Learning Not to Code

Behold, the TRS-80 Color Computer (CoCo for short) with 16k RAM

By: Gregory L. Shelton

Shelton Law Carolinas

1982. A year of city league basketball, middle school band (cornet, thanks for asking), and my first personal computer; a TRS-80 color computer from Radio Shack.

Before IOS and Android, before red states and blue states, before Team Jennifer and Team Angelina, there was Team Tandy and Team Commodore.

Team Tandy kids ran the Tandy/Radio Shack color computer (TRS-80). Team Commodore kids ran the Commodore 64. Both were excellent platforms to learn the MS Basic programming language (If x>10 then goto 70). Other programming languages at that time included Fortran (science), Cobol (business), and the mysterious “machine language” of zeros and ones known only to wizards.

Our immersive games included Berzerk, Lunar Lander, and Hunt the Wumpus

Of course, not much has changed in the world of computing since the early 1980s. Ones are still ones, zeros are still zeros, right? So I decided to build SheltonLawCarolinas.com from scratch. What, with my blogging experience, my TRS-80 pedigree, and my red-blooded pioneer spirit, what could possibly go wrong?

It was smooth sailing at first. I secured the domain, found a web hosting service, and bought a professional template that captured My Vision. Next, I created a rudimentary two-page website with contact information and a description of my law practice, along with the customary “website under construction” caution tape.

The trouble started during the design/construction phase. I was not using a simple “build your own website” block-over-block template that you see on TV commercials. Nope. I was building on a varsity-level business template with approximately zero hours of training. I’d spend a few frustrating hours here and there working on the site, experimenting with the editing tools, trying to adjust fonts, frames, and links, but it was no use. It was like a shade tree mechanic trying to rebuild a CVT transmission. Or challenging a seven year old to a game of HALO. (I remember only lights. Bright, bright lights.)

“So, Greg, why didn’t you just call the man?” you ask?

Words of wisdom from Surry County

Well, I was stubborn. I did not want to give up. I kept telling myself that I’d build the site “next week.” Next week ended up being the week after that. Week after week passed. The website took a back seat to my cases, to firm management tasks, to planning the firm Christmas party.

The website was out of sight, but not out of mind. It was a looming cloud. A distraction. Like going to the park for some pick-up basketball, or watching ABC Afterschool Specials on continuous loop, when you know you should be studying for the exam.

In the end, business is business. The website had to go up, my pride and determination notwithstanding. So I called the man. In this case, an English woman living in Switzerland who I hired through Upwork. I chose her over other candidates because she sent me a nice mock-up of the home page during the selection process. She did a great job on the website, and I have finally crossed “build website” off the to-do list. I only wish I had done it sooner.

Sometimes its better to just call the man.

Things to Delegate

  1. Heart surgery
  2. High voltage electrical
  3. HALO (vs. kids)
  4. Lion taming
  5. S-Corp tax returns
  6. Cobbling/Tailoring
  7. Haircuts
  8. Building websites

TRS-80 Photo: Attr. WikiCommons

NC Law

Will Construction Return or is this “New Normal”?

Tower Cranes, Construction Workers, and a Security Camera

By: Gregory L. Shelton

Shelton Law Carolinas

Yes, we will return to normal, but no one knows when. Government officials walk a timing tightrope. Open too soon and the virus might return with a vengeance. Open too late and the economic system might collapse.

According to recent polls, people remain content with the lockdown for the time being. Support for the status quo will inevitably erode over time. Staying home is fine in small doses, but people are meant to work. Why else would they make daytime television so unwatchable?

Field Report

Construction work is hit or miss at the national level. Some cities have ordered construction work to stop. Other cities deem construction an essential activity. Moratoria aside, many projects are on hold for purely financial reasons. The NCDOT is postponing projects over funding concerns. Private projects in “essential activity” jurisdictions are also being postponed or cancelled, with owners waiting to see what’s over the economic horizon.

Closer to home, work continues on large mixed-use projects, high rises, and underground utilities. Gyms are closed, so I’ve been maintaining my cheetah-like physique by parking on the south side of I-277 and walking to Shelton Law Carolinas’ world headquarters at Trade and Tryon. Its the same every day: tower cranes, jackhammers, beeps, rattles, shouting foremen, blasts of wind-blown sand and water. Construction is alive and well in Uptown Charlotte, but take away construction and Uptown is a ghost town.

Restaurants have set up tables along the sidewalk for carry out. What fate awaits these restaurants and the other storefront businesses that haven’t opened their doors in weeks? Lock boxes are emptying and commercial landlords must decide whether to declare “Default!” or keep tenants afloat with lease amendments. Upstream, the lenders must decide whether to foreclose or forbear on those very landlords. The circle of CRE life.

