How organized documentation can save you in a dispute

Webinar Speaker

Kelly Theard

Construction Lawyer
Deutsch Kerrigan
View Kelly’s Expert Profile

Full Transcript

Seth Bloom:

Well, I wanted to welcome everyone this afternoon. My name is Seth bloom. I’m the senior director of attorney services at Levelset. We’re super excited today to put on another webinar. We have a New Orleanean. Levelset is based in New Orleans. So we have someone from Deutsch Kerrigan and that’s Kelly. She’s the managing partner over there and has a big part of her practice is construction. Today. We’ll be talking about best practices and documenting your project files.

Kelly Theard:

Good afternoon, everyone. So let’s just get right into the 30 minutes. So why should you be documenting your project files? It’s to reduce the likelihood of litigation is obviously a good reason, but there are other reasons that it would benefit you. You can also identify issues as they’re occurring on the project and get ahead of them. You can estimate or administer future work. This has been a big part of what we’ve seen a lot of our contractors do. So what type of claims are you facing? As a sub or a contractor cost estimate problems, lack of timeliness, defective or incomplete work, inadequate review or observations, the best way to protect yourself against these types of claims is to properly document the project. You have to remember that a person’s memory is a lot better at the time of the problem than after the fact.

Kelly Theard:

And we all know that in litigation, it doesn’t happen right away. Typically it could be two or three years after the issues or the project finished. And when that happens, sometimes you don’t have the people there anymore who would have the information. So documenting your files is a critical part of trying to make sure that you have the information either when the employee may not be with you anymore. One of the big things about documenting your falls, and we see a lot of problems with this is timely notice of claims. And as everyone should know, I would think the AIA documents and I believe the consensus documents as well. They clearly specify when you need to provide certain notice and how you need to provide that notice. So I can not stress enough throughout this program that the most important thing you can do is to make sure you have not only your contract, but also your subcontract of your sub contractor, but also the owner contractor agreement. Because a lot of times your subcontract will refer to that agreement and you have agreed to comply with those same terms. So you need to be aware of those. And those terms will have notice requirements. I’ve done a count in the past and the AIA [inaudible] 2017 document has 13 different articles that provide specific time limitations for notice requirements. So always make sure you are reading those contracts when anything comes about

Seth Bloom:

Kelly, not to interrupt you, but I have a question, maybe to clear something up, you said that these claims or problems don’t arise two or three years after the project, or maybe greater now. I know in Louisiana we call it prescription and the rest of the country, they call it a statue of limitation, but what triggers those timelines?

Kelly Theard:

Sure. So here’s the deal about construction projects, if it is a tort claim and you’re a subcontractor or a general contractor and you have a suit against a third party or a third party has a suit against you say, the contractor wants to do the design professional. There’s usually no contract privity between them. So that would be a negligence claim that triggers you to have a one year period in Louisiana, a one year prescription period. It triggers at the, at the time that you become aware of the issue. So this is a really important point because what can happen is you are aware of errors or omissions in those drawings early on in the project. And then you don’t see until, you know, a couple years after the project’s over there’s case law that says that your claims would be prescribed, which means they would be too late and additional. In addition to that, we have perception prevention. Preemption is statute of repose in other States. And you have a five year period in which you can be sued on a project, or you can Sue through a contractual relationship from the date of substantial completion or abandonment. And there’s specific statutes that govern that as to design professionals and contractors.

Kelly Theard:

So notice of a claim can occur in a lot of different ways. And these are just some of the ways I’ve identified. But again, the most important thing you can do is you want to make sure you’re complying with how you’re giving. You’re supposed to give notice under that contract agreement. So let’s talk about how you document you should have in place a document station procedure that you use consistently throughout your projects. And again, documenting as you go is the best way to guarantee or ensure that you have, you know, the proper information. A big problem we see in litigation cases is that when people use these preprinted forms, they do not fill out all the forms. The questions on those forms are there for a reason. They’re very helpful. So when you’re asking about how much equipment is out there, what the weather was like, or who was there, you need to fill those out in order to help later on, if an issue does occur, it also could help with, if you have a delay claim yourself.

