ESSA PRESIDENT SUES EDUCATION DEPARTMENT ON DESIGN DELEGATION RULE (Go Top)

The president of NESCA’s state affiliate, the Empire State Subcontractors Association (ESSA), has commenced a legal action with ESSA’s support against the NYS Education Department to compel that agency to properly enforce the State Board of Regents Rule on design delegation. In petitioning the State Supreme Court, Arthur Rubinstein, president of Skyline Steep Corp, has asserted that the Education Department’s application and interpretation of Board of Regents Rule 29.3(b) is irrational, arbitrary and capricious.

The Board of Regents Rule 29.3(b) provides that a principal design professional (architect or engineer) on a construction project may delegate certain design services to a 3^rd party engineer hired by an unlicensed contractor or subcontractor. However, in order to delegate design services in this fashion, the Rule further states that the principal designer must review and approve the design submitted by the 3^rd party engineer, and determine that the submitted design conforms to the overall project design.

The lawsuit alleges that the Education Department has failed to enforce Rule 29.3(b) by permitting principal architects and engineers to restrict the scope of their review of a design prepared by a contractor’s or subcontractor’s engineer by disclaiming or issuing a qualified or limited approval of such design (e.g., “reviewed only for loads imposed upon structure”), thereby shifting the principal architect’s or engineer’s ultimate design responsibility to the subcontractor and/or the subcontractor’s engineer.

Mr. Rubinstein asserts that the Education Department’s tacit acceptance of such qualified review by the principal designer allows such designer to avoid its overall design responsibility, creating a threat to public safety. He further asserts that the Department’s position runs counter to the express terms of Rule 29.3(b), and therefore, he seeks a judgment vacating the Education Department’s interpretation of the Rule and mandating that the Board of Regents require the Department to enforce the Rule in accordance with its clear meaning.

DASNY UNVEILS PLAN TO IMPROVE CHANGE ORDER PROCEDURES (Go Top)

The New York State Dormitory Authority (DASNY) unveiled a plan to improve its change order and contract closeout procedures at a January 16, 2004 meeting with NESCA representatives. NESCA has held discussions with DASNY about problems associated with that agency’s administrative procedures for several years. As a result of these discussions, in 2003 DASNY appointed a “change order taskforce” to study the problem and provide specific recommendations for improvement. Specific steps DASNY will be taking to improve its administrative procedures include:

· The development of a computerized system to log and track the progress of all change orders.

· The adoption of standard change order administrative procedures for use by all project managers.

· The use of a standard Notice to Proceed form.

· Providing project managers the authority to approve all change orders under $5,000.

· Reducing documentation required for small change orders.

· Paying for all undisputed portions of a change order when a dispute exists on other portions.

· The development of a proactive process to resolve change order disputes.

· The posting of all forms, instructions and approval procedures on DASNY’s website.

· The holding of workshops to educate contractors and DSANY staff on change order procedures.

· The use of “project closeout teams” to close out projects more quickly and efficiently.

DASNY officials reported that most of these procedural improvements will be operational within 90 days.

NO NESCA MEMBERSHIP MEETING WILL BE HELD IN FEBRUARY. INSTEAD, MEMBERS ARE ENCOURAGED TO MAKE RESERVATIONS FOR THE FEBRUARY 14^TH VALENTINE DINNER DANCE.

PRESIDENT’S MESSAGE (Go Top)

In his January 7^th State of the State message, Governor Pataki said that New York can and should add a million new private-sector jobs by the end of the decade. He also renewed his pledge not to raise taxes this year. The Governor proposed an ambitious range of reforms including a new business-tax reform, education reforms to enhance accountability, immediate cuts to state and local Medicaid costs, energy initiatives, and workers’ compensation reform. All told, the Governor listed 45 specific legislative initiatives as his agenda for 2004, a number of which, if enacted, would be good news for business. So why am I not all that happy about the Governor’s agenda?

Well, to begin with, one of his 45 listed “reforms” is Wicks Law Reform. As a mechanical contractor who performs public work, I vigorously support the Wicks Law. Should the dollar limits be reasonably increased? I don’t think there is any question or debate about that. Unfortunately, the Wicks Law “reform” measures the Governor has previously proposed would have done much more than simply increase the threshold; they would have basically gutted the law, and I expect he will propose something similar this year.

