Sixth Circuit Affirms "Disappointed Bidder" Rule, Upholds Dismissal of Bid Protest

On May 22, 2008, the 6th Circuit Court of Appeals upheld the grant of summary disposition in favor of the City of Detroit, and against the low bidder on a DWSD project, and affirmed the "disappointed bidder" rule in Michigan.

"We reviewed the law surrounding standing and disappointed bidders in Club Italia Soccer & Sports Org., Inc. v. Charter Twp. of Shelby, 470 F.3d 286 (6th Cir. 2006). Club Italia held that absent a statutory exception, "a disappointed bidder does not have standing before this court." Id. at 293. Cases prior to Club Italia consistently refused to allow disappointed bidders to bring claims for violations of the bidding procedures. [citations omitted] A bidder who, in addition to seeing his bid rejected, is disqualified from bidding on future projects may have standing, [citations omitted] but EBI cannot obtain standing this way because EBI was not disqualified from bidding on future projects.

* * *

"United of Omaha [v. Solomon, 960 F.2d 31, 34 (6th Cir. 1992)] is particularly fatal to EBI's claims because it held that a disappointed bidder must show that "it was actually awarded the contract at any procedural stage or that local rules limited the discretion of state officials as to whom the contract should be awarded." United of Omaha, 960 F.2d at 34. EBI cannot meet this test because it was never awarded the contract and because [Detroit Mayor] Kilpatrick has unlimited discretion in awarding contracts in order to comply with the EPA consent decree. Like the bidder in United of Omaha, EBI was "obviously disadvantaged" by the government's actions, id. at 35, but it nevertheless "retained only a unilateral hope of being awarded the contract, not a right to it." Ibid. A "unilateral hope" does not create standing."

See, EBI-Detroit, Inc. v. City of Detroit, 2008 U.S. App. LEXIS 11043, *18-21 (6th Cir. Mich. 2008). The trial court's ruling was reported in an earlier post.

[Update: The official cite for this case is EBI-Detroit, Inc. v. City of Detroit, 279 Fed. Appx. 340 (6th Cir. 2008) ]

New Law Passed to Boost Set Asides for Disabled Veteran Contractors

On May 21, 2008, Michigan's Governor Granholm signed S.B. 751 into law as PA 133 of 2008. The new law takes effect immediately. As noted in an earlier post, the new law amends the Management and Budget Act to increase the goal for contract set asides for disabled veterans from 3% to 5%.

Material Deductions Bill Voted Out of House Tax Policy Committee

AGC of Michigan reports in its May 14, 2008 Midweek Briefing that H.B. 6031, the House version of S.B. 1217, was voted out of committee following testimony by AGC Member, Patrick Cebelak, Controller for Granger Construction.

As noted in an earlier post, S.B. 1217 is designed to correct problems with the Michigan Business Tax as it affects construction contractors.

H.B. 6031 would amend the Michigan Business Tax (MBT) Act to amend the definition of "purchases from other firms" as it applies to general building contractors, heavy construction contractors, and construction special trade contractors that do not qualify for a small business credit under Section 417. For those companies, the definition would apply to "any construction materials or supplies directly purchased by the firm for a construction project." These purchases would, then, not be counted in the gross receipts tax base.

Circuit Court Retains Jurisdiction Over $15,000 Contract Claim, Even When Lien Claim is Dismissed

Section 118(1) of the Michigan Construction Lien Act requires that an action to foreclose a construction lien be brought in the circuit court for the county where the real property is located. For smaller liens, this provision overcomes the requirement that claims in circuit court exceed $25,000. Thus, a lien claimant can pursue a foreclosure action in circuit court even where the amount in controversy is less than $25,000.

