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Paradoxes

For the past six months or so, I've been using ConsensusDOCS agreement forms wherever I can reasonably do so ---- meaning that I'm using them for projects on which there is not an owner or architect who insists on using AIA documents. I usually represent owners, have used many AIA standard form agreements over the years (with modifications) and continue to use them.



But where there is not a vested interest in staying with AIA forms, I have tried to use ConsensusDOCS, because my twenty-plus years of experience as a construction lawyer has demonstrated that the premise on which they are based is valid --- a collaborative rather than an adversarial relationship among project participants will, without fail, result in more successful projects.



It is distressing, then, to say the least, to read in a recent Engineering News Record (June 29, 2009) that slow pay has now become a huge issue for contractors and subcontractors throughout the construction sector and in all parts of the country. Pay cycles for contractors have stretched from the customary 30 days, to 45 or 60 days. For subcontractors, pay cycles of 90 days are common. In addition, contractors and subs report that retainages are being held beyond any reasonable time frames, and change orders for indisputably changed work are more frequently being withheld by owners.



It is truly paradoxical that while the ConsensusDOCS are being endorsed by many and varied industry participants (including owners, contractors and subcontractors), the reality is that the economic straits in which we exist make it all but impossible to forge the collaborative relationship the documents contemplate and on which they are based. (This entry published by Karen Estelle Carey, a construction attorney and member of Womble Carlyle's construction group.)

ConsensusDOCS for Public Contracts? Yes, In South Dakota

It will be interesting to see how quickly South Dakota begins using ConsensusDOCS for public contracts after the February 2009 legislation permitting the use of the "ConsensusDOCS 200 Standard Agreement and General Conditions Between Owner and Contractor." It seems safe to assume that the South Dakota chapter of the AGC will be working hard to encourage the use of this contract form, and indeed, it probably is in use now for some public projects.




Several press releases covering passage of the law permitting the use of ConsensusDOCS 200 hailed the law as revolutionary in showing other states how to have a better and more efficient contracting process (for one such release, click here). This could be true, if the ConsensusDOCS 200 is used pretty much "as is". However, H B 1212, the law that gives permission for the use of the form, also provides that any public corporation can modify or delete any portion of it. As with most other things like this, the devil will be in the details of what changes a given public corporation makes to the form. (Post published by Karen Estelle Carey).








How do you measure damages when a construction blunder saves an owner $200 million?

A recent story out of Las Vegas, covered in the NY Times, poses an interesting question for construction and real estate lawyers ---- what would be the measure of damages for defective construction, the result of which is estimated to save the owner at least $200 million?

The Harmon hotel tower, part of MGM Mirage's acclaimed $9 billion development called the CityCenter, had been designed as a 48-story tower, the upper 20 floors to be luxury condominiums. But recently it was discovered that the rebar installed in the concrete beams in the first 15 stories already constructed had been positioned incorrectly, and could not safely support a 48-story tower. Correcting the problem would involve extensive and very expensive demolition and rebuilding.

So MGM Mirage made the decision to top out the building at 28 stories, and not build out the 200 condo units planned for the upper stories --- resulting in a savings estimated at $200 million. And also not being stuck with a lot of unsold condos in the very soft Las Vegas market. The chairman of MGM Mirage said "It takes pressure off of selling more condominiums; it takes pressure off of occupying more rooms."

The measure of damages for defective construction is normally the cost to repair the defective work. However, if the cost to repair is so enormous relative to the value of the structure that it would constitute economic waste to fix it ("economic waste" is a term of art with varying meanings depending on the facts and circumstances), then the measure of damages is usually the diminution in value of the structure.

Under these facts and circumstances, it appears there is a good argument that demolishing and rebuilding the existing 28 stories correctly would constitute economic waste, and that the appropriate measure of damages is the diminution in value of the hotel tower. But this appears to present a problem. In the absence of any obvious market for condos in Las Vegas these days, has the value of the building really been diminished at all?

It would seem not.

But there is something else to consider. The Harmon will be the closest building to the Strip in the CityCenter, so the shortening of the tower is going to change how the development looks. It seems that a lot of work has become necessary to figure out what the new skyline of the CityCenter should be and to satisfy City government on that score. Maybe that's the way to approach the damages calculation.

To read the articles in the NY Times, click here and here. (This blog was published by Karen Carey, a member of Womble Carlyle's Real Estate Development and Construction Law practice groups.)

Employee Free Choice Act Reintroduced; Battle Lines Are Already Drawn

On Tuesday, March 10, George Miller (D-CA), Chairman of the House Education and Labor Reform Committee, introduced the Employee Free Choice Act (H.R. 1409). Asserting that the bill would agive workers the ability to stand up for themselvesa and heralding the effort as a key component of economic recovery, Chairman Miller insisted the EFCA would restore employee rights. Co-sponsor Tom Harkin (D-IA) explained, ajust as the National Labor Relations Act, the 40-hour week and the minimum wage helped to pull us out of the Great Depression and into a period of unprecedented prosperity, so too will the Employee Free Choice Act help reinvigorate our economy.a

The bill, essentially the same as one passed by the House but killed in the Senate two years ago, faces a stiff fight. Although President Obama has pledged his support to the legislation, employer organizations have mobilized a well-coordinated campaign to highlight what they perceive as significant weaknesses in the Act, also countering with their own proposal, the Secret Ballot Protection Act. To make matters even more confusing, on March 11 Joe Sestak (D-PA) proffered yet another alternative, the National Labor Relations Moderation Act (H.R. 1355), which Congressman Sestak describes as a amiddle grounda compromise to preclude a divisive confrontation. As the rhetoric on either side escalates, examination of the key features of EFCA is essential.

To read about the key features of EFCA, continue here.

(This entry was published by Charlie Edwards, a member of the firm's employment law practice group.)

Real Estate Developers Ask for a Bailout

The WSJ and the Washington Post report that some of the country's biggest commercial property developers have sought out government assistance as debt comes due.

