The area of construction law spans several broad and distinct practice areas. At Chioini Group our counsel not only has experienced legal backgrounds, but they also have distinct and unique history within the construction community that we practice. More specifically, attorneys Carl Chioini and Randall Chioini have spent a considerable portion of their lives devoted to construction.
Before receiving his formal education, Carl Chioini worked in his family’s tile and terrazzo business both in the front office and as a tile mason. Before commencing his career as an attorney, Mr. Chioini assisted in growing that business into a well-respected, union contracting company with many well-known projects throughout the state. This business remains in the family to this day and has served as an industry leader for over almost 70 years.
Similar to his father, Randall Chioini started off in the tile business. However, after commencing studies in Construction Management, Mr. Chioini eventually moved his career path to building and development and began a career as a construction manager for a large building and development company. After working several years in the field, he took a position as a purchaser and estimator with a different construction company and continued that career while attending law school in the evenings. After a considerable downturn in the Michigan construction economy, Mr. Chioini focused on practicing law and assisting contractors. More specifically, he began his career assisting and directing many of his construction colleagues in sustaining their businesses through a very lengthy local and national recession. Mr. Chioini remains one of only a few attorneys in the country that has real experience within the construction industry.
Today Chioini Group prides itself on the fact that because of our unique backgrounds, we are not blinded by legal goggles worn by many attorneys who fail to appreciate the hard economics of their clients’ legal matter. We believe our experience plays an integral role in not only serving our construction clients but also our business clients, as we have a much more personal perspective on the realities of the construction industry. For over almost 35 years we have represented a variety of owners, contractors, subcontractors, engineers, suppliers, and other trades in a variety of legal matters.
The construction industry remains unique in that it is one of the only businesses in the world where materials, goods, services, and labor are generally provided in advance of any compensation. As a result of this business model, contractors and other trade professionals are routinely plagued with collection problems. At Chioini Group, we help our clients engage in proactive collection methods and processes to avoid scenarios of missed collection opportunities, including but not limited to, the expiration of lien rights and other legal claims.
Our office routinely engages in collection lawsuits on behalf of our construction clients. Unfortunately, as a result of the fast-paced nature of construction, we are also very cognizant and aware of the fact that many contract change orders cannot always be memorialized in writing. However, that does not relinquish your right to pursue collection of these matters based on a number of legal theories.
Perhaps one of the most effective methods for insuring payment on a project as a contractor, trade, or supplier is to exercise your lien rights under the Michigan Construction Lien Act. Despite the fact that this law was specifically created to carve out additional protections for contractors, many fail to exercise these rights and routinely leave money on the table following a project.
Over the last 5 years contractors and trades have further shied away from this process as a result of financially over-burdened projects that they perceived had limited equity in which to resolve a lien. While that was generally true for the last 5 years, improved economic conditions have reopened the door for contractors to proceed in successful lien foreclosure actions if they are not paid on a project.
We believe it is our duty to assist contractors and trades in understanding the lien process and teach them how to properly perfect these rights or offer services to do this work on their behalf. The reason we take these steps on behalf of our clients is that we firmly believe that our success is directly related to the success of our business partners.
Many contractors and trades are unaware of the fact that the Construction Lien Act also provides that successful lien claimants are entitled to reasonable attorney fees in addition to their contract amount. As such, we avidly pursue attorney fees in these actions as we do not believe that our client should be required to shoulder this burden, especially when the owner or general contractor has not acted in good faith. In 2012, following one of the longest construction lien actions in Michigan history, Chioini Group successfully foreclosed a landmark Detroit property on behalf of its contractor-client and received full contract damages, interest, and several years of attorney fees. Despite the many contractor litigants involved in that case, Mr. Randall Chioini and one other attorney where the only counsel with the tenacity to see this matter to the end after a very lengthy and protracted litigation.
Perhaps one of the most common mistakes our contractor-clients make is failing to read or fully understand the contracts they enter. Many times there are hidden pitfalls or possible implications that could have been avoided at the onset had they been given some attention and clarification. As such, we routinely engage in contractor review and mark-up for our clients as a preventative measure.
Contracts, Scopes, Specifications
There are many occasions where a template contract simply does not exist or the base contract requires an extensive overall or customization. We routinely assist our clients with building a portfolio of study contracts, scopes, and specifications. We are well versed and have experience with most AIA and AGC construction documents.