But what happens if the claim of lien is dismissed? Does this divest the circuit court of jurisdiction over the remaining claims, and require that the case be remanded to the district court? In a recent unpublished decision, the Michigan Court of Appeals considered this issue, and held in the negative. The remaining claims can proceed to trial:

"As a rule, when a court of competent jurisdiction becomes possessed of a case, its authority continues until the matter is finally and completely disposed of, and no court of co-ordinate authority is at liberty to interfere with its action."

Maidaniuc v. Country Pond, L.L.C., 2008 Mich. App. LEXIS 861 (Mich. Ct. App. Apr. 29, 2008). A copy of the slip opinion can be found here.

How to Verify that a Payment or Performance Bond Complies with Michigan's Public Bond Statute

Note: An updated version of this article was posted August 16, 2019 on our firm's website blog here. 

Michigan's public works bond statute (MCL 129.201, et seq) requires that a principal contractor furnish a payment and performance bond executed by a surety authorized to do business in Michigan. Many contracts also require that the general contractor furnish payment and performance bonds, which are executed by a surety listed on Treasury Circular 570.

If you receive a contractor's payment and performance bond, how do you know whether it complies with these requirements? How do you check on a bonding company whose name doesn't sound familiar? How you verify the financial strength of a surety?

There are 3 easy ways to verify basic information about a surety --

Michigan

The State of Michigan, Office of Financial and Insurance Regulation (OFIR) maintains an online database of insurance companies that are registered to conduct business in the State of Michigan. The search interface is somewhat confusing, but if you search using the last field on the form, you should be able to find the surety you are looking for. If you don't find the surety, it means they are not registered to conduct business in Michigan. Take this finding as a red flag.

For insurance companies that are registered to conduct business in Michigan, you get the usual information about state of incorporation, and registered agent. Here's a sample report for Hartford Fire Insurance Company, a surety that is active in Michigan.

Treasury Circular 570

Treasury Circular 570 is a list of acceptable sureties on federal bonds maintained by the U.S. Department of Treasury. A surety that isn't on this list is probably very small, or one that should not be accepted or relied upon. It raises a red flag in my mind when I don't find a surety on this list.

Michigan law generally provides little recourse to potential bond claimants in the event that a contractor fails to furnish a bond, or furnishes one that fails to comply with the statute. Failure to furnish a bond that comports with the statute, however, would probably be grounds for an owner to terminate a general contract.

A.M. Best Company

A.M. Best issues financial-strength ratings measuring insurance companies’ ability to pay claims. If the contract requires that a surety bond be furnished by a surety with a particular rating (ie., AA or B+), you can verify this rating online through A.M. Best.


Update: My colleague Angie Greenslade referred me to the A. M. Best website. It provides information on the current financial strength of insurance companies, including sureties. Thanks Angie!

DWSD Receives $316 Million Low Bid for Upper Rouge CSO Tunnel (South) Project

Earlier today, the City of Detroit Water and Sewerage Department (DWSD) received bids from two contracting teams for the Upper Rouge CSO (South) Tunnel, Contract PC-764.

A low bid of $316,170,200 was submitted by Kenny Construction/Obayashi, JV. The second bidder was Traylor Brothers/Jay Dee, JV at $352,416,600.

The North Tunnel will be bid later this year.

Read Here for more information about the Upper Rouge CSO Tunnel project.

Supreme Court Limits Grounds for Reviewing Arbitration Awards Under FAA

On March 25, 2008, in a 6-3 opinion, the U.S. Supreme Court ruled that Sections 10 and 11 of the Federal Arbitration Act provide the exclusive grounds for vacating or modifying an arbitration award.

Contractual arbitration agreements providing for judicial review broader than the grounds in the FAA are not unenforceable under the FAA, the Court held. Rather, when the FAA is invoked, a court "must" confirm an arbitration award unless it finds that one of the grounds set out in Sections 10 and 11 for vacating or modifying awards is applicable.

Hall Street Associates, L.L.C. v. Mattel, Inc., No. 06-989, 552 U.S. ___, 2008 WL 762537 (March 25, 2008).