Although the numbers vary by source, roughly $530 billion in commercial mortgages will be coming due in the next three years, with $160 - $400 billion coming due in 2009. Delinquency rates have begun to rise as rent prices fall and vacancies rise for commercial properties; despite the rise, delinquency rates are still below historic levels (i.e the vast majority of these loans are performing).

The problem is these types of loans are underwritten for five, seven, or 10 years with a balloon payment due at maturity. At maturity the loan is typically refinanced by the property owner. But the credit markets are virtually frozen (in large part because hardly anyone is securitizing commercial mortgages) and little, if any credit is available for refinancing (except for loans being made by HUD, Fannie Mae, and Freddie Mac).

To address this problem, property owners are asking the Treasury and the Federal Reserve to include the commercial real estate industry in the $200 billion loan program to rescue the consumer debt market, money intended to help investors purchase securities backed by those assets. Property owners hope that including commercial real estate will encourage banks to refinance mortgages coming due because the banks could securitize the mortgages. Some property owners have gone one step further and asked the Treasury to set up a separate fund just for commercial real estate.

The Treasury and Federal Reserve have said they will consider including commercial real estate in the $200 billion loan program.

Unfortunately, including commercial real estate in this loan program may not be enough to save the industry if only $200 billion is available and $160-400 billion in loans are coming due in 2009. Even if the program includes enough money to cover commercial real estate, Lenders may not be able to underwrite the loans; they may not be able to accurately price the assets because of plummeting property values.

Family Online Safety Institute (FOSI) Releases Online Safety Proposals

The Family Online Safety Institute ("FOSI") released its report Making Wise Choices Online in which it provides a survey of ongoing initiatives to ensure the safety of children using the Internet as well as four policy proposals for the coming Administration to consider. The release coincides with the Second Annual FOSI Conference, held today in Washington, D.C., themed "Safe At Any Speed: Rules, Tools & Public Policies to Keep Kids Safe Online."
Womble Carlyle is pleased to have sponsored the FOSI Conference and to have forged a friendship with this organization.

Click here to learn more about FOSI's Internet safety proposals.

Entrepreneur Removes Home From the Power Grid with the Help of LEDs

Eric Taub of the New York Times posted an interesting story this morning about Dean Kamen, the eccentric inventor of the Segway scooter. Mr. Kamen owns a small, three-acre island off the coast of Connecticut where he built his home, and he recently decided to take his entire island off the power grid--that is, produce his own electrical power (in this case through wind and solar).

To do that, Mr. Kamen had to dramatically reduce his power consumption. He accomplished that goal by using LEDs, or light-emitting diodes, to light his home's interior and exterior. Mr. Taub explains that an LED light fixture uses one-fifth to one-tenth of the power of a standard incandescent fixture. As a result of this change, Mr. Kamen was able to reduce energy consumption in the house by 70 percent. As an added benefit, the bulbs will not need to be changed for years.

The downside of this switch is cost. Although the price of LED fixtures are dropping, they are still significantly more expensive than an incandescent fixture. For that reason, it may be years before builders use this technology in spec homes and buildings.

Source: New York Times

Infrastructure Projects In the Obama Administration --- a Bright Spot In An Otherwise Gloomy Future

From the early days of his presidential campaign, President-Elect Obama has emphasized the importance, and priority, of rebuilding our nation's infrastructure. At first, this was not particularly tied to the goal of job creation, or at least that part of the equation was not stressed. But as the economic downturn spiraled out of control in the past months, rebuilding infrastructure became explicitly tied to creating a large number of new jobs.

State and local governments are very much on board with investing in infrastructure, and doing it quickly. At a meeting of the National Governors Association earlier this week in Philadelphia, the governors told Mr. Obama that over $130 billion worth of infrastructure projects have already won regulatory approval and just need funding to "get the shovels in the ground". Thousands of jobs could be created if these projects could get underway.

It seems that the specific types of projects mentioned most frequently are roads, bridges and schools. This is certainly good news for construction companies who are in the business of horizontal construction and manufacturers of road and bridge-building materials. It is also good news for the many construction companies who have long done business with local counties and school boards.

There are other kinds of infrastructure projects that also should be undertaken --- light rail and other forms of mass transit, wide-ranging installation of broadband, and other things that are badly overdue and will help move our country forward. To read more about President-Elect Obama's conversation with the governors about this subject, click here. (This blog entry was published by Karen Carey, a member of Womble Carlyle's construction law and real estate development practice group.)

AASHE Conference Highlights Sustainability Agenda, Colleges and Local Governments

The second biennial conference of the Association for the Advancement of Sustainability in Higher Education (AASHE) was held at the new Raleigh (NC) Convention Center from November 9-12. The purpose of the conference was to provide a "unique opportunity for every sector of higher education in the United States & Canada to come together to demonstrate how colleges and universities can lead the way to a sustainable future." AASHE lined up host institutions Appalachian State University, Duke University, North Carolina State University and the University of North Carolina at Chapel Hill with the theme of "working Together for Sustainability -- On Campus and Beyond." Admission also included a tradeshow highlighting sustainable solutions from a range of providers from Cree, Siemens and Duke Energy to Aramark, Ecolab and Johnson Controls.

The stated goals for the AASHE conference were to:

Further conference detail may be found at http://www.aashe.org/conf2008/schedule.php.

As reported in The Chronicle of Higher Education, the closing panel highlighted ways that colleges and other sustainability interests can work with local governments. Speakers included moderator Jim Elder, the director of the Campaign for Environmental Literacy, the clerk of courts from Miami-Dade County Florida, the mayor of Chapel Hill and Debra Rowe, a professor at Oakland Community College. Professor Rowe, "who is famously involved in countless sustainability organizations and efforts, said that many campus career offices donat tell students about the sustainability jobs that city governments will need to fill in the future. Sustainability advocates, she said, should use that potential demand to push sustainability education on campus." (This entry published by Liz Riley, a member of Womble Carlyle's construction and real estate development practice group.)