These case-by-case decisions must be made at a time of incredible uncertainty. What will the country look like in September? Will the economy burst out of the gate like a pent-up bull? Or will it sputter into the ditch?

Decision-makers have no choice but to place bets. Knowing what to do is hard because this is not the usual downturn. It is a recession most foul, strange, and unnatural. Bats, lab coats, shuttered storefronts, quarantines, masks, lock downs, Charmin shortages, and trade wars. As if that’s not crazy enough, we’re in an election year.

Incumbents are on the horns of a dilemma. If shelter-in-place is lifted and the virus returns, challengers will accuse incumbents of mass murder. If the shelter-in-place is not lifted, and the narrative shifts to evictions, lost jobs, and depression, challengers will accuse incumbents of mass murder.

Don’t feel sorry for the incumbents. They wanted the job, and with great power comes great responsibility. But do pay attention to the news narratives to get a feel for when people will be allowed back to work and where this is heading. Real Clear Politics aggregates articles from the Locke crowd, the Hobbes crowd, and the Dr. Smith crowd. Also, remember that decisions will vary from state to state, city to city, so don’t ignore local news.

We Outsourced Manufacturing and Technology to China and All We Got Was this Lousy T-Shirt

Oil prices are historically low, the feds are spending like its 2999, and the world is closed for business. It looks bleak. Strangely, China may be the construction industry’s best hope.

Beijing is doing a spectacular job unifying Americans and turning public opinion against outsourcing. The tide was turning even before Wuhan. Regular beat downs of Google, Apple, Disney, and most recently the NBA, tell the tale of cunning communist billionaires ordering cloying crypto-colonialist billionaires to dance. And dance they have, pith helmets, swagger sticks, and all, into the dragon’s maw with one hand waving free.

We wince.

The poll of 1,000 Americans found unfavorable opinions of China are shared across party lines, with about 70 percent of Republicans and Republican-leaning independents and 60 percent of Democrats and Democratic-leaning independents holding them. In addition, the poll shows that about 90 percent of those surveyed see growing Chinese power and influence as a threat.


China’s Think Locally, Spread Globally coronavirus strategy did not help matters. In a lawsuit filed against China earlier this week, the State of Missouri framed the case against China’s thusly:

An appalling campaign of deceit, concealment, misfeasance, and inaction by Chinese authorities unleashed this pandemic. During the critical weeks of the initial outbreak, Chinese authorities deceived the public, suppressed crucial information, arrested whistleblowers, denied human-to-human transmission in the face of mounting evidence, destroyed critical medical research, permitted millions of people to be exposed to the virus, and even hoarded personal protective equipment- thus causing a global pandemic that was unnecessary and preventable. Defendants are responsible for the enormous death, suffering, and economic losses they inflicted on the world, including Missourians, and they should be held accountable.

State of Missouri v. The People’s Republic of China et al, Case No. 1:20-cv-00099 (E.D. Mo. Apr. 21, 2020).

Support for China will remain strong in certain pockets of both political parties, K Street, and our academic institutions. The Communist Party of China is less popular lower down Maslow’s pyramid, where jobs have been lost and people are worried about their livelihoods.

Although the bloom is off the transpacific rose, China cannot be immediately cast aside. Not yet anyway. The construction industry relies heavily on China for materials and manufactured goods. Moving production back to the United States will take time, and once moved, construction materials will probably cost more. (I say probably because tariffs and trade disputes could change the cost equation.) Construction is supply-chained to China for the time being.

I should add that outsourcing to an authoritarian regime bent on replacing the United States as the sole superpower is a nuanced, complex issue with pros and cons. Having nowhere to go and nothing to do, what better time to retrieve our game consoles, gas grills, and sun-faded plastic patio furniture from self-storage; and contemplate our higher standard of living?

Homeward Bound?

The days of China controlling our supply of pharmaceuticals, PPE, and vital equipment are over. Beijing all but guaranteed this result when it declared that China could plunge the United States “into the mighty sea of coronavirus.” Boastful, foolish, and accurate.

Pharmaceuticals and other industries should expect carrot-or-stick incentives to return production and supply chains to the United States. Senator Chris Coons, a Democrat, said “we should look hard at providing incentives to American manufacturers and small businesses to bring back to our country some of this critical manufacturing capacity.” Representative Chip Roy, a Republican, introduced the “Beat China Act” earlier this month. The goal of the bill is to bring pharmaceutical manufacturing back to the United States.

