Judgment and Order

To Our Clients, Co-Counsel and Friends:
We write to provide you with an important update relating to the New York City Department of Environmental Protection (the “DEP”) filing procedures for complex asbestos abatement or alteration projects. On June 1, 2010 the DEP announced that abatement contractors may now apply for a variance from the DEP that would allow the New York City Department of  Buildings (the”DOB”) to issue a permit prior to completion of the abatement activities.

The DEP has recognized that requiring all asbestos abatement activities be completed at a job site before DOB can issue a permit for any related construction work  presents an undue hardship for complex and/or multi-phased projects. This new DEP variance is intended to allow flexible phasing of projects.

The DEP Asbestos Technical Review Unit, in consultation with the New York City Fire Department, will determine whether to grant or deny a variance application. In order to receive a variance you must complete the Asbestos Variance Application (ACP9) and comply with the following steps:

• 1. Obtain DOB Approval (Application for Construction Document Approval (PW1 Form));
• 2. Submit ACP7 and ACP9 Forms to DEP Asbestos Technical Review Unit;
• 3. Obtain DOB Permit (by way of submitting the Variance to DOB);
• 4. Abatement and DOB-permitted work commences (a party may not engage in asbestos abatement work and DOB permit work simultaneously in the same work area); and
• 5. DOB Permit Sign-Off (upon submission of all ACP20 and ACP21 forms, the DOB permit can be signed-off).

If you have any questions regarding this update, a particular building or a general construction issue, please do not hesitate to contact us

To Our Clients, Co-Counsel and Friends:
We write to provide you with an important update relating to recent efforts by various insurance carriers to exclude certain coverage most critical to contractors and property owners in New York. Our firm is presently litigating various issues arising out of these very circumstances.

Contractors rely on their General Liability Insurance (“GL”) to guard themselves and their additional insured parties (usually the property owner and, where applicable, a general contractor and/or construction manager) against claims of property damage and personal injury. Further, the Workers’ Compensation Law and the statutorily-prescribed Workers’ Compensation Insurance protect the contracting firm from suit brought by an injured employee and compensate the employee for the injury. However, the practical reality is that an employee of the contracting firm who is injured on a jobsite might sue the property owner, i.e., an additional insured on the contractor’s GL policy. The owner would then normally make a claim against the GL policy and should be covered for the claims of the employee thereby receiving the benefits of defense and indemnification as
promised by the contractor’s GL carrier.

In recent years, however, carriers have begun to add exclusionary endorsements to policies issued to contractors who, at a minimum, perform work in New York. These exclusionary endorsements, referred to by some carriers as “Employee Liability Exclusion Endorsements,” remove from the otherwise applicable GL coverage any claims arising out of an injury to the employee of the primary insured party, i.e., the contractor. By proxy, therefore, the contractor’s additional insured party, i.e., the property owner, is not covered for any claims arising out of an injury to an employee of the contractor.

As such, when the property owner is sued by the injured employee, its claim against the contractor’s GL policy is denied and the owner is forced to make a claim under its own policy. The property owner’s insurance carrier then exercises its right of subrogation and brings a third-party action against the contractor (though the employee cannot sue the contractor directly, the Workers’ Compensation Law does not prohibit this apparent end-around).

In light of the foregoing, it is absolutely critical for all contractors and property owners to verify the existence of appropriate coverage. Regrettably, we have seen cases where a carrier has amended the language of a contractor’s GL policy without proper notice.

If you have any questions regarding this Update or a particular insurance coverage issue, please do not hesitate to contact us.

To Our Clients, Co-Counsel and Friends:
Not a single recipient of this Update needs us to advise you that the economy is in a troubling condition. The mainstream media has focused the public’s attention on the status of the banking industry, the stock market and the federal bailout of the auto industry. The question that we discuss here, however, is what the  status of the economy means for the construction  industry and how our clients can best protect themselves in this difficult economic climate.

Lehman Brothers filed for bankruptcy. Merrill Lynch and Wachovia were bought-out. Fannie Mae and Freddie Mac were taken over by the federal government. The banking industry is in a state of flux and still quite reluctant to issue new financing vehicles or otherwise to extend existing financing. Owners have run out of funds and contractors are running out of time. But what does that mean for those of us in the trenches building our nation’s infrastructure? The answer is fairly obvious: payments on construction, demolition and abatement projects have slowed and, in many cases, stopped.

