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Five Opening Day Lessons for Legal Disputes

West W. Winter Attorney The Winter Law Firm, PLLC

San Antonio, TX

September 1 st marks the opening day of dove season in Texas, and dove hunting, along with the return of football, marks my personal favorite time of the year. Some of my fondest memories are from hunting trips with family and friends. As we look forward to opening day with enthusiasm and anticipation, there are a number of lessons that can be learned from opening day which are applicable to all legal disputes.

Preparation for the Hunt

While not everyone prepares the same way for opening day, some amount of preparation is necessary for all of us. We must usually get a license, make sure our shotguns are ready for action, pack a cooler, and get directions to the hunt. Like preparation for the hunt, preparation is essential for success in any legal dispute.

If your business is new to a legal dispute, consult with your attorney and get a detailed roadmap of what you can expect during the dispute and its various phases, such as discovery, mediation, and final hearing or trial. Armed with this information, you will be prepared to assist your attorney and be in the best position to champion your position throughout the dispute. Whether your business is involved in litigation or arbitration, you will be required to provide documentation and other tangible things to your opponent in the discovery phase. It will assist your attorney, and be more cost effective, to gather and organize all relevant documents and evidence early on. The sooner you and your attorney know what the documents hold, including emails and text messages, the better.

It is also important where claims have been asserted to let your lawyer know about any applicable insurance policies. If you are a Defendant and have a right to a defense, then your carrier should be picking up the tab for the defense. Significantly, by not timely reporting a claim or demand to your insurance carrier, you could be prejudicing your carrier’s rights and therefore waive coverage.

Communication In The Field

Communication with fellow hunters is crucial to ensure safety and to allow everyone the opportunity to shoot a limit. Similarly, it is essential during any legal dispute to quickly establish open lines of communication with your lawyer and tremely important resource for you and your business, and you should not hesitate to contact your lawyer as the need arises. Additionally, the attorney-client privilege generally applies to confidential communications with your attorneys, so there is comfort in knowing that, subject to some exceptions, what you and your attorney discuss will remain confidential. Your employees with personal knowledge of the dispute should be contacted and such communications, if made during or in anticipation of litigation, may also be privileged.

It is also important to communicate expectations which you may have relevant to any particular matter for which you are represented. In litigation, where fees and costs can increase quickly, it is important that goals, costs, and any change in circumstances be fully discussed throughout the representation. If there is any confusion or uncertainty, ask lots of questions. Legal issues are often complex, and if you are not fully informed, you may not make the correct decisions for your business. Given the opportunity, your attorney will help you understand the complex issues at hand and help you make the best decisions under the circumstances.

Patience Is Essential

We all miss a bird or two. Despite these misses and the resulting frustration, there’s almost always another opportunity. Remaining calm, staying focused, and sticking with your routine are key to a successful hunt. Legal disputes, as they meander through the process from initial filing to final resolution, pose many challenges for the litigants. While frustration is a natural reaction, remain patient and trust in your counsel and the process. Losing a battle or two along the way is not unusual. Staying focused on winning the war is essential.

Watch Out for Snakes

This age-old admonition remains important for every hunter as a snake bite can have deadly consequences. Remaining vigilant and not letting your guard down mitigates the chances of a bad outcome.

Construction disputes, by their nature, are often document and expert intensive which leads to increased fees and costs. Ending up as the victor, only to learn that the cost of the battle exceeded the prize is not the outcome most seek. And while you may view your side of the dispute as black and white, rest assured that your opponent will likely view its side of the dispute with the same sense of clarity and conviction. The truth is that many gray areas typically exist which allow for credible arguments to be made on both sides. And since most construction disputes involve counterclaims, risk is always part of the equation. Given these circumyour employees. Your attorney is an ex

stances, litigants should remain vigilant throughout the dispute. By knowing the costs and making a candid assessment of the risks involved throughout the process, your business will be able to make a sound business decision of whether to continue the fight or to settle.

