TICL Construction and Surety Law Division
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Messages from the Division Chair
From a TICL member:
I will consider [joining the Division], but I have a question:
Why is a negligence and personal injury-oriented Section of
the Bar establishing a contract-oriented division?
Construction and suretyship law is a lot different from
personal injury and insurance.
To the Member:
Good to hear from you – and good
question. The Construction and Surety Law Division was established as part of
the Tort, Insurance and Compensation Law Section (TICL) a number of years ago.
The reason why the Division is
under the TICL is because surety bonds are primarily written by insurance
companies. The Fidelity and Surety Law Committee of the American Bar
Association, which was created first, is organized the same way where it is
part of the Torts, Trial and Insurance Practice Section. Again this is because
both fidelity bonds/insurance and surety bonds are issued by insurance
As an aside, fidelity products
these days look a lot like long and involved insurance policies, but originally
they started out as short employee dishonesty bonds. Although some
practitioners do not agree with me, it is my view that at bottom a fidelity
policy is actually a surety bond with lots of bells and whistles. This is
because if a fidelity loss is paid the carrier has the equitable right to look
to the dishonest employee for reimbursement. When I got my start in this
business in 1977 claims on both fidelity and surety bonds were handled by the
same claims adjusters in just about all insurance companies. I handled both
types of claims.
So the reason for our division
being under TICL is both historical, and because there is no other section
where construction clearly belongs because it involves so many different areas
of law, e.g. contracts, suretyship, mechanics liens, trust funds, municipal
bidding, litigation, bankruptcy, ADR, creditors’ rights, UCC, architect and
engineer professional liability, insurance, etc.
Speaking of an overlap between
construction and insurance, a significant issue needs to be addressed when
preparing a construction contract to ensure that additional insurance is in
place as contemplated by the various contracts involved. Owners want to push
insurance coverage for the project down to the general contractor, the GC wants
to push it down to its subs, and so on. The additional insurance endorsements
available on the market (largely ISO) often don’t match up with additional
insurance requirements in the contracts. This could cause a huge problem for
all of the companies working on a project, as well as insurance brokers, who
frequently don’t understand the limited role of a certificate of insurance. So
this is an important drafting issue for attorneys who are responsible for
preparing contracts and, of course, protecting their clients.
I would also point out that there
is a Real Estate Construction Committee under the Real Property Law Section. As
stated in the Committee’s web page “The Committee’s basic goal is to educate
real estate lawyers, especially those not well-versed in construction, about
issues that arise in connection with construction agreements – something
virtually all real estate attorneys encounter.” Its emphasis seems to be more
on construction contract documents (principally published by the American
Institute of Architects) used mostly in private construction projects. This
committee does not deal as much with public construction which necessarily
involves suretyship. There is however a lot of overlap between the two groups.
Like I stated, they’re not sure
where to put us construction-types, but for the foreseeable future the
Construction and Surety Law Division will continue to be a part of TICL. I hope
that answers your question.
If you would like to discuss
this further please feel free to contact me.
To CSLD attorneys:
Since my note to you last year Pat Rooney, an adjunct
professor of construction law at Touro Law School has cheerfully assumed the
duties as editor of our newsletter. It has been renamed “Deconstruction” and
was recently posted on TICL. I hope you find it useful. Pat is great to work
with, as is Mike Spinelli, an architect and one of Pat’s students, who assisted
with the first issue of Deconstruction.
We plan to issue Deconstruction three times per year, and
report on cases of importance to construction and surety attorneys. Of course
it is my view that you can’t be a good construction lawyer unless you’re a good
surety lawyer, and vice versa.
We will also be informing you of cases which, although not
purely construction or surety law, are important to various players in the
construction industry, whether they be contractors, subcontractors, suppliers,
public or private owners, etc.
One such issue is additional insurance, which I follow
closely, because a failure to provide additional insurance can be a
catastrophic breach of contract. Not getting the contract language right along
with the correct insurance can also result in liability to the contractor’s
attorney who was supposed to make sure that he had his/her client’s back
covered from this contractual exposure.
We will also be including an article, such as Marc Brown’s
in our current issue, which discusses an issue of concern from a practitioner’s
point of view.
I intend to use my role as chair of the division to weigh in
on legislation that affects our industry. One such piece of legislation, which
I supported on behalf of our division, is NY SB 6906 (please see my attached
Letter). This revision to several statutes would require public owners to show
prejudice if they want to assert late notice as a defense to claim by a
This bill, which was spearheaded by Henry Goldberg, a
Rockville Centre construction attorney and friend, was passed by both chambers
and is awaiting signature by Gov. Cuomo.
If you become aware of any state or federal cases which you
believe we should be aware of please send them to Pat or me.
Also, if you would like to write a short article (and the
emphasis is on short) let us know. This could be an analysis of an issue in a
real case which could be revised to protect confidentiality.
I would appreciate your mentioning our division of NYSBA to
other construction and surety lawyers to help generate interest in our
division. With the number of NY attorneys who practice in this area, and the
issues we have to deal with, we should be a vibrant group. I hope to stimulate
us in that direction.
C. Allan Reeve, Esq.
Reeve Brown PLLC
3380 Monroe Avenue
Rochester, NY 14618-4726
Phone: (585) 310-1610
Patricia A. Rooney, Esq.
Patricia Rooney, PC
394 South 15th Street
Lindenhurst, NY 11757
Phone: 631) 592-4405