Expect the introduction of similar legislation in the coming months. The return of manufacturing should mean good things for the construction industry. There will be factories to build. And infrastructure. The world’s largest owner, the federal government, is contemplating a $2 trillion infrastructure bill as phase four of the coronavirus response. The wisdom of adding trillions more to our debt is a matter for economists to debate. It wouldn’t hurt to thank your grandkids.

Which Way Do I Go?

Don’t bother looking for a guru to tell you what the future will bring. There are too many variables right now, and many gurus have ulterior motives.

ME: Alexa, what happens to an economy after it is shut down to flatten the infection-rate curve of a potentially deadly bat-based coronavirus during an election year when the federal government has spent trillions and oil prices are at an all time low and, oh yeah, the virus may come back this fall?

ALEXA: Shall I add “bat oil” to your cart?

ME: No. But you can tell Bezos these dishes aren’t going to wash themselves.

ALEXA: (Blue light spins, goes dark, spins) Correction drones have been dispatched to your location.

You’re going to have to be your own guru. Use this quiet time to track legislation that impacts your business. Stay in touch with your network. Trust your gut. Filter out the nonsense of mountebanks. Think during walks. Get your house in order. Tell your elected officials what’s on your mind.

You should also keep your ear to the ground. To minimize garbage in, garbage out, set up a personalized coronavirus dashboard to track the specific trends and events impacting your business. The dashboard can be as simple as bookmarks, favorites, desktop links, or reading lists in your web browser. My dashboard includes Dodge’s Construction Industry Coronavirus News, which links to federal and state construction news. Look for industry-specific aggregators on trade association websites.


Construction will return, but it will take time. How much time is anybody’s guess. The economy was shut off at the street. Air has gotten into the pipes; and when the faucet is turned back on, you should expect the pipes to knock, hiss, and sputter for a while. Eventually money will flow steadily from the tap. Make a plan to be around when it does.

Gregory L. Shelton (c) 2020

NC Law , , , , ,

Wuhan Coronavirus: A Justification for Construction Delays?

By: Gregory L. Shelton

Shelton Law Carolinas

The ACC basketball tournament has been cancelled. It is time to start taking Wuhan Coronavirus seriously.

The adverse effects of the coronavirus are (at least) three fold. First, the supply chain of foreign-made materials will be interrupted, and the United States relies heavily on China for construction materials. Second, builders cannot build if they are sick at home. Third, disruptions in finance often affect an owner’s ability to pay.

Most construction contracts include a provision governing labor disruptions, riots, and force majeure events like hurricanes and floods.

Consider section 8.3 of the AIA A201-2017 General Conditions, which provides in part that the Contract Time will be extended when the Contractor is delayed by “labor disputes, fire, unusual delay in deliveries, unavoidable casualties, adverse weather conditions documented in accordance with Section, or other causes beyond the Contractor’s control[.]” (Emphasis added.)

Construction contracts allocate risks among the parties, and the prevailing default setting is to allocate a risk to the party who can best control that risk. Section 8.3 recognizes the fact there are some things that no party to the contract can control. Even today, as we are practised in the fine art of viral Twitter blamestorming, no one can seriously hold an owner, contractor, subcontractor, or supplier responsible for the viral pandemic that is Wuhan Coronavirus.

Those delayed by coronavirus can point to President Trump’s declaration of a national emergency earlier this morning to buttress a pandemic-based claim or defense. “National emergency” evokes war, pestilence, disease, and war. This goes far beyond the dog ate my homework.

While we do not yet know the full extent of the disruption, the prudent ones among you will start documenting when, where, and how the pandemic has interfered with deliveries, progress, or funding.

It will not be enough to show that a delay occurred during the pandemic. You must also prove the causal link between coronavirus and your delay.

That is where the lawyering begins.

Photo Attr: Wikicommons (Shawnfog)

NC Law

Building Codes in the Sky with Diamonds

Attr: Paraphone Music Sweden [CC BY 3.0 (https:creativecommons.org.licenses/by/3.0)]

Gregory L. Shelton

Shelton Law Carolinas

Picture yourself in a shack by the river
With newspaper curtains . . .
roof open to skies
Somebody’s knocking, you answer quite slowly
A man with demolishing eyes

Good Morning, Good Morning

It’s Friday morning at nine o’clock, and you’re still padding about in your ventilated bathrobe, clutching your coffee and perusing the local section of the newspaper. “Four thousand potholes in town? Hmm. I wonder who counted them all.”

Your quiet morning is interrupted by a man from code enforcement. His name is Mr. Maxwell, and he informs you that he wants to bulldoze your home. “Look, Maxwell,” you protest. “Just yesterday I was doing the garden and digging the weeds. Who could ask for more?”

“The county believes this structure is not safe,” Maxwell replies. “You’ve got a hole in the roof where the rain gets in. You have an infestation of Norwegian wood beetles eating through the walls. And I just saw a raccoon coming in through the bathroom window.”

