Inside this
Edition: Governor’s 2003-04 Budget Targets Wicks Law, Union Enforcement Bill Suffers “Pocket Veto”, President’s
Message, Wrongful Termination Allows For Claim Of Damages
Based On Quantum Meruit, Members Asked To Complete Annual
Bpi Information Form, Remember To Post Your OSHA 300a
Summary For 3 Months, Local Governments Adopting
Apprentice Program Mandates, Welcome New Members, Senator Bruno Urges
Tort Reform
GOVERNOR’S 2003-04
BUDGET TARGETS WICKS LAW (Go Top)
Governor
Pataki has proposed a 2003-04 state budget that would go forward with $177
million in already enacted tax cuts and leave overall spending essentially the
same as this year’s. The Governor’s
proposed budget would also repeal the Wicks Law, which has long required that
separate specifications and contracts be prepared for plumbing, HVAC and
electrical work on public construction projects valued at $50,000 or more.
Unlike
a variety of bills introduced in recent years that have called for an increase
in the $50,000 threshold, the Governor’s Budget Bill S.1406/A.2106 proposes an
outfight repeal of the Wicks Law. Since
his budget calls for a reduction in aid to school districts by $567 million,
and no change in aid to local governments, it is clear Governor Pataki is
seeking to appease localities through other means. Instead of increases in state aid, what he has proposed is a
package of measures intended to “relieve localities of costly state
mandates”. Included in this mandate
relief package is a repeal of the Wicks Law, which has long been sought by
local governments.
For years, local government
organizations like the NYS Association of Counties and the NYS School Boards
Association have trumpeted the claim that eliminating the Wicks Law will save
up to 30 percent on local government construction costs. NESCA, on the other hand, believes that
eliminating the Wicks Law will not lower costs for municipalities and school
districts. Rather, common sense
dictates that it is likely just the opposite will occur as plumbing, heating
and electrical contractors are forced to add the cost of subcontractor status
(bid shopping, onerous contracts, slow payment) to their prices.
NESCA’s state affiliate, the Empire State Subcontractors Association (ESSA) will register its opposition to Wicks Law repeal with the governor’s office and legislative leaders, and will work with the mechanical and electrical contractor groups to preserve it. A position paper on the Wicks Law has been prepared by ESSA and will be circulated to the Legislature. Any member who would like more information on S.1406/A.2106 should contact the NESCA office.
UNION ENFORCEMENT BILL SUFFERS “POCKET VETO” (Go Top)
A bill that would have granted labor unions the same standing to enforce New York State’s prevailing wage law as the public contracting agency in charge of building the project has failed to receive approval by Governor Pataki. The bill, S.7562/A.11582, was passed by both houses of the state Legislature in June 2002 but was not delivered to the Governor until December 30th. Since the bill was sent to the Governor at the very end of the year, by law he had 30 days to sign or veto it. Since he did neither, the bill was automatically vetoed (pocket veto).
The bill would have amended Section 223 of the Labor Law by providing that unions would have the same standing to enforce the prevailing wage law against a contractor or subcontractor as the agency in charge of the public work project if any of the union’s members were employed on the project. Further, the bill would have allowed unions to enforce the law completely absent any evidence that a contractor or subcontractor was even in violation.
NESCA opposed this bill because it would have anointed private labor unions with governmental prosecutorial and enforcement powers, something we believed to be clearly unconstitutional.
The month of February was another busy one for NESCA. During the month, the NESCA/GBC/ECA Educational Partnership began a 5-week course on “Basic Computer Skills for the Construction Industry” as well as a Superintendent Training Program (STP) on “Oral & Written Communication, also a 5-week course. I’d like to remind members to take full advantage of the educational opportunities offered by NESCA, GBC and ECA. Between the various management seminars, STP courses and other education programs, there is something for everyone.
