were regular employees, lawyers for the drivers argued during the case.

FedEx defends its contract model as good for efficiency and building customer relationships.

Excessive Fees

The appellate court found in favor of FedEx regarding the amount of fees for drivers' attorneys, ordering the trial court to reduce its $12.3 million award to a ``reasonable'' amount. The fees are ``excessive and cannot stand,'' the appellate court ruled.

Unlike FedEx's ground unit, United Parcel Service Inc., the largest package shipping company and the largest employer of Teamsters union members, employs its drivers on a full-time basis and owns the trucks.

The FedEx unit helped FedEx take as much as 19 percent of the ground delivery market while Atlanta-based UPS has fallen from 82 percent to 70 percent in the past decade.

Shares of FedEx rose $1.04 to $110.08 in New York Stock Exchange composite trading. The shares have gained 1.4 percent this year.

The case is Estrada v. FedEx Ground, BC210130, Los Angeles County Superior Court.

To contact the reporters on this story: Laurence Viele Davidson in Atlanta at lviele@bloomberg.net ; David Mildenberg in Atlanta at dmildenberg@bloomberg.net .

Update on Non-Compete Agreements

In a recent article by Todd A. Jones in the CFMA Magazine the author pointed out the growing trends in the use of these agreements. Really?!

Mr. Jones is correct that it is a growing trend....mainly because few construction companies have historically used this valuable device. The standards for these agreements (reasonable consideration, reasonable geographic location and time) are easy to understand but vary from state to state...so it is important you seek an attorney to determine how to apply these rules to your company!

The law in this area in the states of Kansas, Missouri, Illinois, Nebraska, and Iowa is familiar to our attorneys...yet our folks will tell you each state's law is very, very different, requiring specific knowledge and information about your circumstances.

If you are a WBE\MBE\DBE, you had better contact

The legislation is in session in Missouri....you better read this.....

Effort underway to overturn affirmative action in state contracts
By Angela Tablac Wednesday, Feb. 06 2008
ST. LOUIS POST-DISPATCH


A California businessman is leading an effort in Missouri to end goals in awarding government contracts to minority and women entrepreneurs.

Ward Connerly, who successfully campaigned against affirmative action programs in California, Michigan and Washington, is pushing for similar bans in five more states — including Missouri. Besides state and local contracts, Connerly is targeting affirmative action practices in public education and public employment. His supporters, organized in the state as the Missouri Civil Rights Initiative, are collecting signatures to get the proposal on the Missouri ballot in November.

If passed, the initiative will overturn a 2005 executive order by Gov. Matt Blunt that sets goals to award 10 percent of state agencies' contracted work to minority businesses and 5 percent to women-owned companies.

Tim Asher, executive director of the Grain Valley, Mo.-based Missouri Civil Rights Initiative, said his group wants to eliminate targets that give preference to one group over another.

"A playing field is level and fair if everyone is competing with the same rules," said Asher.

But the initiative's name and its pitch are misleading, opponents say.

"When you go (to vote) and hear someone say, 'Here, sign this. This stops discrimination,' that's false," said Brandon Davis, a member of the statewide Working to Empower Community Action Now coalition, or We Can. The group, formed to fight the initiative, includes religious, community, labor and political activist organizations.

Davis said affirmative action programs boost minority and women employment, and help underrepresented entrepreneurs get a fair chance at work.

On Tuesday, Connerly's local supporters and the proposal's critics stood outside St. Louis-area polling places.

"It's not good for St. Louis. It's not good for Missouri," Wellston resident and We Can volunteer Rodney Lovings, 40, told a voter. "Think before you ink."

Just steps away, Damien Johnson also made his pitch.  "I want people to receive help based on their need," not on gender or race, said Johnson, 27, a St. Louis resident who was collecting signatures for the Missouri Civil Rights Initiative.

Asher's group wants to collect about 150,000 signatures in Missouri by early May.

The other four states targeted by Connerly are Arizona, Colorado, Nebraska and Oklahoma.

Contractor could not recover from Sub who install a non-functioning system?