There is an inconvenient truth that exists in today’s legal industry in which the cost and inefficiency of the legal system has become so cumbersome making litigation almost impossible if not obsolete. As a result, most construction contractors seek to utilize some form of alternative dispute resolution (ADR), whether through the American Arbitration Association or other avenues. While these processes have also become inundated and costly, we regularly assist and represent to navigate the ADR process as quickly and efficiently as possible. We have mediated and arbitrated a variety of construction related matters including but not limited to, several large municipal and international construction disputes.
Construction is distinct in that it is one of the only industries left were materials, labor, and other services are provided in advance of payment. Although, unlike products that are built in a controlled environment or factory, construction is not always an exact science. Many times there can be problems with cost overruns, site conditions, unforeseen conditions, supply issues and employment issues. As a result, construction remains a hotbed for legal disputes. At Chioini Group, we assist our clients first in avoiding such problems before they occur. Ultimately our goal is to assist our clients in efficient, cost-effective, and aggressive resolution of these problems.
Perhaps the most cost effective thing we can do for our clients is to assist them with avoidance of legal matters before they occur. We find that those clients who engage our advice prior to, during, and following a project, remain in an optimal position to finish a project without legal and other collection problems. When clients consider the costs of litigation, failed collection matters, and a whole slew of pitfalls that surround this industry, the upfront cost of representation is minimal.
State and Public Works Projects and the Miller Act
Under Michigan law construction liens are not valid against public projects. Similarly, the Building Contract Fund Act provides that payments made on construction projects be treated as funds held in trust for the benefit of payers and payees. However, this cannot apply to public projects. The state has promulgated public bond statues to provide remedies for non-payment in public projects. There are 3 basic types of bonds: bid bonds, payment bonds, and performance bonds. The Millar Act is a statute that requires that all federal contracts for construction, alteration, or repair in excess of $100,000 must be bonded. Therefore, a party that is awarded a contract must furnish a performance bond in protection of the United States and the project itself.
Owners and contractors are often put in precarious positions when projects are completed and defects are discovered. Generally speaking, some defects can be determined at the onset and must be cured but in other scenarios, defects may be latent or arise or are discovered years after the fact. At Chioini Group, we assist our clients in determining whether they have a case for a construction defect and help them determine the most cost-effective and efficient means of resolving it. We also assist our clients in locating and utilizing industry experts to document test for future litigation and to determine proper remedies. We spend a considerable amount of time keeping ourselves updated on industry standards of all facets of construction, and are familiar with local, state, and national building practices and standards.
Perhaps one of the most frequently litigated issues relative to construction law relates to change orders. Unfortunately, as a result of strict time requisites, contractors and subcontractors often breeze over change orders in attempt to expedite the project. However, when the project is complete there is a poor record or documentation of such change orders and frequently there is an owner or project manager who is still glued to their budget. On the other side, there are many times where change orders can be abused, especially where a trade highly underbid the work and is attempting to recoup some of its lost profit. At Chioini Group, we have considerable experience litigating these issues and frequently advise our clients as to the best methods during the course of the project.
Land Acquisition and Real Estate Matters
Perhaps one of the biggest unforeseen liabilities for any builder or developer relates to the land that their project will sit on. Many times as a result of poor title work or lack-luster representation by brokers and realtors, our clients find themselves in precarious property situations. Problems that we see often are title defects or flaws that were not properly cured before closing and were overlooked by the broker or scenarios where the property is not fit for the intended purpose it was bought. For these reasons, we believe it is imperative that attorneys are involved in all acquisition and sales of property. In fact, many states have legislation that requires attorneys to review all real property transactions in addition to the broker. We believe that this is good policy. Remember, that while a broker makes commission on the sale of your property, they may have done limited to no review of the title work and other considerations. In addition, brokers may not always be required to act as your fiduciary and may be protecting their bottom line. In comparison, attorneys most often at a much more reasonable cost can facilitate that same transaction, while also making sure everything is done correctly. At Chioini Group, we assist our clients in a variety of real estate matters, including general due diligence to full closing services.
Privatized Funding Arrangements
Perhaps the biggest headache for many of our clients is obtaining proper funding to make sure that their project is a success. Unfortunately, over the last several years institutional funding has constricted and many clients find it easier, more efficient, and cost-effective to rely on privatized funding. We assist our clients in structuring and resolving unique issues related to their privatized funding needs.
Our office represents numerous trades and subcontractors in a variety of construction matters. We believe that we have considerable individualized knowledge of specific trades and trade practices which provides our clients considerable added benefit. We currently represent trades representing almost almost every industry. We also specialize in assisting subcontractors obtain proper licensing and other required or preferred industry designations and affiliations.