Because the particular arbitration at issue was part of a U.S. District Court trial, the Supreme Court remanded the case for determination of whether the arbitration agreement, as drafted, should be enforceable not under the FAA but under the U.S. District Court's inherent authority to manage its own cases. The Supreme Court also declined to extend its holding outside the realm of the FAA, noting that its ruling did not apply to enforcement under state statutes or the common law.

Elevated Lake Level Damages -- Time for Bringing Claim is 3 Years, Michigan Court of Appeals Rules

A lawsuit brought by plaintiffs claiming that defendants flooded their property and caused trees to die by wrongfully raising the level of a lake, and seeking money damages under theories of negligence, negligence per se, nuisance, trespass, and civil conspiracy, should have dismissed under a three-year statute of limitations ruled the Michigan Court of Appeals in a recent published decision.

In Terlecki v Silver Lake Property Ass'n of Indian River, ___ Mich App ___ (2008); plaintiffs complained that defendants caused Silver Lake in Cheboygan County to rise, flooding plaintiffs’ low-lying forested property. The defendants' actions, however, occurred more than three years before the plaintiffs filed their lawsuit. The Court of Appeals concluded that "the plain text of MCL 600.5805(10) and MCL 600.5827 bar plaintiffs’ claim for money damages under any of plaintiffs’ liability theories."

Click here for the full text of the opinion.

Bill to Amend Michigan Business Tax Approved by Senate

On April 22, 2008, the Senate approved S.B. 1217 on a roll call vote of 250-38. The bill now goes to the House Committee on Tax Policy.

As noted in an earlier post, S.B. 1217 is designed to correct problems with the Michigan Business Tax as it affects construction contractors.

22 Billion Gallons!

The Atlanta Journal-Constitution reported on Sunday, April 20, 2008 that a mistake in calibrating a gauge that measures lake water resulted in the release of 22 billion gallons from Atlanta's principle source of drinking water in 2006.

"More than a year before Georgia's historic drought demanded the Atlanta area's attention, the U.S. Army Corps of Engineers accidentally released about 22 billion gallons of water downstream from Lake Lanier in 2006, while trying to save taxpayers $138."

Neighbors apparently noticed the water level dropping in Lake Lanier, but the U.S. Army Corps of Engineers didn't realize the problem due to staffing changes.

For the rest of this incredible story, Read Article.

Michigan Construction Law, Contractor's Guide Available from AGC of Michigan

In 2005, the AGC Legal Advisory Committee published an updated "Contractor's Guide to Michigan Construction Law," which is now available on the AGC of Michigan's website in the Legal Resources section.

The Guide was written by members of the AGC Legal Advisory Committee, and is is divided into 17 Chapters --

1. The Contract for Construction: Standard Forms and Common Risk Transferring Provisions
   
2. Bids, Bidders, and Bid Protests (by Thomas Keranen and Peter Cavanaugh)
   
3. Defective Plans/Specifications
4. Contract Changes/Differing Site Conditions (by Peter Cavanaugh)
   
5. Delay in Contract Performance
6. Remedies for Payment Disputes
7. Dispute Resolution Mechanisms
8. Overview of State and Federal Prevailing Wage Law
9. Michigan Occupational Safety and Health Act (MIOSHA)
10. Hiring and Terminating Employees in Michigan
11. Environmental Law: A Brief Overview for the Construction Contractor
12. Bankruptcy in a Construction Setting
13. Dealing With the Media and Press in Corporate Crisis Situations
14. Bonding and Insurance
15. Subcontractors, Rights and Remedies
16. Michigan Construction Defect and Mold Litigation
17. Information Technology and Construction Law

Bill to Amend Michigan Business Tax for Construction Firms Inches Forward

On April 17, 2008, a bill to fix the Michigan Business Tax for construction contractors moved closer to passing the Michigan Senate. S. B. 1217 was placed on order of third reading with substitute S-1.