Indeed many contractors have sought our counsel on this very issue. Our advice is fairly simple: make all amicable attempts at payment but, if not successful, the contractor must file a Mechanics’ Lien. The statute of limitation for filing a Mechanics’ Lien in New York is eight (8) months and in New Jersey is 90 days, both running from the last date that work was performed on a project. After our office files and serves the Mechanics’ Lien we can then initiate an action to foreclose on the lien. If, however, a Mechanics’ Lien is not timely filed the contractor cannot maintain an action to foreclose on the lien and will be left with only the somewhat more challenging breach of contract action.

Indeed, given the state of the banking industry, the increase in Mechanics’ Liens has been staggering. For example, the number of Mechanics’ Liens filed in New York City skyrocketed from a monthly average of 394 in 2006 to a monthly average of 769 in September, October and November 2008. We expect this number to continue to rise as contractors find themselves with ever-increasing accounts receivable.

If you have any questions regarding this Update, a particular claim for payment or a general construction or environmental law issue, please do not hesitate to contact us.

To Our Clients, Co-Counsel and Friends:
We write to provide you with important updates relating to the New York City Department of Environmental Protection (“DEP”). For those of you engaged in the asbestos abatement industry, we write to alert you to recently enacted changes to the asbestos rules. We also write to alert property owners in the City of New York of an opportunity to resolve violations to be heard before the Environmental Control Board (“ECB”) through the new Penalty Relief Program.

The recent amendments to the DEP Asbestos Rules, 15 RCNY 1-01 et seq., are numerous. Some of the most critical amendments include the following:

• 1. Asbestos material must now be “Adequately Wet,” defined as complete penetration of a material with amended water to prevent the release of particulates.
• 2. An Asbestos Investigation Report will now be referred to as an Asbestos Project Notification and
  DEP form ACP-7 should be used.
• 3. All plastic sheeting materials used to contain or dispose of asbestos material must now be flame retardant.
• 4. A thin coat of encapsulant must now also be applied to all surfaces in the work area that were not subject to removal or abatement including the cleaned layer of surface barriers.
• 5. All references to “friable” asbestos material have been removed and the rules now apply to all asbestos-containing material.
• 6. Log Book requirements have been updated and now require greater specificity including, but not limited to, daily activities, certification numbers for handlers and supervisors, and the results of daily safety checks.
• 7. There are two new titles associated with abatement work: Project Designer (a person who holds a valid Project Designer Certificate from the NYS Department of Labor) and Project Monitor (a person who holds a valid Project Monitor Certificate from the NYS Department of Labor). All ACP-9 forms must be completed by a Project Designer.
• 8. The following projects must be certified to the New York City Department of Buildings: (1) full demolitions; (2) alterations, renovations or modifications; and (3) plumbing work. Certification can be made by submission of an Asbestos Assessment Report (ACP-5), an Asbestos Exemption Certificate (ASB4), an Asbestos Project Completion Form, or an Asbestos Project Conditional Close-out Form.
• 9. An Asbestos Abatement Permit and Work Place Safety Plan are now required for activities involving certain obstructions to egress and/or affecting fire or safety features.
• 10. Asbestos Investigators must maintain a permanent record for every building survey/hazard assessment for asbestos.
• 11. All air technicians must now possess a NYS Department of Labor Asbestos Handling License and may not have any business and/or personal relationship with the asbestos contractor (a relationship will be presumed when the same air monitor works on substantially all of an asbestos contractor’s jobs).
• 12. The air sampling technician must maintain a detailed Air Sampling Log, not merely a Chain of Custody.
• 13. A floor plan showing the areas to be abated must be posted in the building lobby.
• 14. Existing light sources may not be used. Emergency lighting that is temporarily blocked due to work must be replaced by battery operated or other temporary emergency lighting.
• 15. Glovebag procedures may only be used in conjunction with full containment of the work area or tent procedures. All glovebags must pass a smoke test.
• 16. Within twenty-one days of completion of the project cleanup (including successful air monitoring) a Project Monitor’s Report must be submitted to the DEP.
• 17. New sections have been added to deal with the following topics: Foam Procedure for Roof Removal; Foam/Viscous Liquid Use in Flooring Removal; Abatement from Vertical Exterior Surfaces; and Controlled Demolition with Asbestos in Place.

The ECB Penalty Relief Program permits business and homeowners to resolve any violations with the ECB that are in default. The violations will be resolved by payment of the underlying fine, without additional penalties, late fees or interest. Common ECB violations include: dirty sidewalks, failure to properly post permits, failure to properly separate recycling materials, failure to restore a street cut, illegal posting of a handbill, sidewalk obstruction and street closing without a permit. The Penalty Relief Program expires on December 21, 2009.

If you have any questions regarding this Update, a particular violation from the ECB or a general asbestos abatement issue, please do not hesitate to contact us.