On February 3rd, the Empire State Subcontractors Association held a Board of Directors meeting at the Fort Orange Club in Albany. Representatives of NESCA and its sister chapters in New York, Syracuse, Rochester and Buffalo reviewed the status of ESSA’s 2003 legislative program and other legislative issues of importance to New York State subcontractors and suppliers. ESSA’s top priority for 2003 is once again legislation that would require private owners to place all retainage held on construction projects into an interest-bearing escrow account. This bill would dovetail nicely with the new private construction prompt payment law, which became effective on January 14th. Much of ESSA’s 6-bill legislative package has already been introduced in the Senate, and will soon be introduced in the Assembly. In addition to the ESSA’s unilateral efforts on our own bill package, the association is working closely with other construction groups on two issues of importance to the entire industry: (1) getting rid of the strict liability standard found in Sections 240 and 241 of the Labor Law; and (2) requiring public owners to pay delay damages for construction delays they cause. ESSA staff has attended recent meetings with representatives of other contractor associations to discuss lobbying strategies for both of these issues. In the coming weeks, we will be ratcheting up the activity regarding our bills and other issues of importance to our members. Already, 2,000 bills have been introduced in the Senate and 4,000 have been introduced in the Assembly, many which have an impact on the construction industry. As the weeks go by, NESCA and ESSA will be weighing in on many of the bills that would impact our members.
Following the ESSA Board of Directors meeting, members of the Board had dinner with our Assembly sponsor, Assemblyman Ron Tocci from New Rochelle. NESCA was represented by Roger Jones, Ed Lawless and Mark Woodward in addition to Terry Burke and Mike Misenhimer. Assemblyman Tocci has long been a strong supporter of subcontractors and our legislative agenda.
NESCA’s next membership meeting will be held on March 13th at the Century House and will feature a program entitled “Human Resources Jeopardy”. Deborah Miller with Employee Management Strategies, Inc. will explore key employee-related issues using the Jeopardy game show format. Hal Hatfield and Marty Mullins will serve as our Jeopardy contestants, so I’m sure this program will be very interesting and definitely entertaining!
James M. Elacqua, President
WRONGFUL TERMINATION ALLOWS FOR CLAIM OF DAMAGES BASED ON
QUANTUM MERUIT (Go Top)
The
Supreme Court of New York, Appellate Division, Third Department, on January 2,
2003 decided MCK Building Associates, Inc. v. St. Lawrence University, et
al. Plaintiff in this case, a
masonry subcontractor who had completed 90% of the work on the job received a
termination letter from the general contractor. The letter cited the defendant’s “lack of job performance” and
“disregard of contractual obligations” and specifically stated that it was
terminating the contract pursuant to the provisions within the contract
documents that govern terminations for default. Under these provisions, the defendant was required to provide 10
days prior notice of termination to the plaintiff, its surety and the
University. However, defendant’s
termination letter indicated that the contract was terminated “as of this date”
and defendant’s surety and the University were not given written notice of
termination until several days later.
Under these circumstances, the court held that it was clear that the
defendant’s termination of the contract was wrongful. Defendants claim that the termination was for convenience rather
than for default and was therefore not subject to the 10 days prior written
notice provision was rejected by the Court.
The
Court also allowed the plaintiff to use quantum meruit as the appropriate
measure of damages for the claim.
Generally, quantum meruit is barred where there is a valid written
contract governing the subject matter at issue, but here, the contract had been
terminated prior to completion and quantum meruit was allowed as the
appropriate measure of damages.
This
case illustrates that where a subcontract has been terminated by the general
contractor, the subcontractor will have the opportunity to plead as a basis for
establishing his damages the legal theory of quantum meruit (i.e. to claim the
amount he deserves). This will allow
the subcontractor to avoid any restrictions concerning damages or measures of
damages which might be contained in the contract. Termination letters should be scrutinized very carefully to
assure that they are in compliance with the contract provisions for termination
or else the termination may indeed constitute a wrongful termination.
Terence J. Burke, Esq., NESCA Legal Counsel
MEMBERS
ASKED TO COMPLETE ANNUAL BPI INFORMATION FORM (Go Top)
One of the most important
services NESCA offers its members is the Business Practices Interchange (BPI). The BPI allows members to obtain accurate, first-hand information
on the business practices of general contractors, developers and
owner-builders.
All members were recently
mailed, and asked to complete our annual Business Practices Interchange listing
form. The BPI is a referral service,
and we merely ask members to provide us with the names of contractors you have
done business with during the preceding twelve months. This information will then be entered into
NESCA’s database. Members seeking
information about a particular contractor may then contact the NESCA office and
will be referred to other members who have recently done business with that
company.
Members are encouraged to
return your completed BPI form to the NESCA office as soon as possible. This service is totally member-driven and
will only work if completed forms are returned. The more completed forms we get back from members, the more
comprehensive our 2003 BPI database will be and the better the system will be
able to benefit everyone.