Kelly Theard:

It’s not just about if you’re being sued by someone, but if you need to support your own claim for additional money related to delays and you know, with COVID going on right now, I think that’s a lot, there’s a lot of potential for that. So it’s becoming more important if you’re having delays due to materials and materials on arriving, you need to document all those things. So before I go into what the general tips are, when preparing documents, what would be a good well-documented project file, I’m just going to run through a list for you of things that you should make sure you have in your project files. We’ve talked about the fully executed agreement between the owner and the general, even if you’re a subcontractor, you have a right to request that, and you should make sure you have any supplemental conditions, the drawings and specifications.

Kelly Theard:

We see this all the time sub will say, well, I only had the sheets related to my work. Don’t do that. You can get the entire set of drawings and specifications. There is information that design professionals include in that you want to be able to know about because they’re going to come back and use it against you later on. So make sure you get the entire set of drawings and specifications, including any agendas in order to make sure you’re fully aware of, you know, all the details on the project, make sure you have a fully executed subcontract agreement. If you’re a subcontractor, make sure you’ve provided your certificates of insurance and you should have copies of your certificates of insurance. In addition, you want to have permits executed change order RFID. Don’t just have the RFI make sure you have the response. If you’re getting the response of an RFI in an email, make sure you’re finding a way to save those so that they can be located later on.

Kelly Theard:

Emails are very important. This is how everyone is communicating, right? Especially now that we’re working remotely, but it was happening before, but it’s even, you know, I get even more emails. Now you need to save your emails on a project. and I want to talk a little bit later about some tips on how to, how to do that and how to make sure your emails are appropriate when you save them. But you should definitely be finding a way to maintain a complete project file, which includes your emails because there’s a lot of communication that goes back and forth. That kind of tells the whole story. So emails are important schedules, meeting minutes, pay apps with backup project photographs, project photographs can make or break a case. So it’s always important to have those. So when preparing your doc for the fall, it’s all pretty known about, right? Yes. It’s just of may, when you have a conversation with somebody and you’re discussing issues that are relevant to the project or the schedule and the project or a specific costs or changes, you should absolutely confirm those conferences and right.

Kelly Theard:

Some people like to just do a mayor, but I’d prefer to see something as an attorney. When I get a case, see an email, going back to that person on the other side, that you had that conversation with, confirming your discussion, saying the date, saying what you agreed upon. Also, this is what we all kind of, I think fall victim to at times, especially with emails, you want to document facts, not your feelings. I am a hundred percent guilty of this. You know, you get so fired up about something and you start typing up the email, walk away from it. Do not send an email when you’re angry or upset about something sarcasm. Absolutely does go over well in emails, nor does your tone. And you need to remember that your tone in an email is how they’re receiving it. It’s not necessarily what you’re intending it to be.

Kelly Theard:

So be really careful about what you’re writing and if it could be considered more of a feeling or an emotional thing, rather than facts, facts are all you should be putting in. Now we’re good words and bad words. So you should not be working things, guaranteeing things, certifying things, unless that’s what your contract says you’re doing. Okay, I’m sure people have heard architects and engineers. They don’t inspect when they perform construction administration, they observe. And that’s because these terms have specific legal meanings that have been developed over the course of litigation. And you need to be very mindful that you’re not using these types of words. So what words can you use? You can represent something. You can acknowledge it to the best of your knowledge or belief. You’ve observed something. You just need to be really mindful that you’re not, you’re not broadening your contractual obligations by something you’ve written in a letter or an email.

Kelly Theard:

So sometimes people think you can use these words, but again, it’s only to be used if you’re contractually obligated to do so, obviously there’ll be a roof warranty. So you can talk about what the roof work would be, but otherwise you should really try to steer away from those types of words. So, as we all know, it’s really not a construction project, unless you have a change order, right? I mean, there’s some contractors that change orders are definitely the bread and butter. So make sure you have executed change orders before you start doing the work. I know this is difficult, but your contracts say it. They require it nine out of 10 times. I can’t imagine any alterations at the time or the amount of money you want that executed change order at the bare minimum, you should have something in writing confirming what that agreement is because that obviously can be used later on if there is some type of dispute, but do not text message about change order issues. I would even be mindful of how much you’re emailing about them. You want to have formal documentation anytime you’re, you’re doing additional work, that’s going to change the amount of time or dollars

