AAPA Asphalt Meeting 2014

1. AAPA Asphalt Meeting 2014 Hotel Capstone Tuscaloosa, AL Joe Duncan Huie, Fernambucq & Stewart March 12, 2014

2. Road Builder Laws Have Changed “Road Builders Get Immunity from the Alabama Supreme Court” –Jere Beasley Report 8/7/2013 “The reports of my death have been greatly exaggerated.” – Mark Twain-ish

3. Even Twain gets misquoted

4. What has actually changed For ALDOT & public employees: Nothing For Contractors: • Supreme Court: Hosea Weaver v. Balch • Statutory Change

5. The old law: McFadden v. Ten-T McFadden: A contractor is entitled to follow the plans and specifications provided by an engineer unless those plans would result in an obviously dangerous or defective condition.

6. Types of cases against contractors • You didn’t tell the state about an obviously defective condition • You failed to comply with the contract requirements: Is this what McFadden really said?

7. An example: Dangerous condition

8. Washington Contractor has completed work but project not accepted Driver drifts off shoulder Plans call for 4’ of aggregate to be placed at edge of pavement to dress edge No requirement to perform and shoulder work Plaintiff’s theory: Contractor should have discussed dangerous condition and inability to place 4’ of aggregate with ALDOT

9. Balch • 5 ½ years before an accident Hosea Weaver resurfaced a roadway under an ALDOT contract • Project was completed and accepted by ALDOT • At time of accident, a 7-10 inch deep ditch ran along the shoulder of the road for 500 feet. • State had maintenance responsibility for road

10. Hosea Weaver v. Balch

11. Hosea Weaver v. Balch

12. Balch Accident Criticism of some comments: “It has to be someone’s fault” “You have to be able to sue someone.” Is it anyone’s fault? Does someone else have to be liable simply because the state is not?

13. Balch Results Balch resulted in a $7.5 million verdict against the road builder The expert never testified that the road was dangerous or unreasonable; the only testimony was that it deviated from the plans and specifications

14. Duties Liability was imposed on the road builder simply because there was a deviation in the width of lane and cross slope changed over the course of 500 feet. The project was match existing.

15. Balch • True for All Projects • All work performed by contractors is inspected by ALDOT • Contractor can not do work outside presence of ALDOT inspector • Work must conform to ALDOT standards and specifications to be accepted • For Balch • Assistant ALDOT engineer for the project agreed that had the ditch been present, the project would not have been accepted • Contractor had no duty to maintain shoulder under ALDOT contract • ALDOT filled in ditch with gravel after accident

16. The deviation from an ALDOT contract does not equate to negligence Plaintiff argued noncompliance with the contract equaled negligence Plaintiff’s argument ignores dangerous and unreasonable Plaintiff’s argument created a moving standard Under Plaintiff’s argument - no violation for “match existing” contact Upon acceptance by the State, Hosea Weaver had no further responsibility – including maintenance Balch – ARBA Arguments

17. Not foreseeable that State would simply fail to maintain the roadway after acceptance Plaintiff agreed that accident would not have occurred had state maintained roadway Failure to maintain was an alteration to Hosea Weaver’s “product” Contractor should not bear liability for State’s discretion State has control over roadway construction State can accept or change plan at will Balch – ARBA Arguments

18. State’s inspection and acceptance should create contractor immunity Contractor contracted with the State, not the Plaintiff Upon completion of a project, the State has the duty to provide safe roads – not contractors State’s acceptance of roadway includes any deviations from contract Balch – ARBA Arguments

19. Balch Decision Per curiam: a majority of justices did not agree What this means: the case is not binding precedent but is persuasive

20. Balch decision • Court applied “acceptance doctrine”: contractor not liable once state accepts • Contractor is not liable due to lack of causation & proximate cause • Contractor has not duty to repair road • Court reversed decision and ruled in favor of Hosea Weaver

21. Alabama Road Builder Statute Based on these situations, the road builders proposed a statute in February 2012 to adopt the acceptance doctrine by statute. The interested parties were sent to mediation with the state bar president.

22. The Process • The interested parties were referred to a mediation process with Jim Pratt, bar president as mediator • Participating parties: • Counties • ALDOT • ARBA • Plaintiff’s bar • Engineers

23. Process Multiple mediation sessions and meetings among the parties resulted in several drafts of the bill John Cooper, ALDOT director, was integral in offering testimony/commentary during mediation to allow the bill’s passage

24. SB 139 • Section 1. Definitions: • “Contractor” means any person or entity, and any subcontractor, director, officer or employee of such a person or entity, that contracts with the State of Alabama, a county or other local government to construct, repair or maintain a highway, a road, a bridge or a street. • “Conclusion of Project” means the date that the Awarding Authority notifies the Contractor, in writing, that the Awarding Authority has assumed maintenance responsibilities for the roadway, or 60 days after the contractor has notified, in writing, the Awarding Authority that the Contractor’s work on the project is completed, whichever is earlier.

25. SB 139 • Section 1: Definitions • “Awarding Authority” means: • The Alabama Department of Transportation, if the Contractor enters into a contract with the State of Alabama to construct, repair or maintain a highway, a road or a street for the State of Alabama; or • The county governing body, if the Contractor enters into a contract with that county to construct, repair or maintain a highway, a road or a street for that county; or • The governing body of any other local government, if the Contractor enters into a contract with that local government to construct, repair or maintain a highway, a road or a street for that local government.

26. SB 139 • “Specifications” means specifications, plans, drawings, bid documents or any other written or electronically stored requirements and details the Contractor agrees to perform. • “Dangerous Condition” means a condition that is not reasonably safe for the intended use of the roadway and is capable of causing a person physical injury or death under the anticipated use of the roadway.