REMEMBER TO POST YOUR OSHA 300A SUMMARY FOR 3 MONTHS (Go Top)
It’s
that time of the year – time to post the annual summary report of injuries and illnesses
that occurred in your workplace during the calendar year 2002. Remember to use the new OSHA 300A form, and
to have it certified by a company executive.
Also, remember you must now post the summary for three months instead of
one, from February 1 until April 30.
Like the former OSHA recordkeeping rule, employers with 10 or fewer
employees (at all times during the calendar year) are exempt.
A
BIG THANK YOU TO TEAL BECKER & CHIARAMONTE, CPA’s AND CNA SURETY CORP. FOR
CO-SPONSORING NESCA’s FEBRUARY 15TH VALENTINE DINNER DANCE
March 13, 2003
Century House, Latham, 5:30
pm
March 13, 2003
Century House, Latham, 6 pm
March 27, 2003
18th Annual Car/Cash
Giveaway
Wolfert’s Roost CC, Albany,
7 pm
April 3, 2003
Century House, Latham, 6 pm
April 10, 2003
Century House, Latham, 6 pm
LOCAL GOVERNMENTS ADOPTING
APPRENTICE PROGRAM MANDATES (Go Top)
NESCA
members who perform local public work projects should be aware that
increasingly more local governments are adopting resolutions that require
contractors and subs who bid their work to participate in a Department of Labor
approved apprenticeship program.
Already in 2003, the City of Schenectady has adopted such a requirement
and the County of Schenectady will soon follow. Also, the Albany and Troy City School Districts have recently
adopted apprentice program mandates. Members who would like information on the
DOL requirements for apprenticeship program approval should contact the NESCA
office.
AFLAC
New York
P.O. Box 312
Voorheesville, NY 12186
(518) 484-5783;
Fax (518) 765-2284
Contact: Susan Scherer
CS Architectural Products,
Inc.
PO Box 826, 400 Old
Niskayuna Road
Latham, NY 12110
(518) 785-3228
Fax: (518) 785-4679
Contacts: Steven Marshall,
Carvel Mowry
D
& K Rock Services, Inc.
P.O. Box 404
Port Ewan, NY 12466
(845) 331-4878
Contacts: Doug & Kathi Ellsworth
Genbrook
Millwork, Inc.
153 Slater Hill Road
Green, NY 13778
(607) 656-7563
Fax: 607-656-7522
Contact: Josh Browning
North
East Underlayments, LLC
3259 State Route 28
North Creek, NY 12853
(518) 251-5129; Fax (518) 251-5757
Contacts: Neal Stahl, Geoffrey Konis
Steam
Plant Systems, Inc.
PO Box 897
Clifton Park, NY
12065
(518) 877-8805
Fax: (518) 887-8686
Contacts: William Pels, Ronald Messen
VBI,
LLC
1241 Kings Road
Schenectady, NY 12303
(518) 374-0394; Fax (518) 374-1152
Contacts: Lou Venditti, Chris Venditti
Yonkers
Excavating Corp.
553 Croton Falls Road
Carmel, NY 10512
(845) 277-3906
Fax: 845-277-1039
Contact: George Calauti
SENATOR BRUNO URGES TORT REFORM (Go Top)
In
remarks made before a recent New York City breakfast forum, Senate Majority
Leader Joseph Bruno urged significant reforms to a tort liability system that
currently costs New Yorkers over $14 billion, more than any other state in the
country. Senator Bruno stated that tort
reform would not only save New Yorkers billions of dollars, but would also ease
budget gaps for both New York State and New York City.
Specific
reforms cited by Bruno included:
Ø
Repeal of joint and several liability, under which a
defendant can be forced to pay all of the damages awarded, even if the
defendant’s liability is only one percent.
Ø
Creation of a $250,000 cap on non-economic damages.
Ø
A limitation on lawyers’ contingency fees.
Ø
Elimination of “vicarious” liability, under which third
parties with no culpability in accidents can be held liable and are targeted
because of their deep pockets.
Ø
An extension of the Court of Claims jurisdiction.
While
Senator Bruno did not specifically mention reforming Sections 240 & 241 of
the NYS Labor Law, which places an absolute liability (no defense) on
construction owners and contractors to provide a “safe place to work”, NESCA,
ESSA and other contractor groups will seize upon this opportunity to push for
240/241 reform.