Kelly Theard:

Oh, field reports. You know, whether it’s the field report or a daily report, you know, field reports are something we see more with design professionals, but for contractors and subs, you typically are doing daily reports. And this is where I go back to the form idea. When you have a form, you need to fill out all the Blake’s in that form. So often we see four with just the date on it, and then somebody’s signature. I have no idea what you want me to do with that, that, that doesn’t help at all. All it shows is you didn’t actually do your job that day because your job was to complete the form. And a good lawyer is going to try to use that in a deposition to make it seem like you don’t know what you’re doing, or you were slacking in some way.

Kelly Theard:

So don’t give them that opportunity. You want to basically be telling the story of your daily reports or your field reports. So please make sure you’re filling out all those forms and being accurate in that. And you got to make sure you’re saving them after a site visit or after the daily report is completed. You should make sure you immediately say that into your files. Like I mentioned earlier, you want a formal procedure within your company, that is how you save project files and with all the emails, it can be more difficult, but there’s lots of different document management sites that will actually allow you to create a project number folder. And you can just kind of move all those documents in there, which is critical. So again, field reports, this just goes through some of the different issues that you want to make sure you are accounting for.

Kelly Theard:

Now, if you have a design professional out on the site with you and they are completing a field report, and they’re talking about rejection of any type of work, make sure you’re getting copies of that report. You are entitled to get the copy of the field report by the design professionals. So you want to make sure you have those to be able to address any issues as they’re arising. Talk a lot about field reports. So submittal records as well, try to keep a log of these, of any critical activity you want to document the time it took to do that. You were the time it took the architect or engineer to review it. When you got it back, if you had to make changes to it, keeping those things clearly documented is critical to making sure we know the true path that those submittals went down.

Kelly Theard:

Okay. Meeting minutes. A lot of times the general is the person who’s doing these mini meeting minutes. And when you do the meeting manager, you need to be identifying everybody who was at that meeting because when an issue comes up in litigation or just a dispute that you’re trying to handle you know, with the other party on the project, you want to be able to know who was there to hear what was said. So always make sure you have all the attendees. You want to make sure everybody receives a copy of them. And you want to clearly identify what was discussed, who discussed it in what resolutions or action plans action plans are so important in these types of situations. If there is a problem to clearly document how you were going to solve the problem. And then at the next meeting, when the problem resolved, confirm that it was resolved and who, who accepted it to be.

Kelly Theard:

So project photographs, I cannot tell you how many lawsuits we see, especially when you’ve got some type of pile driving activity and you know, a neighborhood or downtown where there’s a lot of buildings and houses around. You need to be taking pre construction photographs, not only of your project site, but all of the houses and the buildings around you. It’s critical because nine times out of 10, somebody will tell you their home or their building has some type of damage due to cracks. And you want to see what was there before, and those pre-construction photographs.

Seth Bloom:

I have a question. I’ve seen ’em with some construction software, recently some of these programs allow people, the general contractor to actually, take photos and kind of make them part of the project plan. Is there any sort of software that you suggest, or you’ve seen that that works in a situation

Kelly Theard:

Seen that program yet? But I mean, that sounds fantastic. I mean, to the extent you can do something like that, that’s critical. One thing you want to do with photographs is taking them as the first step, but saving them as the second step. Right? So if there’s any, and I’m happy to look into that, but any type of program that helps you be able to not only save the photo, but relate it to kind of the time period or the detail that’s involved. That’s a really important thing to do.

Kelly Theard:

I have a, I have a family member, that’s a GC. And he sends out his foreman and they take photos, but it goes directly, you know, with categorize within a stage of the project and actually keeps them really abreast of what’s going on. It seems like that would be a great way to avoid any disputes or conflicts as time goes on.

