Photo of Steven M. Williams

Steven M. Williams is the Managing Partner in the Firm’s Harrisburg office, Chair of the Firm's Commercial Litigation Group, and a member of its Labor & Employment, Energy & Utilities, Financial Services, and Government Law & Regulatory Affairs Groups. He concentrates his practice in the areas of commercial and civil litigation, real estate, landlord and tenant law, condominium and homeowner law, employment law, business and corporate law, and construction law.

Steve lectures regularly, and is a frequent writer, on such topics as landlord and tenant law, fair housing, debt collection, employment law, the impacts of social media on individuals and businesses, and miscellaneous business issues.

In some states, courts allow contractors to sue design professionals for negligence even in the absence of a contract. In others, like Maryland, courts apply a rule known as the Economic Loss Rule (ELR) to bar such claims. Courts apply the ELR when, without a contract in place, someone sues another for purely financial losses (i.e., not for personal injuries or property damage). The ELR is very important in the construction world because contractors who sustain losses that they attribute to substandard design documents often sue the design professional who prepared the plans and specifications, even though they rarely have a contract with the designer.

Maryland.jpg

In a recent case – Balfour Beatty Infrastructure, Inc. v. Rummel Klepper & Kahl, LLP – the Maryland Court of Special Appeals (“Court”) reaffirmed the ELR and rejected various claims brought by a contractor against a design professional. The Balfour Beatty Infrastructure case involved a public works project for the City of Baltimore (“City”). The City entered into contracts with the design and engineering firm Rummel Klepper & Kahl, LLP (“RK & K”) to upgrade a water treatment plant. The City also entered into a contract with Balfour Beatty Infrastructure, Inc. (“Balfour”) to build the upgrades. Balfour did not have a contract with RK & K. Due to a series of design errors, Balfour suffered delays during construction and performed additional work that it attributed to the design errors. Based on these facts, Balfour sued RK & K for professional negligence and negligent misrepresentation, alleging that RK & K supplied false information to prospective bidders and failed to establish a  reasonable contract duration.

Continue Reading Can a Contractor Sue a Design Professional Without a Contract? Not in Maryland

On June 25, 2015, Justice Kennedy delivered the Supreme Court’s decision in Texas v. Inclusive Communities Project.  In the case, the Court determined that the Fair Housing Act of 1968 includes disparate impact claims.  Prior to Texas v. Inclusive Communities Project, nine of the twelve federal Courts of Appeals had ruled that the Act encompassed disparate impact claims. Nevertheless, there remained much dispute over the Act’s inclusion of such claims.

There are two forms of discrimination:  disparate treatment and disparate impact.  Disparate treatment is the intentional discrimination based on a person’s inclusion in a protected class (such as race, color, national origin, sex, religion, familial status, or disability).  Disparate impact, on the other hand, has little to do with intent.  Rather, disparate impact occurs when a policy that appears to be neutral on its face is discriminatory against a protected class when it is applied.  It has never been questioned that the Act prohibits disparate treatment.  Until June 25, however, there had been much debate over whether the Act prohibits disparate impact.  The debate is now settled!

The Court recognized, though, the potential dangers of disparate impact claims.  In his opinion, Justice Kennedy wrote:  “An important and appropriate means of ensuring that disparate-impact liability is properly limited is to give housing authorities and private developers leeway to state and explain the valid interest served by their policies.”  The Court concluded that policies adopted by government or private developers are not “contrary to the disparate impact requirement” unless they are “artificial, arbitrary, and unnecessary barriers.”

To address this problem, the Court decided to heighten the burden necessary to establish an initial case of disparate impact liability before considering evidence to rebut the claim.  In short, plaintiffs in discrimination cases will need to show that the implementation of the policy of which they complain creates the discriminatory impact.  By raising the bar of what is needed to assert a valid disparate impact claim, the Court has created some protection for housing providers to ensure that disparate impact claims will not cripple the industry.   The Court also recognized that housing providers  must be allowed to consider market factors when making housing decisions and take into consideration many factors in defending their policies.  If the challenged policy “is necessary to achieve a valid interest,” it will likely survive scrutiny under the disparate impact analysis.

