22.2 Gathering Information and Framing the Issues

• Library: Virginia Construction Law Deskbook (Virginia CLE) (2019 Ed.)

22.2 GATHERING INFORMATION AND FRAMING THE ISSUES

22.201 Early Preparation. Compared to many other types of civil litigation, construction cases often are very document intensive. The case may turn on documents, records, or recollections that must be identified and analyzed at an early stage. Some clients anticipate the potential for litigation before the job begins and administer the job with that thought constantly in mind. As a result, a paper trail is created to support the position the client wants to take on any issue that might arise on the job. Other clients may never have anticipated litigation and addressed issues only as they arose through conversations in the field or by telephone. The attorney must be able to quickly recognize where a particular client or adversary falls in the continuum between these two extremes. Trial preparation will be guided by the quantity and nature of the information that the attorney can gather at this stage, the sources from which that information is available, and the reliability of that information.

On one hand, the client who documents everything is typically doing so for its own best interests and will impart a favorable slant to the documentation. On the other hand, the client who documents little or nothing

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likely is going to remember only the parts of conversations favorable to its position, and probably not even all of that. Relying too much at the outset on the client's version of events, without further investigation, can create a false sense of confidence. Each extreme presents its own case-specific challenges, and those challenges vary further depending on how far the client diverges from the norm.

The first step in preparing the case is to examine all available documents, as this will not only help counsel to become as familiar as possible with the contract that underlies the dispute, but also highlight the absence of any readily identifiable missing documents. For example, many written contracts incorporate other documents, such as general conditions or terms and conditions, specifications, and plans, or other contracts, such as the subcontract incorporating the contract between the owner and the prime contractor. It is not likely that a client will have gathered all of the contract documents before first contacting counsel in the dispute. It is even less likely that the client will have read all of the applicable provisions.

One of the most commonly missing contract documents is an addendum or change order memorializing a modification to the contract. Either document is intended to reflect an agreement reached between the parties identifying a substantive change to the contract. On a project with experienced personnel involved, these modifications generally are numbered sequentially, which helps draw attention to any missing modifications. In a smaller project or one with less experienced job administration, however, the recordkeeping may be more haphazard. Under either scenario, the existence of a change that is binding on the parties can be subject to dispute. All documents and records related to any potential modification should be obtained and compared against the contract requirements for any changes. Documents and records related to potential modifications also should be analyzed to evaluate whether there has been an enforceable change in a manner not contemplated by the contract. The common contract provision that all changes must be in writing is one which may be overcome by subsequent events. Identifying potential disputes over change orders or contract modifications at an early stage is critical in developing the necessary focus on the type of evidence that may be needed to prove or disprove the modification.

As mentioned above, becoming familiar with the underlying contract at the outset is essential to understanding the basis of the dispute. For example, the attorney should not accept without verification the client's representation that the disputed work was beyond the scope of work as

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defined by the contract. Contract provisions requiring more than the client understood to be within the scope of work may be overlooked because the client did not read the entire contract. The scope of work also may not be as clearly defined as the client believes. Inconsistencies may exist in the contract documents, or the client may be relying on contract requirements that the attorney will have to explain are not enforceable.

If there is no written contract, the attorney must take a different approach to identifying evidence that will help to determine the parties' respective rights and obligations. Absent a written contract, the attorney must decide what kind of nonwritten contract will need to be proved or disproved. The underlying agreement may be an express oral contract, an implied-in-fact contract based on quantum meruit, or a contract implied in law on grounds of unjust enrichment. These alternatives, which are discussed below, have separate elements of proof, and the attorney must decide at an early stage which is most applicable given the available facts.

Identifying the contract and the extent to which it defines the rights and obligations of the parties will guide the attorney in the process of putting the case together for trial.

22.202 Assumption That Case Will Go to Trial. Assuming from the outset that the case will be tried forces the attorney to identify and focus on the important issues of law and fact that the evidence must support or refute. There are two basic questions to be answered in preparing any case for trial: (i) "What do I have to prove or disprove?" and (ii) "How do I prove or disprove it?" Keeping these fundamental questions in mind should help the attorney focus on preparing the case.

For an experienced practitioner, this step may require little more than reading the contract and listening to the client's rendition of what happened to bring the project to the stage of a dispute. Further investigation will narrow the focus, and allow surprises to be addressed. For the less experienced practitioner, however, preparing a rough set of jury instructions, regardless of the anticipated forum for trial, can be a beneficial exercise. As the attorney identifies what would have to be proved to a jury, a preliminary outline of the critical issues of fact, tempered by applicable law, emerges. Review of potentially applicable jury instructions also may alert the attorney to issues of law that might not otherwise have been recognized.

The attorney should do any research necessary to become thoroughly familiar with the applicable law. For example, construction cases frequently

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involve claims arising from public projects, and they often may arise from mechanics' liens. These subjects are largely governed by statute. The Virginia Public Procurement Act, ¹ for instance, imposes and grants a variety of obligations and rights. Since these obligations and rights are part of an applicable statute, they are, as a matter of law, incorporated into the contract whether referenced therein or not. ² Likewise, the mechanics' lien statute ³ and underlying cases construing that statute set forth numerous requirements and potential defenses. As addressed in Chapter 18, Mechanics' Liens, the mechanics' lien is a remedy created by statute, not by common law, and thus strict compliance with the requirements of the statute is mandatory.

The facts of a case cannot be considered independent of the applicable law. For instance, terms of the contract that provide key obstacles or defenses may or may not be enforceable, or there may be rules of law that differ from the attorney's expectation. An example is modification of the written contract. Such a provision is not a bar to changes being accomplished in any other manner. The parties may reach agreement—enter into a contract—to modify the original contract verbally, by conduct, or by any other means to prove a contract not in writing. It is merely a question of the evidence required. To prove a modification in a manner other than as specified by the contract, Virginia law imposes a clear and convincing burden of proof, as does the law of North Carolina. ⁴ On the same issue, the laws of Maryland and of the District of Columbia require only a preponderance of evidence to prove the modification not in compliance with the writing requirement. ⁵ While the most persuasive and complete evidence always should be sought on any factual issue, knowing in advance something as simple as the burden of proof may have a significant impact on whether a claim should be pursued or how it should be pursued. Pursuing a claim that has a clear and convincing burden of proof when the evidence is not strong can result in needless expense, detract from the credibility of more meritorious claims, and unreasonably heighten the client's expectations. Also to be considered in identifying issues of law and fact are building codes, either statewide or local, and who has responsibility for complying with them. An attorney who

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performs adequate research on the relevant law will not waste time pursuing barred claims or inapplicable theories and may also discover more tenable claims or theories that might have gone unrecognized in the original analysis.

Another advantage to becoming familiar with applicable law at an early stage is that it permits the attorney to negotiate with the adversary from a position of strength (or sometimes from the unfortunate position of informed weakness). Research should consider not only what must be proved to establish a claim but also what defenses are likely to be raised. Recognizing controlling issues on both sides of the dispute is a key element in achieving a sensible compromise that can spare the client needless expense and inconvenience.

The potential advantages of thorough knowledge of applicable law, the contract's provisions, and relevant documents are...