Kelly Theard:

Yeah, that sounds like a GC. I don’t represent much because it sounds like they’re avoiding litigation, so that’s a good trick. That’s absolutely what you want to do. So yeah. I mean, look, we’re all taking photographs on our phones now, too. That’s really an important point. I mean, sometimes you need to just have a good old fashioned camera not just your phone taking some of these pictures. So those are things to think about. I think assess just kind of mentioned. You want to find a way to save these photos and try to correlate them to the time period that’s happening. Site visit reports should have photos. If you could have photos attached to your daily reports though, that’s fantastic. That’s never going to hurt you unless you’re doing something wrong. But obviously that’s not what everyone’s trying to do. So I mean the more photos, the better.

Kelly Theard:

You wanna make sure when you have photos, you want to have certain information. What’s the date the photo was taken, who took the photo, where, what areas or locations are being photographed, the direction or view of the photo reference, any type of correspondence that it ties to. All those things are important because just because you have a photograph in your, your project files, I can’t just automatically go to the judge or put it up and say, here’s this photograph that shows this, I need to authenticate it. Okay. And the way I have to get a photograph is I know who took it. I know when it was taken and I have them testify to that. So while these things seem really silly and, and can be a little bit too detailed oriented for some people, it really will help you in the long run to make sure you’re documenting that appropriately.

Kelly Theard:

Also, one of the things that we do talk about is when you have electronic files and you’re transmitting them, you want to make sure you have a disclaimer on there. And you really want to be careful about the size that you’re sending out things. I think nowadays people are using, you know, like Dropbox and different programs, because a lot of people you don’t realize, but they may have some type of storage limitation on their email system. So things can actually get transmitted like you mean to then to be. So, because we are communicating so much by email, I think a huge part of properly documenting your files is how you email people and saving those emails. And here’s what I tell all of my clients. When you’re sending an email, you should think about that email as being on a billboard or sending a postcard, remember postcards, when we all used to travel before, COVID, you need to think that anybody can see this email at any point, and I’m not going to be embarrassed or upset.

Kelly Theard:

It’s not going to hurt, you know, what we’re doing. If someone else saw this email, email is, and I’m guilty of this. So do what I say I want to do. Email is meant to be brief. You want to be concise. And to the point, if you’re writing paragraphs upon paragraphs about issues on the project, it’s probably time for a formal letter. You know, now look, you can email the letter, the attached letter, but that’s a better way to do it than just have it in the body of an email. It kind of gets lost. I think when you just have too much information in there, we all are kind of guilty of skimming through because we’re getting so many emails and again, you should never be using your work email for personal email exchanges, just because the project manager and the superintendent from the same company are talking doesn’t mean there’s any privilege over it.

Kelly Theard:

So when you want to go and complain about that architect, or you want to go say, Oh, something went wrong. I’d be really careful about what you’re putting in email internally, because all of that is going to be discoverable. If you are in litigation, every company should have some type of company policy policy on how email is being used so that you really should be familiar with what your company policy is. So other kinds of tips is because everyone is being copied on so many emails, be mindful when you reply all, when you reply all, you want to make sure you know who you’re applying to. If you don’t know someone on the email list, ask the sender before you go. And, you know, say something

Kelly Theard:

Since we’ve been mostly working remotely, not, not construction people for the most part, cause that’s an essential service, but have you seen an uptick in this kind of discoverable information or exchanges? I know we’ve all heard about the nightmare zoom situation where someone keeps their zoom on and, you know, says something inappropriate or doesn’t realize they’re being recorded. But I think that’s such an important point that, you know, these kinds of discussions can all be brought up and discussed in front of a judge and opposing counsel. And

Kelly Theard:

Absolutely. So, I mean, even before Kobe, before we were all working remotely, I mean, we have projects with over a million emails. I mean, the documents are just so cumbersome because there is so much email traffic now, and email is a great tool, but you just need to remember if you wouldn’t have put that on a letter or if you would not want someone else to know, you said that, that you should not be saying it on your work email, there’s just no place for it. And like I said, we’ve seen some really embarrassing ones and that, and a lawyer on the other side, I mean, while it may not be relevant to the situation, we’re going to talk about that all day long, because it shows, you know, great some credibility issues as to you or whether or not you are really doing your job or makes you seem biased in some way.