S.B. 1217 would amend Section 113(6)(e) of the Michigan Business Tax (MBT) Act (MCL 208.1113) to include in the definition of "purchases from other firms", for certain builders and contractors, direct material costs for a construction project under a contract specific to that project.

The MBT currently imposes a modified gross receipts tax on every contractor with nexus in the State. The tax is imposed on the modified gross receipts tax base, after allocation or apportionment to the State at a rate of 0.8%. The tax base is a taxpayer's gross receipts less purchases from other firms before apportionment.
The definition of "purchases from other firms" includes payments to subcontractors for a construction project under a contract specific to that project. Under the bill, "purchases from other firms" would also include direct material costs for a construction project under a contract specific to that project. "Direct material costs" would mean the amounts paid for materials that are deductible on the taxpayer's Federal income tax return as purchases under the cost of goods sold.

To track the progress of S.B. 1217, you can follow the bill on the Michigan Legislature's website here, or contact Bart Carrigan or Damian Hill with AGC of Michigan, who are following S.B. 1217 closely on behalf of the construction community.

Mediation of Construction Disputes, AAA Updates Mediation Services

The American Arbitration Association recently updated its Mediation Services and now devotes a separate website to its mediation offerings. The new website is appropriately named www.aaamediation.com

Among the changes are the following --

New Pricing Structure

• AAA has eliminated the up-front filing fee
• The "mediation" rate designated on the Mediator's resume is a combined rate for the AAA and the Mediator
  

Revised Mediator Resumes

The AAA now provides the following new information about the Mediators on its Panel:

• Years of Practice as a Mediator
• Total Number of Cases Mediated
• Settlement Rates
• Statement of Philosophy
• Multi-Party Experience
• All Mediator Resumes are Posted On-Line
  

Choice of Administration

• Parties have the choice of filing their Mediation Cases locally (through the AAA Offices in Southfield), or at one of the Case Management Centers.
  
• Parties can also file their Mediation Cases through the AAA Mediation Website.
• Note: From my experience, the AAA's Southfield Office is much better at handling AAA matters than the Case Management Center in Rhode Island, which is the office otherwise assigned to handle mediation and arbitration cases from Michigan. Janice Holdinski and her Staff do a great job and I highly recommend that you file your Mediation Case through the Southfield Office. For more information, contact Janice Holdinski at (248) 352-5509. (pjc)
  

Contract Documents Seminar, Tom Keranen and Fred Butters to Speak on April 29, 2008

On April 29, 2008, Attorneys Thomas M. Keranen, PE, and Frederick F. Butters, FAIA, will speak about the ConsensusDOCs contract documents and the AIA 2007 Contract Documents at a seminar sponsored by AIA of Michigan.

Mr. Butters will address the substantial changes made to the AIA documents, and compare the 2007 and 1997 versions. Mr. Keranen will discuss the new ConsensusDOCS contract documents. This seminar will be held at Laurel Manor in Livonia.

For more information, contact Tom Keranen or Fred Butters at (248) 647-9653, or AIA of Michigan at (313) 965-4100 or on their website to sign up for this seminar .

Note: The introduction of the ConsensusDOCS contract documents was discussed in an earlier post.

PDF for Legal Professionals

Adobe Acrobat (PDF) has become the de facto standard in the legal profession for filing documents electronically with federal courts using the PACER system, and increasingly state courts.

Adobe sponsors an excellent blog -- Acrobat for Legal Professionals -- that is geared for lawyers who use PDF documents in their practice, whether it be for filing documents or using PDF to manage large document collections.

One of the most useful aspects of Adobe Acrobat, which is only found in the Professional version, is the OCR function, which can turn a large scanned document into a full-text searchable one. This is particularly useful for finding specific provisions in large contract documents.