Ten Battle-tested Rules for Communicating Well in Hard Times

The line of organizations delivering bad news these days is a long one. And with the financial market challenges causing a ripple effect across the broader economy, that line may be long across America for some time. Communicating tough news is an unenviable task, and legal advisers are increasingly called upon to guide clients through the delivery of news that can be jarring: layoffs, declining profits, product recalls and ethical breaches, to name a few. Henry Fawell, a Strategic Communications consultant at Womble Carlyle based in the firm's Baltimore office, outlines how you can communicate effectively as an organization during difficult financial times.

Click here to read more...

Architects Feel the Hit

A recent article in Architectural Record describes the economic downturn's effect on design firms, and the gloomy forecast for the forseeable future. According to the article, retail and hotel building will fall 10 per cent in 2009, with office construction constricting by 12 percent. While some regional banks for still making loans for projects that are not speculative, even this activity is undercut by fundamental problems in the construction industry, one of the most important being the steep rise in prices of construction materials.

Institutional projects are being impacted as well. Public projects are typically financed by bonds, and voter support this year is extremely uncertain. As for private schools, endowments are typically invested in the stock market, the volatility of which is front page news every day.

The article finds one potential bright spot --- for firms that are able to diversity with international projects. Since this article was published (October 15, 2008), however, it has become painfully clear that the economic downturn is global. To read the entire article, click here. (This entry published by Karen Carey, a member of Womble Carlyle's Real Estate Development and Construction Law practice groups.)

Housing Construction Decline Hits Long-time Construction Supply Company

Stock Building Supply, established 86 years ago in Raleigh, North Carolina as Carolina Builders, "is slashing 3,000 jobs and closing 86 facilities in six states as it struggles with the biggest housing slump in more than six decades" reports the News & Observer. Parent company Wolseley Plc (UK), made the announcement on October 23. The story notes that other building suppliers are also cutting back as a result of the economic slowdown, although the Triangle and Charlotte may fare better than other areas such as Florida, California and Louisiana. (This entry posted by Liz Riley, a member of Womble Carlyle's Real Estate Development and Construction Practice Group.)

Zero Trans fat Homes?

Michelle Kaufmann, an architect known for her line of prefab homes, recently proposed a standardized "nutrition" label to communicate the benefits of a green building to potential buyers. She notes that we traditionally buy a home based on qualities like location, curb appeal, size, and upfront costs, but exclude important factors like sustainability, healthfulness of the indoor environment, and the cost of operating a home.

The purpose of the sustainability label is to quantify the advantages of a green home in easy to understand terms. Her proposed label, similar to the nutritional label found on packaged food products, lists key figures such as energy consumption, carbon dioxide emissions, and insulation values. The label would allow consumers to compare the long-term cost benefits of homes on the market and a home's contribution to improving the environment. In the same way that nutritional labels have changed the way people buy food (for example, the recent push for zero trans fats), Michelle Kaufmann hopes that a standardized sustainability label will change the way people buy homes.

The label could also be married to existing green building standard, such as LEED. The LEED distinction on the label would promote USGBC's brand, and listing key figures on the label will help distinguish a LEED building from one built using traditional building standards.

For more information and an example of a "sustainability label" see Michelle's blog entry and her whitepaper.

House Energy Bill Seeks Improved Energy Efficiency and Green Development for the Built Environment

On Tuesday of last week, the U.S. House of Representatives passed the much talked about energy bill, H.R. 6899, by a vote of 236 to 189. Politicians and the press have spent a great deal of energy focusing on this year's hot button issue, offshore drilling, but the bill also includes a number of provisions that could have an impact on sustainable development and construction. For example, Title VI of the bill is a reformulation of a bill originally proposed by Rep. Ed Perlmutter (D-Co) last spring, the Green Act of 2008.

Among other things, Title VI seeks to cause a 20% reduction in energy consumption for single and multifamily structures built or rehabilitated with HUD assistance; creates an energy efficiency demonstration program that applies to multifamily properties in certain enumerated federally assisted program (e.g. Section 8); establishes incentives for increasing the energy efficiency of multifamily housing, including discounts on premiums for mortgage insurance and allowing mortgages to exceed certain dollar amount limits prescribed by law; and authorizes HUD to make grants to states, cities, and counties to carry out energy efficiency programs for new and existing multifamily housing.

Rep. Perlmutter stated in a recent press release, "The Green Act measures will help revitalize our economy by making energy efficiency practices more affordable, accessible and achievable by consumers, businesses and government entities. By prioritizing energy efficiency practices, we can ease the woes of homeowners, lenders, financial markets, builders and our environment."

Earlier this summer, Karen Carey summarized the testimony of representatives of the National Multi-Family Housing Counsel (NMHC) and the National Apartment Association (NAA) who offered a number of recommendations to improve the original Green Act of 2008. Some, but not all, of these recommendations were incorporated into Title VI, such as including the new National Green Building Standard as one of the applicable green building standards. See Karen's entry on Womble Carlyle's Multifamily and Mixed Use Development Blog for a summary of the other recommendations and a link to the full testimony.

Sen. Saxby Chambliss (R-Ga) predicted that the House energy bill would go nowhere in the Senate. The Senate intends to unveil its own energy bill before it recesses next week, but does not intend to address it until after the November elections.

Sources: HR 6899, Atlanta Journal Constitution

California's Green Building Standard

California's Green Building Standard, adopted by the California Building Standards Commission on July 18, 2008, appears to remain the only state-wide green building standard in existence --- which is somewhat surprising, given the sudden popularity of "going green" in so many business sectors. Hardly a day goes by without several emails in my In box advertising programs, books, events, etc. touting the benefits of being green.

California's standards appear to focus heavily on reducing water use --- by one account, the standards will require (when they become mandatory in a couple of years) that water use be reduced by 20 percent and water for landscaping by 50 percent for all new construction. The standards will also require reducing energy usage by 15 percent. Click here to find the final approved standards.