Kelly Theard:

So just be mindful of what you’re putting in there. Same thing with replying all, if you know, if you don’t know everyone on that email chain, you need to be mindful before you say anything to them, always read every email before you send it. Again, don’t express anger or emotions. I always do what I do when I am like so frustrated and fed up and it’s, it happens daily. I’m sure I will actually start typing up an email. I will take everything out of the, to line all the people, because sometimes it just feels better to get it out, right. You just want to type it and you just need to see the words there, but I will take everyone out of that line so that there’s no one that’s being sent to. And so I don’t accidentally send it for number one.

Kelly Theard:

And that way I can kind of walk away from it. I’ve written it out. I can calm down, I’ll usually go get myself a diet Coke. And then I come back and decide whether or not, you know, what do I need to edit? Whether or not I need to call someone instead. So look, this is a good example of an email that we found in a project file, you know, cursing and emails is probably not a good idea. And this is someone basically, you know, talking about the delays on a project. So this was used to hurt our client because you know, of the type of things that they wrote in this email, remember the tone issue. Tone can not be determined by email. And if it’s somebody that you do not have a very easy going relationship with, or you think there could be some discrepancy in how your tone is received, pick up the phone, we all forget to just pick up the phone anymore.

Kelly Theard:

And I tell you, I think that would really save a lot of problems. If we could just kind of pick up the phone and talk about things. Sometimes again, I would not use email for confidential information. Email is not private, no matter what you think it is out there to be discovered. And judges give a lot of discretion as to what can be produced. I mean, they’re in Louisiana discovery rules basically say it’s better to give it than to not give it right. So the judge is gonna let them get those emails from your project files, a really important thing. And it just seems silly, but the subject field it’s so important to actually put the name of the project in your subject field. So that way, if you can find those emails later on, if you don’t have a system that’s properly saving them and that way, you know, you know, what the issues are on in the email, right?

Kelly Theard:

When all of a sudden there’s an important communication and the subject line says, hello, and then next thing you know, you’ve got this like a string of discussion. That’s really critical to the project. Well, it’s hard to find that email when you’ve got millions or hundreds of thousands of them. So putting the subject line is important. Putting a project number, a project name, maybe identifying what the issue is, proposed change, order discussion, or, you know field work, you know, put something that you can identify. It also doesn’t use emojis. I mean, like I like them too, but emojis are not a place for emails. In the business setting, remember this is not personal. Then we’re seeing more and more that people use text messaging on construction sites. And you gotta really be careful about that, especially if it’s not a company phone, because you need to make sure you’re saving these text messages.

Kelly Theard:

If they are being done, if someone texts, messages, you something, someone else. Okay. And you’re like, I know I can’t, I should not be texting. What you do is you go and you email, right? Because, you know, there’s an easier way to save those emails or you pick up the phone or you send a letter and you confirm it in writing. And then, you know, you’ve really gotta be mindful of, if you do not have a central system for your emails to be stored and an employee leaves and their email address is just shut down before you shut that email address down, you should be talking to someone in it who can make sure to save all of their emails, because of the communication that you need that may really help your case or prove the issue or, or show the delay could be in that email that has now been shut down and you have no access to it anymore.

Kelly Theard:

So given the fact that people, you know, tend to move around a lot, you really want to make sure you save those things before cutting it down. And the last thing I’ll just tell you real quick is accident reports. Again, you need to be doing, there’s probably a policy for your company and you should follow it, but you need to do it at the same time it happens. And these are just some of the things you want to make sure you note, because they’re all going to be important later on if there is some type of litigation on it,

Seth Bloom:

But, I just really want to thank everyone again. My name is Seth Bloom and I’m a senior director of attorney services at Levelset you can check, but check out our expert community or attorney network. You can post questions from anywhere in the country about any sort of construction issue. Kelly can answer them there. And if you have any specific questions in Louisiana then please you can contact Kelly directly and she can help you with those, with those questions. again, you’ve got a great bargain today. fancy attorneys like Kelly cost a lot of money per hour. So to get this kind of information is super valuable, and we really want to thank you Kelly for doing this, today. This will be available on our website. If you want to watch it again or share it with someone else, we really encourage that. So everyone have a great day, stay safe and thanks again, Kelly.