Maxwell tries to hand you an official looking document, but you refuse to accept it. “Chasing paper leads me nowhere,” you tell him. He leaves it in a jar by the door and bids you a good day.

Curiosity eventually wins out. There will be a hearing in ten days to determine whether your house will be demolished.

“How could they do this to me?” you wonder.

You need help. And not just from anybody. You need a guru. An expert-textpert who can help you fend off Maxwell’s sledgehammers.

You ring your solicitor. He listens intently as you tell your story. “Hmm. I see. What’s that? You say you’ll change the constitution?” he asks. “Well, you know . . . states have an inherent right under the Tenth Amendment to enact and enforce laws to protect the health, safety, welfare, and morals of the community. This is known as the state police power.”

The solicitor continues: “A state may delegate its police power to local jurisdictions, such as counties, cities, and towns. Whether and how much authority is delegated varies from state to state. The code enforcement agency to whom the power is delegated may require an owner to repair a structure or even demolish it, provided of course the agency properly interprets the building code and does not violate the owner’s statutory and constitutional rights.”

Mean Mr. Maxwell wants to bulldoze your house, and this lawyer has his head in a cloud. You’ve had enough. You tell him that you can’t sleep, that you can’t stop your brain, and that you’re going insane. “I’ll give you everything I’ve got for a little peace of mind,” you say in desperation.

“No need for that,” the lawyer tells you. “But I do charge by the hour. Now, is your house on the North or South Carolina side of the river?”

“Both sides” you tell him. [Cue sitar music]

South Carolina: Everything Was Right

On the South Carolina side of the river, a splendid time is guaranteed for all.

Let me introduce to you, the one and only police power: “The public policy of South Carolina is to maintain reasonable standards of construction in buildings and other structures in the State consistent with the public health, safety, and welfare of its citizens.” S.C. Code of Laws § 6-9-5. The South Carolina Building Codes Council, a state agency, adopts the building codes to be enforced. Municipalities and counties then enforce the building codes. S.C. Code of Laws § 6-9-10(A); S.C. Code Regs. 8-105; Int’l Bldg. Code §§ 104.2, 104.3.

South Carolina’s streamlined approach to building code enforcement minimizes disputes about procedure and process. However, building code issues do appear from time to time in South Carolina’s law books. Just last year, the Supreme Court of South Carolina addressed the building code in a case called Donevant v. Town of Surfside Beach, 422 S.C. 264 (2018).

In Donevant, the town’s building official issued a stop work order on work being performed without a permit. The town fired the building official for issuing the stop work order. The building official, in turn, sued the town for wrongful termination. The town defended by arguing that the building official was an at-will employee. The court rejected this argument, stating that “it is a violation of a clear mandate of public policy to fire a building official for enforcing the building code.”

Although Donevant deals primarily with the public policy exception to the at-will employment doctrine, it is a good place to start if you want to learn more about the building code in South Carolina. The court introduces the reader to the Building Codes Council, and then walks the reader through the applicable statutes, administrative codes, and even applicable provisions of the International Building Code.

North Carolina: Helter Skelter

Meanwhile, on the North Carolina side of the river, things are very strange.

Richard Ducker’s two-part series on code enforcement and nuisance abatement in the Coates’ Canons blog is aptly titled “What a Mess.” But don’t take his word for it. Let’s climb in the back of a newspaper taxi and take a little trip to Building Code Land.

[Think this part in animation]

Above you in the marmalade skies, you see a flock of law books, covers and pages flapping, screaming like psychedelic seagulls. There are chapters on the police power, chapters on cities, chapters on counties, chapters on state agencies, chapters on administrative appeals. So many chapters. So many pages. See how they fly.

And suddenly . . . they’re gone!

The International Building Code then appears from behind a row of bent backed tulips.

Measurements, calculations, earthquakes, and walls
ramps, sprinklers, voltage, and stalls

Chaotic yet precise, ambiguous yet technical
Building code books are imminently collectible


How we hate to see them go.

But now it’s time to relax and float downstream, to a little hideaway beneath the waves. Here in the sea of green lurk local ordinances, interlocal enforcement agreements, UDOs, constitutions, and even a fireman with an hourglass. (Engineering and Codes is a division within the Office of State Fire Marshall, so that’s a hidden meaning right there.)

Ad hoc, ad loc and quid pro quo.

So little time, so much to know

Jeremy again

By all the sea nymphets, we’re losing power. Time to surface.

[Here comes the sun]

Next stop, ladies and gentlemen: Patterson v. City of Gastonia, 220 N.C. App. 233 (2012).