I was also disappointed in the Governor’s speech over something he failed to propose. I’m talking about tort reform including reform of Sections 240 and 241 of the Labor Law. After all the publicity about not raising taxes, what is the Governor going to do to address one of the largest hidden taxes of all, the “tort tax”? After all the attention it has received in recent years, does the Governor still not know that the construction industry is in the midst of a liability insurance crisis? After all the lobbying, is he still unaware that this insurance crisis has come about because courts, pressed by trial lawyers and the building trades, have interpreted section 240 of the labor law to make the contractor absolutely liable for employee injury? Does he still not know that New York is the only state in the nation with this absolute liability standard, and that is why most insurance carriers have refused to underwrite contractors and subcontractors or have jacked prices up so high as to be unaffordable?

Despite the extensive lobbying on this issue over the past several years; despite the recent Insurance Department hearings on the liability insurance crisis; despite the fact that more and more contractors and subcontractors are closing their doors because they either can’t afford or can’t find coverage, the Governor and the Legislature still haven’t gotten the message. That is why NESCA has elected to join with the NYS Homebuilders Association, the General Building Contractors of NYS and other construction organizations in holding a construction industry Legislative Conference/Lobby Day during the 2004 legislative session. The Lobby Day will be held on March 30, 2004, and will focus exclusively on reforming the absolute liability standard found in Sections 240 and 241 of the Labor Law. We are hoping that contractors and subcontractors from throughout the State will converge on Albany and once and for all drive the point home to our elected officials that something has to be done.

NESCA will soon be sending information and registration forms out to all members to participate in the March 30^th Lobby Day. When you receive this material I truly hope that you make the decision to participate and invest one day of your time toward convincing our elected officials that they must act on 240/241 reform. It is high time we got the trial lawyers out of our pockets so that we can get back to focusing on what we do – building!

Jeffrey B. Senft, President

CALENDAR OF EVENTS (Go Top)

February 3, 2004

NESCA/GBC/ECA Seminar

Hot Legal Issues

Building Industry Center, 6 pm

February 5, 2004

Board of Directors Meeting

Century House, Latham, 6 pm

February 14, 2004

Valentine Dinner Dance

Century House, Latham, 6 pm

February 24-27, 2004

NESCA/GBC/ECA Seminar

OSHA 30-Hour Course

Building Industry Center

COURT OF APPEALS DEFINES THE TEST FOR STRICT LIABILITY UNDER SECTION 240(1) OF THE NEW YORK STATE LABOR LAW (Go Top)

On December 23, 2003, the New York Court of Appeals decided the case of Rupert Blake, et. al. v. Neighborhood Housing Services of New York City, Inc. The plaintiff, who operated his own contracting company was working alone on a renovation job, a two family house in the Bronx. The defendant, a not-for-profit lender, dispatched a rehabilitation specialist to the premises to assess the scope of the work and the amount of the loan. The defendant also recommended a number of contractors to the owner. The plaintiff contractor selected was injured at the job site when the upper portion of his ladder retracted and he suffered an ankle injury. The plaintiff sued the homeowner and the defendant alleging a violation of Labor Law §240 (1).

The Court of Appeals in reviewing the history of Labor Law §240 (1) concluded that Owners and Contractors were not intended to become insurers under the statute. Injury at the work site by itself would not trigger strict liability under §240 (1). In order to establish strict liability, the plaintiff must prove that the Owner or the Contractor violated the statute and that the violation was the proximate cause of the worker’s injury. In the case at hand, the jury found that the plaintiff’s sole negligence was the proximate cause of his injury.

While plaintiffs are still not required to prove negligence on the part of the Owner, they will be required to prove that the Owner violated the statute (which one might assume constitutes negligence in and of itself), and that the statute violation was the proximate cause of the injury. These elements of proof become additional hurdles for the plaintiff to get over in order to establish strict liability on the part of the Owner. No longer will an injured worker look to Owners or Contractors as insurers.

Consider the following illustrations of the proof necessary to establish strict liability under §240 (1) on the part of the Owner and the Contractor.

Scenario 1- Worker falls and was injured. These allegations alone will not establish strict liability.

Scenario 2 – Worker falls and was injured and the Owner violated the statute. These allegations will be insufficient to establish strict liability.