One thing that makes the California standards attractive is that they don't specify how to make the called-for reductions. Giving the construction industry the flexibility to choose how to reduce water consumption and energy should be helpful not only to the industry but also to consumers (whether this flexibility will carry over into the mandatory standards that are to be developed over the next two years or so remains to be seen).

It will be interesting to see whether, and when, other states follow California's lead. I suspect it won't be until after the economy bottoms out and begins to recover. It is hard to concentrate on much of anything else at this point. (This post published by Karen Estelle Carey, an attorney in Womble Carlyle's real estate and construction practice.)

First Measure to Link Transportation Funding to Urban Planning

The Wall Street Journal recently reported that a revolutionary bill has just passed both houses of the California legislature and is on its way to Governor Schwarzenegger's desk for his signature or veto. The Bill, Senate Bill 375, intends to cut carbon-dioxide emissions by rewarding cities and counties that prevent sprawl and improve public transportation.

The bill requires California's regional planning authorities to develop plans to meet a set of emission reduction goals in order to receive transportation funding. Builders who construct projects closer to public transportation will be graced with a lighter regulatory hand (e.g. reduced requirements for environmental studies).

There were a number of concerns, including an increase in the cost of housing, the loss of a city's right to determine the use of its land, and a fear that the law would impede California's growth, but the bill was ultimately supported by environmentalists, local governments, and builders.

Proponents hope that this bill will be a model used by other states to reduce the spread of sprawl, increase transportation-minded development, and lower carbon-dioxide emissions.

There is no word yet on whether the Governor will sign the bill into law.

Another Construction Nightmare

The Womble Carlyle Fair Labor Standards Act Law Blog chronicles the Act with a particular emphasis on the southeast United States. In a blog entry posted yesterday, Charlie Edwards focuses on the increase in new construction industry filings in several specific areas, including a dispute over what constitutes compensible time for purposes of recording worked time. For further information, see his blog entry here.

BIM for Facilities Management

Today I listened in on a webinar presented by Autodesk on the subject of BIM in Facilities Management. Although I am a construction lawyer, not an architect or a facilities manager, I could readily see the value of BIM to facilities managers. To be able to have at one's fingertips complete information on all your facilities, including the physical structure, the mechanical and electrical systems, furnishings, furniture and equipment is quite remarkable. And although FM Desktop can amass much of this information, it is lacking the information that a BIM can provide, and now can be exported, as I understand it directly from Autodesk's REVIT in which the model was created.

I realize that some federal and state governmental agencies are now requiring the use of BIM in designing new buildings. I think large private institutional owners are not there yet, and it may be because the architects they typically use are not educating the owners about the benefits of BIM and giving them the opportunity to take advantage of these opportunities. From what I understand, most architects are still telling their owner clients that "BIM will not be used on this project". It's time for that to change.

In fact, it seems to me that the greatest value of BIM, when all is said and done, may be in the area of facilities management. (This post submitted by Karen Estelle Carey, a member of the Construction and Real Estate Development team.)

Couple Runs Afoul with Implied Warranty of Habitability

A recent NC case arises from an Outer Banks construction lot in Duck, which according to an online resource on Duck is a town established in the 1870as and named for the many ducks and water fowl in the area. A migratory town with around 500 full time residents, nearly a quarter million people flock there every summer.

Waddling through the tangled web of the case, Developer One built a bulkhead retaining wall around a lot fronting the Currituck Sound in Duck. Later, Mr./Mrs. Mancuso purchased the lot individually, and then had their company, Developer Two, build a house, swimming pool and second bulkhead. Buyers bought the house and less than a year later, Developer Oneas first bulkhead sagged and bowed. Not wanting to pay the bill, Buyers filed suit against Mr./Mrs., but not their company Developer Two.

The North Carolina Court of Appeals reaffirmed that North Carolina recognizes a claim for breach of implied warranty of habitability against a "vendor" who is in the business of building dwellings. The implied warranty covers recently constructed dwellings, including all "fixtures," so they are sufficiently free from major structural defects and constructed in a workmanlike manner.

After ruling the bulkhead a "fixture" due to its "annexation to the land", the court needed to find that Mr./Mrs. are "vendors" to hold them liable. Since (1) Mr./Mrs. signed the contract as individuals, (2) Buyers did not know that Mr./Mrs. intended to contract the construction to a separate company, and (3) Mr./Mrs. were actively involved in the construction, the court ruled that Mr./Mrs. were out of luck and could not duck their implied warranty responsibilities by contracting with their own corporation. (This entry posted by Ken Michael, a member of Womble Carlyleas real estate development and construction law practice group.)

Source: Regis M. Burek and wife, Lynda G. Burek v. Bernard Mancuso, Jr. and wife, Frances Mancuso, 657 S.E.2d 446, 2008 WL 565112 (N.C. App. 2008)

The Hidden Risks of Going Green

In a recent article entitled "The Hidden Risks of Green Buildings: Avoiding Moisture and Mold Problems", authors J. David Odom, Richard Scott and George H. DuBose of the Liberty Building Forensics Group, LLC caution owners and other parties thinking of building a "sustainable" or "green" building to pay close attention to the materials being used to determine whether the materials have been adequately tested to ensure that the materials not only qualify as sustainable or LEED certified materials, but also to ensure that the materials are durable and will last as long as other non-green materials. The authors note that "[w]e don't believe that anyone would deem a structure "sustainable" if it cannot survive the first five years without a major renovation because of moisture problems."

As with all buildings, the authors note that the most important components of a building to be scrutinized are the building envelope and the HVAC system. The authors conclude with several recommendations for dealing with the increased risk in using green designs including, 1) a technical peer review of the design focusing on the performance of the HVAC and building envelope systems, 2) adherence to institutional knowledge in the fields of humidity control, waterproofing and building envelope design and resistance against "building flush out" and other practices that have fallen out of favor, and 3) new green products should be examined and evaluated in order to weigh the green benefit against the likely performance of the product, particularly in areas of the building where the risk of failure and the resulting cost to remedy the failure are the greatest. (This entry published by Culley Carson, a member of Womble Carlyle's construction law practice group.)