Adobe Acrobat is also a very easy way to present exhibits during trial. For my last several trials, I converted all of my exhibits, both documents and photographs, to PDF and was able to present the information with little problem. The annotation and full-screen display features of Adobe Acrobat also help to highlight and make sense of text documents.

During a recent arbitration, I used a laptop computer hooked to a 20" flat screen display to display my exhibits using PDF. I was able to keep my client's photographs in front of the arbitrator through most of the proceeding. Opposing Counsel had nothing similar to present his evidence, and conceded afterwards that the photographs had tipped the outcome of the case in favor of my client.

Department of Treasury Introduces New Lincoln

Off topic a bit, but the U.S. Department of Treasury is rolling out a new $5 bill today. The Treasury Department has a pretty cool, interactive website that shows off the new Lincoln, along with the other bills that have undergone face lifts and security enhancements in the past several years.

AIA, NSPE and ACEC conduct Annual Design Professional Liability Insurance Survey

Overview



Professional liability insurance is increaingly critical to the successful design professional. Today’s Architect and Engineer has more choices in coverages and insurance options then ever before. Better still, those choices come at competitive prices. To assist their members in negotiating the complex and ever changing professional liability insurance market, the AIA Risk Management Committee, in collaboration with the American Council of Engineering Companies (ACEC), the National Society of Professional Engineers (NSPE), and the AIA Trust conduct an annual survey of those companies providing liability insurance coverages for the practicing design professional. Written surveys were completed by each company where standard questions are answered. The process culminated with a joint meeting in Chicago in October of 2007, where representatives from each company were interviewed to determine not only the unique and specific aspects of their particular coverages, but also to identify emerging market trends. Those findings are discussed hereafter. An overall summary of the survey results can be found on the AIA national website at AIA.org.


The Market in General


Market Health All of the carriers interviewed indicated that the overall market is generally healthy. The influx of capital seen in prior years has continued, which has engendered competition. Premiums are generally declining, and most carriers concentrate on retaining their current insureds. As most carriers also indicated a desire to expand their business, the expectation is that overall premiums will continue to trend downward, although no substantial drop in rates is expected. Since the design professionals have many options today, carriers are placing more emphasis on the accuracy of their underwriting and reserves.


Claims Trends Most carriers reported that the incidence of claims continues to remain relatively flat. However, the severity of claims continues to rise, albeit at a relatively small rate. When the severity of claims is adjusted for inflation, the actual rise is very small. Some areas of the market (housing and public buildings in particular) have seen a rise in both the incidence and the severity of claims. Most carriers reported an increase in claims arising out of geo-technical issues.


Carrier Health AM Best financial ratings (a leading indicator of the financial health of an insurance carrier) held steady over the past year. Those carriers who shared information concerning their profit models generally adhered to the proposition that they must generate a profit on their underwriting. In years past, some carriers had relied on investment income for profits while operating their underwriting at a loss. As certain types of risks derivative of specific types of work mature, some carriers are open about their intention to manage those risks by reducing the number of firms which perform that type of work in their book of business. Since overall market health depends on maintaining a number of healthy carriers, this business focus likely bodes well for the long term.


Developing Trends


Building Information Modeling (BIM) While building information modeling is a concern, claims exclusively derivative of the BIM project delivery system have not yet emerged. Most carriers admit that the insurance industry generally plans for the worst. In its infancy, CADD presented some of the same concerns inherent in BIM. Not only did the worst CADD fears never develop, CADD has actually made the industry much more efficient and better. The normal approach - stay at arm’s length and blame someone else - likely will not work with BIM since the A/E involvement by definition must be much more immediate. Generally, most carriers believe that the traditional issues (standard of care, scope creep, contract language, etc.) will eventually present again as the technology develops, albeit from a BIM perspective. Most carriers are already addressing the easier questions (damage from viruses, hardware and software compatibility, electronic transfer of documents, etc.) in their current policies.