Scenario 3 – Worker falls and was injured and the Owner violated the statute, and the Owner’s violation was the proximate cause of the injury. These allegations would be sufficient for establishment of strict liability on the part of the Owner and the Contractor.

Whether this Court of Appeals decision will have an immediate impact on the availability and affordability of insurance for subcontractors and Contractors remains to be seen. Certainly, it appears to be a step in the right direction.

Terence J. Burke, Esq.

NESCA Legal Counsel

NEW YORK’S HIDDEN TAX ON HEALTH CARE (Go Top)

The steadily increasing costs of health insurance is driven to a significant extent by Albany’s hidden taxes on health care, according to the sixth briefing paper in The Public Policy Institute’s Tax Watch ’04 series.

The new paper – “New York State’s Tax on Health Care: A Huge and Hidden

Burden on Business” – is enclosed with this Newsletter.

WELCOME NEW MEMBERS (Go Top)

Jeff Arnold, Inc.

P.O. Box 1002

Broadalbin, NY 12025

(518) 883-8508; FAX (518) 883-8508

Contact: Jeff Arnold

Peter K. Frueh, Inc.

117 Old Quarry Road

Feura Bush, NY 12067

(518)-767-3015; FAX (518) 767-3212

Contact: Chris Frueh

Hills Industrial Mechanics, Inc.

P.O. Box 475, 1021 Route 9W

Marlboro, NY 12542

(845) 236-7655; FAX (845) 236-3100

Contact: Karl Moritz

Tarco Steel, Inc.

13 Spud Lane

Binghamton, NY 13904

(607)-775-1500; FAX (607) 775-1400

Contacts: Janet Beal, Larry Card

MEMBER ANNIVERSARIES (Go Top)

In February, the following members reached milestone anniversaries as members of NESCA. Thank you very much for your continued support!

Five Years

Hartford Fidelity & Bonding Co.

OP-TECH Environmental Services

Ten Years

The Troy Savings Bank

Fifteen Years

Barker Steel Company, Inc.

Brunswick Electric

Twenty Years

Petrochem Mechanical Services, Inc.

Stone Bridge Iron & Steel, Inc.

MEMBER PROFILE – BMI SUPPLY (Go Top)

BMI Supply is a full service theatre supply house and contractor that has served the entertainment industry nationwide for more than 17 years. BMI’s professional staff brings over 120 years of combined experience to their clients. Based at 571 Queensbury Avenue, Queensbury, New York, and with a branch office located in Greer, South Carolina, BMI Supply has built and maintains a reputation of excellence in performance and service to the theatre industry. With a 6,000 square foot office and warehouse facility in Queensbury, BMI Supply carries a full line of theatrical supplies and has an extensive inventory of rigging equipment, lighting instruments, gel, paint, stage hardware, lamps, special effects equipment, and much more.

Established in 1987, BMI Supply’s 30 employees are led by company President Robert S. Barber. Chris Edwards, Manager of the Contracting Division, leads a team professional trained in the inspection and installation of stage rigging, lighting, and dimming systems. BMI Supply also serves as a consultant with many architectural firms and project managers for all phases of theatre including drapery, rigging, and lighting system design. The company’s work ranges from initial safety inspections to AutoCAD draftings with complete specifications for stages, TV studios, casinos, and auditoriums. BMI Supply consults with the owner as well as other parties involved to insure the end-product meets their needs and expectations.

A member of NESCA since 2003, BMI Supply has successfully completed projects throughout the country ranging from $50,000 to $500,000 in value. Their contracting department’s “can-do” attitude has earned praise from many clients, architects and theatre consultants.

NESCA members who would like to be profiled in a future Newsletter should contact the NESCA Office.

Don’t Forget to Purchase Your Ticket for NESCA’s 19^th Annual Frank Campito Memorial Car/Cash Giveaway.

Nearly $35,000 in Prizes Will Be Awarded, Including a Grand Prize Worth $25,000!!

All Ticket Holders are Invited to the March 25^th Drawing and Reception at Shaker Ridge Country Club.

Tickets Available at the NESCA Office – Call (518) 869-9800

Ticket Price - $200.00

Aldi Electric, Inc. was the member name pulled in the monthly $100 attendance incentive drawing at the January 8^th membership meeting. Sorry you weren’t there!

Better luck next time!