Yep, as Kent Holland reported (www.constructionrisk.com) the sub was ultimately paid in full. Why? The Sub relied upon the Owner's plans and spec and built them to the standards of the same....letting the Sub off the hook.

Ruthrauff, Inc. v. Ravin, Inc. 914 AQ.2ds 880 (2006 PA. Super 352).  As Kent points out:   This decision confirms the long-standing precedent of the Spearin doctrine – holding that where a contractor follows design requirements – it is excused for the failure of a project to performance as expected.  The greater level of detail the Owner specifies, the greater the responsibility the contractor has to meet those design specifications – but also the greater the responsibility the owner assumes for the adequate performance of the project.  The contractor is legally entitled to assume that the project can be built satisfactorily if the design specifications are followed.

Exit Planning vs. Succession Planning: The Business Owners Guide

I have been asked this before in different ways by business owners. John Brown explains it best as follows:

"Succession Planning: Focus on Transferring Leadership

Step 1: Owner Objectives

Each business owner’s unique objectives drive the creation of his or her Exit Plan. Step One articulates and tests owner objectives so that the comprehensive Exit Plan focuses on achieving those goals. Key exit objectives that will be identified as part of The Exit Planning Process include:

• The owner’s desired departure date.
• The value that the owner wants or needs from the business.
• The individuals or entities to which the owner wants to sell or transfer the business.

Step 2: Business and Personal Financial Resources

Step Two determines what owners have – how much the business is worth and how much cash flow the business can generate for Exit Planning. The current value and projected cash flow, along with other non-business assets and income, are used to determine the paths and planning tools available to reach the owner’s objectives.

Step 3: Maximizing and Protecting Business Value

The elements that build the value of a business or protect the value the owner has worked so hard to create are called Value Drivers. In Step Three, owners and their advisors identify which Value Drivers are important to meeting the owner’s overall exit objectives and devise specific steps to maximize the impact of the Value Drivers.

Step 4: Ownership Transfers to Third Parties

During Step Four, owners who want to sell their business to a third party will work with their advisors to identify ways to do so in the manner that results in the most beneficial sale price and terms. Not all business owners go through Step Four – those who don’t either retain ownership long-term or skip to Step Five.

Step 5: Ownership Transfers to Insiders

Step Five includes a detailed plan to transfer the business to insiders (children, key employees or co-owners). Careful planning in Step Five allows the owner both to receive the desired value from the business and minimize risk, while using resources of the business should the purchaser have little or no personal capital.

Step 6: Business Continuity

Step Six prepares the owner for the contingencies that affect the business and its owners (sometimes referred to as succession planning). A complete Exit Plan incorporates potential changes, such as death or permanent disability of an owner so that the owner’s objectives can still be achieved if circumstances change.

Step 7: Personal Wealth and Estate Planning

The sale of a business generates cash for owners, their families and the IRS. During Step Seven, owners and their advisors create a plan that not only preserves wealth, but minimizes taxes using both lifetime and estate planning tools.

Conclusion

As we have discussed in this article, succession planning and Exit Planning are not incompatible. Succession planning is an important element to the longevity of a company, but it is only one piece of an overall, comprehensive Exit Plan. It is important for professionals in both areas to frequently work together so that the succession plan for the business fits neatly into the owner’s overall Exit Plan."

Brilliantly stated John!

An important mechanic's lien case in Missouri

Service, Not Filing, Tolls Statute

The Missouri Court ruled all parties must be served to meet any statute of limitations deadlines. Further no claim for unjust enrichment existed  where the petition failed to allege the property owner failed to pay general contractor.

Lee Deering Electric Company, And Bell Electric Contractors, Inc., Plaintiff, and Ammonia Master Refrigeration, LTD., Appellant v. Pernikoff Construction Company, Foodbrand, LLC, JFK Construction & Design, Vogel Sheet Metal & Heating, Overberg Decorating Center, Inc., GST, Inc., D/B/A. Arena Systems, and Envirothermics, Inc., Defendants, & St. Louis Mills, L.P., Respondent. Missouri Court of Appeals Eastern District