Sustainability / Green Design As with BIM, claims that are exclusively derivative of sustainable design principles have not as yet materialized. However, with owners investing
heavily in sustainable features on the strength of promises that the investments will pay dividends, carriers are concerned that the claims will eventually develop if performance projections do not materialize.


Housing With the market squeeze on the hosing sectors, most carriers report an up-tick in residential claims. While the exact causes are unclear, the belief is that builders and owners are seeking to recoup losses the see from the general tightening of the residential market. Residential issues have become the principal source of claims for some carriers. As the housing market difficulties continue, claims in this sector are expected to do increase.


Cost Re-Allocation The drive to quantify the standard of care by contract is increasing. Public owners in particular are now insisting on contract clauses that allocate fault to the design professional where cost overruns exceed a specified level. Worse, the levels at which owners are seeking cost recovery has dropped to almost zero. For some carriers, the onset of this cost recovery mentality has elevated public work above condominiums (a traditional claim hotbed) as a claims generator.


Aging Infrastructure As the infrastructure ages and deteriorates it commands an increasing level of attention. The need for inspection and evaluation of those aging buildings and systems has created a new market for some firms. However, conducting an inspection may carry with it liability for conditions that were the subject of the inspection, but which were not detected.

The purpose of the survey is to provide the design professional with basic information necessary to make an informed choice from the myriad of carriers and insurance products available in today’s market. The design professional should ask;


Does my insurance broker have access to a range of carriers and products so that I can take best advantage of the choices the competitive market provides?


Am I receiving competitive premium quotes that reflect the level of competition inherent in today’s market?


Does my carrier have a loss prevention / risk management program, and, if so, does it provide me with appropriate value in exchange for the investment?


The A/E liability insurance market is more varied and dynamic than ever before. While that circumstance creates opportunity, it also demands careful attention to, and evaluation of the numerous options available such that the opportunity is fully realized.

Frederick F. Butters, FAIA, Esq. co-chairs the AIA National Risk Management committe and serves as Board of Directors liaison to the AIA Trust. For more information about this issue, contact him at Keranen & Associates, P.C., 6895 Telegraph Road, Bloomfield Hills, Michigan 48301, Tel: (248) 647-9653.

Statute of Limitations Bill Passes the Senate

On Thursday February 14, 2008, Senate Bill 865 came up for vote in the Michigan Senate. When it became apparent that a last minute effort to tie the bill to Senate Bill 445 (which would reverse recent Michigan Supreme Court decisions concerning the threshold standard for bringing suit under the Michigan no-fault insurance act) would fail, the backers of that effort withdrew and SB 865 proceeded to a vote. The bill passed with 31 votes in favor, 7 against. It now heads to the Michigan House.

Sponsored by Senator Alan Sanborn, SB 865 reverses the Michigan Supreme Court decision in Ostroth v. Warren Recengy GP Limited Partnership. The Ostroth decision upset nearly 15 years of settled jurisprudence, and had the effect of extending the statute of limitations for most claims against design professionals and construction contractors from 2 or 3 years to 6 years.

The governing statue of limitations for claims against design professionals and construction contractors is found at MCLA 600.5805. Simply put, a statute of limitations provides a time window within which a claim that has accrued must be brought, or it becomes time barred. In addition, a statute of repose is found at 600.5839(1). By contrast, pursuant to a statute of repose, if a claim has not accrued after a specified period of time, it can never accrue. Together, the two statutes create an outside limit for claims against design professionals and construction contractors.

The Court of Appeals in Witherspoon v. Guilford read those sections harmoniously such that the end result gave meaning to both statutes. The traditional statutory scheme set out in MCLA 600.5805 governed, but in no instance could the claim window run past that time specified in MCLA 600.5839(1).