This opinion from the court of appeals addresses law-and-order topics like sovereign immunity, demolition, administrative hearings, statutory construction, due process, the housing code, and inverse condemnation. But things aren’t as western as they first appear. Beneath the surface, Patterson takes us on a transcendental journey through the building code appeal process. It’s a long and winding road that may lead to the door of the courthouse. Or department of insurance. Or local zoning board of adjustment. Chief building inspector. City council. Zoning board. Sun king. Goo goo g’joob.

There are also subversive messages hidden in the text of the court’s opinion. For example, the word “procedural” appears throughout. “Procedural” backwards is “la rude corp,” which is almost French for “the rough body.” And building code enforcement in North Carolina is a rough body of law to master.

Surrender to the Void

It would take me years to write a comprehensive book on North Carolina’s helter-skelter laws. I don’t want to be a paperback writer. Just remember this:

True wisdom comes from understanding how much you do not yet understand


I don’t know what’s going on back there, people, but my newspaper taxi appears to be on fire. It’s getting smoky in here. Tour’s over.

We Can Work It Out

Building code enforcement involves aspects of criminal law, construction law, constitutional law, tort law, administrative law, and municipal law. If you find yourself in times of trouble, don’t just sit around making nowhere plans. You have a fighting chance to save your restaurant, gas station, factory, hotel, condo, shed, beach house, or castle. But you’ve got to get help quickly or you may end up sleeping behind the shelter in the middle of the roundabout.

NC Law , , , , ,

The Danger of Groupthink in Litigation

The Danger of Groupthink in Litigation

By: Gregory L. Shelton

Shelton Law Carolinas

(803) 670-0024

Inspired by the Orwell novel 1984, William H. White, Jr. coined the term “groupthink” to refer to rationalized conformity. Groupthink has been blamed for the Bay of Pigs debacle and the Challenger tragedy.

In the early 1970s, psychologist Irving Janis identified eight symptoms of groupthink and organized them into three types:

Type I: Overestimations of the group — its power and morality

  • Illusions of invulnerability creating excessive optimism and encouraging risk taking.
  • Unquestioned belief in the morality of the group, causing members to ignore the consequences of their actions.

Past experience or arrogance can lead the group to believe that failure is simply not possible. Military history is awash in examples of this symptom.

Regarding righteousness, litigators often hear statements like “jurors will be outraged when I tell them what happened” or “no court in the country would let them get away with this!” Guess what. There is a chance that the jurors be bored when you reveal your bombshell at 4:15 p.m. on Friday afternoon; and that horrible thing the defendant did to you may be allowed in the contract you signed.

Type II: Closed-mindedness

  • Rationalizing warnings that might challenge the group’s assumptions.
  • Stereotyping those who are opposed to the group as weak, evil, biased, spiteful, impotent, or stupid.

We are right. Therefore, those who oppose us are ignorant and evil. Sound familiar?

An exhausting day of mediation with a good mediator is the best cure for close-mindedness. Mediation allows the parties to discuss the dispute across the table with a mediator raising questions that one side of the dispute previously ignored or dismissed when they were raised by the enemy.

Type III: Pressures toward uniformity

  • Self-censorship of ideas that deviate from the apparent group consensus.
  • Illusions of unanimity among group members, silence is viewed as agreement.
  • Direct pressure to conform placed on any member who questions the group, couched in terms of “disloyalty”
  • Mindguards— self-appointed members who shield the group from dissenting information.

These symptoms, which are common in litigation, usually occur when: (1) the attorney spends 100% of the time as advocate and 0% of the time as counselor (the “bulldog”), or (2) when the client attacks his or her lawyer for identifying risks or problems with the case.

The client may ask the lawyer something like, “whose side are you on?” Sophisticated or institutional clients who have been through litigation usually do not ask questions like this. When asked this question, the lawyer must explain the difference between the lawyer’s private role as counselor and the lawyer’s public role as advocate.

Take Away

It is not enough to recognize symptoms of groupthink. Litigators and clients should take affirmative steps to prevent groupthink from corrupting the decision-making process. Otherwise, the consensus of a cohesive, self-righteous group of brilliant intellectuals may be to steer the ship straight into the rocks.

Attr.: https://en.wikipedia.org/wiki/Groupthink.

Government Contracts, NC Law, SC Law , , , , , ,

Beware the Credit Card Millionaire



Beware the Credit Card Millionaire

By: Gregory L. Shelton

Shelton Law Carolinas

(704) 940-9012

Con men come in all shapes and sizes. From the elegant mountebank hawking Dr. Feelgood’s magic hair elixir to the foreign prince who must deposit “$$ 50 Million US” by Tuesday, a con man succeeds by gaining the confidence of his mark. Today we examine an abundant subspecies of con man that I call the credit card millionaire (CCM).