Source: The Hidden Risks of Green Buildings

Mutual Waiver of Consequential Damages Re-Visited

From an Owner's perspective, the mutual waiver of consequences damages that was introduced into the AIA standard form design and construction contracts in 1997 and survives in the 2007 edition of these contracts continues to be problematic. While Architects and Contractors embrace this waiver, it is not so good for owners. In reflecting recently on how best to describe to an Owner the potential consequences of waiving consequential damages in the Owner's agreement with the Architect, I created the scenario below that illustrates how this waiver could be seriously detrimental to an owner. Although unlikely to occur exactly as played out below, the scenario is based on fact.

The Architect makes a negligent mistake in the mechanical design of the HVAC system in an assisted living facility. As a result, the air doesn't circulate properly. Word gets around about how terrible the air quality is in the facility. There is some bad press about it, and in fact the air quality is so unpleasant that a few people move out of their units. A particularly fragile lady falls and breaks a hip while moving out, and the family sues the Owner, claiming that she would not have had to move out except for the terrible air quality in her unit. Another resident develops pneumonia and dies, and the family sues the Owner claiming that the faulty air circulation was the proximate cause of the pneumonia. More bad press.

Whatever costs the Owner incurs in defending against these lawsuits and in repairing its public image, and whatever liability it is ultimately found to have would likely be consequential damages. If the Owner waives its right to recover consequential damages, the Owner would have no claim against the Architect for the damages the Owner suffered as a result of the lawsuits and the bad publicity it received.

The point is that Owners should not lightly accept a mutual waiver of consequential damages simply because it appears in the standard form agreement. (This entry was published by Karen Carey, a member of Womble Carlyle's real estate development and construction law practice group.)

Centralizing International Study on Campus: FedEx Global Education Center at UNC-Chapel Hill

As noted in the "Buildings and Grounds" blog of The Chronicle of Higher Education, and recently highlighted at the Society for College and University Planningas annual conference in Montreal, UNC-Chapel Hill has gathered its various international program elements under one roof at The FedEx Global Education Center at University of North Carolina at Chapel Hill, designed by Leers Weinzapfel Associates, and Pearce Brinkley Cease + Lee. Having a central home has improved the global education profile at UNC-Chapel Hill, with faculty, students, international visitors and others making good use of the Global Center since its opening last year. Although some question the ultra-traditional, almost utilitarian style of the building, a look beyond the red brick exterior reveals "a green roof and a large glassy facade. It is oriented around a central atrium that provides for serendipitous meetings between students and faculty members and also offers ample space for banquets. Classrooms in the building are open not only to international programs, but also to programs like biology and philosophy that might benefit from the international atmosphere." (This blog entry was published by Liz Riley, a member of Womble Carlyle's real estate development and construction law practice group.)

Source: The Chronicle of Higher Education

NC Court of Appeals Holds That Risk Allocation Provision Does Not Violate North Carolina Anti-Indemnification Statute

Indemnification and limitation of liability provisions are commonplace in construction contracts. By statute in North Carolina (N.C. Gen. Stat. ASS 22Ba1 (2007)), any contractual agreement relating to the design, planning, construction, alteration, repair or maintenance of a building, road, appurtenance or appliance purporting to indemnify a party against liability for damages caused by such partyas own negligence, in whole or part, is unenforceable. This rule extends to the partyas independent contractors, agents and employees as well.

Recently, the North Carolina Court of Appeals clarified that N.C. Gen. Stat. ASS 22B-1 (2007), North Carolinaas version of the so-called aanti-indemnification statutesa that have been enacted across the country, does not apply to a limitation of liability provision agreed to by parties to a contract in the context of construction.

In Blaylock Grading Co. v. Smith, 658 S.E.2d 680 (2008), the North Carolina Court of Appeals upheld a arisk allocationa provision contained in a construction contract that limited the amount of liability that could be imposed on the defendant for the consequences of his own negligence. In Blaylock, the plaintiff, a grading company, brought a claim of breach of contract and negligence against the defendant, the surveyor on the project. On the issue of liability, the jury determined that the defendant breached the contract with the plaintiff and was negligent in the performance of its surveying duties. On the issue of damages, the jury found that the defendant was liable for over $500,000. The defendant appealed arguing that the Risk Allocation provision in the contract limited the defendantas ultimate liability to $50,000.

On appeal, the Court of Appeals held that ASS 22Ba1 did not apply in this case, noting that the statute only prevents one party to a contract from agreeing to be liable for the negligence of the other party to a contract. By contrast, the Risk Allocation provision contained in the contract at issue only limited the amount of damages recoverable by one contracting party from the other and did not impose liability and damages on the plaintiff for the defendantas negligence. Consequently, the Court held that the Risk Allocation provision did not violate N.C. Gen. Stat. ASS 22B-1 (2007).

Thus, the lesson to be learned for contract draftsmen is that risk allocation provisions are a viable and powerful means to limit prospectively the damages for which a company may be liable. (This entry was published by Culley Carson, a member of Womble Carlyle's construction law practice group.) (PDF)

Source: Blaylock Grading Co. v. Smith (PDF)

Mobile Art Pavilion will make stop in Central Park - Then Disappear...

According to a story in the July 24 New York Times, a traveling art building (of sorts) designed by London architect Zaha Hadid is heading to Central Park this fall. The "Mobile Art" pavilion will showcase works of contemporary artists as well as advertise for its sponsor, Chanel. The 7,500 square foot structure can be packed in 51 containers and shipped to various locations around the world. Mobile Art "will occupy the Rumsey Playfield, midpark at 70th Street, from Oct. 20 to Nov. 9. (It is Ms. Hadidas first New York building, albeit temporary, and has already made stops in Hong Kong and Tokyo and is headed later for London, Moscow and Paris.) ...Ms. Hadid, who won the Pritzker Prize a architectureas highest honor a in 2004, said that she liked the idea that a pavilion 'lands, creates a buzz and disappears.'" See full story, exhibition admission details and cool photos here. (This blog entry was published by Liz Riley, a member of Womble Carlyle's real estate development and construction law practice group.)