27. Section 2: • A Contractor is justified ordinarily in relying upon the specifications that are contained in the contract with an Awarding Authority. No Contractor shall be held civilly liable for work performed on a highway, road, bridge or street including repairs, construction, or maintenance on behalf of the Awarding Authority unless it is shown by a preponderance of the evidence that physical injury, property damage or death is proximately caused by: • a failure by the Contractor to follow the plans and specifications resulting in a Dangerous Condition; or • the Contractor’s performance of the contract in compliance with the plans and specifications creates a condition that should have appeared, to a reasonably prudent contractor, to be a Dangerous Condition; or • a latent defect which creates a Dangerous Condition that is the result of the work of the Contractor.

28. Section 2: Plain English A contactor is not liable for a condition of a road unless: It fails to follow the plans and specs, resulting in a dangerous condition Following the plans results in an obviously dangerous condition The contractor’s work creates a latent defect

29. Section 3 During the course of construction, a Contractor who constructs, maintains or repairs a highway, road, street, or bridge for the Awarding Authority is not liable to a claimant for personal injury, property damage or death arising from the performance of such construction, maintenance, or repair, if, at the time of the personal injury, property damage or death, the Contractor was in compliance with contract documents material to the condition, including the Traffic Control Plan, that was the proximate cause of the personal injury, property or death unless following the plans and specifications would result in a Dangerous Condition that should have appeared to be defective to a reasonably prudent contractor or that the contractor should have known that following the plans and specifications could create a Dangerous Condition that caused the injury or death.

30. Section 3 Plain English The contractor will not be liable if it follows the plans and specs unless doing so creates an obviously dangerous condition.

31. Section 4 If, prior to or during the course of construction, a Contractor discovers or determines that following the plans and specifications could result in a potentially Dangerous Condition then the Contractor shall, with specificity of such condition(s), expressly notify the Chief Engineer of the Alabama Department of Transportation in writing by certified mail, return receipt requested. The Alabama Department of Transportation, or the Awarding Authority, shall respond to the specific condition(s) raised within fourteen (14) days in writing as to its decision as to the appropriate response to the Dangerous Condition. The Contractor shall not be liable for any claim relating to any decision made by the Alabama Department of Transportation or Awarding Authority as to the appropriate response, design decisions or engineering decision, if any, to respond to the potentially Dangerous Condition identified.

32. Section 4 Plain English If the contractor discovers a dangerous condition, then it can write to ALDOT for direction. ALDOT has 14 days to respond and the contractor is not liable for how ALDOT elects to address the situation.

33. Section 5 The Contractor shall bear no civil liability for any alleged property damage, personal injury, death or other civil claims made by non-contractual third parties arising from the design decisions or professional engineering judgment, including decisions relating to the proper scope or inspection of the project, by the Awarding Authority. This section shall not apply to situations in which: • the Contractor contracts in whole or in part to design the roadway or project or to provide professional engineering services as to the design of the roadway; or • the Contractor undertakes to provide design or professional engineering services as to the roadway or project.

34. Section 5 plain language A contractor is not liable for engineering decisions made by the designer unless: The contractor is paid to design the road or The contractor attempts to provide engineering i.e., design/build projects

35. Section 6 The Contractor shall bear no civil liability for any Dangerous Condition that is outside of the scope of the project or that is in excess of any requirement of the governing plans and specifications provided by the Awarding Authority. This section shall not apply to situations in which: • the Contractor contracts to design in whole or in part the roadway or project or to provide professional engineering services as to the design of the roadway; or • the Contractor undertakes to provide services as to the roadway or project that are outside the scope of the project or that are in excess of any requirement of the governing plans and specifications.

36. Section 6 Plain Language The contractor is not responsible for issues outside the scope of the project unless The contractor is hired to address such issues The contractor undertakes to address those issues Example: A resurfacing project that does not include shoulder work.

37. Section 7 A Contractor shall bear no civil liability to a claimant for personal injury, property damage, or death which occurs subsequent to the Conclusion of the Project where the proximate cause of the personal injury, property damage or death is occasioned by a failure of the Awarding Authority to properly maintain the roadway or any of its features, including shoulders, unless: • a Contractor contracts in whole or in part with the Awarding Authority to maintain the roadway, or any of its features, including shoulders, or project in question; or • the Contractor undertakes, independent of a contract, to maintain a roadway or any of its features, including shoulders.

38. Section 7 Plain Language The contractor is not responsible for any accident that is proximately caused by the state/county’s failure to maintain the road unless: The contractor is hired to maintain The contractor undertakes to maintain

39. Section 8 Nothing in this Act shall limit or eliminate the liability of a Contractor for any civil action based on any alleged loss of or damage to, the property of a utility that is rightfully located on, or adjacent to, the right-of-way of any highway, road or street on which the Contractor performed the construction, repair or maintenance.

40. Section 9 The provisions of this act are severable. If any part of this act is declared invalid or unconstitutional, that declaration shall not affect the part which remains.

41. Section 10 This act shall only apply to a cause of action which accrues after the effective date of this act. Pursuant to this act, a cause of action accrues at the time of property damage or the occurrence of the personal injury or death that is made the basis of the civil action.

42. Section 11 Nothing in this law shall be interpreted or construed to alter or affect the rights of any Awarding Authority to make a claim against a contractor or to exempt a contractor from compliance with all provisions of contracts between such contractors and an Awarding Authority.

43. Section 12 This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.

44. A Lot of Information in a Little Time • Questions? • Contact us: Huie, Fernambucq & Stewart, LLP Joe Duncan 205-874-3420 jduncan@huielaw.com twitter: @joeduncanatty