We are told to surround ourselves with successful people. Winners.

The cologne-scented magazines tell us that successful people wear expensive Swiss watches and drive big German sedans. The CCM exploits these messages to run his confidence game.

The CCM syllogism:

Successful people wear Rolexes.

I wear a Rolex.

Therefore, I am successful.

The CCM leases the car and buys the watch on credit, but to him these trinkets are more than tools of the trade. The CCM believes that he is entitled to live like a king even though he produces nothing of value. He is not stealing or freeloading. He is simply getting what he deserves; what the world owes him for his greatness.

His hair will be highlighted.  He doesn’t wear socks. He went deep sea fishing on Tuesday. He is too rich to wear long pants to your office. He may be wrapped in gold chains and bracelets.

The CCM will have great opportunities, too. Right now, he’s negotiating a huge deal to develop twelve stand-alone restaurants in the Carolinas, and he wants you to be the general contractor.   But he is not afraid to take you to task if you can’t keep up with his hustle and bustle. Remember, he’s successful. He deserves a top notch product. He’s in the fast lane. Now. Now. Now.

Of course, none of this is real. The CCM is mimicking a successful person in order to latch on to his host (that’d be you) to extract goods and services. Biologists refer to this behavior as aggressive mimicry, where parasites or predators share signals with harmless species allowing the mimic to avoid identification by their host or prey. The CCM thus shares much in common with the humpback anglerfish, the assassin bug, and the leucochloridium genus of flatworm.

By The original uploader was Elapied at French Wikipedia, Public Domain, https://commons.wikimedia.org/w/index.php?curid=17897496

Government Contracts, NC Law, SC Law

Keep the Hate Mail Coming

You Supply the Paint, I'll Paint Your Portrait

You Supply the Paint, I’ll Paint Your Portrait

Keep the Hate Mail Coming

By: Gregory L. Shelton
Shelton Law Carolinas

In business litigation, winners and losers often are decided by the documents, whether it be a single email, a series of memos, or hundreds of letters. It stands to reason, then, that the things people write to each other will probably affect the outcome of the case.

For the trial lawyer, simply reading the documents to the judge, jury, or arbitrator is not enough. The lawyer must use the documents to portray the landscape, the mood, the scenes, and the characters of the case. Some situations require delicate, subtle brush strokes, while other situations require an aggressive dose of expressionism.

Bob Ross’ go-to colors included Titanium White, Phthalo Blue, and Yellow Ochre. In testy lawsuits, the palette can include Nasty Green, Purple Anger, Vicious Red, Bossy Blue, Calculating Grey, and Irrational Sienna.

Written outbursts and bluster directed at the opponent offer temporary relief to the sender, but in most cases are self-destructive acts.


“I will seek punitive damages and pursue criminal charges.”

“You’re the worst architect I’ve ever seen and I’ve told everyone I can how you destroyed this project through your incompetence.”

The recipient should view these tantrums as more paint on his palette. This is easier said than done, of course . . . . The troublesome biology of fight or flight and all that.

When you receive an unprofessional letter or email, overcome your base instincts. Take a breath, count to three, and quietly thank the sender as you exhale.

Attr: Andrea di Bonaiuto, Cappellone degli Spagnoli (WikiCommons)

Government Contracts, NC Law, SC Law

Litigating Complex Construction Disputes

Litigating Complex Construction Disputes


What do you want the judge or jury to see?

By: Gregory L. Shelton

Shelton Law Carolinas

For construction lawyers, there are cases, and then there are cases.  Defending a general contractor being attacked from the top by an owner, from the side by the architect, and from below by the subcontractors and suppliers on an office tower project. Championing a condominium owners’ association facing many millions of dollars in repair costs caused by defective construction. Roads, hotels, stadiums, tunnels, factories, power plants . . . .

The stakes are high, the issues complex, and the lawyer is surrounded by dragons that need slaying. It is easy to become overwhelmed by the volume of letters, phone calls, emails, pleadings, discovery requests, and strategic decisions that must be made quickly. Assigning an army of lawyers to a case will only go so far. Yes, Fortune 500 companies can turn over every leaf, review every document, and interview every witness, along with his or her barber or hairdresser. Knowing the facts is critical, of course.

But facts about what?  Which events? Which issues? Which witnesses? If the case is going to trial, the lawyer must whittle down ten million potentially relevant documents stored in the hard drives, bankers boxes, and filing cabinets of the parties to three hundred for the jury.