Builders Instituting Lender Liability Lawsuits

The Wall Street Journal reports that the "love affair" between lenders and builders that existed during the housing boom is over, and the lender liability lawsuits that characterized the real-estate downturn in the early 1990s are making a comeback.

Builders are beginning to file suits against lenders contending that the lenders forced the builders and their projects into insolvency by acting in bad faith. The bad faith allegations include delaying or stopping projects midstream by refusing to release funds from construction loans, launching lengthy audits and appraisals, and aggressively enforcing personal guaranties.

The Journal suggests that the clampdown is the result of financial institutions acting in the face of intense pressure from regulators and shareholders to reduce their real-estate exposure and avoid crippling losses.

For more information, see the Wall Street Journal.

Watch Appleas aUnleasheda event live right here

Apple is set to announce new hardware today. The company is holding a (virtual) keynote at 10 AM PT (1 PM in New York, 6 PM in London, 7 PM in Paris). And youall be able to watch the event right here as the company is streaming it live.

Rumor has it that the company is set to announce some new Macs. Over the past year, Apple has updated its entry-level computers with new custom-designed M1 chips. And now, the company could bring its own chips to higher-end computers, such as a 14-inch and 16-inch MacBook Pro, a new Mac Mini and a 27-inch iMac.

Apple could use this opportunity to redesign its laptops from the ground up with new display technologies, a new array of ports and a new form factor in general. But thatas not all. Apple has also been working on an updated version of its entry-level AirPods.

You can watch the livestream directly on this page, as Apple is streaming its conference on YouTube.

If you have an Apple TV, you can open the TV app and look for the aApple Special Eventa section. It lets you stream todayas event and rewatch old ones.

And if you donat have an Apple TV and donat want to use YouTube, the company also lets you livestream the event from the Apple Events section on its website. This video feed now works in all major browsers a Safari, Mozilla Firefox, Microsoft Edge and Google Chrome.

Source: Tech crunch


China Could Be Exploiting Internet Security Process to Steal Data, Cyber Experts Warn

To access the data of unsuspecting users, the Chinese Communist Party (CCP) could take advantage of a universal authentication process that is believed to be secure but may not actually be, cybersecurity experts warned, although encryption is still the preferred method of protecting digital data and Protection of computers - in some cases, the same digital certificates used for internet authentication allow the Chinese regime to infiltrate and wreak havoc on various computer networks, they said. 

Digital certificates that verify the identity of a digital entity on the Internet. A digital certificate can be compared to a passport or driver's license, according to Andrew Jenkinson, CEO of cybersecurity company Cybersec Innovation Partners (CIP) and author of the book Stuxnet to Sunburst: 20 Years of Digital Exploitation and Cyber aaWarfare. 

"Without it, the person or device you are using may not meet industry standards, and the encryption of critical data could be bypassed so that what should be encrypted remains in plain text," Jenkinson told The Epoch Times Used to Encrypt internal and external communications that prevent a hacker, for example, from intercepting and stealing data. But "fake certificates" or invalid certificates can tamper with any data. 

Sense of security, "said Jenkinson. Cybersecurity firm Global Cyber aaRisk LLC said digital certificates are generally issued by trusted CAs and then the same level of trust is passed on to intermediaries However, there are opportunities for a communist entity, malicious actor, or other untrustworthy entity to issue certificates to other "hideous people" who appear trustworthy but are not, he said.

"If you issue a certificate from a trusted authority, you will trust it," said Duren. "But what the issuer could actually do is pass that trust on to someone who shouldn't be trusted. Duren said he would never trust." a Chinese certification authority for this reason, stating that it is aware of a number of companies that have banned Chinese certificates because they were issued to untrustworthy agencies. 

Jenkinson said that Chinese certification bodies make up a small portion of the overall industry and the certificates they issue are generally limited to Chinese companies and products.

Prince, a member of the hacking group Red Hacker Alliance who declined to give his real name, uses his computer at their office in Dongguan, Guangdong Province, China, on Aug. 4, 2020. (Nicolas Asfouri/AFP via Getty Images).

 In 2015, certificates from China Internet Network Information Center (CNNIC), the state agency overseeing domain name registration in China, were challenged. Mozilla revoked CNNIC certificates because it knew of unauthorized digital certificates associated with multiple domains. Both Internet companies opposed CNNIC delegating its authority to issue certificates to an Egyptian company that issued the unauthorized certificates. According to Jenkinson, CNNIC certificates were banned because they had "back doors". 

A back door means that [the Chinese certification body] could literally take administrative access and send data back to the mothership, ahe said. Since 2016, Mozilla, Google, Apple and Microsoft have also blocked the Chinese certification authorities WoSign and their subsidiary StartCom due to unacceptable security practices.Vulnerability Despite these bans on Chinese digital certificates in recent years, the CCP has not been deterred and has long-term gambling, Jenkinson said, referring to an alarming discovery by his cybersecurity firm two years ago that it was a multinational consulting firm. 

Digital certificates are typically valid for a few years depending on the certification authority, and a renewal is required to keep them valid and keep the data they are supposed to protect secure, he said. "But in 2019, CIP Chinese discovered certificates that had been valid for 999 years," Jenkinson said. His company made this discovery by researching the laptops of a leading global consulting firm. 

Jenkinson made the company aware of the vulnerability and offered, "They are either incredibly accommodating or complicit," he said, noting that the company's customers include government agencies.This multi-billion dollar company's failure to fix this problem means hundreds of thousands of people could be exposed to Chinese infiltration through the company's lax safeguards, Jenkinson said. The company engages its customers every time someone uses one of its laptops, he said. 