Enjoy the Hunt

Shooting a limit of birds is always exciting, but even on days when the birds just aren’t flying, hunting provides golden opportunities to spend quality time outdoors. While legal disputes will undoubtedly be a source of frustration, there is much to take away from the process as a participant. Involvement in a dispute will reward you with first-hand experience with the legal process and result in your business being better prepared for future disputes, should they occur. You may also be able to implement changes in your day-to-day operations to reduce the risk of future disputes. Happy hunting!

West W. Winter, a LEED Green Associate, serves on the board of the Construction Law Section of the San Antonio Bar Association and has been listed as one of the Best Lawyers in San Antonio for Construction Litigation. The Winter Law Firm represents general contractors, subcontractors, and suppliers in all phases of the construction process, from contract formation through dispute resolution, litigation, and collection. West can be reached via email: west@ thewinterlawfirm.com.

Common Risk Factors in Surety Underwriting

Eric Schmalz, Principal Schmalz & Associates Surety Bonding

Liberty Hill, TX

When I began my surety underwriting career in 2002 as a trainee, one of the foundational books I was given to read was “Construction Contractors’ Survival Guide” by Dr. Thomas C. Schleifer. The book was written for construction contractors to learn from, but the parallels to surety underwriting make it a tremendous asset in learning about elements of contractor failure that remain unchanged over time. The underlying theme Thomas points out across the various risk factors is that the project will likely get done, but will it get done profitably? This is a very important question. I will focus on two of the most common risk factors outlined in this book and I highly recommend visiting Thomas’ website letstalkbusiness.net for many more helpful resources. residents view the project. There may be perience in the construction industry and and contractors. He has written exten

Increase in Project Size

Most contractors can build a project that is two, three, or even four times their largest project to date. But it is easy to underestimate the strain a very large project puts on the companies’ resources. A contractors’ balance sheet that is set up to handle their normal project size and backlogs, can be strained significantly if slow pay occurs on a much larger project. This large project is often longer in duration, which creates a heavier impact on cash-flow from retention held and is more complex to finalize. A large project requires greater management supervision and likely requires an increase in oversight from owners, engineers, and architects. The last point I’ll note is the opportunity cost – the very large project will require dedicated management from key people who could have otherwise managed a couple of smaller projects, and your bonding company may be fairly conservative in supporting additional projects of size until the large project is complete. The best advice is to take measured, incremental increases in project size while expanding your company resources to meet those demands.

Change in Geographic Location

A change in geographic work location can change many risk variables for a contractor. Travel, housing, site conditions and weather are just a few factors that add cost, risk, and require a well thought out plan. Finding local subcontractors, labor, equipment, and material supply can all present challenges not dealt with in your normal operating territory. At a minimum you may not receive the best pricing quotes available and less than optimal service. Bidding and winning a project in a small town that is new to you can also present political and bu

to hear how the local government and some unfair treatment by locals who do not like or want the project built. The regulatory oversight and inspection process can be very different than with owners you are used to working with. A prudent course of action to expand geographic footprint would be to operate on the fringes of current territory and branch out further in a measured fashion.

In the surety industry we have experienced contractor failures as a result of a contractor taking on a job with one or both of risk factors, amongst other reasons. If you are exploring a job that will require a surety bond and the job is significantly larger than anything you’ve completed previously or in a new geographic location, you can expect questions to be raised. These issues can be overcome with proper planning and good communication with your surety agent and surety company. Often this communication is no more than letting your bonding agent and underwriter see the planning and risk management process a contractor would undergo even if a bond wasn’t required.

Dr. Thomas C. Schleifer has vast exserves as a turnaround expert for sureties reaucratic challenges. You are not around

sively on a variety of construction related issues. I would highly recommend picking up one of his books or reading some of his articles.

Schmalz & Associates is an agency exclusively supporting contractor’s bonding needs. Eric Schmalz was an underwriter and manager for over 15 years working for Top 10 surety companies and now helps his contractor clients establish and maximize their surety bonding. Please call 512-640-6444, email eric@schmalzsurety.com or visit the website at www.schmalzsurety.com