Technology has improved over the years, making document review and case management much more efficient. When I started practicing law, reviewing documents could mean a trip to Chicago, or to the project site, or to the opposing attorneys’ office, or to a warehouse off Highway 17, or to a spider-infested tool shed in the swamp to rummage through stacks of boxes. Today, document review means logging on to a computer and running search queries. Easier, but not nearly as exciting or dangerous.

While technology has made us more efficient, lawyers must still know the fundamentals. Complex litigation requires the lawyer to set up a good data tracking and collection system, a clear delineation of responsibility among the team members, and systems to deal with the volume of discovery requests, letters, and other incoming and outgoing paper.

But above all, the lawyer must decide what he wants the jury to know about his client’s case. The lawyer will not dump hundreds of documents in the jurors’ laps for the jury to sort out. The lawyer will not utter the words “subsequent to,” “had occasion to,” or “exited the facility.” Instead, the lawyer will tell the jury what they are about to see. “In this case, you will see how a bad survey cost ABC Contracting millions of dollars, and you will see how the project owner tried to cover up the surveyor’s mistake and leave ABC holding the bag.” Once the lawyer decides on his theme of the case, the lawyer can truly put the important documents, testimony, photographs, and other evidence to work for his client.

And that, Charlie Brown, is the art of litigating a complex construction case.

Photo of Fantasy City attr. Kimon Berlin, WikiCommons

Government Contracts, NC Law, SC Law , , , , , , ,

Employees, Independent Contractors, and The Mythical “1099 Employee”

16th c. depiction of mythical 1099 Employee

1099 Employee Depicted in 16th c. Triptych “The Garden of Earthly Delights” by Hieronymus Bosch

Employees, Independent Contractors, and the Mythical “1099 Employee”

By: Gregory L. Shelton
Shelton Law Carolinas

(704) 940-9012

I too have heard the whispers of strange creatures called “1099 Employees” that roam abroad. But before you run off to Oregon with night vision goggles and a duck call, understand that the term “1099” refers to Form 1099-MISC, an IRS form used to report “nonemployee compensation” and other miscellaneous income. Employee wages and withholding, on the other hand, are reported on the W-2 form.

We could debate the metaphysical aspects of “1099 employees,” but let’s just skip ahead to the part where I tell you that “1099 employees” do not exist. The term is an oxymoron, like “deafening silence” or “forward retreat.”

What fun is a world without some mystery and danger, you ask? Fret not. The law offers plenty of mystery and danger when it comes to deciding whether to treat a worker as an employee or an independent contractor.

I.      The Employee/Independent Contractor Distinction

Classifying a worker as an independent contractor eliminates significant costs and administrative burdens for construction companies. Companies don’t pay or administer an independent contractor’s social security taxes, overtime, health insurance benefits, workers compensation insurance, unemployment insurance, and other costs. The company also avoids potential liability under employment discrimination laws. In general terms, independent contractors can thus be viewed as subcontractors.

Simply declaring a worker an independent contractor, however, will not make it so. The law imposes a duty on the company to properly classify the worker’s status; in the same way the law imposes a duty on the taxpayer to properly report income.

The construction industry is particularly susceptible to misclassifying employees as independent contractors. The industry is nomadic and seasonal in nature, involves greater potential for on-the-job injuries, and relies heavily upon subcontractors and journeymen laborers to perform the work. To add to the temptation, the time and administrative overhead necessary to comply with employment laws, tax laws, and regulations can be overwhelming to smaller companies. This is particularly true in the stop-and-go MGB economy of recent years.

II.    Our Employees Independent Contractors Are Our Greatest Asset!

I’ve observed three general categories of construction companies that misclassify workers:

  • Companies that innocently, or perhaps naïvely, believe that worker classification is a matter of private contract between the company and the worker.
  • Companies whose workers straddle the line between employee and independent contractor (“close calls”).
  • Companies that understand the law but decide that the financial benefit of treating an employee as an independent contractor outweighs the risk of getting caught.

What constitutes an “employee” is often in the eye of the beholder (meaning in this case a judge or jury). Courts and government agencies have developed legal tests as guidance. The IRS takes into account twenty factors to decide status, whereas the DOL applies the “economic realities” test derived from a decision by the United States Supreme Court. State courts use their own “common law” tests developed through court precedent. For example, South Carolina courts follow the Yellow Cab test, named after a state court case involving a cab driver’s relationship to the cab company.

Although other factors are considered, the issue of control over the worker plays a critical role in the tests. For instance, under South Carolina’s Yellow Cab decision, “[t]he test for determining whether a relationship between parties is that of employer and employee, or that of employer and independent contractor, is whether the party for whom the work is being done has the right to control the worker with respect to the manner or method of doing work, as distinguished from the right merely to require certain definite results conforming to the contract.” Other factors considered by courts and agencies include training, integration, work hours, duration of relationship, payment of travel expenses, furnishing of tools, and availability of the worker’s services to the public.