Companies or customers who use the company's services could be held for ransom, they have their intellectual advantages


A Sinister Six Movie Should Copy Spider-Man: No Way Home & Bring In Miles

Sonyas upcoming Sinister Six movie should take some inspiration from Spider-Man: No Way Home and introduce a new version of Miles Morales. Sony has had plans for a Sinister Six film since The Amazing Spider-Man film franchise was in progress. The second film, The Amazing Spider-Man 2, ended with a clear setup for the villain team, with the Green Goblin (Harry Osborn) and The Gentleman (Gustav Fiers) equipping allies (and possibly members) of Oscorp with advanced weapons and devices. The plans, unfortunately, never came to fruition, but Sonyas new villain-focused Spider-Man universe, which began with 2018as Venom, has led to new plans for the iconic team.

Miles Morales - whose comic debut was in 2011as alternate universe Ultimate Comics: Spider-Man - is his realityas second web-slinger, taking Peter Parkeras place after his apparent death in a final confrontation with the Green Goblin. Miles and his stories were well-received, quickly growing in popularity among readers, and he made his cinematic debut in 2018as animated film, Spider-Man: Into the Spider-Verse. As the star of numerous comics, an animated film, and a recent video game, it wonat be long before Miles has his long-awaited live-action debut.


With Sinister Six reportedly being the endgame of Sonyas Spider-Man films, itas reasonable to assume that the movie will be a crowd-pleasing epic with more than one payoff. Sony will reportedly work alongside Marvel Studios to tie their film in with the MCU, meaning that Tom Hollandas classic Peter Parker Spider-Man may face off against the six villains. Although Spider-Man was often on his own against the six in the comics, the film can easily justify introducing a second Spider-Man to even the odds and give viewers a live-action Miles Morales simultaneously.

Not only is Sony and Marvel Studious working together on the Sinister Six film, but the multiverse will be unleashed in the upcoming No Way Home. While the Miles Morales who appears in the Sony film could be their iteration, he might alternatively be from the MCU, creating a new kind of character dynamic for Tom Hollandas Spider-Man, whoas typically mentored by characters like Iron Man or Doctor Strange.

The Sinister Sixas villain roster can be comprised of characters from multiple realities as well. In addition to introducing the first live-action iteration of Miles Morales, the film can bring back actors like Alfred Molina, Jamie Foxx, and Willem Dafoe for yet another performance. With No Way Home bringing the iconic villains back, Sony could take advantage of their fan-favorite status, adding to the already crowd-pleasing introduction of Miles.

Spider-Man: No Way Home will be the first live-action Spider-Man movie to use the multiverse for crossovers. In addition to bringing back characters from bygone film eras, theyave also allowed for interaction with Sonyas Spider-Man universe. If Sony intends to make the Sinister Six film their franchiseas endgame, theyad make it an even more effective grand finale by bringing in Miles Morales.


How Supergirl Revamped Superman IV's Story And Made It Work

Warning: The following contains SPOILERS for Supergirl season 6, episode 15, "Hope For Tomorrow."

The Supergirl season 6 episode "Hope For Tomorrow" enhanced the story of the Superman movie Superman 4: The Quest For Peace in every respect. The final movie to star Christopher Reeve as Kal-El of Krypton, Superman 4 is widely considered to be the worst of the classic Superman films. Given that, it would be all but impossible for Supergirl to revamp The Quest For Peace and not improve it, but the episode "Hope For Tomorrow" successfully addressed nearly every common complaint about the movie.

The central storyline of the second half of Supergirl season 6 found Kara Zor-El (Melissa Benoist) competing with the exiled 5th Dimensional Princess Nyxly (Peta Sergeant) for control of seven magical totems, tied to the seven cosmic forces of Hope, Love, Courage, Humanity, Dreams, Destiny and Truth. Each totem required its wielder to pass a test proving their mastery of each force. The Test of Hope in the Supergirl season 6 episode "Hope For Tomorrow" proved particularly difficult, as it required the victor to "inspire a hope that burns longer and brighter than the sun." While this might ordinarily have been an easy task for Supergirl, this test came at a time when nuclear war seemed imminent between the nations of Kaznia and Corto Maltese and hope was in short supply.


The story of Superman 4: The Quest For Peace, was likewise based around the fear of nuclear war and Superman acting to end the threat after receiving a letter from a concerned boy. Sadly, the movie did so poorly it sunk any chance of a Superman 5. While the story of Superman 4 made a noble effort to tackle a serious issue, the film suffered from budget cuts and editing issues that eliminated most of the film's more thoughtful moments in favor of recycled flight scenes and nonsensical padding. The Supergirl season 6 episode "Hope For Tomorrow" takes most of the story elements from Superman IV and builds upon the base concepts to create something far better.

Roughly halfway through the Supergirl season 6 episode "Hope For Tomorrow," Lena Luthor (Katie McGrath) asked the same question as the worried boy in Superman 4: The Quest For Peace; why can't Supergirl just take away all the nuclear weapons and throw them into the sun? Kara gave the same basic answer as Superman in the movie, saying that she was "forbidden from interfering in human history." However, Kara further explained to her friend Lena Luthor that human nations needed to be free to determine their own destinies without some all-powerful alien imposing their beliefs on them. Kara also pointed out that even if she could get rid of all the nuclear weapons in the world, it wouldn't solve the conflicts that lead to war. (Ironically, Kara did wind up having to throw several nuclear missiles into the sun before the episode's end.)

This point was driven home by another scene, in which the United States diplomat overseeing the peace talks between Kaznia and Corto Maltese asked J'onn J'onzz (David Harewood) to use his telepathic powers to make the leaders of the two delegations sign a peace treaty. The Martian Manhunter refused, saying that while he was glad to use his powers to pacify the two leaders after Nxyly used the Totem of Courage to make them afraid of looking weak during the negotiations, he refused to directly control their actions. Both of the Supergirl scenes did a far better job of showing why heroes have a responsibility not to use their powers than every speech Superman made regarding that point in Superman 4: The Quest For Peace.