That state of harmony reigned until the Ostroth decision in July of 2004. In the Ostroth case, the Court concluded that the 6 year period set out in MCLA 600.5839(1) was a period of both limitations and repose, and that controlled all claims to the exclusion of MCLA 600.5805. The net effect was a substantial increase in the statutory time limits. Since most claims accrued at completion of the construction or shortly after, the 2 or 3 year periods set out in MCLA 600.5805 usually controlled their disposition. The 6 year period of MCLA 600.5839(1) represented a marked departure from and increase in those time limits.

As yet, the effect of Ostroth has not manifested in the form of higher insurance rates. However, as we move into the extended claims period it permits, reasonable expectations suggest that will begin to occur. SB 865 would effectively reverse Ostroth and restore the statutory balance the Witherspoon court struck. As such, SB 865 is not a reduction in the statutory limitations period, but is instead simply a return to settled law pre-Ostroth.

With bi-partisan support in the Senate, SB 865 will hopefully receive favorable treatment as it moves into the House such that design professionals and construction contractors will see a return to the pre-Ostroh law, and the reasonable statutory time frames it reflects.

For more information about this issue , contact Frederick F. Butters at Keranen & Associates, P.C., 6895 Telegraph Road, Bloomfield Hills, Michigan 48301, Tel: (248) 647-9653.

Michigan Legislature Enacts "Owner Built Residence Transfer Act"

On Februray 13, 2008, the Michigan Legislature enacted SB 0577. The "Owner Built Residence Transfer Act" (PA 6 of 2008) is designed to protect homeowners who buy homes from unlicensed builders. The Act takes effect in 180 days.

Rationale

Michigan law contains various provisions requiring a residential builder to be licensed, but this requirement does not aply to someone who is building their own home. Article 24 of the Occupational Code, however, permits an unlicensed property owner to act as a residential builder when building a home for their own use and occupancy. The exception has led to abuses by unlicensed builders, who build several homes per year "for their own use" and decide the sell them as soon as the house is completed. Effectively, such persons are acting as (unlicensed) residential builders.

Provisions

The Owner Built Residence Transfer Act --

• requires that an "owner-builder" who intends, at the onset of construction, to live in a "residential structure" either to live in it or place it for sale if he or she is unable to live there;
  
• allows an owner-builder to sell only one owner-built residence per year;
  
• prohibits an owner-builder who lives in a new residential structure from selling it or transferring ownership for at least 120 days;
  
• requires an owner-builder, when offering a residential structure, to supply a notice that the structure was built by an owner-builder who was not a licensed builder;
  
• specifies that an owner-builder who fails to comply with the disclosure requirements is liable for repair costs and the buyer's temporary shelter costs;
  
• allows the buyer of an owner-builder residential structure to bring an action within 18 month for damages resulting from a violation of the disclosure requirements.

The Act includes the following definitions:

• "Owner-builder" means an individual who is not a licensed residential builder and who builds, or acts as a general contractor for the construction of a residential structure in which that person, or a member of his or her family, actually resides or intends to occupy for his or her own use upon the issuance of an occupancy permit.
• "Residential structure" means premises used or intended to be used for a residence purpose and related facilities appurtenant to the premises used or intended to be used as a adjunct of residential occupancy.

For more information about this issue, contact Peter Cavanaugh at Keranen & Associates, P.C., 6895 Telegraph Road, Bloomfield Hills, Michigan 48301, Tel: (248) 647-9653.

MDOT Implements New Claims Procedures

The Michigan Infrastructure & Transportation Association (MITA) reports in their current newsletter that the Michigan Department of Transportation (MDOT) has updated its claims procedures.

"On January 30th, after almost two years of collaboration and work by the Department and MITA, MDOT leadership signed into policy their new procedure for review of contractor claims. This new procedure, formally issued as Bureau of Highway Instructional Memorandum 2008-02, Review of Contractor Claims, replaces an outdated and organizationally archaic process defined in MDOT documents dating back to the mid 90’s."

For the rest of the story, follow this link.

For a copy of MDOT's January 30, 2008 Memorandum outlining their new claims procedures, following this link.