Courts examine classifications on a case-by-case basis, focusing on the specific facts and circumstances at issue in the case. For close calls, companies should seek guidance from legal counsel before classifying a worker as an independent contractor.

III.   The Enforcers  

The government agencies with power to punish a “misclassifer” (my term) include the Internal Revenue Service, Department of Revenue, Department of Labor, Occupational Safety and Health Administration, Equal Employment Opportunity Commission, and Immigration and Customs Enforcement. CGL carriers may also take an interest in worker classification.

A company charged with or sued for misclassifying a worker can face financial penalties including unpaid withholdings, unpaid employment insurance taxes, unpaid overtime, private lawsuits for damages, assessment of attorneys’ fees, and other unpleasant consequences depending upon the issues involved.

IV.    To W-2 or Not to W-2 . . .

A company’s choice of tax form is not the last word on the worker’s classification as employee or independent contractor. If an employee is misclassified as an independent contractor, expect government agencies, insurance companies, plaintiffs’ lawyers and employment lawyers to scrutinize a worker’s true relationship to your company. Courts and government agencies have developed several legal tests to decide whether a worker is an employee or independent contractor. A company found to have misclassified an employee as an independent contractor faces financial penalties, damages, and legal expenses.

Attr. Hieronymus Bosch, The Garden of Earthly Delights, 1504

Government Contracts, NC Law, SC Law , , , , ,

Twenty-Year Express Warranty Survives Six-Year Statute of Repose

Something's Gotta Give

Something’s Gotta Give

When Principles Collide: North Carolina Supreme Courts Holds that Twenty-Year Written Warranty Survives the Six-Year Statute of Repose

By: Gregory L. Shelton

Shelton Law Carolinas

(704) 940-9012

When irreconcilable legal principles collide, the highest court in the land will have the last word. In Christie v. Hartley Construction, Inc., the Supreme Court of North Carolina had to decide what happens when North Carolina’s six (6) year statutory time limit on claims–or statute of repose–collides with the freedom of parties to make contractual promises as they see fit.

I.   Background

In the Christie case, homeowners sued the manufacturer of an exterior stucco-like material under the manufacturer’s express (written) twenty-year warranty. The manufacturer acknowledged its written twenty-year warranty, but asked the court to dismiss the warranty claim because the homeowners did not file the lawsuit within the six-year statute of repose applicable to construction cases. The homeowners, in turn, argued that the manufacturer relinquished any claim to the statute of repose defense when it promised to warrant the product for twenty years.

This seemingly run-of-the-mill construction case actually makes the “top five” most important construction cases in 2014 because of the legal principles at stake. The supreme court summarized the dispute as “a conflict between the public policy embodied in the repose period set out in N.C.G.S. § 1-50(a)(5) and the right of parties to contract freely.”

II.   The Competing Principles

In the red corner, we have the “statute of repose,” which functions as an “unyielding and absolute barrier” to untimely legal claims. The six year statute of repose starts to run at project completion, even if the plaintiff is unaware of the defects. If a lawsuit is not filed within six years from completion, the plaintiff simply has no claim against a builder or developer. Statutes of repose serve the policy function of putting time limits on potential claims so that industry participants can evaluate potential liability exposure in a meaningful way.

In the blue corner, we have the legal principle of “freedom to contract.” This principle provides that courts will not act paternalistically when interpreting a contract that two parties have entered. For example, courts will not judicially rewrite (“blue pencil”) contracts to make the terms more understandable or fair. Instead, courts favor the policy of allowing the parties to contract freely as they deem appropriate.

Two legal principles in direct opposition . . .

The unstoppable force colliding with the immovable object . . .

And there could only be one winner.

III.  And the winner is . . .

In a unanimous decision, the supreme court declared “freedom to contract” as the winner:

“[W]e conclude that the six-year statute of repose set out in the statute provides valuable protection to those who make improvements to real property, but that the beneficiaries of the statute of repose may choose to forego that protection without violating any rule of public policy.”

In layman’s terms, a manufacturer that chooses to stand behind its product for twenty years should be allowed to do so. The supreme court looked at the problem from the customer’s point of view as well: “A warranty that a seller knows is unenforceable is a sham,” observed the court, “useful only to beguile the unsuspecting.”

IV.   Conclusion

The Christie case makes the “top five” list of most important construction law cases because the statute of repose has been heavily litigated over the past few years as damage from defective work in the building boom has started to surface.

The case is equally important to the builders and manufacturers out there. The lesson: Don’t make promises you don’t intend to keep.

NC Law , , , , , ,