The Supergirl season 6 episode "Hope For Tomorrow" featured a subplot that centered around Esme, a foster child adopted by Alex Danvers/Sentinel (Chyler Leigh) and Kelly Olsen/Guardian (Azie Tesfai), and the Super Friends' efforts to help the young girl get acclimated to her new home. A victim of an abusive situation in her previous foster home, Esme was shy and fearful of being sent back to the group home she had been in. Restoring Esme's hope in the future went beyond being a test of Supergirl's ability to inspire hope and became a test for the whole team, as well as a central part of the theme of "Hope For Tomorrow." By contrast, despite being the inspiration of Superman's effort to bring an end to nuclear war in Superman 4: The Quest For Peace, the boy who wrote to Superman disappeared from the movie after Superman took him to the United Nations to hear him speak.


Originally set up as a romantic interest for Kara Danvers in Supergirl season 5, reporter William Dey (Staz Nair) has been one of the more divisive characters created for the Arrowverse, with many fans finding the character annoying and wondering what purpose he served after he and Kara agreed to be just friends in Supergirl season 6. Comparisons could be drawn between William Dey and Lacy Warfield (Mariel Hemingway) whose only purpose in Superman 4: The Quest For Peace was acting as a hostage and pushing an unconvincing love triangle between herself, Lois Lane and Clark Kent. However, the Supergirl season 6 episode "Hope For Tomorrow" redeemed William, who was far from a passive figure after being taken captive by Nyxly. Indeed, it was William's quick thinking that enabled the Super Friends to take the Totem of Courage away from Nyxly.

While Superman 4: The Quest For Peace saw legendary actor Gene Hackman return as Lex Luthor, his role in the film was far from extensive. Apart from creating the monstrous Nuclear Man, Luthor had surprisingly little to do with the action of the film and most of his scenes were comedic non-sequiturs. By contrast,  the Arrowerse Lex Luthor does not appear on camera in the Supergirl season 6 episode "Hope For Tomorrow," but nevertheless had a major impact on the episode's final scene.

As "Hope For Tomorrow" came to a close, Supergirl elected to throw the Totem of Hope into the sun, knowing that Nxyly needed all seven totems as part of her scheme to defeat Supergirl and the Super Friends. Shortly after Nxyly learned what Supergirl had done, a box fell through a portal in front of her. The box contained a watch and a note from a secret admirer telling her not to "lose hope." When Nyxly put on the watch, it formed one of Lex Luthor's trademark armored Lexo-Skeletons around her, revealing the identity of her mysterious new ally in a clever fashion. It was certainly more subtle than most of Gene Hackman's scenes trolling Superman in Superman 4: The Quest For Peace. This, coupled with the other connections throughout the episode, highlight how Supergirl was able to successfully revitalize the failed film's story arc.


The Flash Trailer Confirms Batman Will Have A Bigger Role Than We Thought

The latest The Flash trailer suggests that Michael Keaton's Batman has a bigger role in the film than many initially assumed. Ezra Miller makes his DCEU return as the Scarlet Speedster after starring in Zack Snyder's Batman V Superman: Dawn of Justice and Justice League. Directed by Andy Muschietti, The Flash's first trailer was released at DC FanDome 2021, offering a sneak peek at what to expect from the standalone flick.

It's no secret that The Flash was in production limbo for quite some time with a few director changes. But, the movie finally kicked into production in 2021 and is currently filming. Specific plot details are still scant at the moment, although a few pertinent details have been confirmed. That includes the return of Kiersey Clemons as Iris West and the introduction of Sasha Calle as Supergirl/Kara Zor-El. Barry Allen is also joined by two Batman variations: the first one being Ben Affleck's and the other one being Michael Keaton's. Obviously there's a lot of excitement surrounding their involvement, but there's heightened anticipation about Keaton's Batman iteration simply because this is the first time he will reprise the superhero role in two decades.


Considering the fact that it's the Flash's solo outing, it was initially unclear how involved Keaton would be in the film. Set photos revealed him back as the Bruce Wayne persona, and the actor's personal interviews confirmed that he's indeed wearing the cape and the cowl again. Still, with very little known about the movie's plot, there were questions about the extent of his appearance. Some argued that it wouldn't be anything more than an extended cameo, with the primary focus on Barry Allen instead. This makes sense since he is the movie's headlining character. However, The Flash's trailer suggests that Batman's role in the film is going to be more prominent than initially perceived; much of the trailer focuses on him, including both versions of the Flash visiting Tim Burton's Wayne Manor and then, his Batcave. It even ends with the tease of the 1989 Batmobile reveal.

Interestingly, despite all the references to Keaton's Caped Crusader, the hero doesn't properly appear in The Flash trailer. Instead, there's only a shot of his iconic cowl looking outside the Batcave. But, the fact that he provides the narration for the majority of the trailer further indicates the extent of his appearance. At one point, it seems like the two Barry Allens and Supergirl recruit him for a mission, and it's safe to say that he at least considers joining his fellow DC heroes in the movie. It's worth noting that The Flash appears to be an adaptation of the Flashpoint storyline from the comics. Barry's time-traveling likely fractured space-time which has had ripple effects in other universes, including that of Supergirl and Keaton's Batman. The voice-over dialog is Bruce Wayne making sense of everything that's happening.

The question now is, how does Affleck's Batman fit into all of this? Based on what's known about The Flash production, the actor didn't start to film his scenes until the middle of principal photography. Some theories suggest that Affleck's Batman dies in the movie, and that it could serve as motivation for Barry's time travel. Furthermore, many are also curious if Affleck's version of the hero will cross paths with Keaton's Caped Crusader. Fans will likely have to wait for the movie's debut to find out.


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