While Texas v. Inclusive Communities Project involved the specific issue of tax credit distribution for housing projects, the Court’s decision makes clear that its holding applies to all housing matters covered by the Act.  Thus, all housing providers should carefully review their policies with counsel to limit the risks of having to defend disparate impact claims.

About the Authors: 

Steven M. Williams is the Managing Partner of the Harrisburg, Pennsylvania office of Cohen Seglias, Chair of the firm’s Commercial Litigation Group and a member of the Business Practices and Labor & Employment Groups. Steve has been representing landlords in virtually every aspect of their business for over 23 years and concentrates his practice in the areas of commercial and civil litigation, real estate, landlord and tenant law, employment law, business and corporate law and construction law.  He can be reached at 717.234.5530 or swilliams@cohenseglias.com.

Alexander F. Barth is an Associate in the Business Transactions and Commercial Litigation Groups at Cohen Seglias. He focuses his practice on commercial litigation and represents businesses and individuals in complex commercial disputes.  Alex represents residential and commercial real estate developers in land use and zoning matters throughout Pennsylvania and New Jersey. He can be reached at 215.564.1700 or abarth@cohenseglias.com.

By: Steve Williams

Pennsylvania now has a law that prescribes how landlords must handle a tenant’s abandoned property in certain circumstances. Senate Bill 887 was signed into law by Governor Corbett on July 5, 2012 (as Act 129-2012), becomes effective on August 4, 2012, and amends the Landlord and Tenant Act.

In summary, Act 129 requires that tenants remove their personal property when they relinquish possession of an apartment. Relinquishment occurs when a tenant is evicted, or when he vacates, removes substantially all of his personal belongings and gives his landlord a forwarding address or written notice that he has abandoned. The Act provides for a period of time during which a landlord must hold the abandoned property for the tenant to retrieve, and it provides for payment to landlords for removal and storage costs in some cases. Finally, the Act requires that tenants be provided notice of landlords’ rights under the Act.

As a result of the Act, landlords may want to consider amending their leases, or preparing a lease addendum, to provide the required notice. In addition, landlords may want to create a form notice letter to be sent to tenants who leave property behind.

There is more to the Act, and a careful reading of it is recommended. For more information, contact Steve Williams at (717) 234-5530 or swilliams@cohenseglias.com.

Steve Williams is Managing Partner in the Firm’s Harrisburg office, and a member of the Firm’s Commercial Litigation and Employment Law Groups.

Pennsylvania Governor Corbett has signed, House Bill 377 (HB 377) into law. The new law repeals the sprinkler mandate that became effective on January 1, 2011 that required builders to install sprinkler systems in all new single- and two-family homes.

Under the new law, builders must provide homebuyers with the option to install a sprinkler system and inform them of the benefits of sprinklers. The state code already requires hard-wired smoke detectors be installed in new homes. If a homebuyer opts not to install sprinklers, the home must be built with extra fireproof material on the floor boards in order to slow the spread of fire.

The new law has a retroactive effect to January 1, 2011. Thus, under the new law, homebuyers who were granted building permits after January 1, 2011 that required the installation of sprinklers are no longer required to install them.

HB 377 also sets a supermajority requirement for future votes by a state board to change the state’s Uniform Construction Code.

If you have any questions please contact Steve Williams at (717) 234-5530 or swilliams@cohenseglias.com, or the Cohen Seglias attorney with whom you normally consult.

On April 12, 2011, the Pennsylvania Senate voted to pass House Bill 377 (HB 377). The Senate’s version of the bill contained some changes, and HB 377 was sent back to the House for a concurrence vote. A day later, the House voted to approve the bill as it came out of the Senate. HB 377 is now on its way to Pennsylvania Governor Tom Corbett for signature.

HB 377, if enacted, will remove the residential sprinkler mandate from the Uniform Construction Code for single- and two-family homes that became effective as of January 1, 2011. It would also require that builders provide homebuyers with the option to install a sprinkler system and inform them of the benefits of sprinklers. If the homebuyer opts not to install sprinklers, the home must be built with extra fireproof material on the floor boards in order to slow the spread of fire. The home building industry highly supports HB 377, while firefighters and insurance professionals are generally opposed to it.

We will keep you posted on the progress of HB 377, but as always please contact us if you have any questions or need further information.